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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Tuesday, October 22, 2002

1530

The Chair (Mrs. Sue Barnes (London West, Lib.))

Ms. Sharon Sholzberg-Gray (President and Chief Executive Officer, Canadian Healthcare Association)

1535

1540

The Chair

Ms. Helen Ghent (Chair, Council for Health Research in Canada)

1545

1550

The Chair

Dr. Jean-Victor Wittenberg (President, Canadian Alliance for Children's Healthcare)

1555

1600

The Chair

Dr. Dana Hanson (President, Canadian Medical Association)

1605

1610

1615

The Chair

Mr. James Lunney (Nanaimo—Alberni, Canadian Alliance)

Ms. Sharon Sholzberg-Gray

Mr. James Lunney

Ms. Sharon Sholzberg-Gray

Mr. James Lunney

Ms. Sharon Sholzberg-Gray

1620

Mr. James Lunney

The Chair

Dr. Jean-Victor Wittenberg

Mr. James Lunney

The Chair

Ms. Pauline Picard (Drummond, BQ)

Ms. Sharon Sholzberg-Gray

1625

Ms. Pauline Picard

Ms. Sharon Sholzberg-Gray

1630

The Chair

Mr. Bryon Wilfert (Oak Ridges, Lib.)

1635

Dr. Dana Hanson

Ms. Sharon Sholzberg-Gray

Mr. Bryon Wilfert

1640

Ms. Sharon Sholzberg-Gray

Mr. Bryon Wilfert

The Chair

Mr. William Tholl (Secretary General and Chief Executive Officer, Canadian Medical Association)

The Chair

Dr. John Hylton (Executive Director, Council for Health Research in Canada)

The Chair

Ms. Sharon Sholzberg-Gray

1645

Mr. Pat Martin (Winnipeg Centre, NDP)

Ms. Sharon Sholzberg-Gray

Mr. Pat Martin

The Chair

Mr. William Tholl

Dr. Jean-Victor Wittenberg

1650

The Chair

Ms. Maria Minna (Beaches—East York, Lib.)

1655

The Chair

Dr. Dana Hanson

The Chair

Ms. Sharon Sholzberg-Gray

1700

The Chair

Dr. Jean-Victor Wittenberg

Ms. Maria Minna

The Chair

Mr. Roy Cullen (Etobicoke North, Lib.)

The Chair

Mr. William Tholl

1705

The Chair

Ms. Sharon Sholzberg-Gray

1710

Ms. Helen Ghent

The Chair

Mr. James Lunney

Dr. Dana Hanson

The Chair

Mr. William Tholl

1715

The Chair

Mr. Tony Valeri (Stoney Creek, Lib.)

The Chair

Dr. Jean-Victor Wittenberg

Mr. Tony Valeri

Dr. Dana Hanson

The Chair

Ms. Pauline Picard

The Chair

Dr. Dana Hanson

1720

The Chair

Dr. John Hylton

The Chair

Mr. Shawn Murphy (Hillsborough, Lib.)

Ms. Sharon Sholzberg-Gray

1725

The Chair

Mr. Roy Cullen

The Chair

Mr. William Tholl

The Chair

Ms. Sharon Sholzberg-Gray

1730

The Chair

CANADA

Standing Committee on Finance

NUMBER 003

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, October 22, 2002

[Recorded by Electronic Apparatus]

¹ (1530)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Good afternoon, ladies and gentlemen. Pursuant to Standing Order 83(1), we'll continue with pre-budget discussions. We have a panel mainly in the area of health care today, and we will go from 3:30 p.m. to 5:30 p.m..

We have witnesses this afternoon from the Canadian Healthcare Association, and again we welcome Sharon Sholzberg-Gray, the president and chief executive officer. She has with her the director of policy development, Kathryn Tregunna.

Also with us, from the Council for Health Research in Canada, is Dr. John Hylton, the executive director, and Helen Ghent, the chair; and from the Canadian Alliance for Children's Healthcare, Dr. Jean-Victor Wittenberg, the president. Dawn Walker is not here, but we'll send her our best.

Next, from the Canadian Medical Association, we have Dr. Dana Hanson, the president, and William Tholl, who is the secretary general and CEO.

All of you are welcome. We have your briefs. We've had them translated ahead of time and we've read them, so if you could address the briefs during a presentation of about eight or nine minutes, that will give us the time to do some questioning. We find that is very useful to the committee.

We're going to go in the order on the agenda today. Ms. Sharon Sholzberg-Gray, please go ahead and commencez.

Ms. Sharon Sholzberg-Gray (President and Chief Executive Officer, Canadian Healthcare Association): Thank you very much, Madam Chair, and congratulations on your reappointment.

On behalf of the Canadian Healthcare Association's board of directors and our provincial and territorial members, we thank the members of the committee for the opportunity to appear before you once again. Today, we're pleased to offer you our recommendations for health in the 2003 federal budget, as outlined in our written submission to the committee in September.

I'd like to start by commenting on the recent Speech from the Throne. CHA is pleased that the federal government has signalled its continuing commitment to our health system through “the necessary federal long-term investments, which will be included in the next budget.” As part of this commitment, CHA urges the federal government to assert its role as the steward of our health system. This will require money immediately and in the long term. The federal government must move swiftly to address critical challenges that face our health system and that will impact on the health and productivity of Canadians.

At the time of the September 2000 health accord, CHA appreciated the increased commitment of the federal government, but said at the time that it wasn't enough to address the significant challenges facing our health system and that the federal share was less than it should be. I would like to note that right now, as we're sitting, the federal cash contribution is roughly the same as it was in 1995-96. Of course, there has been some inflation since then, and it's very important to remember that. Over two years later, the challenges that I spoke about are still there, and many are getting worse.

CHA recognizes the shared responsibilities of both the provincial and territorial, as well as the federal governments in health. However, it is only the federal government that is accountable to all Canadians for achieving access to comparable services no matter where individuals live in this country. Federal leadership is critical, and it's essential that we move from talk to action now. Funding increases for health must start in this fiscal year, 2002-03, and not be delayed until after April 1, 2003. This will clearly demonstrate the federal government's commitment to our publicly funded health system.

CHA urges the federal government to ensure adequate, predictable public funding for health over and above the September 2000 health accord announcements, under four broad categories.

First, stabilize the existing system by increasing the CHST base by $1.1 billion in this fiscal year and announcing an escalator to begin April 1, 2003. I noted earlier that the actual cash amount in the CHST is no more now than it was seven years ago, and that's food for thought, even at 2% per year of inflation.

Second, address urgent needs through targeted funds for specific areas, such as medical equipment, information technology, health system accountability, capital infrastructure, health human resources, and health services research.

Third, support appropriate system change through transition funds to support primary health care reform and other needed changes.

Fourth, expand the continuum of care by creating a separate fund to establish a national home, community, and long-term care program for all age groups—the elderly, people with special needs, children—with this program having national objectives and provincial and territorial collaboration, we hope.

CHA is aware of competing demands concerning the budget. We have to say that we support increased public spending in other important areas, particularly those related to the broader determinants of health, such as post-secondary education, the environment, children's needs, and aboriginal issues. To meet these competing demands, we require a decision-making environment that supports both health and other social investments. They go hand in hand.

CHA supports appropriate health system change. However, before we continue to change the system, we must, as I have said, stabilize it by immediately increasing the CHST cash floor. The CHST escalator that we have mentioned must reflect inflation and population growth. This will provide flexibility in meeting the daily demands for health services. I have to tell you that we only put a 2.5% escalator into our brief, but GDP growth is more like 3.5%. We were being very conservative in our estimates, though, so that's open to change, depending on growth in the economy.

¹ (1535)

I've noted before that there must also be new, targeted federal funds for urgent needs currently facing the health system. I'd like to mention our third category again: transitional funds to support appropriate system change. We'd like to note again the importance of primary health care reform. This could realize significant cost savings and have important health outcomes through disease prevention and health promotion.

Regarding our fourth category, CHA urges the federal government to commit at least $1 billion annually—that's just a start—to begin to ensure that all Canadians have access to needed health services across a broader continuum of care, including home, community, and long-term care, supported by a pharmacare program.

I'd like to repeat that commitments concerning the CHST base should be announced in the February 2003 budget and must begin flowing immediately in this fiscal year, 2002-03. Hospitals and regional health authorities across this country are facing deficits. Provincial governments aren't allowing them to have deficits. Their only solution—if that's a solution that governments think is a good solution—is to cut services to Canadians. That's simply not on, so unless money starts flowing in this fiscal year, Canadians won't have their health needs met.

Commitments concerning targeted and transitional funds and expanding the continuum of care should flow beginning April 1, 2003. CHA believes the federal government shouldn't just write a blank cheque but must instead use its spending power to achieve national standards and buy change. This is what Canadians expect. This is what they're willing to pay tax dollars for.

There has been considerable discussion regarding potential sources of increased federal revenue for health. Possibilities include a health-specific tax and raising general taxes. A targeted health-related tax could lead to other targeted taxes, which would eventually tie the government's hands in terms of meeting new social needs or balancing social spending with other needed government investments. In any event, money is fungible—in other words, it's interchangeable—so even a specific health tax would be added to government's consolidated revenue fund and could not be traced. Therefore, CHA has reservations about a health-specific tax.

In any event, CHA isn't convinced that the federal government needs to increase taxes, given the higher-than-anticipated federal surpluses. The Minister of Finance was quoted recently as saying he expects the surplus in this fiscal year to be much higher than originally anticipated.

The government should think before introducing further tax cuts beyond the $100 billion over five years announced two years ago. Additional tax cuts would certainly tie the government's hands and wouldn't enable it to do any of the things it said it wants to do in the Speech from the Throne.

Business leaders have long acknowledged the economic benefits of a publicly funded health system. We urge the government to consider its ongoing, substantial contribution to the health system as an investment in and not a drain on the personal health of Canadians and the economic health of our nation.

Meetings of first ministers and ministers of health will be necessary to develop and implement government's response to the Romanow Commission recommendations and other recommendations that may come to the fore. However, governments can't do it alone. Health system managers and trustees—and those are our members—health service providers, and others must be active in moving words to action. And in case it's not understood, we want to repeat that implementation of any new recommendations will require increased funding both now and in the long term.

