Finance Committee on Sept. 21st, 2022

[Jay Goldberg]

Certainly you could have fewer strings attached. The issue, again, would be the accountability issue. Perhaps it would be somewhat lessened if the federal government said they were going to give this money without conditions, and therefore it would be up to the provincial government to accept responsibility, but it's a similar issue in that you're sending money from one level to another level to then deliver services, whereas voters are not able to hold them accountable.

So perhaps that would allow for a bit less of an issue, but again, provincial politicians will still take the opportunity to blame the federal government for a lack of funding.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Goldberg, and thank you, MP Lawrence.

We'll now have questions from the Liberals.

MP MacDonald, you have six minutes.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

I want to continue this conversation just a little bit with the Canadian Taxpayers Association. In one phrase, you talked about accountability and then you related it to health care. We're actually dealing with accountability issues in health care on transfer payments to the provinces.

I'm a little confused by your comments. You're talking about accountability in one sense, but in the other sense, it's a confusing message. I just want you to clarify the accountability measures in health care and the transfer payments to the provinces.

[Jay Goldberg]

This is exactly the point. There are two kinds of accountability here. One kind of accountability is that if there are strings attached to funding, the federal government is making sure that the provincial government is doing what the federal government wants. The primary mechanism of accountability that's lacking is for voters and constituents, who expect to see the delivery of those services, to actually judge the results.

There's a difference between being accountable to a federal government that can pick any of its own criteria when it wants to judge where provincial spending is going.... It is not the same kind of accountability when you have the average citizens at the local level, who do not feel that the operating of their system is sufficient.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

I'm going to flip right to the Canadian Health Coalition.

Look, this is all kind of entangled, to use that term loosely. We've seen that some provinces, such as Quebec and British Columbia, are calling for large Canada health transfers and for increases while cutting taxes and running large surpluses. The Canadian Centre for Policy Alternatives has published a report noting that the Province of Ontario, for example, has reduced its own revenues by $7.5 billion.

What role do provinces play in our health care systems? Could the Canadian Health Coalition respond to that, please?

[Steven Staples]

I'll defer a little bit to my colleague Keith Newman about this. He is an economist, and he may have some comments.

I actually find myself in agreement with Mr. Goldberg, because the problem has been that the provinces have successfully managed to play a bit of a blame game here and point the finger at the federal government for areas that they are responsible for. I think the federal government and Mr. LeBlanc quite rightly pushed back on that over the summer, following the meetings of the premiers in Victoria, by saying, look, we do fund a lot, and we expect to see some outcomes. They took issue with the numbers.

Our current, modern health care system wasn't even envisioned in 1867. While it does fall largely to the provinces, it is a shared responsibility. The federal government does have a role in it. Its major role is through the landmark legislation that governs the billions of dollars in transfers, which is the Canada Health Act. The five principles of the Canada Health Act are designed to make sure that we don't have the kind of balkanization and disparities in our country that I think some of the measures Mr. Goldberg is putting forward would result in.

You know, I'm from New Brunswick. We are part of a national project here. We want to have a Canada Health Act that ensures that health care services are accessible and affordable across the country. The federal government plays an essential role in that.

So yes, the federal government is putting up money. It has historically come to arrangements with the provinces. But it does have the right, I think, to ensure that there's accountability for that and to look for some outcomes under the Canada health transfer and, at a minimum, the five principles of the Canada Health Act. Plus, bans on extra billing and user fees have to be in place. We need to see a strengthening of the Canada Health Act in particular, but also special programs for health care programs like the ones we're seeing with dental, we've seen with child care, and we would hope to see with pharmacare, where outcomes are guaranteed for the federal dollars. Increasingly, I think, that's what Canadians are looking for.

[Keith Newman, Economist, Canadian Health Coalition]

Could I add a point on that?

[Heath MacDonald, Liberal, Malpeque, PE]

Sure.

[Keith Newman]

The idea that we would have a balkanized system with every province running about doing its own thing, I obviously don't agree with. There are things that have to be coordinated nationally. For example, my colleague mentioned pharmacare. Well, with a universal public pharmacare plan, we could, as a country, negotiate our prices. Now, we have 110,000 plans. We'd be much better off having one plan that we can bargain with for the drugs, for prices and for access and all these kinds of things. It makes no sense to have a super balkanized system. Frankly, I'm confused about that.

Second, this whole pharmacare thing, because it would be a national plan with all these various benefits, would save massive amounts of money: according to the Hoskins report, $16 billion a year just for employers. I mean, yay, employers will save $16 billion a year. Individuals will save $6 billion or $7 billion a year. Now, it's true that the federal government will pick up some of that money, but it will be able to save all of us a lot of money: at least $5 billion a year, probably more. That's a great thing. That would be a federal government program, and there is no alternative to that.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP MacDonald and Mr. Newman. That is the time.

We are moving now to the Bloc and MP Ste-Marie for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I have a few remarks before I begin my questions, which are for Mr. Staples. My remarks are unrelated to my questions.

