Fraser Institute
Dearth of medical resources harms Canadian patients
From the Fraser Institute
The imbalance between high spending and poor access to doctors, hospital beds and vital imaging technology, coupled with untimely access to services, can, and does, have a detrimental impact on patients.
Whether it’s a lack of family physicians or other health-care workers, Canadians know we have a serious health-care labour shortage on our hands. The implications of this shortage aren’t lost on patients (including Ellie O’Brien) who’ve possibly faced delays in accessing organ transplants because potential donors need a regular family doctor to screen them to begin the transplant process.
Given these access issues, coupled with some of the longest recorded wait times for medical procedures on record, is it any wonder that Canadians are dissatisfied with how their provincial governments handle health care?
While one instinct might be to demand governments spend more on health care, it’s not clear we’re getting good value in return for what’s already being spent. In fact, compared to 29 other high-income countries with universal health care, Canada spent the most on health care as a share of the economy at 12.6 per cent in 2021, the latest year of available comparable data (after adjusting for differences in the age structure of each country’s population).
But what do we get in return for this spending?
As far as medical resources go, not a whole lot. In 2021, Canadians had some of the fewest medical resources in the developed world. Out of 30 high-income countries with universal health care, Canada ranked 28th on physician availability at 2.8 per 1,000 people, far behind countries such as seventh-ranked Switzerland (4.5 physicians per 1,000) and tenth-ranked Australia (at 4.3 physicians per 1,000).
But doctors are just one part of the puzzle. Canada also ranked low on available hospital beds (23rd of 29 countries), meaning patients often face delays for hospital care. It can also mean that patients end up being treated for their illness outside a traditional patient room—such as a hospital hallway, a phenomenon that has spread to many provinces.
We also see a low availability of other key medical resources including diagnostic equipment. In 2019, Canada ranked 25th of 29 comparable countries with universal health care on the number of MRIs (10.3 units per million people) compared to top-ranked Japan, which had four times as many MRIs as Canada. And we ranked 26th out of 30 countries on CT scanners (14.9 scanners per million people) compared to second-ranked Australia, which had five times as many CT scanners. It’s also worth noting that a large a portion of Canada’s diagnostic machines are remarkably old.
It’s no accident that countries such as Australia, which actually spend less of its economy on health care compared to Canada, perform better than Canada on measures of resource availability and timeliness of care. Unlike Canada, Australia embraces its private sector as an integral part of its universal health-care system. With 41 per cent of all hospital care in Australia occurring in private hospitals in 2021/22, private hospitals can act as a pressure valve for the entire system, particularly in times of crisis. Indeed, the country outperforms Canada on measures of timely access to family doctor appointments, specialist care and non-emergency surgery, and has done so regularly for years.
The imbalance between high spending and poor access to doctors, hospital beds and vital imaging technology, coupled with untimely access to services, can, and does, have a detrimental impact on patients. For some, this problem can be life threatening. Without genuine reform based on real world lessons from higher performing universal health-care countries including Australia, it’s impossible to reasonably expect our health-care system to improve despite its hefty price tag.
Author:
Alberta
Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn
From the Fraser Institute
By Tegan Hill
According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.
The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.
For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).
And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.
In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.
This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.
Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.
Of course, if the government falls back into deficit there are implications for everyday Albertans.
When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.
According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.
Author:
Business
Ottawa’s avalanche of spending hasn’t helped First Nations
From the Fraser Institute
By Tom Flanagan
When Justin Trudeau came to power in 2015, he memorably said that the welfare of Indigenous Canadians was his highest priority. He certainly has delivered on his promise, at least in terms of shovelling out money.
During his 10 years in office, budgeted Indigenous spending has approximately tripled, from about $11 billion to almost $33 billion. Prime Minister Trudeau’s instruction to the Department of Justice to negotiate rather than litigate class actions has resulted in paying tens of billions of dollars to Indigenous claimants over alleged wrongs in education and other social services. And his government has settled specific claims—alleged violations of treaty terms or of the Indian Act—at four times the previous rate, resulting in the award of at least an additional $10 billion to First Nations government.
But has this avalanche of money really helped First Nations people living on reserves, who are the poorest segment of Canadian society?
One indicator suggests the answer is yes. The gap between reserves and other communities—as measured by the Community Well-Being Index (CWB), a composite of income, employment, housing and education—fell from 19 to 16 points from 2016 to 2021. But closer analysis shows that the reduction in the gap, although real, cannot be due to the additional spending described above.
The gain in First Nations CWB is due mainly to an increase in the income component of the CWB. But almost all of the federal spending on First Nations, class-action settlements and specific claims do not provide taxable income to First Nations people. Rather, the increase in income documented by the CWB comes from the greatly increased payments legislated by the Liberals in the form of the Canada Child Benefit (CCB). First Nations people have a higher birth rate than other Canadians, so they have more children and receive more (on average) from the Canada Child Benefit. Also, they have lower income on average than other Canadians, so the value of the CCB is higher than comparable non-Indigenous families. The result? A gain in income relative to other Canadians, and thus a narrowing of the CWB gap between First Nations and other communities.
There’s an important lesson here. Tens of billions in additional budgetary spending and legal settlements did not move the needle. What did lead to a measurable improvement was legislation creating financial benefits for all eligible Canadian families with children regardless of race. Racially inspired policies are terrible for many reasons, especially because they rarely achieve their goals in practise. If we want to improve life for First Nations people, we should increase opportunities for Canadians of all racial backgrounds and not enact racially targeted policies.
Moreover, racial policies are also fraught with unintended consequences. In this case, the flood of federal money has made First Nations more dependent rather than less dependent on government. In fact, from 2018 to 2022, “Own Source Revenue” (business earnings plus property taxes and fees) among First Nations bands increased—but not as much as transfers from government. The result? Greater dependency on government transfers.
This finding is not just a statistical oddity. Previous research has shown that First Nations who are relatively less dependent on government transfers tend to achieve higher living standards (again, as measured by the CWB index). Thus, the increase in dependency presided over by the Trudeau government does not augur well for the future.
One qualification: this finding is not as robust as I would like because the number of band governments filing reports on their finances has drastically declined. Of 630 First Nation governments, only 260 filed audited statements for fiscal 2022. All First Nations are theoretically obliged by the First Nations Financial Transparency Act, 2013, to publish such statements, but the Trudeau government announced there would be no penalties for non-compliance, leading to a precipitous decline in reporting.
This is a shame, because First Nations, as they often insist, are governments, not private organizations. And like other governments, they should make their affairs visible to the public. Also, most of their income comes from Canadian taxpayers. Both band members and other Canadians have a right to know how much money they receive, how it’s being spent and whether it’s achieving its intended goals.
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