As the Speech from the Throne noted, no issue touches Canadians more deeply than health care. Our health care system is a practical expression of the values that define us as a country, of the willingness of Canadians to share risk and accept responsibility for one another. CHA wholeheartedly agrees.

It's not a question of whether we, as a society, will make these health investments. We have to. There's no alternative. We're going to spend 9% or 10% of our GDP on health no matter what. The question is how we make these investments. Who will make them? Which parts of society will make these investments? Will it be governments, through Canadians acting together? Or will it be individuals paying through out-of-pocket expenses or private insurance, if they can afford it or if they can buy it? They won't even be able to buy it if they have pre-existing conditions. Or will we shift the cost to businesses, which would increase their costs, reduce their productivity, and compromise Canada's global competitiveness? Businesses don't seem willing to step up to the plate to assume extra health costs in this country.

¹ (1540)

If we choose the last two options, we'll be abandoning the core Canadian value of sharing risk. CHA believes, as Canadians do, that access to health services must be based on need, not ability to pay.

On behalf of the Canadian Healthcare Association, we thank you for giving us the opportunity to appear before you, and of course we would be pleased to answer your questions later.

Thank you.

The Chair: Thank you very much.

I'd now like to hear from the Council for Health Research in Canada.

Ms. Helen Ghent (Chair, Council for Health Research in Canada): Thank you, Madam Chair.

I would like to say that Dr. John Hylton is here to back me up if you want to ask any questions. I'm a little jet-lagged, so please forgive me if I stumble.

First of all, I want to say what a privilege this is. This is the sixth year that we have appeared before the finance committee, and we have always been well received. We have seen incredible results, and we hope they continue.

It's also interesting that today happens to be our health research day on the Hill, so we had a lot of members and other allies visiting all party members. With that issue, I'd just like to mention that while I represent the Council for Health Research today, the people who have joined us today are other researchers and charities who have the same interest in increasing the dollars for health research. While they may have other agendas, today we speak with one voice for that.

When we hear other presenters, we back most of the things we hear. We also recognize that health research is really the underpinning of good health care. We have been pleased with the changes that CIHR has brought with regard to expanding the mandate in the research field. Actually, we have seen some wonderful results of collaboration that have never happened before, both within government, intergovernmentally, and with agencies, etc. In the long run, I think they are going to make huge changes in health care for Canadians. This is one of the most important things when we look at where the government spends its dollars in the health care field.

Our basic message to you, of course, is a thank you. What we see, we like. We think we're on the right track. But health research and health care cannot happen with financing that is done in chunks. They have to be looked at in the long term, and it has to be understood that most research takes place over a three- to five-year term. If we want to encourage our young people, there always has to be a little bit extra every year to encourage and to in fact finance the new researchers and give them an opportunity.

We believe one of the things that is important is that you see payback. We have already written or commissioned a brief that is in fact in the process of being translated. When we have it, we will make sure you get it, because it demonstrates in real, concrete terms some of the payback from the investment in health research today.

When we talk about what we want from you in terms of money, the message is pretty much the same. We are continuing to look for 20% for five years. That equals CIHR's goal of $1 billion in 2005. We know CIHR believes health research is really the foundation of the health care system in this 21st century. Without it, I think the expenses that we will realize will be actually unaffordable altogether.

There is no question that it touches all parts of the health care continuum. We hear about the terrific amount of money that is spent in hospital care, but that will never change, nor will the long-term care, unless we have the basic research to say what is an appropriate treatment, what is an appropriate preventive measure, and what is a better way to use health care workers in long-term care. All of those things need justification in order to continue. We believe the investment, through the Canadian Institutes of Health Research, will pay off down the road.

¹ (1545)

On behalf of all of the agencies that raise public dollars for health research, and on behalf of all those researchers who raise dollars and who need the money to do the research, we hope you will continue to recognize the need for the investment in health research.

John, do you have anything to add? No?

Thank you very much.

¹ (1550)

The Chair: Thank you very much.

Now, from the Canadian Alliance for Children's Healthcare, we'll hear from Dr. Jean-Victor Wittenberg.

Please go ahead.

Dr. Jean-Victor Wittenberg (President, Canadian Alliance for Children's Healthcare): Thank you.

The Canadian Alliance for Children's Healthcare—which I will refer to as CACH as I go through this—and I very much appreciate being invited to participate in this nationwide discussion. I only hope we can make some useful contribution to your work.

The CACH mission is to foster optimal health care delivery for children and families in Canada by creating strategic alliances of relevant participants. In this report, we briefly refer to work that we've done with regard to heath care delivery for families in which parents have paid positions in the workforce and children have what we call extraordinary care needs. Economic issues for the families in the community and quality of life issues for the children, their siblings, and their parents are central. We respectfully offer a number of recommendations for action by the Government of Canada.

In June 2000, CACH recognized that families made up of working parents and children with serious illnesses or disabilities constitute a highly vulnerable group. These children have extraordinary care needs. In order to provide their children with basic health care and developmental support, parents must invest time, energy, and financial resources that are a multiple and sometimes exponential increase over the usual investments made by parents. Many of these parents also hold paid positions in the Canadian workforce. They need to keep those jobs to ensure family income and to protect their families from the challenges and adverse consequences of poverty, especially at a time when the costs of providing for extraordinary care needs are drawing even more deeply on their resources.

There are a number of different extraordinary care scenarios, based on differing health care challenges, faced by these children and families. The extraordinary care need may present as a single acute episode, as repeating, intermittent acute episodes, as extended unremitting periods of time, or as palliative care associated with the expected death of a child.

Even though these families face different care scenarios, they have in common the extraordinary efforts required to meet their children's care needs. These are care needs that encompass the complex physical, emotional, social, and financial needs of children with serious illnesses and disabilities, and the needs of their families. However, whatever the medical or health condition, optimal outcomes for all members of the family are associated with effective family functioning. The purpose of families is to provide for the needs of their members. The demands of extraordinary care are a challenge, sometimes a huge challenge, and sometimes an overwhelming challenge to a family's ability to do that.

The UN Convention on the Rights of the Child, the more recent document called A World Fit for Children, and a broad scientific literature place family functioning at the centre of efforts to ensure healthy children and optimal child development. A very newly released book, Vulnerable Children, which is based on studies using data from the National Longitudinal Survey of Children and Youth and edited by J. Douglas Willms, refers repeatedly to “family-enabling environments”. This is the basic principle that informs all of our recommendations today. Our most basic recommendation to the government is to create family-enabling environments that ensure optimal functioning, development, and quality of life, and optimal contributions to our communities from all family members.

One mother with a child who has had to face both severe illnesses and serious disabilities, a mother who has made remarkable contributions to her family and to our community, stated it as, “All children have a right to have parents.” I would add only that all children have the right to parents who are not overwhelmed. When families are stressed, and especially when parents are stressed, family functioning is in danger of deteriorating. This is never more true than when children have extraordinary care needs. It is impossible to appreciate the impact that a child's serious illness or disability has on the family, or the scale of sacrifices that these parents and their children must make, without being one of them or directly involved with them.

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As we go through this, I'm going to use a few quotes from parents we interviewed in focus groups or individually. The first is this:

I had just been back to work for six weeks from maternity leave when she got sick. We took her to emergency on a Monday morning and were told within two hours that she had leukemia, so I've not been back to work since that day. At that point I had such little information, I didn't even know if my daughter was going to be alive in a month...all I knew was that she was sick, we were going to be put in the hospital and I wouldn't be coming back to work, indefinitely.

A father said:

You know, you can't go back, you're never going to go back where you left. You can't go back to that normal...you're inside the bubble of the cataclysm.

That's the experience of a child with extraordinary care needs on a family.

We recommend that the government create a policy category for “children with extraordinary care needs” defined as the extreme physical, emotional, social, and financial needs of children who require this kind and degree of specialized care. We recommend that the government create a secretariat to focus on the wide-ranging needs and urgent problems that require cross-discipline, cross-departmental attention, and broad-based community intervention.

This will enable us to gain a clearer perspective and increase our understanding of how best to work together to resolve the issues faced by these children and families. The scientific literature makes it clear that there are serious adverse consequences. While many Canadian families report high levels of work-family stress, stress is dramatically increased when extraordinary care needs arise. Parents who experience work-family conflict have increased rates of depression, physical illness, and heavy use of alcohol.

Not surprisingly, children in these situations suffer as a result of family stress. Children with disabilities or chronic illness are more than twice as likely as children without a disability or chronic condition to report a history of abuse. Children with a disability or chronic health condition are significantly more likely to be placed in foster care. Children with a chronic illness or disability are substantially more likely to have low self-esteem, be in emotional distress, and to attempt suicide. There are self-evident health care benefits to addressing the stresses inherent in extraordinary care.

CACH has been delighted with the government's commitments in the last two throne speeches: in January 2001, to ensure that families with children who are gravely ill do not lose job security and fall into poverty; and in the most recent Speech from the Throne, to extend that support to families in which a child, parent, or spouse is gravely ill.

CACH has been collaborating in ongoing work to implement those intentions and fully supports them, but we must not forget that extraordinary care needs go well beyond end-of-life crises. It is vital, and it is entirely within the Canadian tradition and completely congruent with the goals of the Standing Committee on Finance, that we create family-enabling environments for all of our families, especially those that are most challenged. CACH believes that collaborative approaches are the cornerstone of effective health care and social services. Governments, professionals, and service providers bring necessary expertise and resources to the table; however, no one knows better than the families what they endure and what they need.

Effective frameworks that support families demand flexibility. There are as many potential solutions as there are families and children. I quote:

If you want to find out what to do for them, you have to treat them separately. ...all should be included in the definition, but treated individually as what their needs are, 'cause they're, they're different. ...but, it's not going to be an easy thing... I can't see it as being able to just make this blanket statement and it's going to cover everything, they're going to have to leave room for a lot of differences.

