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Brief to the House of Commons Standing Committee on Finance 1995 Pre-Budget Consultation

https://policybase.cma.ca/en/permalink/policy1994
Last Reviewed
2019-03-03
Date
1994-11-18
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1994-11-18
Topics
Health systems, system funding and performance
Text
I. PURPOSE While Canada is undergoing significant social, political and economic change, the Canadian Medical Association (CMA) remains committed to the delivery of high quality health care and to safeguarding the national integrity of the health system. However, given the need for the federal government to gain control over our deficit and national debt, it seems clear that putting Canada's fiscal house in order remains a high priority. In this regard, CMA appreciates the invitation to submit its views on the 1995 pre-budget consultations that are underway. One overriding objective of the brief is to provide the Committee with a better understanding of the current pressures on physicians across Canada that have arisen as a direct result of past government decisions in this area. It is our firmly-held position that the health care system in general, and the medical profession in particular, have paid more than their fair share in terms of contributing to debt management. This brief focusses on five somewhat distinct areas of concern to Canadian physicians: (1) federal health transfers to the provinces; (2) taxable health benefits; (3) the goods and services tax (GST); (4) Registered Retirement Savings Plan (RRSP) contributions, and (5) the Lifetime Capital Gains Exemption (LCGE) for Small Businesses. In each case, the brief contains specific recommendations as to what the government should do, and more importantly what the government should not do, to balance its short-term deficit reduction targets against longer-term Canadian values. To summarize, good health policy and prudent economic policy go hand-in-hand provided the principles of fairness and good management practices are observed. If change is to come within an overall policy framework that is strategic, coordinated and fair and which preserves (or augments) the integrity of Canada's health care system, it behooves us to avoid short-term, stop-gap initiatives. As the government's 1994 Throne Speech put it "...the agenda of the government is based on an integrated approach to economic, social, environmental and foreign policy". Accordingly, in establishing an appropriate fiscal framework for health, change must take place within the context of a longer-term integrated view. II. BACKGROUND...."Medicare Is A Shared Value" Canada's system of universal health insurance is still one of the best in the world. Experts from around the world travel many thousands of miles to study and, in some cases, emulate our system. For most Canadians, medicare is a highly cherished, integral component of our social fabric. While Medicare's popularity has not diminished over the past 30 years, it is sometimes taken for granted in these difficult economic times. Recent public opinion surveys indicate that 84% of Canadians (with the highest response in Quebec) see medicare as a defining characteristic of being Canadian. Furthermore, 84% of Canadians are of the opinion that the system provides high quality care. 1 At the same time, however, 65% of Canadians are concerned about continued accessibility to a full range of publicly-financed benefits. According to the same poll, 83% of Canadians see current financing of the system as being "unsustainable" over the longer-term 2 and they are right. As much loved as the Canadian medicare system is, there is a large and growing consensus that we need to make changes. This brief is not about maintaining the status quo. Rather, it is about managing the changes required in the long-term best interests of all Canadians and of the physicians who are ultimately responsible for serving those interests, subject to the fiscal realities confronting government. III. CONSIDERATIONS CMA acknowledges that there is a pressing need, now more than ever, for the federal government to balance a number of competing social and economic policy challenges. In a time when deficit reduction measures are required, all segments of society are being asked to do more with the same or less. Health care is no exception, having done so for quite some time. At the same time, we must re-evaluate the variety of services provided or paid for by government. Deficit Management, but at what Costs? As of 1993/94, Canada's net public debt stood at $508.2 billion, or $17,484 for every Canadian. Combined with the debts of the provinces and territories, our national debt is in excess of $700 billion. Not to understate the case, currently one-third of each revenue dollar the government collects is allocated to debt service payments on the federal debt. 3 CMA believes enough is enough: we must not pass this burden on to future generations of Canadians. The federal government has managed to run operating surpluses for five of the past seven years. 4 While this is necessary it is no longer sufficient to meet our fiscal challenges. Maintaining the status quo would mean that debt service payments would further crowd out government expenditures at an accelerated rate. While the government's first priority should be to get us "out of hock", there is an equally- compelling need to respect the longstanding and fundamental principle of fairness/equity that help define Canadian society. One step toward meeting these twin objectives is to consider all possible methods of repatriating that portion of the national debt held by the international lending community. Some experts have argued that Canada, as a country, can no longer afford to have "massive leakages" in interest payments to individuals/countries abroad. 5 In so doing, we would also repatriate our ability as a sovereign nation to set and maintain social policy objectives. This involves guarding against the persistent "tyranny of the deficit" and the influence that international bond rating agencies can exert on the economy. Facts and Fallacies about Health Spending In reviewing expenditures in the public sector, some would suggest that health and health care spending are "out of control". This is a myth. While it is true that Canada spends 10.0% (1993) of Gross Domestic Product (GDP) on health care (second highest among OECD countries), the reality is that the public sector share of total health care expenditures has fallen from 76.4% in 1975 to approximately 71.9% in 1993 6 (falling to the lowest third of OECD countries). This process of reducing real public sector expenditures, in the absence of a well-coordinated and planned framework, has not always been in the best interests of health and health care. Specifically, federal offloading in terms of unilateral reductions in health cash transfers to the provinces have been followed by: * the elimination of entire programs, such as dental insurance programs for children and universal drug insurance programs; * hospital closures (e.g., 52 hospitals in Saskatchewan); * massive regionalization of health programs and the attendant disempowerment of community hospital boards; * the reduction of total bed capacity by as much as 20% in some provinces; * the reduction in medical school enrolment by 10% and a planned 10% reduction in post-MD residency slots; * global medical care expenditure caps in virtually every province in Canada; * individual physician income thresholds in at least five provinces; * a moratorium on interprovincial mobility of physicians; * legislative overrides of duly-negotiated contracts for health care providers; * widespread restrictions on the operation of high technology equipment; and * the de facto "expropriation" of physician business practices without compensation (e.g., Saskatchewan pathologists). These repercussions also serve to underline the fact that change is the only constant in the health care system. Many physicians across the country have expressed concerns that such changes or "threats" to our health care system are already beginning to have serious consequences for individual patients in terms of access to needed medical facilities. If the national integrity of medicare is to survive, federal fiscal policy changes must be assessed within a larger and longer-term framework; one that respects the need for innovation and professionalism in the health care system. Physicians as Responsible Professionals Some mistakenly argue that physician expenditures are responsible for the increasing costs to the health care system. The reality is that physician expenditures as a proportion of total health care expenditures in Canada have declined from 15.7% in 1975 to 15.1 in 1991. 7 Furthermore, physician expenditures constitute a declining share of GDP. Given the recent round of unilateral reductions in medical care spending in many jurisdictions, this percentage share will continue to drop significantly as more recent data become available. As health care resources have become increasingly constrained, physicians have taken on added responsibilities at the macro, meso and micro levels to better manage our health resources. * At the "macro" level, within the provinces and territories, the medical profession has been engaged in formalized consultation structures known as "Joint Management Committees" or "Administrative Councils" with government and other stakeholders to ensure value for money within a diminishing "real" globe of publicly-available resources for health care. * At the "meso" or institutional level, physicians are working hand-in-hand with health care administrators and other community stakeholders to "rationalize" services so as to provide the best value for money in all areas. In addition, to give a greater voice for choice and improve overall accountabilities in the system, physicians are providing formal input to governments that are looking to regionalize health system operations. * At the "micro" or clinical level, physicians have been taking the lead in developing and disseminating clinical practice guidelines (CPGs) to ensure that the care provided is both appropriate and cost-effective. More can and is being done, in collaboration with government, to ensure responsible use of the taxpayer's dollar while meeting the needs of individual patients. At all levels, physicians will continue to involve themselves as capable and responsible professionals. As the health policy agenda continues its rapid pace, physicians and the organizations that represent them should be viewed as "agents" for, rather than "objects" of, change. Good Health Policy Means Good Economic Policy Agencies such as the World Economic Forum, 8 tell us that our system of financing health care is one of Canada's greatest assets in competing in the new world economic order. We should heed this advice, as the Prime Minister recently observed. Compared to the United States, this economic advantage takes the form of 30 percent lower health spending (measured as a percent of GDP or in per capita expenditures) while providing for universal medical benefits and high quality care. In terms of our European trading partners, the fact that health insurance programs are financed primarily through consolidated revenues (rather than employment-based taxes), also confers a unit cost advantage to Canadian exporters. In this sense, good health policy and good economic policy should be mutually reinforcing. Aside from the complementary nature of the relationship between health and the economy, this fundamental concept also suggests that we need to take a longer-term, more integrated and more strategic approach to managing our collective debt and debt-servicing challenges. The federal government can no longer simply shift its financial obligations onto the backs of lower levels of government or individual Canadians without consultation or advance notice. We need to re-evaluate the full range of government- provided or -funded services. Again, however, if federal fiscal reductions are to take place, the principles of fairness and equity must begin to guide the development of sustainable economic and health policies. While there are no doubt trade-offs that can and must be made, if the price of getting our fiscal house in order is losing a national treasure - i.e., our health care system, it is a price too high to be paid. To summarize, we have set out a series of principles that should serve to guide the Committee in its decision-making, they are: * take the longer-term view; * adopt a system-wide, integrated approach for fiscal management; * strive for a strategic approach that mutually reinforces health and economic policies; and * strengthen the fundamental foundation of fairness and equity. These four principles form the building blocks of the remainder of CMA's submission. IV. ISSUES Canada is at a social, political and economic crossroad. The challenge to this Committee and to this Government is to balance short-term fiscal pressures against the longer-term need to re-position Canada to take advantage of economic opportunity while preserving that which is of fundamental importance to Canadian society as a whole. As the Committee looks to striking the right balance, there are five specific areas of concern that the CMA wishes to bring to your attention on behalf of the Canadian medical profession. The Temptation to Reduce Federal Health Transfers CMA commends this Government for exempting EPF health transfers from the extended freeze that was applied to other provincial transfer programs in its spring 1994 budget. We would have been surprised had this Government done anything else, given that medicare is the "Liberal legacy" of the 1960s and given the Liberal Party's consistent opposition to the previous government's "policy by stealth" (i.e., Bill C-69; Bill C-96). The fact is that medicare's contribution to getting our "fiscal house in order" is already large and continues to grow. In specific terms, the Committee will know that over the 1986/87 to 1995/96 fiscal period, it is estimated that $42.108 billion will have been removed via reductions in Established Program Financing for health and post-secondary education. For health alone, over $30 billion will have been removed from the system by fiscal year 1995/96. 