Trudeau’s National Pharmacare plan won’t come cheap
It’s a familiar pattern from the Trudeau Liberals.
First, fail to provide leadership on important economic projects.
Then, use tax dollars to cover such failures, all the while imposing value-driven demands on provinces.
What quickly follows is lost revenue, fewer jobs, more debt, and new taxes.
The latest pet project seems to be a national Pharmacare program, firmly controlled by Ottawa. While Canadians would love to have some relief from rising prescription drug costs, Prime Minister Justin Trudeau’s experiment is bound to face the usual mismanagement of Ottawa’s big government bureaucracy, followed by legal challenges from the provinces over jurisdictional issues.
In our federal system, health care is provincial jurisdiction. Over the years, several federal-provincial tussles, including numerous court challenges, have not only wasted tax dollars, but also created duplication and more red tape.
While lip service was paid to the idea of cheaper drug costs, Ottawa’s dabbling in a new Pharmacare program received little interest from various premiers wary of yet another intrusion in their jurisdiction.
At this year’s annual premiers’ summer gathering, participants were divided into two groups: those who had no intention of participating in a federal drug plan; and those who did not want to share the costs.
Besides open intrusion into their jurisdiction, the premiers objected to Ottawa setting national standards and imposing more financial burdens on cash-strapped provinces.
To pay for this new program, taxes will need to rise substantially, warns former federal budget officer Kevin Page.
Already, there is talk of taking GST back to 7% from the current 5%. But it’s not just federal taxes – provincial governments will have to find a way to meet the requirements of this national program.
No wonder the premiers gave such a cool reception.
The existing national standards in health care imposed on provinces by the federal government is already a cause of friction, and has added another bureaucratic layer to the delivery of health care services.
Health Canada, without any constitutional jurisdiction, employs 9,304 full-time and 1,025 part-time (2018 figures) bureaucrats duplicating the work of their provincial counterparts.
The costs associated with maintaining such an army of federal employees could be better used to deal with challenges in the health care system.
Further, Ottawa’s record of management and leadership failures speaks volumes about potential Pharmacare challenges. Look at the Phoenix pay system, which the Auditor General called a complete failure. A Senate Committee found that by 2023, Phoenix will cost the Canadian taxpayers $2.2 billion in unplanned costs.
Or the federal long gun registry, supposed to cost $2 million per year. Instead, it cost billions until it was scrapped.
Ultimately, government overspending is downloaded to taxpayers and employers. Employers with current extended benefits are in the dark about the potential impact of federal Pharmacare. Employers in B.C. learned the hard way about downloading, when the NDP government sprung the Employers’ Health Tax on them to defray the cost of phasing out the Medical Services Premium.
How employers will have to alter health coverage, and at what cost, is unclear.
The price of invading provincial jurisdiction is clear: higher taxes for Canadian taxpayers; higher operating costs for Canadian employers.
National Pharmacare sounds wonderful in theory – so long as you don’t look at the price tag.
Dr. Shinder Purewal is a professor of political science at Kwantlen Polytechnic University, a regular political commentator, and the author of two books, Tandoori Democracy and Sikh Ethnonationalism and the Political Economy of Punjab. He lives in Surrey.