CACH encourages the government to allow family decision-making to play a part in determining how support is implemented. Let families use their own understanding of how they work best. Let families play a significant role in deciding how to use supports that we extend to them. For example, we believe that the employment insurance program is an effective way to support many families when there is conflict between care for children with extraordinary care needs and job demands. Many working parents, however, are not eligible for EI. Tax deductions are less effective for families with less income. Almost all families with these kinds of demands lose staggering amounts of income.

º (1600)

I cannot tell you how many parents of children with extraordinary care needs we interviewed who are university trained professionals who, because of the demands of their situations, are making annual incomes of $30,000 or less as a result of having to interrupt their careers and ongoingly interrupt their work due to the demands of parenting.

I quote:

My first manager was excellent because he had a son born that was deaf so he knew the stress, and that you have to see a doctor more often, and all this other stuff that you have to do more often than with a child that's healthy. But then, when he got transferred and I had a new manager, it was like night and day. It was a nightmare. We butted heads for years and years. I ended up with a burnout. I basically had a major depression because of it. I got so stressed out that I ended up going on sick leave for six months and then I just quit.

A father said: “It was produce or die, and my company died because I wasn't there.”

We recommend that the government augment the child tax benefit for children with extraordinary care needs. This measure will recognize the extraordinary financial stress of caring for such children and will put the benefits directly into the hands of those who need the most support.

Another clear example implying a need for flexible approaches occurs in the case of family members who have serious illnesses or disabilities and are teetering between being able to live at home and being moved into institutional care. Families can decide by themselves for the most part when that time should come. At present, all too often the decision is made when they cannot afford to keep the family member at home. Once the family member is in an institution, funds flow to support what is extremely expensive, but frequently much less than ideal, care. Could we not do this more logically?

We recommend that the government attach funding to individuals rather than to individuals and institutions. This is as true for children as it is for elders and all in between. Provide funding that gives families the opportunity to provide care at home or that moves with the individual to an institution when it is indicated.

My last point is just to support the comments about research and evaluation of interventions.

The Chair: Thank you very much. I know there is more in this brief, and the committee has that. Thank you very much, Dr. Wittenberg.

Next is our presentation from the Canadian Medical Association.

Who will start this? Go ahead, doctor.

Dr. Dana Hanson (President, Canadian Medical Association): Along with our CEO, Mr. Bill Tholl, I thank you very much.

The Canadian Medical Association appreciates the opportunity to once again participate in the Standing Committee on Finance's pre-budget consultation process. We value this open and constructive dialogue.

Our focus today is the need to turn the corner from debate to action on securing a truly sustainable health care system. Turning the corner will require a significant and strategic federal reinvestment. The CMA was pleased to hear, in the recent Speech from the Throne, that the government will “put in place a comprehensive plan for reform, including enhanced accountability to Canadians and the necessary federal long-term investments, which will be included in the next federal budget”.

It's our objective today to provide the committee with a sense of what will be required in terms of short- and longer-term financial reinvestments in health to achieve that goal.

When we appeared before this committee last, it was just weeks following the horrific events of September 11, 2001. In light of this tragedy, the CMA chose to focus the presentation on the issue of the state of our emergency health preparedness system and key investments that needed to be made in our health care system to prepare and protect ourselves in times of crisis. While the government has taken some action in the area of health and security, it is not nearly enough, and physicians of Canada remain extremely concerned about the ability of our health system to respond in times of national emergency.

We urge the committee to reconsider our recommendation to establish an assistance fund for municipal and provincial authorities to improve the coordination of emergency responses amongst public health officials, police, fire, ambulance services, and hospitals. Investments are also needed in emergency preparedness resources and infrastructure such as medical supplies, equipment, laboratory facilities, and training for health care professionals needed to anticipate and respond to disasters, both natural and man-made.

In addition to health and security, there are other urgent health issues that require immediate action--issues such as health human resources, particularly with respect to access to care in rural and remote communities; health infrastructure; health technology--that simply cannot afford to wait. The pressing nature of these issues warrants the use of one-time, targeted, special-purpose transfers. These short-term bridge financing initiatives would be approximately $2.5 billion over three years and include initiatives such as a health resource education and training fund, targeted funding to post-secondary institutions, direct financial support to students, a health technology fund, and piloting of remote information communication technology solutions.

In addition to these bridge financing investments, the CMA is also calling for an immediate target investment of $700 million to the area of public health. In the recent Speech from the Throne, the importance of a strong public health system was highlighted as a priority. The government promised “to move ahead with an action plan in health policy areas under its direct responsibility”, including addressing emerging risks, adapting to modern technology, and emphasizing health prevention activities. In addition to health and security, the CMA has identified two other areas of public health that require more immediate federal assistance, those being a childhood immunization strategy and a national illicit drug strategy. We believe these two investments will not only improve the health of Canadians but also save the system money in the long run.

Therefore, to address the urgent needs of our health care system, both in terms of the $2.5 billion bridge financing initiatives and the $700 million public health initiatives, the CMA is calling for an immediate reinvestment totalling $3.2 billion over the next five years. Given that this year's budget surplus will be in the neighbourhood of $9 billion, we think this immediate reinvestment is not only necessary but also feasible.

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Now that we've addressed the urgent needs of the health care system, I want to direct the committee's focus to our recommendations regarding the longer-term federal reinvestment in health care.

In its submission to the Commission on the Future of Health Care in Canada, the CMA set out a vision of a sustainable health system. This vision provides for timely access to an expanded set of core services through a renewed partnership between patients, health care providers, and governments, both federal and provincial. The CMA believes that if we are to have a truly national health care system, the federal government must be willing to clearly identify a contribution to health care over the long term that is large enough to be relevant in all jurisdictions.

To achieve this goal, the CMA recommends that the federal government, first, provide greater protection against provincial or territorial revenue shortfalls by renewing the fiscal stabilization program and/or lifting the ceiling on the federal equalization program; and second, that it provide funding for new core services on a 50-50 shared basis, with the ultimate goal over the next 10 to 15 years of restoring a true partnership in funding necessary services.

In order to raise funding to the 50% level, we suggest that funding for all new health and health care services be introduced on a 50-50 cost-sharing basis. This would encourage provinces and territories to become early adopters of new technology and help to update the basket of core services available to Canadians. How quickly the 50% cost-sharing of expanded core services could be realized would depend on the uptake rate of new technologies. Our estimates suggest that an initial investment in cost-sharing core services would cost approximately $16 billion over the first five years, starting in 2003-04. To accomplish this long-term reinvestment in our health care system, the CMA recommends an incremental approach, with initial reinvestments starting immediately, but more significant contributions not beginning until after 2005-06. This approach would allow for those funds to come from within the existing fiscal framework.

The varying fiscal capacities of individual provinces and territories have made it increasingly difficult to ensure the provision of reasonably comparable services across Canada. I think what is taking place currently in Newfoundland and Saskatchewan is indicative of this problem. The fiscal stabilization program is not health-specific and only takes effect when provincial revenues drop by over 5%. The federal equalization program is also ineffective, because of the ceiling provision that caps increases in payments to the rate of national GDP growth. Making improvements to either of these programs would lessen the impact on the health care system of the ebbs and flows in the business cycle.

Further details on our long-term spending estimates are provided to you within our briefing package. I would point out that the senior vice-president and chief economist for the Toronto Dominion Bank of Canada and former associate deputy minister of finance, Mr. Don Drummond, recently stated that he believed increases in health care spending could be absorbed within the current and anticipated fiscal framework.

Canadians have said they are prepared to spend more on health care, but only if they can be reassured of two things: first and foremost, that all efficiencies in the system that can be achieved have been achieved; second, that the funds allocated for health are actually spent on health. In our opinion, it would be irresponsible for the federal government to commit itself to further large investments in health care spending without introducing proper accountability mechanisms.

º (1610)

As the Auditor General of Canada has uncovered, Canada's health care system does not have adequate governance structures at the national level to provide for real accountability. As a result, Canadians are held hostage to the endless bickering between governments about shares of funding. While some progress has been achieved with the development of common health indicators, Canadians have to contend with a bizarre system of silo accountability, where federal and provincial governments individually report on populations under their own jurisdictions, but no one reports or is held accountable--more importantly--for how access to health care compares across jurisdictions.

The CMA believes creating a permanent, independent Canadian health commission would help address the lack of transparency and accountability. The purpose of such a commission would be to report annually to Canadians on the performance of the health care system and health status of populations. Its legitimacy would be strengthened by not having it report to any one government.

There continues to be a lot of discussion of how government would pay for all these programs. While we believe long-term financing of the current system could be accommodated within the present fiscal framework, other mechanisms might need to be explored for funding of further expansion of the continuum of care. We do not feel that there are great efficiencies to be found in the current system. One alternative source that is typically mentioned as a mechanism for raising revenue is a dedicated tax. The CMA does not believe that is necessarily the best way to go.

In conclusion, we recognize that this committee has a formidable task before it in recommending a fiscal framework that will take into account the renewal of our health care system. The CMA challenged the federal government to produce an implementation plan for health care renewal within 100 days of issuing the Romanow commission report. Obviously, your report will have a large role to play in achieving that goal, and we certainly wish you well in your work to make Canada a leader and innovator in health and a compassionate society.

Thank you.

º (1615)

The Chair: Thank you very much.

We'll start our questioning with Mr. Lunney. You have eight minutes, question and answer--and I'm strict, Mr. Lunney.

Mr. James Lunney (Nanaimo—Alberni, Canadian Alliance): Thank you very much, Madam Chair.

Thank you to all our witnesses for very interesting presentations.

I would like to begin with our first brief, which was from the Canadian Healthcare Association. I have a couple of questions we'd like to send your way. But for my benefit--and perhaps you don't need an introduction to everyone on the committee--I wonder if you could briefly tell us a little about the Canadian Healthcare Association, who you are, who you represent, how long you have existed, and so on.

Ms. Sharon Sholzberg-Gray: The Canadian Healthcare Association is a federation of provincial and territorial hospital and health organizations across Canada. Our members are the various provincial and territorial associations, whose members actually deliver the health services to Canadians. As an example, in Saskatchewan our member is the Saskatchewan Association of Health Organizations, which represents the various district health councils in Saskatchewan and whose members are actually providing services. In Ontario our member is a hospital association, the Ontario Hospital Association. Remember, all these health organizations receive government funding, but they are supposed to be community based, and their governance structures usually involve public trustees, public board members, who are there to serve in the public interest. They are funded by government, by and large, but they are responsible for delivering the very health services we talk about.

