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Enough talk, we need to actually do something about Canadian health care

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12 minute read

From the Macdonald Laurier Institute

By J. Edward Les for Inside Policy

Canada spends more on health care as a percentage of GDP than almost all other OECD countries, yet we rank behind most of them when it comes to outcomes that matter.

I drove a stretch of road near Calgaryā€™s South Health Campus the other day, a section with a series of three intersections in a span of less than a few hundred metres. That is, IĀ triedĀ to drive it ā€“ but spent far more time idling than moving.

At each intersection, after an interminable wait, the light turned green just as the next one flipped to red, grinding traffic to a halt just after it got rolling. It was excruciating; Iā€™m quite sure I spied a snail on crutches racing by ā€“ no doubt making a beeline (snail-line?) for the ER a stoneā€™s throw away.

The streetā€™s sluggishness is perhaps reflective of the hospital next to it, given that our once-cherished universal health care system has crumbled into a universal waiting system ā€“ a system seemingly crafted (like that road) to obstruct flow rather than enable it. In fact, the pace of medical care delivery in this country has become so glacial that even a parking lot by comparison feels like the Indianapolis Speedway.

TheĀ health care crisisĀ grows more dire by the day.Ā Reforms are long overdue. Canada spendsĀ more on health careĀ as a percentage of GDP than almost all other OECD countries, yet we rank behind most of them when it comes to outcomes that matter.

And weā€™re paying with our lives: according to theĀ Canadian Institute for Health Information, thousands of Canadians die each and every year because of the inefficiencies of our system.

Yet for all that we are paralyzed by the enormity and complexity of the mushrooming disaster. We talk about solutions ā€“ and then we talk and talk some more. But for all the talking, precious little action is taken.

Iā€™m reminded of an Anne Lamotte vignette, related in her bestselling bookĀ Bird By Bird:

Thirty years ago my older brother, who was ten years old at the time, was trying to get a report written on birds that heā€™d had three months to write, which was due the next day. We were out at our family cabin in Bolinas, and he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books about birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brotherā€™s shoulder, and said, ā€œBird by bird, buddy. Just take it bird by bird.ā€

So it is with Canadian health care: weā€™ve wasted years wringing our hands about the woeful state of affairs, while doing precious little about it.

Enough procrastinating. Itā€™s time to tackle the crisis, bird by bird.

One thing we can do is to let doctors be doctors.Ā  A few weeks ago, in a piece titled ā€œShould Doctors Mind Their Own Business?ā€, I questioned the customary habit of doctors hanging out their shingles in small independent community practices. Physicians spend long years of training to master their craft, years during which they receive no training in business methods whatsoever, and then we expect them to master those skills off to the side of their exam rooms. Some do it well, but many do not ā€“ and it detracts from their attention to patients.

We donā€™t install newly minted teachers in classrooms and at the same time task them with the keeping the lights on, managing the supply chain, overseeing staffing and payroll, and all the other mechanics of running schools. Why do we expect that of doctors?

Keeping doctors embedded within large, expensive, inefficient, bureaucracy-choked hospitals isnā€™t the solution, either.

Thereā€™s a better way, I argued in my essay: regional medical centres ā€“ centres built and administered in partnership with the private sector.

Such centres would allow practitioners currently practicing in the community to ply their trade unencumbered by the nuts and bolts of running a business; and they would allow us to decant a host of services from hospitals, which should be reserved for what only hospitals can do: emergency services, inpatient care, surgeries, and the like.

In short, we should let doctors be doctors, and hospitals be hospitals.

To garner feedback, I dumped my musings into a couple of online physician forums to which I belong, tagged with the query: ā€œFood for thought, or fodder for the compost bin?ā€

The verdict? Hands down, the compost bin.

I was a bit taken aback, initially. Offended, even ā€“ because who among us isnā€™t in love with their own ideas?

But it quickly became evident from my peersā€™ comments that Iā€™d been misunderstood. Not because my doctor friends are dim, but because I hadnā€™t been clear.

When I proposed in my essay that we ā€œleave the administration and day-to-day tasks of running those centres to business folks who know what theyā€™re doing,ā€ my colleagues took that to mean that doctors would be serving at the beck and call of a tranche of ill-informed government-enabled administrators ā€“ and they reacted to the notion with anaphylactic derision. And understandably so: too many of us have long and painful experience with thick layers of health care bureaucracy seemingly organized according to theĀ Peter Principle, with people promoted to ā€“ and permanently stuck at ā€“ the level of their incompetence.

