Mr. Speaker, last week we all saw the introduction of the Kirby report on medicare reform. I would say that the Kirby report was a classic case of medical malpractice. It had the wrong diagnosis, in my mind and in the minds of New Democrats, for what ails our health care system today.
Like other opponents of our health care system the Kirby report wrongly claimed that government could no longer afford medicare. It conveniently overlooked the fact that nationally we spent a smaller percentage of our GDP on health in 2001 than we spent in 1992, 1993 and 1994. Is less than 10¢ on every dollar of our collective wealth too much to spend on health care? Most Canadians would say no.
The Kirby report astoundingly, after much supposed consultation, flies in the face of what Canadians want in their health care system. The Kirby report begins with the premise that health care is a commodity to be bought and sold, and that medicare should be subjected to market based reforms. The majority of Canadians have made it clear that they do not agree with this recipe. Instead they view the medicare system as a public good that should be protected from the market.
The Kirby report advocated the further privatization of our public medicare. The report claimed that it did not matter who owned the health care institutions or services. Public studies have shown that private for profit health care is more expensive, inequitable and unaccountable than any public system.
The Kirby report ignored the threat international trade deals pose to our public medicare. The report approved private for profit ownership of care but ignored the far reaching and adverse implications of this under the North American Free Trade Agreement and other trade deals.
The report did not recommend adding home care and pharmacare or long term care to the Canada Health Act. These are issues we have just been discussing across the floor. These are critical issues for an aging Canadian population.
The report recommended a limited approach to expanding medicare to include home care, but did not address the root causes of soaring drug costs and excessive patent drug protection. The report made no specific recommendations for increased public spending of long term care and ignored the need for national programs and standards in these three crucial policy areas. The Kirby report had no cures for our system and simply kicked out further the foundations of our proud, effective and efficient health care system.
The question is, what is it that has brought our system to the state that it now finds itself in? New Democrats and Canadians believe that the Liberal government's policy of underfunding health care has created the breeding ground that enables opponents of medicare such as Ralph Klein and Senator Kirby to exploit public concern. New Democrats will be fighting for full restoration of federal funding for health care, as well as a renewed plan that includes expanded universal health care beyond hospital walls to take in home care and prescription drugs.
Tommy Douglas first established medicare in Saskatchewan over 40 years ago. Twenty years later he saw his vision of a national health care system destroyed by the practice of double billing. In a speech in 1982 he rallied support for federal action by declaring that he for one would not sit idly by and see that happen. The Canada Health Act results from his efforts. Tommy Douglas did not sit idly by and neither will we.
Privatization, long waiting lists for surgery, crowded emergency rooms, woefully inadequate home care and long term care, shortages of family doctors, nurses and other professionals, that is the Prime Minister's legacy thus far for our health care system.
The Romanow report due in November is expected to provide a blueprint for a renewed federal role in health care. New Democrats believe that this renewed role must be a significant increase in federal funding to the provinces, an enforcement of the Canada Health Act to stop the proliferation of private clinics and hospitals, and the introduction of the long promised national pharmacare and home care programs. New Democrats will be fighting for these measures, and will oppose any “rob Peter to pay Paul” proposal for funding the federal increase in health care transfers.
We have seen trial balloons about increasing the GST or further cutting employment insurance to pay for increases in health care funding. Such moves would be unfair and unacceptable. If the Liberals need more revenue for health and social programs, they should look first at the ill-advised tax cuts contained in the former finance minister's 2000 budget. Those tax cuts benefited the banks, big business and the wealthy.
People often ask: How would the New Democrats fund the health care system, and where would they create the wealth that is required to put this system back in the shape that is required? I would like to put forward some concrete ways that we would suggest to put the needed resources into health care.
Next month, Mr. Romanow will complete his report on health care and recommendations for reform will cost money. We all know that. The government has refused to rule out a tax hike. We are against the idea of a tax hike or increasing the GST. We believe in a progressive, sustainable tax system and, moreover, we believe that health care funding should come out of general revenues.
I do not like the idea of dedicated taxes, like those being floated, which would corrupt the flexibility of the federal government. A dedicated tax is a last resort idea which should be adopted only when all else fails. The goal is to ensure that the burden of health care costs would be fairly and progressively shared by restoring the progressivity and the sustainability of our income tax system. Here are some suggestions as to how we could do that, how we could raise the revenue necessary to fund our health care system.
On the revenue side, we would start by closing some important tax loopholes, such as tax expenditures which target certain individuals and industries, and which are not in the public interests. We could close or narrow the scope of some of these tax expenditures to generate additional revenues for the federal government.
For example, there is the capital gains tax. In 2000 the former finance minister announced two consecutive reductions in the capital gains inclusion rate, the first from 75% to 66% and the second from 66% to 50%. The Liberals underestimated the cost of those tax expenditures, almost a million dollars for 2001 alone. If we were to restore the capital gains inclusion rate to 75%, then we would retrieve an average $1.2 billion a year in additional revenue to put back into our health care system.
A second suggestion that would help at this point to get more money into the system would be to restore the progressivity of our income tax system. Over time, the number of income tax brackets and the associated marginal tax rates have fluctuated wildly. In the 1960s the marginal tax rates for top income earners was as high as 60% for incomes over $400,000. However, in 1972 dramatic changes were made in the Income Tax Act, including a reduction to the top rate to 47%, and later to 43%. In 1987 there were 10 marginal tax rates, ranging from 6% on the first $1,320 of income to 34% on taxable income exceeding $63,000.
In conclusion, we believe that by adding another tax rate and by working on capital gains loopholes we would be able to begin to address the inadequacies in the funding in regard to the Canada Health Act.