Our association was founded in 1931 as the Canadian Hospital Association. It changed its name to the Canadian Healthcare Association in 1995 as a recognition of the fact that its members represent a broad continuum of care.

Mr. James Lunney: Thank you. That was an excellent overview.

As a first question--and Dr. Hanson referred to this in his brief--let me lay this one on you. It has to do with some groups who advocate that the federal government should direct the earmarked federal-provincial funding for health care expenditures, rather than deliver the moneys through block funding. In respect of accountability, we've had some problems in determining exactly how much money is being spent. I wonder if you have an opinion on that as well.

Ms. Sharon Sholzberg-Gray: It is an issue that has come before our association. I'd like to also say that we have a national board of directors with representation from every province and territory in this country, and sometimes they have difficulty coming to a consensus on issues. Quite frankly, some of our provincial members think a block fund is a good thing because it enables them to spend money on social determinants of health other than the health system. Others think, though, that there would be greater accountability and transparency if there were a health-specific transfer.

In any event, even if there were a health-specific transfer—and it's something we've talked about in, I think, a positive way in the past—it would necessarily only be a notional allocation to health, because no one is going to track the dollars. The dollars might be conditional, but they're not going to be tracked. The dollars are still going to go into the consolidated revenue funds of the provinces even if there is a specific health transfer that the federal government gives to the provinces. So I think this is an issue that needs some further discussion.

The other thing, of course, is that all of the CHST money now is used to assert the conditions of the Canada Health Act. If there were a health-specific transfer, would it be only a portion of that money? Of course, not knowing how much of it is health is what's creating the “he says, she says” arguments about who's contributing what, so that's a problem as well.

So I think it's an issue that probably will need further discussion and perhaps can be resolved in a way that's satisfactory to everyone, but it's not going to essentially change that much. What really counts as accountability mechanisms is what you get for the money you invest, whatever it is: What is the health status of Canadians? What's the performance of the health system? What are the outcomes? Are we getting value for money? Make sure there's an objective place where all of these comparisons can be made and the reports can be issued. That's more important, it seems to me, than worrying about whether there's a notional allocation to health or not.

Mr. James Lunney: With our provinces spending between 40% and in some cases almost 50% of their resources on health care, is more money the answer?

Ms. Sharon Sholzberg-Gray: It's part of the answer. First of all, I think we also have to look at why it's now 40% or 50% in some provinces. And by the way, the figures we have show an average of something more like 33%. The real issue is that some provinces are including program spending only and some are including the money that they're using to pay down their debt. Other provinces have reduced spending so much in other areas and have not reduced it in health recently, so health is looking like a bigger proportion than it did formerly. That's really the issue of trying to follow dollars and knowing who's really spending what, and that kind of thing.

It is true that we cannot have, over time, provinces spending 40% to 50% of their provincial budgets on the health system. That's why we need to implement many of the health reforms we speak about in our big ten-point plan that we referred to in our brief: so that, over time, we'll be able to have a sustainable health system. But as I said before, the reality is that a health system has to go up a certain amount a year. Labour costs are 70% to 80% of the health system's costs. If we have labour agreements that, due to pent-up demand, are at 7% a year and we still need to put money into medical equipment, new technology, information technology, and other areas...we can't have a health system that we don't pay for.

So the issue is who's paying what and whether the federal government is paying its fair share. What we're saying is that even though the federal government has made some progress in the last two years, it's not paying its fair share yet.

º (1620)

Mr. James Lunney: Thank you.

Going over to our health research comments, you mentioned here a new category for families under stress and for mothers with high-needs children: broad-based community support. Certainly, in my own community, I'm aware of many families who are in very difficult circumstances because of high-needs children.

There was an interesting article in the paper just the other day about autism and the tremendous increase in autism amongst our children in the school system. There are all kinds of children with severe disabilities now. It seems there are far more than we ever used to see, and of course there's the possibility of it being viral and so on. We're seeing an increase in asthma, learning disabilities, and behavioural problems, and there's a high use of Ritalin with our children. There seem to be major problems with our children, and I think we certainly need more research to determine what is causing this assault on our children and what's causing such extraordinary difficulties.

I just throw that out as a comment. We certainly support you in the need for more research.

The Chair: Dr. Wittenberg.

Dr. Jean-Victor Wittenberg: Thank you.

I agree with you. There are huge problems that we're facing in our communities and in helping our children. I think there are two things we need to think about in that. One is certainly the research to find out what's leading to it, and there is also the research that looks at what interventions are effective. I think that's equally important. There are a lot of things going on out there, but we have to know if they're effective if we're going to pay for them.

The second point I want to make is that it is absolutely vital that we treat children early, that we catch on to what's going on, and that we intervene quickly and effectively, because the longer it lasts, the harder it is to turn around and the more damage we've caused to these kids.

Mr. James Lunney: Thank you.

I had some questions for CMA. Hopefully we'll get a second round, here.

[Translation]

The Chair: You have eight minutes, Ms. Picard.

Ms. Pauline Picard (Drummond, BQ): I'd like to go back to Mr. Lunney's question on health care spending. I think everyone agrees that at the outset, the federal government covered 50 per cent of health care costs, with the provinces picking up the remaining 50 per cent.

In so far as the Canada Social Transfer is concerned, the provinces all agree at this point in time that the government is picking up only 14 per cent of the tab. Its involvement has dropped from 50 per cent to 14 per cent. I think that's clear in everyone's mind. We're not talking about new health care programs through which the federal government has invested in areas under provincial jurisdiction. The provinces are referring solely to the Canada Social Transfer. The federal government share of the CST now stands at 14 per cent, which has lead to an imbalance in federal and provincial contribution levels.

In your opinion, is the federal government spending enough on health care? That's the question I would like you to answer for me.

[English]

Ms. Sharon Sholzberg-Gray: We've said over and over again that the federal government doesn't spend enough on health care, but I'd like to perhaps give a small historical lesson to show that the 50-14 is perhaps comparing apples with oranges. When the federal government entered into medicare and there was a 50-50 cost-sharing agreement, it was 50% of physician and hospital expenses, that is, those services that are mandated under the Canada Health Act and were mandated earlier under the hospitalization and the medicare that extended to physician services. The federal government never paid 50% of the total health bill the provinces were spending the money on. It paid 50% of hospital and physician expenses. Today, to put things into perspective, hospital and physician expenses are only about 44% of the health bill, a much smaller percentage than they used to be.

So the issue is whether the government is still spending 50% of physician and hospital services. No, it probably isn't, but it's not spending as little as 14%. I'm not sure where the 14% comes from. If we look at what is transferred under the CHST now, if you include the early childhood development amount, in this year it's $19.1 billion. Fourteen per cent of that is such a small.... I'm not sure where 14%.... I won't even mention tax point transfers. I don't want to get into the argument of whether the original tax point transfers will be included or not.

Let's look at the cash alone. Seventy billion dollars is spent per year on publicly funded health care in this country, and about $30 billion on private. Fourteen per cent of $70 billion is $9.8 billion. I'm not sure who decided that of the $19 billion of CHST $9.8 billion can be attributed to health. I'm not sure where those figures came from. What it means is that we need some clarity on figures. Maybe that's why a health-specific transfer would be useful. Close to $20 billion in CHST is the reality. On the other hand, there's $70 billion in publicly funded health care in this country. That's a reality as well. Not all of it is spent by provincial governments, some of it is spent by the federal government for aboriginal health, armed forces, RCMP, and those kinds of things.

I think what we really have to do is say the true figures are somewhere in between. The federal government never paid 50% of the entire health care bill, just 50% of hospital and physician expenses. On the other hand, they're paying more than 14%, not anywhere near enough, but probably closer to 20%, and if you include the tax point transfer, even more. The reality is, you're right, they're not paying anywhere near enough. It just shows how useless these arguments about who's paying what, and he says, she says, and who's right and who's wrong really are.

The federal government has to step up to the plate and pay more, there is no question about it, but it's also true that the provinces have extended, in their own regions and their own provinces, medicare way beyond hospital and physician services. In Quebec, for instance, there's pharmacare, there are home care services, there are community services, there are long-term care services. Every province has some of those. What they're saying is that the federal government should contribute to those as well, without any national objectives, which may or may not be the best way for the federal government to spend money. It should always spend it, it seems to me, in a manner linked to objectives that can be achieved, measured, and those kinds of things.

So it's not 50% versus 14%, it's somewhere in the middle, but the federal government isn't doing its fair share.

º (1625)

[Translation]

Ms. Pauline Picard: Since we're on the subject of prescription drugs, the current increase in spending in this sector can be attributed to a number of factors. These are the same factors that have combined to bring about higher health care costs: the aging of the population, new technologies, the cost of drugs and ongoing research.

In your opinion, what is the best approach to dealing with these increased costs? They are part of overall spending in this area and with the aging population, spending on prescription drugs can only increase. The reality is the same everywhere.

Another problem issue is patent drugs versus generic drugs. In your opinion, what's the best approach to take in dealing with the new costs associated with prescription drugs?

[English]

Ms. Sharon Sholzberg-Gray: First, the provincial premiers met and decided on a national formulary, and that has to be the essence of any federal-provincial approach to drugs. Second, you correctly noted that drugs are the area of fastest rising costs. There is now more expended on drugs than on physicians, for instance. The real issue, then, is the best way for the federal government to contribute to those escalating costs, noting that the original medicare was only physician and hospital costs and drugs consumed while in hospital.

So if the federal government could enter into an agreement with the provincial governments for, let's say, a national pharmacare program, those governments, like Quebec, that already contribute heavily to a universal pharmacare program would get the money anyway for the new program, because they probably will exceed the objectives of any new program, as they have a universal program with a mixed private-public aspect.

It seems to me also that the federal government, in funding any new pharmacare program, probably couldn't fund everything. It would have to fund catastrophic drugs, it would have to fund certain population groups, like seniors or people with ongoing chronic needs and those kinds of things. And I think all governments would have to get together to make decisions on this by using smart cards, electronic patient records, and what not, to make sure we have the drug use issue under control.