But I didnā€™t mean to suggest ā€“ not for a minute ā€“ that doctors shouldnā€™t be engaged in running these centres. I also wrote: ā€œNone of which is to suggest that doctors shouldnā€™t be involved, by aptitude and inclination, in influencing the set-up and management of regional centres ā€“ of course, they should.ā€

Of course they should. There are plenty of physicians equipped with both the skills and interest needed to administer these centres; and they should absolutely be front and centre in leading them.

But more than that: everyoneĀ should have skin in the game. All workers have the right to share in the success of an enterprise; and when they do,Ā everybody wins.Ā  When everyone is pulling in the same direction because everyone shares in the wins, waste and inefficiencies are rooted out like magic.

Contrast that to how hospitals are run, with scarcely anyone aware of the actual cost of the blood tests or CT scans they order or the packets of suture and gauze they rip open, and with the motivations of administrative staff, nurses, doctors, and other personnel running off in more directions than a flock of headless chickens. The capacity for waste and inefficiencies is almost limitless.

I donā€™t mean to suggest that the goal of regional medical centres should be to turn a profit; but fiscal prudence and economic accountability are to be celebrated, because money not wasted is money that can be allocated to enhancing patient care.

Nor do I mean to intimate that sensible resource management should be the only parameter tracked; patient outcomes and patient satisfaction are paramount.

What should governmentā€™s role be in all this? Initially, to incentivize the creation of these centres via public-private partnerships; and then, crucially, to encourage competition among them and to reward innovation and performance, with optimization of the three key metrics ā€“ patient outcomes, patient satisfaction, and economic accountability ā€“ always in focus.

No one should be mandated to work in non-hospital regional medical centres. Itā€™s a free country (or it should be): doctors should be free to hang out their own community shingles if they wish. But if we build the model correctly, my contention is that most medical professionals will prefer to work collaboratively under one roof with a diverse group of colleagues, unencumbered by the mundanities of running a business, but also free of choking hospital bureaucracy.

I connected a couple weeks ago with the always insightful economist Jack Mintz (who is also a distinguished fellow at the Macdonald-Laurier Institute). Mintz sits on the board of a Toronto-area hospital and sees first-hand ā€œthe problems with the lack of supply, population growth, long wait times between admission and getting a bed, emergency room overuse,ā€ and so on.

ā€œSomething has to give,ā€ he said. ā€œProbably more resources but better managed. We really need major reform.ā€

On that we can all agree. We canā€™t carry on this way.

So, letā€™s stop idling; and letā€™s green-light some fixes.

As Samwise Gamgee said inĀ The Lord of the Rings, ā€œItā€™s the job thatā€™s never started as takes longest to finish.ā€


Dr. J. Edward LesĀ is a pediatrician in Calgary who writes on politics, social issues, and other matters.

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Business

Tariff-driven increase of U.S. manufacturing investment would face dearth of workers

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From the Fraser Institute

ByĀ Jock Finlayson

Since 2015, the number of American manufacturing jobs has actually risen modestly. However, as a share of total U.S. employment, manufacturing has dropped from 30 per cent in the 1970s to around 8 per cent in 2024.

Donald Trump has long been convinced that the United States must revitalize its manufacturing sector, havingā€”unwisely, in his viewā€”allowed other countries to sell all manner of foreign-produced manufactured goods in the giant AmericanĀ market. As president, heā€™s moved quickly to shift the U.S. away from its previous embrace of liberal trade and open markets as cornerstones of its approach to international economic policy ā€”wielding tariffs as his key policy instrument. Since taking office barely two months ago, President Trump has implemented a series of tariff hikes aimed at China and foreign producers of steel and aluminumā€”important categories of traded manufactured goodsā€”and threatened to impose steep tariffs on most U.S. imports from Canada, Mexico and the European Union. In addition, heā€™s pledged to levy separate tariffs on imports of automobiles, semi-conductors, lumber, and pharmaceuticals, among other manufactured goods.

In the third week of March, the White House issued a flurry of news releases touting the administrationā€™s commitment to ā€œposition the U.S. as a global superpower inĀ manufacturingā€ and listing substantial newĀ investmentsĀ planned by multinational enterprisesĀ involvedĀ in manufacturing. Some of these appear to contemplate relocating manufacturing production in other jurisdictions to the U.S., while others promise new ā€œgreenfieldā€ investments in a variety of manufacturing industries.