9 Even with a resumption of GNP minus three percent growth formula in per capita EPF entitlements for health, beginning next spring, reduced cash contributions to medicare programs will continue to contribute to the attainment of the government's fiscal targets. Given the unprecedented health reforms taking place across the country, Canadians and the health care system can ill afford another federal fiscal shock. The system is already balkanizing, with poorer regions not being able to fiscally sustain some basic health care benefits. Any further acceleration in the rate of reduction in federal cash transfers will all but assure the demise of the national integrity of medicare programs. Moreover, any further reductions in federal health-related cash transfers will: (1) significantly hamper or stall the work of the newly-created National Health Forum; (2) further reduce the capacity for enforcement of national health principles under federal law; (3) exacerbate health-related problems of dealing with child poverty and problems of reducing health inequalities by socio-economic class; and (4) increase other areas of federal direct program expenditures in the context of renewed efforts to provincial program "uploading" (e.g., Canada Pension Plan Disability Program). A propos of health and economy going hand-in hand, it is useful to remind ourselves of the importance of maintaining the comparability of health benefits across Canada in terms of promoting regional development, shared opportunity and efficient resource allocation. Poor regions of this country are already finding it difficult to compete for scarce new business investment capital. The implications of competing from a more uneven playing field in terms of being able to offer only "bare bones" publicly-financed health benefits will further widen the gap between the "have" and "have not" provinces. It is for these reasons that the CMA joins with other national health organizations 10 in recommending the following: 1. THAT THE FEDERAL GOVERNMENT AVOID FURTHER CUTS TO THE EPF HEALTH TRANSFER AND LOCK IN THE CASH PORTION; 2. THAT THE FEDERAL GOVERNMENT NEGOTIATE A STABLE FIVE-YEAR FUNDING ARRANGEMENT WITH THE PROVINCES/TERRITORIES; 3. THAT THE FEDERAL GOVERNMENT MUST ENSURE THAT ACCOUNTABILITY OF THE HEALTH TRANSFER BE SEPARATE AND EXPLICIT. Taxable Health Benefits Canadians have already been dealt one blow with the increasing de-insurance of health care services (e.g., reduction of out-of-country benefits to an unfair and dangerous level, elimination or reduction in drug benefit programs). In the context of funding those services that remain public benefits, only the cruellest government would strike yet another blow to individual Canadians and to Canadian business by taxing the very benefits that taxes were raised to pay. If implemented, this proposal would be tantamount to nothing less than double taxation. Fairness and equity would suggest that the government should be doing more, not less at the legislative and regulatory levels to promote the availability of private health insurance benefits in areas increasingly vacated by government cutbacks. This is why CMA makes the following recommendation: 4. THAT THE CURRENT FEDERAL GOVERNMENT POLICY WITH RESPECT TO NON-TAXABLE HEALTH BENEFITS BE MAINTAINED; Goods and Services Tax (GST) When the GST was introduced in 1991, preoccupation with implementation issues resulted in a number of fundamental injustices at the micro level. One such injustice was dealt to the medical profession. Physicians, like other Canadians, expect to pay their fair share of taxes. We do not however, accept what essentially amounts to double taxation. Physicians in practice in Canada are in the unique, unenviable and unfair position of being forced to absorb all the GST on business inputs. Unlike all other professions, physicians are precluded from being able to pass on the tax to consumers (with provincial health insurance plans as payment in full) or from claiming input tax credits (ITCs) since insured medical services are deemed to be "tax exempt". Unlike other professions, physicians cannot claim input credits for the imputed taxes associated with providing needed medical care. In fact, all of the following health professionals are capable of recouping from patients the GST paid on inputs because their revenues are not restricted by government: dentists; optometrists; chiropractors; physiotherapists; chiropodists; osteopaths; audiologists; speech therapists; occupational therapists and psychologists. Physicians are still angrily awaiting remedial steps to correct this injustice. To be clear, CMA is not asking for preferential treatment for Canadian physicians. What we want is the same fair and equitable treatment from the federal government accorded to other self-employed professional groups. Like physicians, other professions are purchasing inputs and paying GST; but unlike physicians, they are able to recoup the GST. Given this oversight in the legislation and regulations, physicians have already been asked to pay (over and above the GST paid by other professional groups) a cumulative total of $250 million since its introduction of the tax in 1991. The magnitude of this tax paid is not in dispute (as a result of a study prepared by KPMG). While the direct effects of the GST are significant and measurable, the indirect effects are even more significant though less measurable. It is estimated that the 55,000 physicians in Canada employ up to 100,000 Canadians. Given the disproportionate effects of the GST on the medical profession as employers, the employment dampening could be at least as high as 1,000 full-time jobs lost. In addition, the tax-induced distorting effects in terms of efficient resource allocation in the health care system cannot be measured, but are thought to be significant. A goal of health reform in many parts of the country is to move care services out of institutions and into the community. Current federal GST policy, by taxing supplies in a clinical practice setting but not in a hospital setting, acts to discourage this shift in emphasis. No other issue in recent years has raised the ire of individual practitioners as much as the imposition of this most unfair and inequitable tax on business inputs. Understanding that the Minister of Finance is in the process of consulting with the provinces as to the nature of a replacement tax for the GST, we are confident that this oversight will be remedied. In the interests of fundamental fairness/equity and allocative efficiency, CMA respectfully recommends the following: 5. THAT THE COMMITTEE WORK TO ENSURE THAT CANADIAN PHYSICIANS, AS SMALL BUSINESSES, PAY NO MORE THAN OTHER PROFESSIONS UNDER ANY REPLACEMENT TAX FOR THE GST; 6. THAT ALL TAXES ON BUSINESS EXPENSES BE FAIRLY AND FULLY REMOVED UNDER ANY REPLACEMENT TAX FOR THE GST; 7. THAT IF ANY REMEDIAL STEPS ARE TAKEN TO ENSURE NO TAXES ARE LEVIED ON BUSINESS INPUTS, THESE BE APPLIED UNIFORMLY ACROSS ALL EXEMPT SERVICES. Registered Retirement Savings Plan (RRSP) Canadian physicians, while receiving a large proportion of their professional earnings from the public sector (94%), do not benefit as self-employed individuals from defined benefit plans or from publicly-financed pension benefits that accrue to employed professionals. They, like other self-employed individuals, must plan and fund their own retirement. Fairness/equity once again demands that there be symmetry between money-purchase (MP) and defined-benefit (DB) retirement plans. This is all the more important for physicians because of their compressed period of lifetime earnings in relation to other groups. This Committee will have heard various calls for either reducing the annual contribution limit or taxing assets within RRSPs. Such arguments are both specious and patently unfair. Both propositions potentially involve double taxation. Experts both within and outside government argue, quite correctly, that the current policy be maintained, and that equity between employees and the self-employed before the taxman be assured. It is for these reasons, that CMA has led an unprecedented alliance for the preservation of retirement savings, and recommends the following: 8. THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT; 9. THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE; 10. THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. Lifetime Capital Gains Exemption (LCGE) for Small Businesses Most Canadian physicians are independent, self-employed practitioners. As such, they have the ability if they are incorporated to claim the LCGE when they sell their practices. Over time, several provinces have accorded physicians the right to incorporate (e.g., Prince Edward Island, New Brunswick, Alberta, British Columbia, and the Yukon Territory), in other jurisdictions, physician incorporation is under active review (e.g., Nova Scotia, Quebec, Ontario and the Northwest Territories). While physicians have benefited from incorporation on a limited basis, this issue takes on added importance when one considers the "national" move towards incorporation allowing a greater number of eligible physicians to claim the LCGE. Recent health reforms have also underscored the importance of maintaining the current policy. Previously, physicians were free to move their practices from one location to another to meet the changing health needs of Canadians. Over the past two years, provincial governments have moved to restrict inter-provincial mobility of physicians and indeed mobility within any given province or territory. These "barriers" not only restrict the number of new entrants into the system in addition to those who wish to move to other areas of the country, but also can be thought of as increasing the capitalized value of established practices. Indeed, with the advent of regional physician resource plans across Canada, the cost of establishing a new practice can be expected to continue to grow at an unprecedented rate. So while some physicians have yet to claim the LCGE, it is reasonable to think that they will some time in the future. As the health needs of Canadians change, and as people move, medical care services will have to respond accordingly. The elimination of the LCGE, by significantly increasing the purchase price of a new medical practice, unnecessarily and unfairly raises additional economic barriers to shifting practices in response to changing community health needs. CMA therefore recommends: 11. THAT THE FEDERAL GOVERNMENT MAINTAIN THE CURRENT POLICY FOR THE LIFETIME CAPITAL GAINS EXEMPTION FOR SMALL BUSINESSES. V. TRADE-OFFS To summarize: in broad terms the health care sector has already paid its fair (and to a larger extent unfair) share. Everyone who has appeared before this Committee will argue that cuts should not occur in their backyard. They can't all be right! The government of Canada must decide where its priorities lie over the longer-term. Deficit reduction targets can no longer be met by simply chipping away at the full range of federally-sponsored programs. The national integrity of national health insurance programs, given their importance to Canada's economic, social and political future must be on the short list of safeguarded social programs. If further reductions in federal health