So I think it's a combination of approaches. You rightly say the federal government doesn't currently contribute to pharmacare at all. It's a growing obligation on the part of provinces, and it points to the fact that the original medicare deal, the 50-50 deal, was for a limited part of the health care system. It seems to me we can come to some agreements that would benefit everybody, and still give individual provinces, by the way, the right to shape the pharmacare program in the way that best meets their internal population needs, but at the same time ensures that some national objectives are met, so that Canadians know what to expect.

For instance, it doesn't seem to me it's a good thing to have a situation in our country today where catastrophic drugs are covered in Quebec--which is a good thing--but not covered in the Atlantic provinces, or that certain population groups are covered in one way in some provinces and not in another. It seems to me that if we're in this together, we should find a way of making sure there are reasonably comparable services, though not identical. And the federal government can do something about coming up to the plate and offering more money, if only to fund some existing programs that are doing a good thing.

º (1630)

The Chair: Merci beaucoup.

Mr. Wilfert, eight minutes.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Madam Chair, I thank the presenters for coming here today.

I wanted to return to one area, just comment on another, and then get a reaction. Currently, the provinces are running very misleading ads suggesting that the federal government is paying 14¢ on the dollar. The provinces claim we are not providing our fair share. The provinces conveniently compare the CHST cash to total provincial social spending, not health spending. Then they depict this, of course, as federal government support. They ignore the $16 billion in tax transfers under the CHST, the $10 billion in equalization payments, and $5 billion of direct federal support for health.

This obviously is a very clear trend, and I have figures I can certainly present to show there has been a steady increase in federal funding for health care over the years. We mentioned Romanow, as an example. The Prime Minister has given a commitment that he will be meeting with the first ministers early in the new year. Before we can talk about additional dollars, if additional dollars are required, we have to decide what kind of health care system we want for the long term. Then, I presume, we would have to decide how we are going to fund it.

To go back to an earlier question, when we transfer the CHST, the provinces, of course, can move those dollars around for post-secondary, social spending, etc. At the same time, they can claim we are not providing the dollars. Canadians see these line-ups at emergencies, etc., and feel that in terms of delivery, they are being shortchanged. We don't run the system, the provinces run the system. If we don't dedicate dollars for health care, how do we ensure more accountability and transparency, not only in the dollars we are currently sending, but with any future dollars, without impinging on the provincial right to administer those dollars? In Ontario we didn't close the hospitals or reorganize the system, they did.

My second part is that the issue of the institutes for health research, to me, is a very important one and one I strongly support personally. I believe it's the type of investment that has attracted the best and the brightest, not only to stay in this country, but to come here. It is well documented. The figure I have heard is around 20%; I presume you are looking at some kind of incremental increase to get to that over the next five years. Again, it is sometimes hard for people to understand, though, how that investment pays off. As a comment to you, getting the public and the media behind us to give the kinds of examples I have certainly read about I think is important in having decision-makers respond more positively. I think it's important for chairs of excellence, etc.

Anyone can answer on the first part, but clearly, there is the issue of accountability and transparency if we're sending more dollars to the provinces.

Thank you, Madam Chair.

º (1635)

Dr. Dana Hanson: If I may, Madam Chair, I think it's an excellent question. With the CHST, we would certainly be supportive of taking the H out and saying that is distinctly credited to health, and therefore getting rid of some of the ambiguity that goes with saying it's the same dollars being spent on health, education, and social services. Then we would know immediately where that is supposed to be going.

The second part of that would be how we know that. That is where it comes back to our submission with regard to the commission. We would build a whole element of transparency and accountability into the system that would be at arm's length from government, reporting directly to Canadians. It would report across jurisdictions, so that this whole argument of comparison from one jurisdiction to the other and the argument of figures would be minimized by that sort of approach.

The third part would be the whole argument, is it 14%, is it 41%, is it 20%? What we are proposing is that we have to move forward from that and say, how does the federal government continue to play a substantial role in the whole system? We would say that by looking at 50-50 sharing for new items of core services and technologies, it would grow over time. Therefore, the national aspect to this whole system, which is so important to Canadians, would become much more evident, and there would be that accountability on both sides, being a two-way street of accountability, not just from the provinces and the federal government, but both ways.

Ms. Sharon Sholzberg-Gray: Madam Chair, could I answer that also?

In case people are worried about making sure that money is spent to achieve the objectives for which it's being sent to the provinces, one thing that should be made clear, too, is that we oughtn't forget the money is conditional upon the Canada Health Act. In other words, a province that doesn't comply with the Canada Health Act doesn't get that money.

Similarly, when the federal government agrees to transfer any funds in the future—for a medical equipment fund, an IT fund, for health human resources, or anything; in other words, if it goes the route of a targeted fund—it can assure that there are certain principles related to those targeted funds that are met by the provinces and the territories in any agreement that's reached. In other words, there are conditions that ought to be met, and then that conditionality and the accountability mechanisms together, it seems to me, would assure that the outcomes and the results that you're looking for are achieved.

But let's go back to the federal-provincial-territorial fight and who is spending what and whatnot. The reality is that established program financing and CAP, which together became the CHST, were $18.7 billion in 1994-95, $18.5 billion in 1995-96, and by 1997-98 were $12.5 billion, and now we're back to just under $19 billion. I say again, too, that $19 billion today is not the same as almost $19 billion some seven, eight, or nine years ago. So the reality is there have been increases in recent years, but they haven't made up for those cuts. I'm afraid the federal government has to accept that and understand that it's going to be called to come to the plate in the future to provide its fair share. And that's the reality.

Mr. Bryon Wilfert: I just might say, though, Madam Chair, that the $19 billion is only cash, whereas $16 billion is in tax, which I again—

º (1640)

Ms. Sharon Sholzberg-Gray: Yes, and we're the only association that recognizes the tax points.

Mr. Bryon Wilfert: The transfer of the tax points is the one thing that, at certain times, depending on who is arguing, is conveniently left out. I have to tell you that is the one thing I personally get infuriated about, because this plays into the argument that the provinces are suggesting, on 14¢. The total right now is about $45 billion, and that figure looks a lot more attractive. The fact is, though, that at the end of the day, I want to know there is accountability and transparency as a taxpayer. If the Province of Ontario says there was $1.2 billion in new health care funding last year—which it did—it conveniently leaves out that $1.1 billion of it was in federal transfers.

The Chair: We'll go to Mr. Tholl for a final point on this, and then the time will be up.

Mr. William Tholl (Secretary General and Chief Executive Officer, Canadian Medical Association): I'll defer to the...[Editor's note: Inaudible—].

The Chair: Dr. Wittenberg or Dr. Hylton.

Dr. John Hylton (Executive Director, Council for Health Research in Canada): Thank you, Bill.

Firstly, Mr. Wilfert, thank you for your statement in support of health research. It's very much appreciated. I hope that when I review with you a few of the numbers that we've calculated, you're equally supportive. I'm not sure we were quite on the same wavelength, and I appreciate an opportunity to clarify things a little bit.

First of all, as you know, the Government of Canada has made an unprecedented commitment to health research in Canada over the last several years, not only through CIHR, but CFI, the research chairs, Genome Canada, and so on. To address the first part of your comment, in our view, parliamentarians certainly have a right to expect accountability for the spending of those dollars. As Ms. Ghent mentioned in her comment, one of the activities our council is undertaking, in cooperation with a number of other groups, including the research institutes, the health charities, and a number of others, is to do an accountability report for parliamentarians to show you precisely what the return on investment has been in public funding.

Having said that, I want to come back to the issue of 20% over five years, or 20% each year over five years. There's a bit of a difference there. Our recommendation and the recommendation of many other groups that will be appearing before you is 20% a year over five years. I want to take just a moment to explain why that's critically important.

Last year, the federal government added $75 million to CIHR's budget, bringing it up to $560 million. If it had not been for that, CIHR would have had only $50 million in uncommitted funds to spend because of the multi-year nature of health research funding. Most of the grants are for five years. This year, of the $560 million, only $50 million has not been committed because of previous awards. If we want to keep going in building the world-class health research enterprise that we're in the process of building in this country—that's an incredibly exciting development, not only for health care but for the innovation agenda, the economic spin-offs, and the jobs, and we can certainly talk about it if you're interested. What it means is that they're in the same situation next year.

If they don't have that top-up, that 15% to 20%, at least until they get to $1 billion and are at a place where they can turn over $200 million every year on a five-year cycle, we will precipitate a crisis in the enterprise in the country. We'll go from $125 million in new funding this year and last year to, whoops, $50 million next year without an increase. For all the scientists who are coming up for renewal, all the projects that are going on, either we'd have to cancel competitions or severely reduce the size of the average grant. This would certainly undermine the incredible progress that has been made in the last couple of years. As difficult as those numbers may be to swallow, we feel it's incredibly important that the Government of Canada carry forward on the plan that's unfolding.

So we appreciate the opportunity to clarify that.

The Chair: Thank you, Doctor.

Mr. Martin, please go ahead.

Ms. Sharon Sholzberg-Gray: Yes, that's in addition. Remember, we had four particular areas in which we asked for funding.

º (1645)

Mr. Pat Martin (Winnipeg Centre, NDP): So, yes, that's the cost for one of the—

Ms. Sharon Sholzberg-Gray: The first was increasing the CHST base and having an escalator. Increasing the CHST base in this fiscal year is something that would start in this fiscal year, and it would then be escalated beyond what's in the current September 2000 accord. But it's not substantially more. I think we're being quite reasonable.

We have a table in our presentation that shows we're at roughly a billion dollars more than the accord each year, and we think that's really necessary to keep the base. We then have other targeted and transitional funds, and a separate fund for a national...it's not just home care, it's home, community, and long-term care, supported by pharmacare. We say in our brief that it's an initial $1 billion a year, but it will have to be escalated and become more over time. We're not hiding that as well.

The reason we're beyond home care and beyond pharmacare is that we're concerned that not only should the acute care system be supported on the basis of national objectives, so ought to be the continuing long-term care sector, which is the poor cousin of the health care sector, I think, across this country.