Firstly, I would like to remind my colleagues that the provinces are grouped for negotiating drug prices in order to reduce costs. So there is some leverage.

Secondly, in response to what Mr. Goldberg said, I never suggested that Quebec would be unwilling to develop its natural resources in order to receive higher equalization payments. I am dumbfounded by that statement; I cannot believe it. It shows how little is known about Quebec.

Quebec develops its natural resources. That includes mines, hydraulic resources, forestry and fisheries. Clearly, we do not have the same resources as other parts of the country. Quebec does develop its resources, however, and does so sustainably, at least that is my commitment.

We also want to develop our manufacturing sector. Yet it is very difficult to develop the manufacturing sector when only half the government supports it. The federal government focuses more on other areas of economic development, especially if you factor in the value of our currency, the Canadian dollar. This is known as Dutch disease.

When the value of the dollar climbed on the strength of natural resource exports, starting with hydrocarbons, that really hurt the manufacturing sector, which was a strength of Quebec's economy.

Considering what the federal government does in terms of economic development, stimulus and mobilization of its apparatus, equalization payments are poor consolation. We would rather see our sectors of the economy achieve their full potential.

I wanted to make that clear. It is absolutely not the case that Quebec does not develop its resources in order to receive equalization payments. Even someone with advanced degrees needs to do their homework on this topic.

I will now move on to my questions for Mr. Staples.

In the first hour of our meeting, we heard from Mr. Seth Klein. We know his sister wrote the book, The Shock Doctrine, which suggests that crises are created in order to get people to accept privatization, for instance.

Mr. Staples, you say you are opposed to privatization, as is Ms. MacEwen. Would you agree that chronic underfunding may have led to the degradation of public services, which in turn leads the provinces to turn to the private sector because of that underfunding?

If so, do you understand that federal budget cuts to health care date back to the 1990s, when the federal government wanted to wipe out its deficit by reducing health and social services transfers?

My questions are for Mr. Staples, But Ms. MacEwen may also answer if she wishes.

[Steven Staples]

Pardon me, but there was no interpretation. Perhaps Mr. Newman can answer for me.

[Keith Newman]

Thank you, Mr. Staples.

Thank you for your question—

[The Chair, Liberal, Peter Fonseca]

I'm going to interrupt, Mr. Newman.

Mr. Staples, did you select the interpretation for English? There should be a globe at the bottom of your screen, and interpretation. I want to make sure you capture everything that's being said.

Thank you.

[Steven Staples]

Thank you.

[The Chair, Liberal, Peter Fonseca]

You may continue, Mr. Newman.

[Keith Newman]

Thank you.

You are completely right in saying that the federal government failed in its responsibilities, so to speak, in the 1980s. It did indeed try to reduce its budget deficit on the backs of Canadians, which was obviously a very bad thing. We were completely opposed to that.

Austerity was a pretext. The government said it had to balance the federal budget, which is by no means necessary. As we have seen recently, the issue is not accounting. The federal government is responsible for balancing the Canadian economy, not on the basis of some financial figures, but rather in accordance with the needs of all Canadians and Quebeckers, and it failed to do so. You are completely right.

Our organization, the Canadian Health Coalition, does in fact push the government to fund national programs across the nation, including insurance for prescriptions and dental care, and so forth. As an economist, I would say that these programs are much more effective when they are centrally administrated and funded, by the federal government, and when they are not for profit, a point I wish to emphasize.

We are not necessarily opposed to the private sector, but we are opposed to making profits on the backs of the sick. In this regard, we would like the federal government to set rules for...

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Newman and Mr. Ste‑Marie.

We've gone well over the time, but thank you.

We're moving to the NDP and MP Blaikie for six minutes.

Go ahead, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

Mr. Goldberg, I thought it would be useful for the committee's deliberations if you could itemize for us or give us a list of the provinces you think are actively discouraging natural resource development in order to maintain their equalization revenue.

[Jay Goldberg]

If I could give an itemized list...?

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Yes. Which of the 10 provinces do you believe are actively discouraging resource development in order to maintain their equalization revenue?

[Jay Goldberg]

Well, what we've seen is that there are provinces all across the country that haven't done enough to develop natural resources.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Could you name one, please? Ideally, you could name all of those that you think belong to that category, but you could start with one and then carry on to the others.

[Jay Goldberg]

Well, you know, we spoke about some of the projects that could be developed in Quebec, for example. We've spoken about projects in other regions, in Atlantic Canada. I think Premier Legault and others have talked about wanting to get away from equalization and better developing local economies.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is it your contention that those governments are actively seeking not to develop their natural resources in order to maintain their equalization revenue? You mentioned the Atlantic region, so I take that to mean Newfoundland and Labrador, P.E.I., New Brunswick and Nova Scotia, as well as the Province of Quebec. Are there any other provinces you'd like to add to that list?