transfers are deemed appropriate, the Committee should be prepared to publicly acknowledge that the principles of universality or comprehensiveness (i.e., the choice between covering everyone versus everything) will have to be fundamentally re-examined. Given the degree of support for the universality principle, if the federal government is serious about further reducing its direct or indirect contributions to health, then it must reconsider the range of core benefits that will be made available to Canadians. In fact, we may now have reached the point where we need to get back to basics; reminding ourselves of the original medicare promise, which was to protect Canadians from the spectre of personal bankruptcy associated with large and unexpected health care bills. Not to pay the day-to-day ("grocery") bill of health care. The recently-announced National Health Forum, chaired by the Prime Minister, will provide an important opportunity to assess the breadth and depth of publicly-financed health care. The contribution of medicine to the health of Canadians and to the economy is just too important to be traded off. Physicians are still feeling the "aftershocks" of recent federal fiscal decisions. They have also had to absorb sharp unilateral reductions at the provincial level. The provinces of Nova Scotia, Prince Edward Island and Alberta - to name only three - have disproportionately singled out the medical profession on a net earnings basis in decreasing health funding. Taken together, these fiscal forces could trigger an unprecedented exodus of physicians from Canada. As governments move to restrict the ability of physicians to provide needed medical care, CMA is increasingly concerned about the growing number of physicians who are being actively recruited by the United States, and those who feel they have no alternative but to leave the country. At a macro level, we as a society, must recognize that we are in a North American labour market, and as such, each physician heading south represents both a short-term pain and long-term pain. VI. SUMMARY OF RECOMMENDATIONS The CMA offers the following recommendations to the Committee in its deliberations: 1. THAT THE FEDERAL GOVERNMENT AVOID FURTHER CUTS TO THE EPF HEALTH TRANSFER AND LOCK IN THE CASH PORTION; 2. THAT THE FEDERAL GOVERNMENT NEGOTIATE A STABLE FIVE-YEAR FUNDING ARRANGEMENT WITH THE PROVINCES/TERRITORIES; 3. THAT THE FEDERAL GOVERNMENT MUST ENSURE THAT ACCOUNTABILITY OF THE HEALTH TRANSFER BE SEPARATE AND EXPLICIT. 4. THAT THE CURRENT FEDERAL GOVERNMENT POLICY WITH RESPECT TO NON-TAXABLE HEALTH BENEFITS BE MAINTAINED; 5. THAT THE COMMITTEE WORK TO ENSURE THAT CANADIAN PHYSICIANS, AS SMALL BUSINESSES, PAY NO MORE THAN OTHER PROFESSIONS UNDER ANY REPLACEMENT TAX FOR THE GST; 6. THAT ALL TAXES ON BUSINESS EXPENSES BE FAIRLY AND FULLY REMOVED UNDER ANY REPLACEMENT TAX FOR THE GST; 7. THAT IF ANY REMEDIAL STEPS ARE TAKEN TO ENSURE NO TAXES ARE LEVIED ON BUSINESS INPUTS, THESE BE APPLIED UNIFORMLY ACROSS ALL EXEMPT SERVICES. 8. THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT; 9. THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE; 10. THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. 11. THAT THE FEDERAL GOVERNMENT MAINTAIN THE CURRENT POLICY FOR THE LIFETIME CAPITAL GAINS EXEMPTION FOR SMALL BUSINESSES. _______________ 1 The Angus Reid Group, The Reid Report. Vol. 8, No. 7, July/August, 1993 and Vol. 8, No. 8, September, 1993. 2 Ibid. 3 Agenda: Jobs and Growth: Creating A Healthy Fiscal Climate (The Economic and Fiscal Climate), Department of Finance, October 1994. 4 Economic and Fiscal Reference Tables, Department of Finance, September 1994; Annual Financial Report of the Government of Canada, Fiscal Year, 1993/94. 5 Valaskakis K.: The Debt Monster, Montreal Gazette, November 5, 1994. 6 National Health Expenditures in Canada, 1975-1993. Health Canada. 7 Ibid. 8 World Economic Forum 1991: The World Competitiveness report 1990, Institut pour l'étude des méthodes de direction de l'entreprise, Lausanne, Switzerland. 9 Thomson A 1991: Federal Support for Health Care: A Background Paper. Health Action Lobby, Ottawa, June 1991. 10 See the 1995/96 Pre-Budget Submission to the Standing Committee on Finance by the Health Action Lobby (HEAL), November 15, 1994.
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Chronic Diseases Related to Aging: CMA's Presentation to the House of Commons Standing Committee on Health

https://policybase.cma.ca/en/permalink/policy10226
Date
2011-10-17
Topics
Population health/ health equity/ public health
  1 document  
Policy Type
Parliamentary submission
Date
2011-10-17
Topics
Population health/ health equity/ public health
Text
The Canadian Medical Association wishes to commend the House of Commons Standing Committee on Health for undertaking this study of the issue of chronic diseases related to aging. It is a timely issue, since the first members of the Baby Boom generation turned 65 in 2011 and it's predicted that by 2031 a quarter of Canada's population will be 65 or older. Though chronic disease is not exclusive to seniors, its prevalence does rise with age: according to Statistics Canada, about 74% of Canadians over 65 have at least one chronic condition such as diabetes, high blood pressure, arthritis or depression and nearly 25% have three or more. The proportion is higher among people 85 years old and over. What are the causes of chronic disease? There are many. Some of them are rooted in unhealthy behaviour: smoking, poor nutrition and, in particular, lack of physical activity. Physicians are concerned about rising obesity rates in Canada, for example, because obesity increases one's risk of developing chronic diseases later in life. But there is more to chronic disease than unhealthy behaviour. It is also affected by a person's biological and genetic makeup, as well as by his or her social environment. Lower income and educational levels, poor housing, and social isolation, which is a greater problem for seniors than for other populations, are all associated with poorer health status. Now the good news: chronic disease is not an inevitable consequence of aging. We can delay the onset of chronic disease, and perhaps even reduce the risk that it will occur. Patients who do have existing chronic disease, their conditions can often be controlled successfully through appropriate health care and disease management, so that they can continue to lead active, independent lives. Thus the CMA supports initiatives promoting healthy aging - which the Public Health Agency of Canada defines as "the process of optimizing opportunities for physical, mental and social health as people age." Healthy lifestyles should be encouraged at any age. For example, the Canadian Physical Activity Guidelines, which CMA supports, recommend that people 65 or older accumulate at least two-and-a-half hours per week of aerobic activity such as walking, swimming or cycling. Experts believe that healthy aging will compress a person's period of illness and disability into a short period just prior to death, enabling a longer period of healthy, independent and fulfilling life. For those who are already affected with chronic diseases, treatment is long term and can be very complex. People with diabetes, for example, need a continuous ongoing program to monitor their blood sugar levels and maintain them at an appropriate level; people with arthritis or other mobility problems may require regular physical therapy. For the patient, chronic disease means a long-term management that is much more complicated than taking antibiotics for an infection. People with two or more chronic conditions may be consulting a different specialist for each, as well as seeking support from nurse counsellors, dieticians, pharmacists, occupational therapists, social workers or other health professionals. Often, management requires medication. The majority of Canadians over 65 take at least one prescription drug, and nearly 15% are on five drugs or more, which increases the possibility that, for example, two of those drugs could interact negatively with each other to produce unpleasant and possibly serious side effects. Long-term, complex chronic disease care is in fact the new paradigm in our health care system. About 80% of the care now provided in the United States is for chronic diseases, and there is no reason to believe Canada is greatly different. Hence, it is worth considering what form, ideally, a comprehensive program of chronic disease management should take, for patients of any age. The CMA believes it should include the following four elements: * First, access to a primary care provider who has responsibility for the overall care of the patient. For more than 30 million Canadians, that primary care provider is a family physician. Family physicians who have established long-standing professional relationships with their patients, can better understand their needs and preferences. They can build a relationship of trust, so that patients are comfortable in discussing frankly how they want to treat their conditions: for example, whether to take medication for depression or seek counselling with a therapist. The family physician can also serve as a co-ordinator of the care delivered by other providers. This leads to our second recommended element: * Collaborative and coordinated care. The CMA believes that, given the number of providers who may be involved in the care of chronic diseases, the health care system should encourage the creation of interdisciplinary teams or, at minimum, enable a high level of communication and coordination among individual providers. We believe all governments should support: o Interdisciplinary primary care practices, such as Family Health Networks in Ontario, which bring a variety of different health professionals and their expertise into one practice setting; o Widespread use of the electronic health record, which can facilitate information sharing and communication among providers; and o A smooth process for referral: for example, from family physician to specialists, or from family physician to physiotherapist. The CMA is working with other medical stakeholders to create a referral process tool kit that governments, health care organizations and practitioners can use to support the development of more effective and efficient referral systems. The patient may also need non-medical support services to help cope with disability related to chronic disease. For example, a person with arthritis who wants to remain at home may need to have grab bars, ramps or stair lifts installed there. Ideally, a coordinated system of chronic disease management would also include referral to those who could provide these services. * The third necessary element is support for informal caregivers. These are the unsung heroes of elder care. An estimated four million Canadians are providing informal, unpaid care to family members or friends. About a quarter of these caregivers are themselves 65 or older. Their burden can be a heavy one, in terms of both time and expense. Stress and isolation are common among caregivers. The federal government has taken steps to provide much-needed support to informal caregivers. The most recent federal budget, for example, increased the amount of its Caregiver Tax Credit. We recommend that the government build on these actions, to provide a solid network of support, financial and otherwise, to informal caregivers. * The fourth and final element is improving access to necessary services. Only physician and hospital services are covered through the Canada Health Act, and many other services are not. All provinces have pharmacare programs for people over 65, but coverage varies widely between provinces and many, particularly those with lower incomes, find it difficult to pay for their necessary medications. Seniors who do not have post-retirement benefit plans - and these are the majority - also need to pay out of pocket for dental care, physiotherapy, mental health care and other needed supports. We recommend that all levels of government explore adjusting the basket of services provided through public funding, to make sure that it reflects the needs of the growing number of Canadians burdened by chronic disease. In particular, we recommend that the federal government negotiate a cost-shared program of comprehensive prescription drug coverage with provincial/territorial governments. In conclusion, the CMA believes the committee is wise to consider how we might reduce the impact - on individual patients, the health care system and society - of chronic disease related to aging. Chronic disease management is a complex problem, but warrants close attention as it is now the dominant form of health care in Canada. We look forward to the results of the Committee's deliberations.
