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Government meddling contributes to doctor exodus in Quebec

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From the Fraser Institute

By Bacchus Barua and Yanick Labrie

They have not left Quebec’s health-care system but rather have opted out of the province’s publicly-financed framework to provide care to their patients privately.

Quebec’s health minister recently came under fire after reports revealed a record number of physicians left the province’s public system to practise privately. Less discussed are the reasons why physicians made this choice.

Indeed, it turns out that ill-conceived attempts to protect publicly-funded health care by the Trudeau government and successive provincial governments may have contributed to the increasing numbers of physicians opting-out.

To be clear, the 780 physicians in question account for about four per cent of physicians in the province. However, this represents a 22 per cent increase in the number of physicians leaving the public system compared to the previous year—and is part of a growing trend. More importantly, they have not left Quebec’s health-care system but rather have opted out of the province’s publicly-financed framework to provide care to their patients privately.

Why?

One reason, is because governments have forced them to do so.

Until recently, physicians in Quebec (including those who practiced in the public sector) were allowed to charge patients so-called “accessory-fees” in certain instances—for example, if the service was either not covered or insufficiently reimbursed by the government’s fee schedule.

However, the federal Canada Health Act (CHA) clearly states that “extra-billing” of this nature, when charged by physicians who also bill the public system, must result in dollar-for-dollar deductions in federal health-care transfer payments to the province. In other words, the CHA encourages provincial efforts to effectively force doctors to choose between the public and private system if any out-of-pocket expenses are involved.

And so, under financial threat by the Trudeau government, Quebec eventually clamped down on such fees charged by physicians who worked in the public system.

Consequently, physicians who relied on these payments to cover a portion of their operating costs faced an unfortunate choice—stay in the public system at the risk of financial ruin or opt-out entirely and practise exclusively in the private sector.

For many, the choice was obvious. One study found that by 2019 “an additional 69 specialist physicians opted out after the 2017 clampdown on double billing [sic] than previous trends would have predicted.” Several clinics offering endoscopy and colonoscopy services simply closed their doors. Quebecers also ended up with a less convenient health-care experience following this clamp down, as evidenced by the reduction in clinic-provided services that followed.

This attitude to extra-billing stands in stark contrast to the situation in other universal health-care countries such as Australia where consultations with specialists are usually only partially (85 per cent) covered by the universal plan. In fact, physicians (family doctors and specialists) can generally set fees above the government’s fee schedule so long as they forgo the convenience of directly billing the government (i.e. patients claim reimbursement after the fact). Notably, Australia’s health-care system costs less than Canada’s in total (including these private payments) yet delivers more rapid access to health-care services with a greater availability of medical professionals, hospital beds, and diagnostic and surgical technologies.

More generally, a recent study found 22 of 28 universal health-care countries require patients to share a portion of the cost of treatment (with generous protections for vulnerable groups). These include deductibles (an amount individuals must pay before insurance coverage kicks in), co-insurance payments (the patient pays a certain percentage of treatment cost) and copayments (the patient pays a fixed amount per treatment). Crucially, many of these countries including Australia, Germany, the Netherlands and Switzerland also have shorter wait times than we endure.

In these countries, physicians are also generally allowed to practise both in publicly-funded universal settings and private settings (a policy known as “dual practice”) rather than having their activities restricted to one setting only. In other words, Canada’s federal restrictions on cost-sharing and extra-billing (such as Quebec’s accessory fees) and provincial barriers to dual-practice place our universal system in the minority of a small cohort of countries that are not particularly known for stellar performance.

The looming threat of further reductions in federal cash transfers, under the CHA, has led to provinces such as Quebec imposing increasingly restrictive conditions on physicians in the public system. And in response, physicians—by opting-out—are indicating that they’ve had enough.

It’s ironic that the very groups intent on supposedly “protecting public health care” by forcing physicians to choose between the public and private systems have enforced policies that may very well lead to the public system’s continued demise.

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Canada Post is failing Canadians—time to privatize it

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From the Fraser Institute

By Jake Fuss and Alex Whalen

In the latest chapter of a seemingly never-ending saga, Canada Post workers are on strike again for the second time in less than a year, after the federal government allowed the Crown corporation to close some rural offices and end door-to-door deliveries. These postal strikes are highly disruptive given Canada Post’s near monopoly on letter mail across the country. It’s well past time to privatize the organization.

From 2018 to the mid-point of 2025, Canada Post has lost more than $5.0 billion, and it ran a shortfall of $407 million in the latest quarter alone. Earlier this year, the federal government loaned Canada Post $1.034 billion—a substantial sum of taxpayer money—to help keep the organization afloat.

As a Crown corporation, Canada Post operates at the behest of the federal government and faces little competition in the postal market. Canadians have nowhere to turn if they’re unhappy with service quality, prices or delivery times, particularly when it comes to “snail mail.”