Mr. Pat Martin: Thank you.

The highest figure that I've heard...actually we've heard the debate about whether there should be a dedicated tax specifically for health care or whether we should be looking at raising taxes. To date, no one has raised the issue—the closest to this that I've seen is in the CHA brief—that we have $100 billion worth of tax cuts scheduled for the coming five years.

In your brief, you call for no more tax cuts, for now at least. I haven't heard anybody say we should be rolling back some of these tax cuts or that we should be halting some of the announced tax cuts. The highest figure that I've heard is $16 billion over the next five years, which is what the CMA is recommending. Do you agree?

Do any of the organizations here agree that, for instance, the corporate tax rate going down from 17% to 16% is over $1 billion per year right there? The cut in capital gains tax is over $2 billion per year. Is it of interest to your organizations at all to contemplate postponing or reneging on some of those proposed tax cuts?

The Chair: Perhaps Mr. Tholl wants to give us that answer.

Mr. William Tholl: Thank you, Madam Chair.

We don't recommend that there be any further tax cuts or a reduction of the ones that have already been committed to. What we have looked at, though, very carefully.... In fact, less than two weeks ago, we convened an expert panel to look at how we can rope in the tax lever to work with the spending lever in the area of health. People like Alan Maslove, at Carleton University here in Ottawa, have argued—we think correctly—that if we're going to go ahead and try to achieve the objectives of a sustainable health system, we need to look at the tax policy, spending policy, informing policy, and regulatory policy together.

For example, when we start to look at existing tax policies, we look at the medical expense tax credit. It goes back to 1942. We ask questions like where the 3% came from. It came from an estimate, some 45 to 50 years ago, of the out-of-pocket individual expenditures on physician services. We're asking why that is still the case.

Isn't it appropriate now to look at how this antiquated system of tax policies that we have may or may not be working in conjunction with the spending policies? This is particularly applicable when you start to look at what we might be able to do in the areas of pharmacare and home care. If you can't afford to spend your way out of it using 100¢ dollars, you might be able to use 15¢ and 20¢ tax dollars on the margin to try to point the system in the right direction.

Dr. Jean-Victor Wittenberg: I don't have direct experience of working with people trying to get the disability tax credit in that situation, but mental illness, as you may already know, is one of the most pervasively disabling disorders we have in our society. A program I am working with in Toronto at the moment is looking at supporting the children of psychotic parents. If you do not provide supports that give these kids what they need, they are at tremendous risk. The disability tax credit is one way of supporting a healthy spouse in a family where the other parent is severely ill. Similarly, when you have a child who has a severe mental health problem, and there are a lot of them that are extremely severe and extremely demanding on a family, if you do not provide extra funding to that family, the whole family suffers.

º (1650)

The Chair: Thank you very much.

Ms. Minna, you have eight minutes, and then we're going to go to Mr. Cullen for eight minutes to finish off the first round.

Ms. Maria Minna (Beaches—East York, Lib.): Thank you.

First, there's a tremendous amount of great information. I think we've gone through some of this before, but it was actually interesting to listen to the different pieces today.

The one part the CACH mentioned with respect to children that struck me--apart from all of it, which I think was very well done--was the need for coordinating health organizations, social services professionals, all of the programs that would go to servicing. It reminded me, though, of the whole of the health care system, the need for reorganizing and restructuring in that context.

In my own riding, the Toronto East General Hospital did a particular study with all the social agencies in that catchment area. They called it “Silos”. It started out as a result of a number of seniors actually falling through the cracks. A senior who was receiving Meals on Wheels and other kinds of assistance from a seniors' neighbourhood link, as it's called, became ill and ended up in hospital. Nobody knew he was in hospital. The family doctor didn't know, the agencies didn't know, they didn't know where to find him. They stopped all services. He was in hospital, then came back out. Nobody knew he was out again to provide services. He became dehydrated, was back in hospital, that kind of vicious circle. That's just one example, but there are others.

So one of the recommendations this group in the hospital came up with was, yes, we need increased dollars, no question, in the health care system, but we also need to restructure and reorganize how we use those dollars and how we collaborate in all the services in the community, which are health determinants in themselves, to keep people healthy, whatever the age. In this case, it was seniors, but you're talking about children and it could work across. So for me, preventive health and restructuring and reorganizing the health care system is important.

The problem with that, of course, is that I don't know how we, at this level, would get that done, unless we go to the commissioner, because it's provincial jurisdiction. One could say, well, this is what should be done, but you can't prescribe, I don't think, and that's a problem.

That brings me to some of the other health determinants. Special child care for special children, no question, but child care in general, quality child care, when it comes to providing proper nutrition for children and so on, is part of a health determinant. That wouldn't be part of the health budget, but nonetheless, it's part of what contributes to a healthy society and keeps the cost down in the long term. The federal government spends dollars on “Healthy Babies”--there's a program in my riding called “Healthy Babies”--through Health Canada. That's not part of the health budget transfer, but the Government of Canada is spending those dollars.

So we have, I guess, all these levels of things that have to be somehow coordinated in our country. Maybe what we need is a national objective on healthy people, basically, and maybe this commission would be the one to, over the long term, look at how things could be coordinated or not coordinated. I'm not too clear as to how you intend it to work. If you have thought it out, maybe you can give me a bit more information on that.

My other question was with respect to accountability. There's accountability that deals with outcomes, and maybe the commission would deal with that. But there's also specific accountability as to where the money goes. The hospital I just mentioned has been waiting 10 years for an MRI. We've been begging and begging. When I heard that we were transferring a billion dollars to the provinces from the Government of Canada, I thought, great, finally we'll get an MRI. Well, Ontario spent it on private clinics.

Do we need to strengthen the Health Act? Does it need to be changed to stop the proliferation of private clinics or not? If we don't and it's there, we need to start pressuring for the job to get done. If we need to change the act--and maybe we should, I'm not too clear; I should be, but I'm not sure--maybe Ms. Sholzberg-Gray could give that, so we can understand something of what your intentions were with respect to the commission, and also with the accountability.

º (1655)

The Chair: Dr. Hanson.

Dr. Dana Hanson: I'm only too happy to try address that. I think you've hit the nail right on the head and been very insightful with your examples as to the continuum of care. In the past it has always been the question about its being, as Ms. Sholzberg-Gray has said, for physicians and hospitals. What we're seeing is that health care has moved out of those settings, it is across a broad spectrum, and I would actually challenge you and say child care is part of that. Child immunization, as we said, is part of that. When we look at the whole continuum of care and the broad spectrum, that's where we, as a nation, feel it is important, and we must have a federal presence in that to make it accountable and more equal across the board.

I think, then, when it comes to accountability, there's that whole question about the medical technology fund, where we found in the study we sponsored that only 60% got to technology. And in provinces such as mine, New Brunswick, it was on lawnmowers and tractors--

Ms. Maria Minna: Mattresses, pressure cookers--that's the frustration.

Dr. Dana Hanson: Exactly. All of those. That's the true frustration--

Ms. Maria Minna: It's frustrating.

Dr. Dana Hanson: Therefore, we would see a commission looking at health care in respect of the technology and what is available, accessibility to the system and to the technologies, but it also could easily envisage looking at health in the broader sense of health determinants. What about the economic conditions? What about the public health determinants of water and all those sorts of things? This is the realm of looking at health in that broad sense of determinants, and it would certainly be useful in monitoring trends and, very importantly, reporting back to Canadians as to where things are across the country, not just having it fudged in an individual jurisdiction.

So that's how we would see it, as moving forward on all those sorts of levels, not just limited to the narrow definition that at the present time the Canada Health Act tends to force us into. Do we need to change it? I think the regulations and things would probably, with a broader view of health and health care, be sufficient.

The Chair: Ms. Sholzberg-Gray.

Ms. Sharon Sholzberg-Gray: I'd just like to respond to the last question, which appeared to be directed at me, the whole issue of your waiting for an MRI in the hospital in your riding and being disappointed to see that MRIs were bought for some private clinics--

Ms. Maria Minna: In private clinics. I want to stop that.

Ms. Sharon Sholzberg-Gray: --and not necessarily for that hospital. It's a general issue. When the federal government has a targeted fund for medical equipment, it could set the conditions attached to the use of that money. So the federal government could say that in any community the priority shall be for the hospital to have the piece of diagnostic equipment. Once it has it and the community still needs more pieces of diagnostic equipment, then one could have them in other community settings.

I can give you a recent example that occurred with one of our members. In the Yukon the hospital desperately wanted a CAT scanner and didn't have one, and the Government of the Yukon announced it was going to have a CAT scanner in the Yukon, but it was going to be in a private clinic, and the real issue was that trauma patients in the hospital would then have to be moved out for their CAT scans into the private clinic. It seems to me that the federal government condition could be that in a community in which there is going to be one CAT scanner, one MRI, the hospital should have priority, and then perhaps you could look at other community settings.

So it's not inconceivable that the federal government could come forward with those conditions, and they're conditions, it seems to me, that most people would think are quite reasonable and quite acceptable. It doesn't require changes to the Canada Health Act. It merely says that when there are first ministers' agreements, those conditions could be agreed to. So that's one solution.

With respect to the Canada Health Act, changing it and that kind of thing, it would be good, for instance, if somebody took a look at the regulations that were first drafted many years ago when the Canada Health Act came into being. That would clarify what the Canada Health Act means and we don't have to rush to open it up, change it or anything. We should look at the regulatory approach first; that would be a safer thing to do.

I think the federal government can achieve its goals just through good negotiation, good agreements for the common good of all Canadians, and more money, of course.

» (1700)

The Chair: We'll now allow Dr. Wittenberg to have his say. Thank you.

Dr. Jean-Victor Wittenberg: Thank you.

I offer two comments. First, when I do an intervention, when I do research, I don't know how effective what I do is unless I know where my intervention is pointed. If the federal government is going to pour money into Canadian health care, it has to have some control of where that money is going or the government will have no way of measuring the effectiveness of what it's doing.

Along that line, the research is overwhelming that the closer we move to the private sector type of health care, the worse the kind of health care we get will be. Having sat on the board of an American organization, I have a lot of experience of seeing how dreadful that system treats people who are significantly ill. So that's one comment.