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Healthy Living: CMA's Presentation to the House of Commons Standing Committee on Health

https://policybase.cma.ca/en/permalink/policy10058
Date
2011-02-08
Topics
Population health/ health equity/ public health
  1 document  
Policy Type
Parliamentary submission
Date
2011-02-08
Topics
Population health/ health equity/ public health
Text
I would like to thank the Committee for inviting the Canadian Medical Association to appear on this very important topic. As a family physician in Saskatoon and the past president of the CMA, I can assure you that Canada's physicians have an acute interest in drawing attention to the health consequences of poor nutrition and lack of physical activity, and the challenge of obesity. We know that obesity is a contributor to a number of chronic diseases, such as diabetes, cardiovascular disease, hypertension and liver disease, as well as breast, colon and prostate cancer. We know that over-consumption of salt, sugars, and saturated and trans fats can be a factor in hypertension, cardiovascular disease and stroke, and kidney disease. And we know that Canadians have become dramatically less physically fit in recent decades. As a country, we need to espouse a culture of health and wellness, based on good nutrition and physical activity. Finding solutions will require a collaborative, system-wide approach involving all levels of government, the health, education, industry, finance and transportation ministries, and the private sector. We know that if provided with support when young, children can adopt healthy life styles. That is why the CMA continues to call on governments across the country to work with school boards to: * provide at least 30 minutes of active daily physical education for all primary and secondary grades, given by trained educators in the field; * provide access to attractive, affordable, healthy food choices and clearly post the nutrition content of the foods they sell; and * ban junk food sales in all primary, intermediate and secondary schools in Canada. The CMA has advocated policies and regulations for food safety, and promoted healthy eating and physical activity as key components of healthy living and the prevention of disease. The CMA policy statement Promoting Physical Activity and Healthy Weights calls for a Canada-wide strategy for healthy living that includes: * information and support for Canadians to help them make healthy choices; * support for health professionals in counselling patients on healthy weight and in treating existing obesity; * community infrastructure that makes healthy living choices easier; and * public policies that encourage healthy eating and physical activity. All Canadians need access to nutritious food at affordable prices. The price of milk, produce and other healthy foods varies greatly in different parts of Canada. In remote areas, they are even more expensive because of high transportation costs. In urban areas, nutritious food may be unaffordable for people on low incomes and unavailable as grocery stores move to the suburbs thus creating "food deserts". Among other strategies, governments should consider: implementing school meal programs; and taking into account the cost of nutritious food when setting social assistance rates. The proliferation of packaged, prepared foods and fast foods has contributed to excess amounts of salt, sugar, saturated and trans fat and calories in our diet. While we welcome the federal government's support for the reduction of trans fats and sodium levels in processed foods, reliance on the food industry to voluntarily reduce these ingredients has not been successful. We believe that regulation is needed to safeguard the health of Canadians. Healthy living begins with an awareness of the impact of food and exercise on health. While individuals must take responsibility for making healthy choices, the CMA believes that governments have an obligation to provide guidance on healthy eating and physical activity that can be easily incorporated into daily lives. We commend the federal and provincial/ territorial governments for their recent Framework for Action to Promote Healthy Weights. Physicians were also pleased to see the revised Canada's Food Guide in 2007, and the recent update to Canada's Physical Activity Guide. The CMA supports nutrition and caloric labeling on packaged foods to help Canadians make informed food choices. The federal nutrition labeling awareness initiative is useful to consumers but we think information can be simplified. For example, the UK is testing front of pack 'traffic light' coding for fats, salt, sugar and calories. The CMA has also called for a clear display of caloric counts, and sodium, trans-fats and protein levels on restaurant and cafeteria menus. The CMA believes encouragement of active transportation, that is walking and cycling, is a way to increase physical activity. Communities need to make it easier for Canadians to be physically active in their day-to-day life by providing sidewalks and pedestrian-friendly intersections; bike lanes, paths and parking spaces; and trails, parks and green spaces. One area that we believe warrants further study is the use of incentives to promote healthy behaviours. By transferring funds or other benefits to an individual, incentives provide immediate rewards for behaviours that can lead to long-term health gains. An example in Canada is the Children's Fitness Tax Credit, which is intended to help children be more active by off-setting some of the costs incurred by families for sports and leisure programs. Government disincentives largely involve the use of regulation and taxation in order to change individual behaviour. This helps to create an environment in which healthy choices are easier to make. It is impossible to overstate the importance of nutrition and physical activity to our health. Encouraging Canadians to make healthy choices requires a wide ranging, long-term and collaborative approach. The CMA believes this challenge should be met urgently. Canada's physicians are more than ready to work with governments to ensure that Canadians can improve and maintain their health.
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A Healthy Population for a Stronger Economy: CMA pre-budget consultation submission to the Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy10224
Date
2011-08-12
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2011-08-12
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) submission to the House of Commons Standing Committee on Finance examines how increasing retirement income saving options, improving access to prescription drugs, and planning for a Canadian Health Quality Alliance to promote innovation in the delivery of high quality health care can enhance our health care system and, in turn, make our economy more productive. Higher quality health care and expanded options for meeting the needs of retired and elderly Canadians will contribute to the ultimate goals of better patient care, improved population health and help our country reach its full potential. Polls show that Canadians are becoming increasingly concerned about the future of their health care system, particularly in terms of their ability to access essential care. The CMA's 2011 pre-budget submission responds to these concerns and supports a healthy population, a healthy medical profession and a healthy economic recovery. Our recommendations are as follows: Recommendation # 1 The federal government should study options to expand the current PRPP definition beyond defined contribution pension plans. Also, the federal government should expand the definition of eligible administrators of PRPPs beyond financial institutions to include organizations such as professional associations. Recommendation # 2 Governments, in consultation with the life and health insurance industry and the public, should establish a program of comprehensive prescription drug coverage to be administered through reimbursement of provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drug therapies. Recommendation # 3 The federal government should convene a time-limited national steering committee that would engage key stakeholders in developing a proposal for a pan-Canadian Health Quality Alliance with a mandate to work collaboratively towards integrated approaches for a sustainable health care system through innovative practices in the delivery of high quality health care. Introduction Over the past year, the CMA has engaged Canadians across the country in a broad-based public consultation on health care and heard about their concerns and experiences with the system. This exercise was undertaken as part of the CMA's Health Care Transformation (HCT) initiative, a roadmap for modernizing Canada's health care systemi so that it puts patients first and provides Canadians with better value for money. We have heard through these consultations that Canadians do not believe they are currently getting good value from their health care system, a feeling borne out by studies comparing Canada's health care system to those in leading countries in Europe. We also heard that Canadians are concerned about inequities in access to care beyond the basic medicare basket, particularly in the area of access to prescription drugs. While all levels of government need to be involved, it is the federal government that must lead the transformation of our most cherished social program. 1. Retirement Income Improvement Issue: Increasing retirement savings options for Canadians with a focus on improving their ability to look after their long-term care needs. Background The CMA remains concerned about the status of Canada's retirement income system and the future ability of Canada's seniors to adequately fund their long-term and supportive care needs. The proportion of Canadian seniors (65+) is expected to almost double from its present level of 13% to almost 25% by 2036. Statistics Canada projections show that between 2015 and 2021 the number of seniors will, for the first time, surpass the number of children under 14 years of age.ii The CMA has been working proactively on this issue in several ways, including through the recently created Retirement Income Improvement Coalition (RIIC), a broad-based coalition of 11 organizations representing over one million self-employed professionals. The coalition has previously recommended to the federal government the following actions: * increased retirement saving options for all Canadians, particularly the self-employed; * changes to the Income Tax Act, Income Tax Regulations and the Employment Standards Act to enable the self-employed to participate in pension plans; * the approval of Pooled Retirement Pension Plans (PRPP) as a retirement savings program for the self-employed; * changes to the current tax-deferred income saving options (increase the percentage of earned income or the maximum-dollar amount contribution limit for RRSPs); * a requirement that registration to all retirement saving options be voluntary (optional); and * opportunities for Canadians to become better educated about retirement saving options (financial literacy).iii The CMA appreciates that federal, provincial and territorial finance ministers are moving ahead with the introduction of Pooled Registered Retirement Plans (PRPPs). The CMA, as part of the RIIC, has been providing input into the consultation process. However, PRPPs represent only one piece of a more comprehensive retirement savings structure. Recommendation # 1 The federal government should study options that would not limit PRPPs to defined contribution pension plans. Target benefit plans should be permitted and encouraged. Target benefit plans allow risk to be pooled among the plan members, providing a more secure vehicle than defined contribution plans. Also, the administrators of PRPPs should not be limited to financial institutions. Well-governed organizations that represent a particular membership should be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. The CMA also continues to be concerned about the ability of Canadians to save for their long-term health care needs. The Wait Time Alliance - a coalition of 14 national medical organizations whose members provide specialty care to patients - reported recently that many patients, particularly the elderly, are in hospital while waiting for more suitable and appropriate care arrangements. Mostly in need of support rather than medical care, these patients are hindered by the lack of options available to them, often due to limited personal income. The CMA has previously recommended that the federal government should study options for pre-funding long-term care, including private insurance, tax-deferred and tax-prepaid savings approaches, and contribution-based social insurance. This remains pertinent. 