Thanks very much.
The Canadian Health Coalition is a national public advocacy organization dedicated to the preservation and improvement of public health care. Our membership includes organizations representing health care workers, nurses, retirees—I'm one of them—churches and trade unions, as well as coalitions in 10 provinces and one territory. I'm a member of the CHC board. I have a masters degree in economics from McGill University, and I am a constituent of Mr. Fergus who is sitting over there.
The CHC supports the implementation of a national universal public drug plan, as proposed by the HESA committee earlier this year. We ask the finance committee to recommend financial support in the 2019-20 budget for its implementation. Today I would like to focus on some of the financial and broader economic reasons for our support.
Some of you may be aware that currently, prescription drugs are provided through a patchwork of more than 100 public and an incredible 100,000 private plans, a system rife with high prices and excessive administration costs. Drugs should be included in medicare just like doctors and hospitals. A universal public plan would consolidate bargaining power at the national level and lead to lower prices through bargaining with pharmaceutical companies. Countries similar to ours with single-payer pharmacare, including Sweden and the U.K., spend only about two-thirds what we do on prescription drugs. We would achieve similar savings.
In 2016, if we had had a public drug plan, employers would have saved a remarkable $9 billion in that year alone. Every year, year in and year out, employers would save about almost $10 billion. A reduction in costs of this magnitude would enhance the competitiveness of Canadian businesses. The automobile industry has pointed out the value of public health care covering doctors and hospitals to its Canadian facilities. Pharmacare would add significantly to that advantage.
I would just like to note that the burden is not only financial. A public plan would also allow businesses to focus on running their firms rather than managing and bargaining drug coverage for their workers. From a business perspective, I have to tell you that an officer of a very large company once told me how she supported a public plan, because rather than deal with pressing business issues, she often had to deal with employees unhappy with the company's drug plan. She had no knowledge in the area, of course—how many of us do?—whereas a public plan would have specialists who could determine which drugs to cover based on the evidence. I would add that these specialists should be free of financial or other conflicts.
For households, if a public drug plan had been in effect in 2016, savings would have totalled $7.1 billion in just that year, once again, year in and year out. These numbers are according to the Parliamentary Budget Officer. When premiums are included, it's $7 billion. People can invest that money in themselves or their small businesses or pay down debt.
In this case, the leadership of the federal government will be critical and must contribute a significant [Inaudible—Editor] to the program to induce the provinces to participate and to follow national standards. The CHC believes that the federal government should fund at least 50% of pharmacare. When medicare began 50 years ago, the federal government covered one half of the cost of doctors and hospitals, and it should do the same today for pharmacare.
Net new spending by the federal government would be rather modest given that it currently spends almost $3 billion on prescription drugs directly, as an employer, to first nations and others, and indirectly—and this is the largest part—through tax credits. Should money happen to be needed to be raised for pharmacare, it should come from small increases in personal and corporate income taxes, the fairest sources of taxation. An increase in the GST should not be considered. That would be both unfair and unpopular. A positive new program should not be associated with it. Might I add—and I would like to underline this three times—nor should a payroll tax on workers or employers be considered. Such taxes amount to a tax on jobs, increase their costs and hinder job creation. The competitive advantage of lower costs for employers would be negated by a pharmacare payroll tax.
To sum up, I'd just like to say that public health care can be thought of as part of Canada's social infrastructure, just as bridges, roads, ports and railways are part of our physical infrastructure. Efficient and fair drug coverage will add to our country's overall productivity and competitiveness. It will lead to a healthier population and less time away from work. It will reduce the burden on the health system caused by, it is estimated, 100,000 needless admissions to hospital every year resulting from non-adherence to required medication due to cost.