President Trumpā€™s intense focus on manufacturing is shared by a large slice of Americaā€™s political class, spanning both of the main political parties. Yet American manufacturing has hardly withered away in the last few decades. The value of U.S. manufacturing ā€œoutputā€ has continued to climb, reaching almost $3 trillion last year (equal to 10 per cent of total GDP). The U.S. still accounts for 15 per cent of global manufacturing production, measured in value-added terms. In fact, among the 10 largest manufacturing countries, it ranksĀ secondĀ in manufacturing value-added on a per-capita basis. True, China has become the worldā€™s biggest manufacturing country, representing aboutĀ 30 per centĀ of global output. And the heavy reliance of Western economies on China in some segments of manufacturing does give rise to legitimate national security concerns. But the bulk of international trade in manufactured products does not involve goods or technologies that are particularly critical to national security, even if President Trump claims otherwise. Moreover, in the case of the U.S., a majority of two-way trade in manufacturing still takes place with other advanced Western economies (and Mexico).

In the U.S. political arena, much of the debate over manufacturing centres on jobs. And thereā€™s no doubt that employment in the sector has fallen markedly over time, particularly from the early 1990s to the mid-2010s (see table below). Since 2015, the number of American manufacturing jobs has actually risen modestly. However, as a share of total U.S. employment, manufacturing has dropped from 30 per cent in the 1970s to around 8 per cent in 2024.

U.S. Manufacturing Employment, Select Years (000)*
1990 17,395
2005 14,189
2010 14,444
2015 12,333
2022 12,889
2024 12,760
*December for each year shown. Source: U.S. Bureau of Labor Statistics

Economists who have studied the trend conclude that the main factors behind the decline of manufacturing employment include continuous automation, significant gains in productivity across much of the sector, and shifts in aggregate demand and consumption away from goods and toward services. Trade policy has also played a part, notably Chinaā€™s entry into the World Trade Organization (WTO) in 2001 and the subsequent dramatic expansion of its role in global manufacturing supply chains.

Contrary to what President Trump suggests, manufacturingā€™s shrinking place in the overall economy is not a uniquely American phenomenon. As Harvard economist Robert Lawrence recently observed ā€œthe employment share of manufacturing is declining in mature economies regardless of their overall industrial policy approaches. The trend is apparent both in economies that have adopted free-market policiesā€¦ and in those with interventionist policiesā€¦ All of the evidence points to deep and powerful forces that drive the long-term decline in manufacturingā€™s share of jobs and GDP as countries become richer.ā€

This brings us back to the presidentā€™s seeming determination to rapidly ramp up manufacturing investment and production as a core element of his ā€œAmerica Firstā€ program. An important issue overlooked by the administration is where to find the workers to staff a resurgent U.S. manufacturing sector. For while manufacturing has become a notably ā€œcapital-intensiveā€ part of the U.S. economy, workers are still needed. And today, itā€™s hard to see where they will be found. This is especially true given the Trump administrationā€™s well-advertised skepticism about the benefits of immigration.

According to the U.S. Bureau of Labor Statistics, the current unemployment rate across Americaā€™s manufacturing industries collectively stands at a record low 2.9 per cent, well below the economy-wide rate of 4.5 per cent. In a recent survey by the National Association of Manufacturers, almost 70 per cent of American manufacturers cited the inability to attract and retain qualified employees as the number one barrier to businessĀ growth. A cursory look at the leading industry trade journals confirms that skill and talent shortages remain persistent in many parts of U.S. manufacturingā€”and that shortages are destined to get worse amid the expected significant jump in manufacturing investment being sought by the Trump administration.

As often seems to be the case with Trumpā€™s stated policy objectives, the math surrounding his manufacturing agenda doesnā€™t add up. Manufacturing in America is in far better shape than the president acknowledges. And a tariff-driven avalanche of manufacturing investmentā€”should one occurā€”will soon find the sector reeling from an unprecedented human resource crisis.

Jock Finlayson

Senior Fellow, Fraser Institut
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Economy

Solar and Wind Power Are Expensive

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From the Fraser Institute

By BjĆørn Lomborg

Politiciansā€”supported by powerful green energy interests and credulous journalistsā€”keep gaslighting voters claiming green energy is cheaper than fossil fuels.

Global evidence is clear: Adding more solar and wind to the energy supply pushes up the price of electricity for consumers and businesses. Families in Ontario know this already from their bitter experience: from 2005, theĀ Ontario governmentĀ began phasing out coal energy and dived headlong into subsidizing wind and solar generation.