2. Universal access to prescription drugs Issue: Ensuring all Canadians have access to a basic level of prescription drugs. Background Universal access to prescription drugs is widely acknowledged as part of the "unfinished business" of medicare in Canada. In 1964 the Hall Commission recommended that the federal government contribute 50% of the cost of a Prescription Drug Benefit within the Health Services Program. It also recommended a $1.00 contributory payment by the purchaser for each prescription. This has never been implemented.iv What has emerged since then is a public-private mix of funding for prescription drugs. The Canadian Institute for Health Information (CIHI) has estimated that, as of 2010, 46% of prescription drug expenditures were public, 36% were paid for by private insurance and 18% were paid for out-of-pocket.v Nationally there is evidence of wide variability in levels of drug coverage. According to Statistics Canada, 3% of households spent greater than 5% of after-tax income on prescription drugs in 2008. Across provinces this ranged from 2.2% in Ontario and Alberta, to 5.8% in P.E.I. and 5.9% in Saskatchewan.vi Moreover, there is significant variation between the coverage levels of the various provincial plans across Canada. For example, the Manitoba Pharmacare Program is based on total income, with adjustment for spouse and dependents under 18, while in Newfoundland and Labrador, the plan is based on net family income.vii,viii The Commonwealth Fund's 2010 International Health Policy Survey found that 10% of Canadian respondents said they had either not filled a prescription or skipped doses because of cost issues.ix Moreover, there have been numerous media stories about inequities in access across provinces to cancer drugs and expensive drugs for rare diseases. The high cost of prescription drugs was frequently raised during our public consultations this year. The need for a national drug strategy or pharmacare plan was mentioned by an overwhelming number of respondents, many of whom detailed how they had been affected by the high cost of drugs. The cost to the federal government of a program that would ensure universal access to prescription drugs would depend on the threshold of out-of-pocket contribution and the proportion of expenses that it would be willing to share with private and provincial/territorial public plans. Estimates have ranged from $500 millionx, and $1 billionxi, to the most recent estimate from the provincial-territorial health ministers of $2.5 billion (2006).xii Recommendation # 2 Governments, in consultation with the life and health insurance industry and the public, should establish a program of comprehensive prescription drug coverage to be administered through reimbursement of provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drug therapies. Such a program should include: * a mandate for all Canadians to have either private or public coverage for prescription drugs; * a uniform income-based ceiling (between public and private plans and across provinces/territories) on out-of-pocket expenditures, on drug plan premiums and/or prescription drugs; * federal/provincial/territorial cost-sharing of prescription drug expenditures above a household income ceiling, subject to capping the total federal and/or provincial/territorial contributions either by adjusting the federal/provincial/territorial sharing of reimbursement or by scaling the household income ceiling or both; * a requirement for group insurance plans and administrators of employee benefit plans to pool risk above a threshold linked to group size; and * a continued strong role for private supplementary insurance plans and public drug plans on a level playing field (i.e., premiums and co-payments to cover plan costs). 3. Innovation for Quality in Canadian Health Care Issue: Development of a proposal to establish a Canadian Health Quality Alliance to promote innovation in the delivery of high-quality health care in Canada. Background There is general agreement that Canada's health care system is no longer a strong performer compared to similar nations. Clearly, we can do better. However, progress has been slow on a comprehensive quality agenda for our health care system. At the national level, there is no coordination or body with a mandate to promote a comprehensive approach to quality improvement. Over the past two decades, health care stakeholders in Canada have gradually come to embrace a multi-dimensional concept of quality in health care encompassing safety, appropriateness, effectiveness, accessibility, competency and efficiency. The unilateral federal funding cuts to health transfers that took effect in 1996 precipitated a long preoccupation with the accessibility dimension that was finally acknowledged with the Wait Time Reduction Fund in the 2004 First Ministers Accord. The safety dimension was recognized with the establishment of the Canadian Patient Safety Institute (CPSI) in 2003. Competence has been recognized by health professional organizations and regulatory bodies through the development of peer-review programs and mandated career-long professional development. While six provinces have established some form of health quality council (B.C., Alta., Sask., Ont., Que., N.B.), there is no national approach to quality improvement beyond safety. Given that health care stands as Canadians' top national priority and that it represents a very large expenditure item for all levels of government, the lack of a national approach to quality improvement is a major shortcoming. In the U.S., the Institute for Healthcare Improvement is dedicated to developing and promulgating methods and processes for improving the delivery of care throughout the world.xiii England's National Health Service (NHS) has also created focal points over the past decade to accelerate innovation and improvement throughout their health system. Canadian advancements in the health field have occurred when the expertise and perspective of a range of stakeholders have come together. The CPSI, for example, was established following the deliberations and report of the National Steering Committee on Patient Safety.xiv It is estimated that it would cost less than $500,000 for a multi-stakeholder committee to develop a proposal for a national alliance for quality improvement, including the cost of any commissioned research. Recommendation # 3 The federal government should convene a time-limited national steering committee that would engage key stakeholders in developing a proposal for a pan-Canadian Health Quality Alliance with a mandate to work collaboratively towards integrated approaches for a sustainable health care system through innovative practices in the delivery of high quality health care. This alliance would be expected to achieve the following in order to modernize health care services: * Promote a comprehensive approach to quality improvement in health care; * Promote pan-Canadian sharing of innovative and best practices; * Develop and disseminate methods of engaging frontline clinicians in quality improvement processes; and * Establish international partnerships for the exchange of innovative practices. Such an alliance could be established in a variety of ways: * Virtually, using the Networks of Centres of Excellencexv approach; * By expanding the mandate of an existing body; or * Through the creation of a new body. REFERENCES i Canadian Medical Association. Health Care Transformation in Canada. Change that Works. Care that Lasts. http://www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Advocacy/HCT/HCT-2010report_en.pdf Accessed 13/07/11. ii Statistics Canada. Population Projections for Canada, Provinces and Territories. http://www.statcan.gc.ca/pub/91-520-x/2010001/aftertoc-aprestdm1-eng.htm. Accessed 13/07/11. iii Retirement Income Improvement Coalition. Letter to the federal Minister of Finance and the Minister of State (Finance). March 17, 2011. ivHall, E. Royal Commission on Health Services. Volume 1. Ottawa: Queen's Printer, 1964. vCanadian Institute for Health Information. Drug Expenditure in Canada, 1985 to 2010. Ottawa, 2010. viStatistics Canada. CANSIM Table 109-5012 Household spending on prescription drugs as a percentage of after-tax income, Canada and provinces, annual (percent). http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&searchTypeByValue=1&id=1095012. Accessed 05/29/11. vii Manitoba Health. Pharmacare deductible estimator. http://www.gov.mb.ca/health/pharmacare/estimator.html. Accessed 07/28/11. viii Newfoundland Department of Health and Community Services. Newfoundland and Labrador Prescription Drug Program (NLPDP). http://www.health.gov.nl.ca/health/prescription/nlpdp_application_form.pdf. Accessed 07/29/11. ixCommonwealth Fund. International health policy survey in eleven countries. http://www.commonwealthfund.org/~/media/Files/Publications/Chartbook/2010/PDF_2010_IHP_Survey_Chartpack_FULL_12022010.pdf. Accessed 05/29/11. x Senate Standing Committee on Social Affairs, Science and Technology. The health of Canadians - the federal role. Volume six: recommendations for reform. Ottawa, 2002. xi Commission on the Future of Health Care in Canada. Building on values: the future of health care in Canada. Ottawa, 2002. xii Canadian Intergovernmental Conference Secretariat. Backgrounder: National Pharmaceutical Strategy decision points. http://www.scics.gc.ca/english/conferences.asp?a=viewdocument&id=112. Accessed 23/07/11. xiii http://www.ihi.org. Accessed 29/07/10. xiv National Steering Committee on Patient Safety. Building a safer system: a national integrated strategy for improving patient safety in Canadian health care. http://rcpsc.medical.org/publications/building_a_safer_system_e.pdf. Accessed 23/07/11. xv http://www.nce-rce.gc.ca/index_eng.asp. Accessed 29/07/10.