The second comment is that there are ways in which the federal government can intervene without changing anything directly, through things such as the early childhood development initiative. If we put more money into that, if we develop our kids and make them healthier from the start, they will stay healthier and they will learn how to take care of themselves better.

Ms. Maria Minna: That was a commitment of mine for two years, prior to the announcement on the federal-provincial arrangement. I want to see that really increased.

The Chair: Thank you very much. The time on this round is up, so I'm going to go to Mr. Cullen.

Mr. Cullen, you have eight minutes.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Madam Chair, and thank you to all the presenters for a very useful discussion.

I'd like to come back to this concept of a continuum. I think a couple of you have mentioned it, and it's certainly the way I like to think about health care. One of the things I haven't heard much about today is the whole area of preventative medicine, lifestyle issues, promotion, and education. I'd like you to maybe come back and touch on that area, because the treatment system is unfortunately under siege in the health care system. We talk a lot about prevention, promotion, and education, but we never seem to get there.

I'd like to come back to another issue, and that is that we don't have the benefit right now of the reports from Roy Romanow or Senator Kirby. Just reading between the lines, though, it sounds as though some kind of pharmacare, home care, long-term care, or community care types of issues are going to be on the table. The government is going to be seized with those issues.

I guess I have the following question for Ms. Sholzberg-Gray, Dr. Hanson, Mr. Tholl, and others if they wish to comment: Given that there are certain constraints on the fiscal resources that are available, I guess the government will have a number of different options. One would be to do everything, I suppose, but that may not be a realistic option. That would be to top up the CHST and reinforce the existing framework and the funding mechanisms. The other would be to get into the fray of some kind of national pharmacare or long-term care or home care types of programs. That's where there seems to be a gap in terms of the federal contribution to total health care costs. Where prescribed drugs are increasing, programs like home care seem to be very integral in terms of the delivery of the health care system.

I'm wondering where you would put your priority. Would it be to reinforce and better fund the existing framework, or for the government to get into new program areas like pharmacare or home care? I'll just use home care to characterize that. If it were the case that we should do a bit of both, how would you constrain pharmacare or home care given that, it seems to me, these are big-ticket items? The capacity of the government to fund these in a complete way may not be realistic in the short to medium run.

So those would be my questions. How would you design those to be realistic, given the fiscal capacity of the government?

The Chair: Mr. Tholl, and then Ms. Sholzberg-Gray.

Mr. William Tholl: Thank you very much, Madam Chair.

I think we're all looking forward to what Senator Kirby and Commissioner Romanow have to say.

As far as the CMA is concerned, we again look back in time to try to get some lessons about how we managed to arrive at where we are today. The lesson learned is that we got here by the instalment plan, with Saskatchewan introducing hospital insurance and then rolling it out across the country, and then with medicare later being introduced in Saskatchewan and rolled out. That's the way this is likely to occur, in our judgment, given the affordability constraints.

You're quite right. The estimates range from $7 billion a year upwards to have a pharmacare program or a home care program on the same footing as our hospital and medical insurance programs. What we're suggesting is that you start with the care in the home. If you don't provide it in the home, it would otherwise have to be provided in a hospital. In other words, it's a very tight definition of home-based and community-based care.

Obviously, along with that home care program, there would be out-of-hospital drugs that are provided in a caring home environment. We actually think there's an up-and-running pilot that has been going on for some time in the province of New Brunswick—it's called the extramural program—that we would start with. That would be on the cash side.

On the tax side, just to come back to what I mentioned earlier, we think you need to look at our current hodgepodge of tax policy. It goes from tax deductions starting with wigs and going through teletype machines and on down. It's a real hodgepodge. Start to look at how that could be used strategically to help those particularly where they have catastrophic drug expenses and so forth and do not have supplementary health benefits in the workplace.

So we would start with home care, although we're not saying it stops there. Start there because of the concerns about what's affordable in the short term, and then start to look imaginatively at how the tax system might support going forward with a home care and pharmacare program.

» (1705)

The Chair: Ms. Sholzberg-Gray.

Ms. Sharon Sholzberg-Gray: As I understood the question, you were trying to ask whether we should stabilize and enhance the existing medicare system by topping up the CHST. We had a very specific proposal regarding that, and we think it was quite modest and affordable, at $1.1 billion this year, and then with a certain escalator, which we only had at 2.5%. As I said, we think that's fairly modest.

At the same time, we didn't think we could ignore other parts of the continuum. I was looking at one of the TV networks all weekend. It was a news channel that, over and over again, repeated the same news item about how there were no beds in a particular hospital in Toronto because the top floor was filled with people awaiting placement in long-term care. They were in care at $750 a day in a hospital when they could have been in more appropriate care that would have been a fraction of the price somewhere else, but those alternative places weren't available.

It really isn't an either/or thing. We have to find a way of beginning. Hopefully it's not too incremental. I agree that we need acute care and replacement home care immediately, supported by the drugs that people need for the short-term home care. But one could also argue that it is not efficient and effective for us to have people using hospital beds when they could benefit from being in cheaper alternative settings like long-term care settings, or who would benefit from home care, which isn't there. Not to do it will cost more.

Should the federal government embark on this new, separate, national program? I think it has to. I think it could use the Social Union Framework Agreement as the jumping off point to make a start, to invest $1 billion.

The provinces all have programs in this area. The problem is that there's a patchwork quilt across the country. Do we want it to keep becoming more and more of a patchwork quilt, or do we want certain minimum national objectives that we can achieve? I'm not saying we have to do everything in one day, but we ought to make a commitment to try to resolve those things. If we don't, we're going to end up using less cost-effective settings.

That doesn't mean, of course, that we don't have to have a flexible hospital system that meets the needs of those who ought to be in hospital. They have to have access to diagnostics. They have to have access to the care they need. But we ought not to be using those settings for people who would benefit from other settings that are cheaper.

We have to move, I'm afraid, in all directions at once, but it seems to me that it's doable within the fiscal framework. If it isn't doable, why is it that those are problem areas? They're outside of medicare. Why isn't the private market coming to the front? Why isn't it all solved? Why do we even have a long-term care problem, a pharmaceutical problem, a home care problem, if private market forces alone could do it? They're entitled to do it. The Canada Health Act isn't stopping them, yet these are crisis areas in our country. Obviously governments have to come to the fore, otherwise we'll continue to have problems. Private market solutions aren't working in those areas. If they were, we wouldn't have to be talking about them. It seems to me governments have to move.

On primary health care reform, you talked about health promotion and disease prevention. If we had a proper primary health care system, based in communities and with access to a variety of services, then the health promotion and disease prevention activities and services would be part of that primary health care system.

» (1710)

Ms. Helen Ghent: I have a comment about prevention and lifestyle. I think one of the problems is the way governments do business. We do work in silos. The Department of Finance worries about the bottom line. When I went to speak to them about tobacco, they frankly didn't care about how many people died. They're just interested in the bottom line. I think with all of the things the government is responsible for, it has to start to change the way it does business and work together. Because I believe compulsory physical education in the classroom is a health issue. The answer may be that we need to have a bike path. You can't just take health away from other parts of life. How that is achieved I'm not sure, but I really do believe we have to be innovative in our thinking, and I believe, with Dr. Wittenberg, it starts with the young.

The Chair: Thank you.

We have finished the first round. I'm going to do a second round, but I'm going to suggest that since not everyone wants to ask a question, we go one short question and answer each, and I'll alternate back and forth.

Go ahead, Mr. Lunney.

Mr. James Lunney: Thank you, Madam Chair.

To our friends from the Canadian Medical Association, I've been going through your “Prescription for Sustainability”, which I have been privileged to look through before. One of the issues that is very difficult to deal with in defining the public health care system--and I see you've covered that on page 12 of your brief--is talking about core services. If I could just quote briefly, you say “No country in the world has been able to provide first-dollar coverage for timely access to all services”. Of course, this is why we have the 70%-30% split now, and what mix we are going to end up with in the future remains to be defined.

You say here:

As health care has evolved, more and more services have migrated outside hospital settings, effectively reducing the relative size of the basket of core services.

In your recommendations I note that you say:

That the scope of the basket of services be determined and updated regularly to reflect and accommodate the realities of health care delivery and the needs of Canadians. That the scope of services not be limited in its current application to hospital physician services.

You are dealing with a rather difficult issue here, and I applaud you for taking it on, but it has to be addressed. I wonder if you would address the CMA's perspective on how to define what services ought to be covered and so on.

Dr. Dana Hanson: I appreciate the question, because often it comes back to that whole thing of how we expand it, how we get it to the continuum that we've been talking about, how we do that in a logical and progressive way. One element is that those sorts of things that would be added to the core basket of services would be evidence-based, where there is good scientific evidence that they will indeed be useful and will have a positive outcome on the health of Canadians. Second is that they are ethical in the broadest sense. The third is that they would be economical. One cannot ignore that part of the equation when you are looking at these, regardless of what the funding mechanism is, the reassurance of those sorts of guidelines. As to how one would expand the basket first within the hospital and within physician services, as technologies in those settings do increase, and then, very importantly, how you would expand it into the further continuum, you need that sort of guidance. It would then fall back on the commission to make sure those sorts of guidelines were indeed in place as one rolled out a further necessary core basket of services.

The Chair: I'll just allow one supplementary.

Mr. William Tholl: Very briefly, it would still be the decision of the provinces to determine what's in and what's out. However, if you contrast what we're saying with what Mazankowski said in his report, we don't think it's possible to have evidence-based guidelines province by province. We think the evidence is the evidence. It ought to be done once, it ought to be done well, it ought to be done by the national health commission. Then that information helps guide provincial decisions. They would determine the rate at which they would add to what they define to be core services in their province.

» (1715)

The Chair: Okay, thank you.

Mr. Valeri.

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Madam Chair.

I've been listening to the discussion here this afternoon. I'm interested in the state of palliative care in particular. I wondered if anyone has hit on that. You've talked about long-term care and home care, but I'm interested in the state of palliative care and what role the federal government should play in that area.