Those green policies led to a sharp hike in electricity prices. From 2005 to 2020 the average, inflation-adjusted cost of electricityĀ doubledĀ from 7.7 cents to 15.3 cents. Since 2019 the Ontario government hasĀ subsidizedĀ these high costs through a slew of programs like the ā€œRenewable Cost Shiftā€, lowering the direct pain to ratepayers but simply moving the increasing costs onto the government coffers. Today, thisĀ policy costsĀ Ontario more than $6 billion annually, four-times what was being spent in 2018.

A relatively small amount of wind energyĀ costsĀ Ontarians over a billion dollars each year. OneĀ peer-reviewed studyĀ finds that the economic costs of wind are at least three times their benefits. Only the owners of wind power make any money, whereas the ā€œlosers are primarily the electricity consumers followed by the governments.ā€

Yet, politiciansā€”supported by powerful green energy interests and credulous journalistsā€”keep gaslighting voters claiming green energy is cheaper than fossil fuels.

They argue fundamentally that the green transition is not just cheap but even that it makes money, because wind and solar are cheaper than fossil fuels.

At best, this is only true when the sun is shining and the wind is blowing. At all other times, their cost is significantly higher. Modern societies need around-the-clock power. The intermittency of solar and wind energy means backup is required, often delivered by fossil fuels. That means citizens end up paying for two power systems: renewables and their backup. Moreover, much more transmission is needed to ensure wind and solar reach users, and backup fossil fuels, as they are used less, have even fewer hours to earn back their capital costs. Both increase costs further.

This intermittency can be huge, as when solar power in the Yukon delivered a massiveĀ 150 timesĀ more electricity to the grid in May 2022 than it did in December 2022. It is also the reason that the real energy costs of solar and wind are far higher than green campaigners claim. Just look around the world to see how that plays out.

OneĀ studyĀ shows that in China, when including the cost of backup power, the real cost of solar power becomes twice as high as that of coal. Similarly, a peer-reviewedĀ study of Germany and Texas shows that the real costs of solar and wind are many times more expensive than fossil fuels. Germany, the U.K., Spain, and Denmark, all of which increasingly rely on solar and wind power, have some of the worldā€™s most expensive electricity.

Source:Ā IEA.org energy prices data set

This is borne out by the actual costs paid across the world. The International Energy Agencyā€™sĀ latest dataĀ from nearly 70 countries from 2022 shows a clear correlation between moreĀ solar and windĀ and higher average household and business energy prices. In a country with little or no solar and wind, the average electricity cost is about 16 cents per kilowatt-hour. For every 10 per cent increase in solar and wind share, the electricity cost increases by nearly 8 cents per kWh. The results are substantiallyĀ similarĀ for 2019, before the impacts of Covid and the Ukraine war.

In Germany, electricity costs 43 cents per kWhā€”much more than twice the Canadian cost, and more than three-times the Chinese price. Germany has installed so much solar and wind that on sunny and windy days, renewable energy satisfies close to 70 per cent of Germanyā€™s needsā€”a fact the press eagerly reports. But the press hardly mentions dark and still days, when these renewables deliver almost nothing.Ā TwiceĀ in the past couple of months, when it was cloudy and nearly windless, solar and wind delivered less than 4 per cent of the daily power Germany needed.

Current battery technology is insufficient. Germanyā€™s entire battery storage runs out in about 20 minutes. That leaves more than 23 hours of energy powered mostly by fossil fuels. Last month, with cloudy skies and nearly no wind, Germany faced the costliest power prices since the energy crisis caused by Russiaā€™s invasion of Ukraine in 2022, with wholesale prices reaching a staggering $1.40 per kWh.

Canada is blessed with plentiful hydro, poweringĀ 58 per centĀ of its electricity. This means that there has been less drive to develop wind and solar, which deliver just 7 per cent. But the urge to virtue signal remains. Indeed, the federal governmentā€™sĀ 2023 visionĀ for the electricity system declares that shifting away from fossil fuels is a ā€œscientific and moral imperativeā€ and ā€œthe greatest economic opportunity of our lifetimeā€.

Yet the biggest take-away from the global evidence is that among all the nations in the worldā€”many with very big, green ambitionsā€”there is not one that gets much of its power from solar and wind and has low electricity costs. The lower-right of the chart is simply empty.

Instead, there are plenty of nations with lots of green energy and exorbitantly high costs.

BjĆørn Lomborg

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