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A Healthy Population for a Stronger Economy: The Canadian Medical Association's Presentation to the Standing Committee on Finance's pre-budget consultations

https://policybase.cma.ca/en/permalink/policy10228
Date
2011-10-18
Topics
Health systems, system funding and performance
Population health/ health equity/ public health
  1 document  
Policy Type
Parliamentary submission
Date
2011-10-18
Topics
Health systems, system funding and performance
Population health/ health equity/ public health
Text
Thank you for the opportunity to appear before this committee. Over the past year, the Canadian Medical Association has engaged in a wide-ranging public consultation on health care and heard from thousands of Canadians about their concerns and experiences with the system. This exercise was undertaken as part of the CMA's Health Care Transformation initiative, a roadmap for modernizing our country's health care system so that it puts patients first and provides Canadians with better value for money. The CMA found there is a groundswell of support for change among other health care providers, stakeholders and countless Canadians who share our view that the best catalyst for transformation is the next accord on federal transfers to provinces for health care. That said, while looking ahead to what we would like to see in the next health care accord, we have identified immediate opportunities for federal leadership in making achievable, positive changes to our health care system that would help Canadians be healthier and more secure and help ensure the prudent use of their health care dollars. During our consultation, we heard repeated concerns that Canada's medicare system is a shadow of its former self. Once a world leader, Canada now lags behind comparable nations in providing high quality health care. Improving the quality of health care services is key if Canada is ever going to have a high performing health system. The key dimensions of quality, and by extension, the areas that need attention are: Safety, Effectiveness, Patient-Centeredness, Efficiency, Timeliness, Equitability and Appropriateness. Excellence in quality improvement in these areas will be a crucial step towards sustainability. To date, six provinces have instituted health quality councils. Their mandates and their effectiveness in actually achieving lasting system wide improvements vary by province. What is missing, and urgently needed, is an integrated, Pan-Canadian approach to quality improvement in health care in Canada that can begin to chart a course that will ensure that Canadians ultimately have the best health and health care in the world. Canadians deserve no less and, with the resources at our disposal, there is no reason why this should not be achievable. The CMA recommends that the Federal Government funds the establishment, and adequately resources the operations, of an arms length Canadian Health Quality Council with the mandate to be a catalyst for change, a spark for innovation and a facilitator to disseminate evidence based quality improvement initiatives so that they become embedded in the fabric of our health systems from coast to coast to coast. Canadians are increasingly questioning whether they are getting value for the $190 billion a year that go into our country's health care system... with good reason as international studies indicate they are not getting good value for money. Defining, promoting and measuring quality care are not only essential to obtaining better health outcomes, they are crucial to building the accountability to Canadians that they deserve as consumers and funders of the system. We also heard during our consultation that Canadians worry about inequities in access to care beyond the hospital and doctor services covered within medicare, particularly when it comes to the high cost of prescription drugs. Almost 50 years ago, the Hall Commission recommended that all Canadians have access to a basic level of prescription drug coverage, yet what we have now is a jumble of public and private funding for prescription drugs that varies widely across the country. Last year, one in 10 Canadians either failed to fill a prescription or skipped a dose because they couldn't afford it. Universal access to prescription drugs is widely acknowledged to be part of the unfinished business of medicare in Canada. Our second recommendation, therefore, is that governments establish a program of comprehensive prescription drug coverage to be administered through reimbursement of provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drug therapies. This should be done in consultation with the life and health insurance industry and the public. In the 21st century, no Canadian should be denied access to medically necessary prescription drugs because of an inability to pay for them. Our third and final recommendation relates to our aging population and the concerns Canadians share about their ability to save for their future needs. We recommend that the federal government study options that would not limit PRPPs to defined contribution pension plans. Target benefit plans should be permitted and encouraged as they allow risk to be pooled among the plan members, providing a more secure vehicle than defined contribution plans. As well, the administrators of PRPPs should not be limited to financial institutions. Well-governed organizations that represent a particular membership should be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. The CMA appreciates that governments are moving ahead with the introduction of Pooled Registered Retirement Plans. However, we note that PRPPs represent only one piece of a more comprehensive saving structure. We also continue to be concerned about the ability of Canadians to save for their long-term health care needs. Many patients, particularly the elderly, are in hospital waiting for more suitable care arrangement. These patients are hindered by a lack of available options, often because they lack the means to pay for long-term care. They and their families suffer as a result, and so, too, does our health care system. While not in this pre-budget brief, the CMA holds to recommendations we have made in previous years that the federal government study options to help Canadians pre-fund long-term care. In closing, let me simply say that carrying out these recommendations would make a huge and positive impact, soon and over the long term, in the lives of literally millions of Canadians from every walk of life. Thank you for your time. I would be happy to answer your questions.
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Improving Accountability in Canada's Health Care System: The Canadian Medical Association's Presentation to the Senate Standing Committee on Social Affairs, Science and Technology

https://policybase.cma.ca/en/permalink/policy10230
Date
2011-10-19
Topics
Health care and patient safety
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2011-10-19
Topics
Health care and patient safety
Health systems, system funding and performance
Text
The CMA appreciates the opportunity to appear before this committee as part of your review of the 10-Year Plan to Strengthen Health Care. An understanding of what has worked and what hasn't since 2004 is critical to ensuring the next accord brings about necessary change to the system. Overview of 2004 Accord On the positive side of the ledger, the 2004 accord provided the health care system with stable, predictable funding for a decade - something that had been sorely lacking. It also showed that a focused commitment, in this case on wait times, can lead to improvements. However, little has been done on several other important commitments in the Accord, such as the pledge that was also made in 2003 to address the significant inequity among Canadians in accessing prescription drugs. Along with the lack of long-term, community and home-based care services, this accounts for a major gap in patient access along the continuum of care. We also know that accountability provisions in past accords have been lacking in several ways. For instance, there has been little progress in developing common performance indicators set out in previous accord. i The 2004 accord has no clear terms of reference on accountability for overseeing its provisions. Vision and principles for 2014 What the 2004 accord lacked was a clear vision. Without a destination, and a commitment to getting there, our health care system cannot be transformed and will never become a truly integrated, high performing health system. The 2014 Accord is the perfect opportunity to begin this journey, if it is set up in a way that fosters the innovation and improvements that are necessary. By clearly defining the objectives and securing stable, incremental funding, we will know what changes we need to get us there. Now is the time to articulate the vision- to say loudly and clearly that at the end of the 10-year funding arrangement, by 2025, Canadians will have the best health and health care in the world. With a clear commitment from providers, administrators and governments, this vision can become our destination. As a first step to begin this long and difficult journey, the CMA has partnered with the Canadian Nurses Association, and together we have solicited support from over 60 health care organizations for a series of "Principles to Guide Health Care Transformation in Canada." These principles define a system that would provide equitable access to health care based on clinical need; care that is high quality and patient-centred; and that focuses on empowering patients to attain and maintain wellness. They call for a system that provides accountability to those who use it and those who fund it; and that is sustainable - by which I mean adequately resourced in terms of financing, infrastructure and human resources, and measured against other high-performing systems, with cost linked to outcomes. Based on our experience working within the provisions of the 2004 accord, we would like to suggest three strategies to ensure the next accord leads to a sustainable, high-performing health care system. They are: a focus on quality; support for system innovation; and the establishment of an accountability framework and I will touch briefly on each one. Focus on quality First, the crucial need to focus on improving the quality of health care services. The key dimensions of quality, and by extension, the areas that need attention are: safety, effectiveness, patient-centredness, efficiency, timeliness, equitability and appropriateness. Excellence in quality improvement in these areas will be a crucial step towards sustainability. To date, six provinces have instituted health quality councils. Their mandates and their effectiveness in actually achieving lasting system-wide improvements vary. What is missing and urgently needed is an integrated, pan-Canadian approach to quality improvement in health care that can begin to chart a course to ensure Canadians ultimately have the best health and health care in the world. Canadians deserve no less and, with the resources at our disposal, there is no reason why this should not be achievable. The CMA recommends that the federal government fund the establishment and resource the operations of an arms-length Canadian Health Quality Council, with the mandate to be a catalyst for change, a spark for innovation and a facilitator to disseminate evidence-based quality improvement initiatives so that they become embedded in the fabric of our health systems from coast to coast to coast. To help expand quality improvement across the country, the Institute for Healthcare Improvement's Triple Aim provides the solid framework. Our health care systems will benefit inordinately from a simultaneous focus on providing better care to individuals and better health to populations, while reducing the per-capita cost. There is ample evidence that quality care is cost effective care. This approach, when adopted and applied as the pan-Canadian framework for any and all structural changes and quality improvement initiatives, will not only serve patients well, but will also enhance the experience of health care providers on the front lines. System innovation The second strategy revolves around system innovation. Innovation and quality improvement initiatives are infinitely more likely to be successful and sustained if they arise out of a commitment by frontline providers and administrators to the achievement of a common goal. We need to shift away from compliance models with negative consequences that have little evidence to support their sustainability. Innovative improvements in health care in Canada are inadequately supported, poorly recognized, and constrained from being shared and put into use more widely. This needs to change. The 2014 accord, with a focus on improving Canadians' health and health care, can facilitate the transformation we all seek. Building on the success of the 2004 Wait Times Reduction Fund and the 2000 Health Accord Primary Health Care Transition Fund, the CMA proposes the creation of a Canada Health Innovation Fund that would broadly support the uptake of health system innovation initiatives across the country. A Working Accountability Framework And, third, there needs to be a working accountability framework. This would work three ways. To provide accountability to patients - the system will be patient-centred and, along with its providers, will be accountable for the quality of care and the care experience. To provide accountability to citizens - the system will provide and, along with its administrators and managers, will be accountable for delivering high quality, integrated services across the full continuum of care. And to provide accountability to taxpayers - the system will optimize its per-capita costs, and along with those providing public funding and financing, will be accountable for the value derived from the money being spent. We have done all of this because of our profound belief that meaningful change to our health care system is of the essence, and that such change can and must come about through the next health accord. Therefore I thank this committee for your efforts on this important area. I would be happy to answer your questions. Appendix A Issues identified in 2004 Accord and Current Status [NOTE: see PDF for correct dispaly of table] Issue Current Status Annual 6% escalator in the CHT to March 31, 2014 Has provided health care system with stable, predictable funding for a decade. Adoption of wait-time benchmarks by December 2005 for five procedural areas Largely fulfilled. However, no benchmarks were set for diagnostic imaging. The Wait Time Alliance is calling for benchmarks for all specialty care. Release of health human resource (HHR) action plans by December 2005 Partially fulfilled. Most jurisdictions issued rudimentary HHR plans by the end of 2005; F/P/T Advisory Committee on Health Delivery and Human Resources issued a paper on a pan-Canadian planning HHR framework in September 2005. First-dollar coverage for home care by 2006 Most provinces offer first-dollar coverage for post-acute home care but service varies across the country for mental health and palliative home care needs. An objective of 50% of Canadians having 24/7 access to multidisciplinary primary care teams by 2011 Unfulfilled: Health Council of Canada reported in 2009 that only 32 per cent of Canadians had access to more than one primary health care provider. A 5-year $150 million Territorial Health Access Fund Fulfilled: Territorial Health System Sustainability Initiative (THSSI) funding extended until March 31, 2014. A 9-point National Pharmaceuticals Strategy (NPS) Largely unfulfilled: A progress report on the NPS was released in 2006 but nothing has been implemented. Accelerated work on a pan-Canadian Public Health Strategy including goals and targets F/P/T health ministers (except Quebec) put forward five high-level health goals for Canada in 2005, although they were not accompanied by operational definitions that would lend themselves to setting targets. Continued federal investments in health innovation Unknown-no specificity in the 2004 Accord. Reporting to residents on health system performance and elements of the Accord P/T governments ceased their public reporting after 2004, and only the federal government has kept its commitment (at least to 2008). Formalization of the dispute advance/resolution mechanism on the CHA Done but not yet tested. i P/T governments ceased their public reporting after 2004, and only the federal government has kept its commitment (at least to 2008).Government of Canada. Healthy Canadians: a federal report on comparable health indicators 2008. http://www.hc-sc.gc.ca/hcs-sss/alt_formats/hpb-dgps/pdf/pubs/system-regime/2008-fed-comp-indicat/index-eng.pdf. Accessed 06/21/11.