Consequently, given its near-monopoly over the postal market, Canada Post has few incentives to keep costs down or become profitable because the government (i.e. taxpayers) is there to bail it out. The lack of competition also means Canada Post lacks incentives to innovate and improve service quality for customers, and the near-monopoly prohibits other potential service providers from entering the letter-delivery market including in remote areas. It’s clearly a failing business that’s unresponsive to customer needs, lacks creativity and continuously fails to generate profit.

But there’s good news. Companies such as Amazon, UPS, FedEx and others deliver more than two-thirds of parcels in the country. They compete for individuals and businesses on price, service quality and delivery time. There’s simply no justification for allowing Canada Post to monopolize any segment of the market. The government should privatize Canada Post and end its near-monopoly status on letter mail.

What would happen if Ottawa privatized Canada Post?

Well, peer countries including the Netherlands, Austria and Germany privatized their postal services two decades ago. Prices for consumers (adjusted for inflation) fell by 11 per cent in Austria, 15 per cent in the Netherlands and 17 per cent in Germany.

Denmark has taken it a step further and plans to end letter deliveries altogether. The country has seen a steep 90 per cent drop in letter volumes since 2000 due to the rise of global e-commerce and online shopping. In other words, the Danes are adapting to the times rather than continuing to operate an archaic business model.

In light of the latest attempt by the Canadian Union of Postal Workers to shakedown Canadian taxpayers, it’s become crystal clear that Canada Post should leave the stone age and step into the twenty-first century. A privately owned and operated Canada Post could follow in the footsteps of its European counterparts. But the status quo will only lead to further financial ruin, and Canadians will be stuck with the bill.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Alex Whalen

Director, Atlantic Canada Prosperity, Fraser Institute
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Business

Carney government plans to muddy the fiscal waters in upcoming budget

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From the Fraser Institute

By Jake Fuss and Grady Munro

Rather than directly spend money on critical infrastructure such as roads, bridges, ports or even electricity grids—things that traditionally are considered capital investments—the government plans to spend money on subsidies and tax breaks to corporations (i.e. corporate welfare) under the umbrella of “capital investment”

The Carney government’s long-awaited first budget is almost here—expected Nov. 4—but Canadians may not recognize what they get. Early on, the new government promised a new approach to spending. Thanks to a decade of record-breaking spending under Justin Trudeau, the federal deficit sits at a projected $48.3 billion while total debt has eclipsed $2.1 trillion. But the Carney government’s plan announced this week appears to rely on accounting maneuvers rather than any substantive spending reductions.

According to the latest details released by the government, the Carney government will separate spending into two categories: “operating spending” and “capital investment.” Within this framework, the government plans to balance the “operating budget” within three years.

But of course, if the government eventually balances the operating budget, that doesn’t mean it will stop borrowing money to pay forcapital investment”—a new category of spending the government can define and expand whenever it deems necessary.

Currently, according to the government, capital investment will include any spending or tax expenditures (e.g. tax credits and deductions) that “contribute to capital formation”—the creation of assets (such as machinery or equipment) that improve the ability of workers to produce goods and services.

In other words, rather than directly spend money on critical infrastructure such as roads, bridges, ports or even electricity grids—things that traditionally are considered capital investments—the government plans to spend money on subsidies and tax breaks to corporations (i.e. corporate welfare) under the umbrella of “capital investment,” so long as this spending will somehow “encourage” capital formation. But clearly, corporate welfare doesn’t belong in the same category as the expansion of a critical port, for example, and the government shouldn’t pretend that it does.

Put simply, because the term “capital investment” is so broad and malleable, the government can seemingly use it whenever it wants. For example, to meet NATO’s spending target of 2 per cent of GDP, a key point of contention in Carney’s negotiations with President Trump, the Carney government could (inaccurately) categorize some defence spending as capital spending. And in fact, the Parliamentary Budgetary Officer—Ottawa’s fiscal watchdog—views the Carney government’s definition as “overly expansive” and suggests the inclusion of corporate tax breaks and subsidies will “overstate” the government’s actual contribution to the creation of capital.

This approach by the Carney government will not help Canadians understand the true state of federal finances. While Finance Minister François-Philippe Champagne recently said that the “deficit and the debt will be recorded in the same manner as in previous budgets,” on budget day and beyond the government will undoubtedly focus on the operating budget when communicating to Canadians. So, the government will only tell part of the story.

After years of fiscal mismanagement with large increases in spending and debt under the Trudeau government, Canadians need a government willing to make the tough decisions necessary to get federal finances back in shape. But the Carney government appears poised to shirk accountability and use tricks to cloud the true state of federal finances.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute
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