Second, as health care providers or representatives of the health care providers, what's your opinion of the whole regulatory process with respect to drugs? We've talked about pharmacare and the increasing cost of drugs, a very big part of the whole health care equation, yet nobody touched on the regulatory process that exists in Canada, and perhaps you could assist us by providing some of your opinions in both those areas.

The Chair: Dr. Wittenberg, then Dr. Hanson.

Dr. Jean-Victor Wittenberg: As to palliative care, I expect that you're already aware of it, but I'll just bring up the fact that the government has promised in the last two Speeches from the Throne to provide support for family members of people who need palliative care. That's an important aspect of their health care and of protecting the family.

Mr. Tony Valeri: I understand that, but are there funding areas we should be participating in with respect to palliative care?

Dr. Dana Hanson: From my experience from New Brunswick, we certainly are in that. One of the most socially responsible areas of the extramural hospital has been with palliative care. When you talk about the extramural hospital, care outside the hospital and funded if you weren't there, one can say, yes, it reduces beds, etc., but when we talk about true social impact, everyone who has had experience with palliative care through that program has been extremely positive about having a loved one either die at home if they so wish or stay at home as long as they need to or feeling comfortable, themselves or their family. That has proven to be extremely useful. It is very progressive if it does keep up with the whole question of pain in the palliative setting, which I think is absolutely essential and has been extremely useful. When we're talking about moving out beyond the hospital and beyond this box we're in at the moment, palliative care in the home care setting is extremely useful. So I think it is addressed among the things we would like to see.

With regard to the drugs, the formulary approach that has been taken by the provinces I think is a very big step forward. There are other areas in which the costs are being looked at with the industry itself, but it needs a great deal more work and needs to be highlighted.

The Chair: Okay.

Madame Picard, do you have one small question?

[Translation]

Ms. Pauline Picard: I'd like to talk about telemedicine. I think Dr. Hylton should be able to answer my questions. Since 2000, the federal government has invested $500 million in this sector. How do you feel about using this technology more extensively? I'd also like to know if any of the initiatives taken thus far in this area have produced positive results.

[English]

The Chair: Dr. Hanson.

Dr. Dana Hanson: I think that's a very exciting area, one in which there have been a number of pilots carried out in a number of areas, such as in Newfoundland, which has a long history of telemedicine. There have been some projects in Nova Scotia, as well as others across the country. In the crunch we're in with regard to human health resources, they have proven to be extremely useful and adaptable to the needs of the people in those areas. That is not to say there is not some further application to these areas, and I think Canada Health Infoway is looking into many of those areas.

I think one of the areas we've included in the submission today is not an overlap with that, but it also says that when we come to information communication technology, we have to bring the professionals up to speed on that side in order to implement these very innovative and very useful things that continue to give a very good quality of care if they are properly structured. And we would applaud further research and implementation of these with the moneys that have been made available, realizing that they may indeed uncover systems that may well cost more, but if they address the needs of the people in those communities most effectively and with the best impact for them, we would, as a nation and as a federal government, have to consider those very seriously.

» (1720)

The Chair: Dr. Hylton.

Dr. John Hylton: I would just point out that we have a number of very exciting projects happening across the country in telemedicine, which mostly have to do with access to specialists, and there are projects in teleradiology, telepsychiatry, teledermatology, and many other areas where services to remote areas are being significantly improved because of the use of technology. There are evaluations currently under way that will provide much more information about just what those projects are accomplishing.

But there is a series of other initiatives that relate to providing more general health information. One of the trends across the country has been, for example, setting up a telephone line where people can phone for general health information. A number of provinces have also done manuals, home health guides, including B.C. We have quite a number of practitioners in the country experimenting with different ways of getting information and support, particularly to rural areas. A number of quite significant research projects are under way currently, supported by CIHR and other funders, that are investigating exactly what works and what doesn't and trying to capture the effects of parts of those programs so that they can be expanded. It's a very exciting area, and there is a lot of activity across the country looking at it.

The Chair: Mr. Murphy.

Mr. Shawn Murphy (Hillsborough, Lib.): I just want to address a question to Madam Sholzberg-Gray. I agree with much of what you are saying. I question whether there will be the activity in this year's financial statement--that's pretty optimistic--but I think we are all looking for a totally sustainable system. It is my fear that in three years' time we'll be having the same discussion here. I believe the federal government has to put more money in. There has to be systemic change, but there are a lot of other demands.

Looking at it in an international context, I certainly don't want to go to the United States model, but is there any other country that suggests what we should be looking at from a best practices point of view?

Second, is there any thought on the percentage of GDP that would go on health care? I think we're at 9% now. If we went to 10%, 12%, 14%--do you see a maximum limit?

Ms. Sharon Sholzberg-Gray: On the first question, among OECD countries in the 9.2% or 9.3%, where we are, we're about number five, but remember that includes public and private spending together. Public spending as a percentage of GDP is something like 6.4%. When we compare ourselves to other OECD countries, we are about 21st in the public-private ratio, so we're one of the low public spending countries in the world. In fact, we spend less on public health in Canada as a percentage of GDP than they do in the United States. They just don't get as good a bang for their buck. They spend slightly more, maybe 6.5%, as opposed to our 6.4%, of GDP on the public side. Of course, they spend a lot more on the private side. We're not really spending a lot either in per capita terms or in percentage of GDP on the public side. It's on the private side where we're spending more than the countries we could compare ourselves to.

As to whether they all have the magic answer, whether they are having the most efficient, most effective health systems in respect of where the funds are going and whatnot, I think we all have the same list: money spent on health promotion and wellness programs, an appropriate approach to drug utilization and drug formularies and that kind of thing, a positive approach to end-of-life care and palliative care, rather than throwing everything at an individual in making sure they're comfortable and doing as well as can be, making sure people have access in a timely way to diagnostics, treatment that's needed, and those kinds of things, having centres of excellence. Everyone agrees that it's better to have centres of excellence than lots of small clinics that provide services perhaps without as good outcomes, which, by the way, is something that would happen if we had a lot of private clinics, as opposed to centres of excellence. We ought to think about that when we're thinking about little 30-bed private hospitals, as opposed to centres of excellence that could ensure high quality and high performance, but that's a whole other issue.

Everyone has the same primary health care reform that is community-based, that provides 7/24 services with the help of telehealth, and those kinds of things--everyone has the same list. The real problem is, we talk about it and we don't do it. The issue is how we move from A to B, how we move from debate to action--and oughtn't we do it once and for all, now that we have an opportunity to do it? Otherwise, three years from now we're going to be having the same discussion.

Integrated approaches provide another example, not having the silo approach--all of those things. Everyone has the same list. Everyone talks about it. In some parts of the country they are making strides on moving forward, in others they're not. There's the evidence-based approach. In other words, all these things are on the list. I could go on and on.

The real issue is that we have to move, and how are we going to move through making the decision once and for all to invest to achieve those objectives, to encourage the provinces, but with them still having the right to do what they want within the provinces, to try to achieve those objectives, to measure the performance, to measure the outcomes, to have the commission that will hold government's feet to the fire? In other words, we have to do it. We have to make the decision that this time we're all going to move and we're all going to move together, because that's in the interests of Canadians.

» (1725)

The Chair: Thank you.

Our final questioner of the day is Roy Cullen.

Mr. Roy Cullen: Thank you, Madam Chair.

I just wanted to pick up on a question asked by my colleague, Mr. Valeri. I'm not sure if he was asking this question specifically, but I will ask you this. I don't know if you have examined this in any depth at all, but yesterday President Bush of the United States indicated that he's going to rewrite patent regulations to end illegal mechanisms used by brand-name drugs, pharmaceutical companies, to extend the market life on drugs past their 20-year patent term. Under U.S. law, brand-name companies can win automatic 30-month injunctions and block the sale of lower-priced generic versions merely by alleging patent infringement.

Now, certainly when the generic companies talk to us, that has a very familiar ring to it. So I guess my question is twofold: do we have the same problem in Canada, and if we do, should we be enacting similar legislation?

The Chair: It looks like a couple of you want to take that one on. Who's going to go first?

Mr. Tholl.

Mr. William Tholl: Not only is there the same problem in Canada, there's the same problem worldwide. I think it's worthy of saying, although it hasn't been said today, that there's an upside to the increased drug costs that we're paying and that other countries are paying. It's measured, in some ways, by the reduction in hospital costs. So I think one has to look at what drugs bring to the table, both as a potential benefit centre as well as a cost centre. That's the first point.

Point two is, yes, as I understand it, exactly the same problem is here in Canada. There's a provision that blocks, even after the 20-year period of exclusivity, the no-name brand drugs from getting onto the market. We've been suggesting for some time that there's an answer that requires multilateral discussions, not just within Canada. There's only so much Canada can do on its own to try to better manage drugs and to maximize the upside that I'm talking about.

Provinces have initiated that in terms of premiers agreeing--Sharon's mentioned it, as have we--with the first start being a sharing of notes on what works and what doesn't work. But I think the longer-term answer lies in looking at Canada and the world and the worldwide problem of managing drug care costs.

The Chair: Thank you.

Ms. Sholzberg-Gray.

Ms. Sharon Sholzberg-Gray: I think the first step is to stick to the 20 years and to not have frivolous ways of extending the 20 years. That's the position of our association. If we stuck to the 20 years, we'd at least be giving the brand-name drug companies the protection of 20 years so that they would invest in the research, and there's a reason for doing that. On the other hand, trying to extend the 20 years through just making an allegation of patent infringement or that kind of thing is maybe a frivolous way to go.

It seems to me the 20-year rule ought to be a 20-year rule, and we should find a way to make sure that's asserted. It is true that there will be cost savings, ultimately, by having more generics and of course reference-based pricing, as they do in B.C., where the lowest-cost drug is the rule, and that type of thing.

So I think there are ways to reduce drug costs, and strictly adhering to the 20-year rule is a good start.

» (1730)

The Chair: Thank you very much on behalf of all the committee members today. Your presentations were excellent. With the exception of one, you've been here many times before. Certainly we always look forward to hearing your input, because we know you come with so much experience. Again, thank you very much for the evening.

Tomorrow we'll see the Governor of the Bank of Canada at 3:30 p.m. in this room.

We are adjourned.