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Nutrition Labelling: CMA's Presentation to the House of Commons Standing Committee on Health

https://policybase.cma.ca/en/permalink/policy10085
Date
2011-03-03
Topics
Health care and patient safety
Population health/ health equity/ public health
  1 document  
Policy Type
Parliamentary submission
Date
2011-03-03
Topics
Health care and patient safety
Population health/ health equity/ public health
Text
Thank you very much for inviting the Canadian Medical Association back to this committee as you continue your study on healthy living. A few weeks ago my colleague Dr. Doig was here to talk about the health consequences of poor nutrition and lack of physical activity and the policies CMA has advocated to promote healthy living. Today I would like to expand upon nutrition labelling and health claims on foods, and on the labelling of foods regulated as natural health products. Nutrition facts tables can be an important source of information, but many Canadians have difficulty interpreting them. A 2009 Health Canada review of research on nutrition labelling indicated that: * those with little nutrition knowledge have difficulty using the tables and are unable to relate the information they contain to their own dietary needs; and that * the concept of percentage of daily value is often misunderstood. There has been an increase in the use of health claims on the front of packaging expressed as slogans or logos such as "healthy choice," as well as in disease reduction and nutrient content claims. Studies have shown that foods carrying health-related claims are seen by consumers as healthier choices. But the myriad of different claims can be confusing and may, in fact, draw attention away from the less healthy characteristics of a food, or oversimplify complex nutritional messages. We believe a standard consistent "at a glance" approach to front-of-package food labelling could reduce confusion and help consumers make informed dietary choices. The "traffic light" front-of-pack labelling currently in voluntary use in the UK is an example. The front-of-pack labels on composite processed foods use green, amber and red to indicate low, medium or high levels of the nutrients most strongly associated with diet-related health risks: fat, saturated fat, sugars and salt. Also included is calorie count per serving and percentage daily amount information. Research in the UK has shown that consumers generally understand these labels. Shoppers are most likely to use them when buying a product for the first time; to compare different products; when shopping for children; when trying to control intake of certain ingredients such as fat or salt, for health reasons; or when trying to lose weight. Not surprisingly, research in the UK and Canada also shows that those most likely to read nutrition labels are those who are already interested in healthy eating. For this reason, labelling policy must be embedded in a broader nutrition policy that uses multiple instruments to foster education and interest in healthy eating, and helps ensure that Canadians have healthy food choices by, for example, regulating amounts of salt in processed food. In addition, physicians have become quite concerned about a recent tendency toward regulating 'fortified foods 'as Natural Health Products. The Food and Drugs Act effectively prevents products classified as foods from being marketed as having medicinal benefits unless there is compelling scientific evidence that the claims are true and the products are safe. The same strong legislation does not apply to Natural Health Products (NHPs), which are regulated under a different act. This is a concern because a trend is emerging whereby manufacturers of products normally sold as foods fortify their products with approved natural health products such as vitamins or minerals. Examples of these are energy drinks and vitamin-enhanced juice, power bars, gums and candy. The manufacturer can then request federal approval to market the product as a 'health product in food format.' If approved, food labelling requirements no longer apply and health claims that would not be allowed under the Food and Drugs Act can be made. Without proper nutrition labelling, it is difficult, if not impossible, for consumers to make informed food choices. This can be particularly troubling for those with special diets or health concerns. Further, those misled by dubious health claims might be consuming empty calories or high amounts of fat or sodium, with no corresponding benefit. The result is that the health of Canadians may be compromised. The CMA has called on Health Canada to require compelling evidence of health benefits before changing a product's regulatory status from food to natural health product, and nutrition labelling for all foods regulated as a natural health product. Faced with an array of products and health claims, and a barrage of advertising extolling their benefits, Canadians can find it challenging to make healthier food choices. To find our way through to the right choice, we need good nutritional information, and the ability to access and understand this information. Governments and health care providers share a responsibility to help Canadians make choices that will help them achieve and maintain good health. Canada's doctors are partners in healthy living and are ready to work with governments and others toward a healthy population. I welcome your questions.
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Registered retirement savings plans : Presentation to the House of Commons Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy1996
Last Reviewed
2019-03-03
Date
1994-11-17
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1994-11-17
Topics
Physician practice/ compensation/ forms
Text
Millions of Canadians are planning for their retirement relying on Registered Retirement Savings Plans (RRSPs) and private pension plans, either as their only future retirement income or to supplement the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP). Approximately 5 million contribute to RRSPs. Another 3.7 million participate in registered pension plans (RPPs). Some are independent business people, others work in family businesses. Some are self-employed or work for organizations that have opted for RRSPs instead of RPPs. Our Alliance is representative of this Canadian diversity. The objective of the Alliance is to maintain the current provisions of the Income Tax Act (the Act) and Income Tax Regulations (the Regulations) governing retirement savings. The current system is fundamentally good for the economy of Canada, and any changes made for short term deficit reduction will ultimately harm the economy in general and small and medium-sized business, in particular. Research shows that RRSPs are an important tool for small business retirement planning. Only in recent years have limits been adjusted to bring similar protection to those afforded under RPPs. We have only just started to achieve a measure of equitable treatment for the retirement savings of the self-employed and employees not protected by employer pension plans. The current system provides for the harmonization of all tax-assisted retirement savings arrangements, which will only be achieved when the limits on money-purchase arrangements (including RRSPs) attain the equivalent limits already set for defined-benefit arrangements, such as employer pension plans. Changes to RRSPs alone will discriminate against the self-employed and against employees without employer pension plans. These Canadians form the majority of the workforce now and in the future. Arguments in favour of changes to the current system are based on two assumptions: firstly, that Canadians are saving sufficient income for their retirement and will continue to do so regardless of tax increases; and secondly, that the cost to the Government in lost tax revenues is enormous. Neither of these assumptions is valid. Background The fiscal theory underlying retirement savings is decades old. Contributions to registered plans are deductible and all earnings are exempt from tax until benefits are paid out from those plans. In essence the retirement savings system consists of a deferral of tax on contributions and earnings. The pension tax reform of 1989-1990 does not change the underlying fiscal theory. It aims to achieve equity between the employed and the self-employed and between defined benefit arrangements and money-purchase arrangements (including RRSPs). That equity was achieved by phasing in a higher contribution limit for money-purchase arrangements so that they could, in the future, provide a retirement income comparable to that furnished by a defined benefit arrangement. This objective of achieving equivalence permeates the Act and the Regulations and has resulted in a substantial and continuing realignment of retirement savings arrangements in Canada. That realignment, with its attendant compliance costs, borne by employers and employees, was based on the acceptance of the premises behind pension tax reform, which acceptance Canadians have demonstrated. This realignment had a gestation period of over 5 years. 1 From the 1984 federal budget, which sought complete equity but with massive compliance costs, to the 1985 federal budget, which sought lesser compliance costs but with diminished equity, there issued pension tax reform, which yields substantial equity with substantial compliance costs. The Auditor General, in his 1988 report, estimated that pension tax reform would necessitate $330 million in start-up costs and $15 million in annual reporting costs. The Department of Finance disagreed and estimated that start-up costs would be from $60 to $70 million and that the annual reporting costs would be between $10 and $15 million. The independent consultant's report, upon which the Auditor General's report was based, had said that the start-up costs would be $395 million. Accordingly, Canadians have already borne many of the costs of retooling the retirement savings system and will continue to do so. Having paid those costs, surely Canadians are entitled to the measure of equity that the system promises. Governing Principles There are disquieting rumours about possible changes to the current retirement savings system. As yet, the government has said little on this issue, other than to say that the retirement system is not inviolable. The Alliance seeks to maintain the status quo. We should, therefore, deal with the principles that underlie the current system, and which continue to hold true: internal fairness and the accumulation of sufficient retirement income. Internal Fairness The current system was reformed to deliver internal fairness - if not quite yet, by 1996. It allows individuals to accumulate a pre-determined amount of private retirement savings. Taxpayers may, on a tax-assisted basis, earn a lifetime pension at the rate of $1,722 per year. In other words, an employee with 35 years of service may be entitled, on retirement, to an annual lifetime pension of $60,270. That level of tax assistance has been available to members of defined benefit plans since 1977. It has been frozen at that level since that time and will remain frozen until 1996. The money purchase limits, including RRSP limits, have been phased in to eventually provide equivalent benefits. Accordingly, the annual RRSP limits, when fully instituted in 1996, will allow the self-employed to accumulate retirement savings equivalent to those of members of defined benefit plans. Thus, one of the rationales underlying the current retirement savings structure is to eliminate the earlier discrimination against the self-employed. The self-employed will now be allowed to achieve retirement savings equivalent to those available to employees. RRSPs are not an isolated program under the Act, but rather an integral component of an indissoluble whole. Accumulation of Sufficient Retirement Income The limits set by pension tax reform are intended to provide a level of retirement income that will allow retired individuals to maintain their standard of living. It is generally felt that a retirement income equal to about 60-70 percent of pre-retirement income should not result in a marked change in one's standard of living. Increasingly, it appears that individual taxpayers will need to rely more on private retirement savings and less on public programmes. It is important, therefore, that the tax system permit the accumulation of retirement savings sufficient to allow taxpayers to maintain their pre-retirement standard of living. Indeed, it does not appear possible for money-purchase arrangements to reach, in most cases, the replacement ratio of 60 to 70 percent. Consider the following example. 2 Let us consider two taxpayers earning $50,000 and $100,000 respectively, in 1993 who maximize their contributions to RRSPs. What replacement income ratio can these taxpayers attain? Assume that the taxpayers are married and that the annuity to be purchased from the RRSP, at retirement, has the following characteristics: post-retirement indexation at 3% per annum with a spousal survivor benefit of two-thirds. 3 The results of this hypothetical are: [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] RRSP as a percentage of final year's salary at a 1993 salary of $50,000 ($100,000) Retirement Age Savings Start Age 25 35 45 55 41.0% (31.6%) 24.7% (19.0%) 11.2% (8.6%) 60 54.4% (41.9%) 35.1% (26.7%) 19.0% (14.6%) 65 72.2% (55.7%) 48.8% (37.6%) 29.4% (22.6%) [TABLE END] The above table indicates, for example, that a 35-year old earning $50,000 in 1993 can, at most, earn a pension from an RRSP equal to 48.8% of his final year's income, if his retirement commences at age 65. In other words, after 30 years of working and saving, that individual will have a retirement income of less than half of his pre-retirement income. This is below the income replacement threshold assumed by pension tax reform itself. For the taxpayer earning $100,000 in 1993, his RRSP pension will be 37.6% of this pre-retirement income. The only individual who attains an adequate replacement ratio, on these assumptions, is the 25-year old who saves for 40 years. It follows that, although the pension tax system espouses equivalence with the defined benefit pension plan, it does not attain it in practice. Inequities in the Current System In the current North American context, the limits of Canadian tax assistance for retirement savings are not generous. The equivalent money purchase and defined benefit limits for the United States, for example, are more than twice as generous as the Canadian limits. In addition, the Canadian system does not provide for deferrals of salary, as does the United States system. Furthermore, inequities exist in the provision of supplementary retirement benefits. Supplementary benefits are those in excess of the $60,270 benchmark pension discussed above. They also include benefits that the Regulations, and the Department of National Revenue, do not allow to be paid from a registered pension plan. Servants of the people, such as Members of Parliament and Members of Provincial Legislatures, benefit from the privileged status of the payor of the pension, in that security of the pension promise is not an issue. Self-employed individuals and ordinary employees, on the other hand, must be concerned with the funding of their pension promise. Requirement for Informed and Thoughtful Debate In the early 1990s, annual contributions to RRSPs and RPPs exceeded $33 billion. Trusteed pensions, not including consolidated revenue fund plans, held $235 billion in assets at the end of 1992. The book value of the assets of such plans stood at $268 billion at the end of the first quarter of 1994. RRSP assets, not including self-directed plans, totalled $147 billion at the end of 1992. In his discussion paper entitled Creating a Healthy Fiscal Climate: The Economic and Fiscal Update, released October 18, 1994, the Minister of Finance has indicated that the tax expenditure associated with all retirement savings for 1991 was $14.9 billion. It is not surprising, therefore, that the Department of Finance should cast a covetous eye at the retirement savings system. We are concerned that a search for easy sources of revenue might prompt the government to change the existing rules in the Act governing retirement savings. It is submitted, however, that changes to the system, although fiscally attractive in the short term, would be detrimental to Canadian taxpayers in the long run. Deficit reduction should not be the sole motivating factor for change to the retirement savings system. The existing complex web of rules governing retirement savings should only be touched if there are compelling reasons, unrelated to immediate deficit reduction, to effect change. This is particularly so given the recent and unfinished reform of retirement savings arrangements in this country. It is clear that this debate has not yet begun and cannot be completed before the next federal budget. The prudent approach, therefore, is to defer any change to the retirement savings system until that debate has taken its course. A Framework for the Debate The following parameters should govern any consideration of the changes to the retirement savings system. 1. The Principle of Even-Handedness It is clear that all components of the retirement savings structure are interrelated. As a result, it would be unfair to single out RRSPs for detrimental treatment. RRSP savings are no different from other forms of retirement savings. 2. A Tax Increase According to a recent study of the Canada Tax Foundation, 3.7 million Canadians contributed to RPPs, and 4.8 million Canadians contributed to RRSPs, in the 1992 taxation year. 4 In that year, 69.7 percent of contributors to RPPs and 60.5 percent of contributors to RRSPs were in the middle income range ($25,000 to $60,000). Obviously, the participation rate by Canadians in retirement savings arrangements is quite high. A change to the retirement savings regime, by limiting deductibility of contributions for example, would be viewed as a tax increase by users of these arrangements. Indeed, for those individuals, any negative change to the retirement savings arrangement will have the same effect as a tax increase. 3. Job Creation The quest for deficit reduction should not obscure the important role that government can play in creating an environment conducive to increasing employment opportunities. As the government has previously stated, the bulk of job creation must come from small and medium-sized businesses. As a result, the current retirement savings regime, and in particular RRSP investments, should be viewed as an asset, and not a liability. The ability to deduct savings for retirement has the effect of increasing aggregate private savings as a source of funds for capital investment. 5 Reducing the tax incentive for retirement savings could have the effect of reducing the amount of "pooled" capital funds that could be made available for entrepreneurial activities. It would also add to the cost of doing business in Canada and stifle future employment opportunities. The rules in the Income Tax Act that permit RRSP contributors to put investments in small businesses are insufficient at present and must be strenghtened if the government wants to encourage job creation. Canada's Economic Challenges 6 shows that small business is playing an increasing role in the economy. Any reduction in the existing schedule of limits will hurt the ability of small business to create jobs. Indeed, the government should consider measures to increase the access by small and medium businesses to the retirement savings capital pool. The latest report of the House of Commons Industry Committee makes the point well: Ottawa should use tax incentives to help improve the competitiveness of the Canadian small business sector...One way the government can increase small business access to capital would be to permit owners, operators and other major shareholders to use funds from their registered retirement savings plans to buy equity in their business...that would increase the availability of such "love capital". 7 4. The Tax Expenditure Calculation As indicated earlier, it is said that the tax expenditure for all retirement savings for 1991 was $14.9 billion. That number suggests that the Government of Canada bears a high cost for its retirement savings system. However, it is our view that the calculation of that cost is not correct, with the result that the number is inflated. The Department of Finance's calculation of the tax expenditure cost is arrived at by adding the value of deductions associated with contributions and the value of the tax shelter on earnings. From that result is subtracted the revenue generated from withdrawals. For example, for the 1991 taxation year, the $14.9 billion number noted above is calculated as follows: Tax expenditure (RRSP) = value of deductions + value of tax shelter - taxes on withdrawals = $3.310 billion + $2.960 billion - .735 million = $5.535 billion Tax expenditure (RPP) = value of deductions + value of tax shelter - taxes on withdrawals = $4.460 billion + $8.950 billion - 4.030 billion = $9.38 billion Tax expenditure (RRSP + RPP) = $5.535 billion + $9.38 billion = $14.915 billion. The Government of Canada has itself admitted that its calculation of tax expenditures is subjective. In the case of tax deferrals, it has further stated that: Estimating the cost of tax deferrals presents a number of methodological difficulties since, even though the tax is not currently received, it may be collected at some point in the future. 8 The government has also specifically commented on tax expenditures associated with retirement savings: It should be noted that the RRSP/RPP tax expenditure estimates do not reflect a mature system because contributions currently exceed withdrawals. Assuming a constant tax rate, if contributions equalled withdrawals, only the non-taxation of investment would contribute to the net tax expenditure. As time goes by and more retired individuals have had the opportunity to contribute to RRSPs throughout their lifetime, the gap between contributions and withdrawals will shrink and possibly even become negative. An upward bias in the current estimates can therefore be expected to decline. 9 The method used to calculate the tax expenditure costs associated with retirement savings is based on the "current cash-flow" model. In effect, the calculation takes a snapshot of a given year and does not take into account future income flows. As indicated above, the calculation adds the value in a year of tax deductions to the lost tax on earnings, and subtracts the tax generated from withdrawals. We argue that that model is flawed. Current demographics show that the system is not yet mature since contributions will exceed withdrawals for some time. Once the baby boom generation begins to retire, withdrawals will exceed contributions. Substantial revenues will be generated for the fisc, revenues necessary to support government programs of the day. The value of the tax on those withdrawals is totally ignored in the static model adopted by the Department of Finance. Statistics Canada projects that the proportion of the Canadian population aged 70 and over will increase from 7.84% in 1991 to 10.6% in 2010. The numbers of such individuals will increase from 2.102 million in 1991, to 3.355 million in 2010, a 59.6 percent increase. Those individuals will be drawing pensions, both from RRSPs and RPPs. Those pensions will be taxed and will benefit the fisc. Furthermore, there is evidence to suggest that the calculation adopted by the Government greatly over-values the cost to the fisc. A US commentator has suggested that government also gains "additional corporate tax revenue on the extra capital stock that results from higher savings. The government's official revenue estimates ignore this increase in corporate tax receipts." 10 To restate the position, the tax expenditure calculation adopts a static approach, both by considering only the current year's cash flows and by ignoring any secondary effects of the retirement savings pool. Until the true cost of the retirement savings system can be ascertained, the current estimates cannot be relied upon to justify change to the tax rules governing retirement savings. Trade-Offs While the Alliance recognizes the need for the Government to get its fiscal house in order, with a particular emphasis on the expenditure side of the equation, a proper balance must be struck between short-term solutions and longer-term consequences. One important consideration is the long-term pain that would result from Canadians having less financial flexibility to properly plan for their retirement. This long-term consequence must be measured against the short-term gain in revenues that would result from a freeze or reduction in the contributions to RRSPs and RPPs. At a time when the Government is encouraging greater self-reliance in matters of finance, further limiting Canadians' ability to adequately plan for their retirement would serve to aggravate the public future dependence on government programs. Looking at current demographic trends, it is important to ensure that all Canadians have an opportunity to set aside necessary financial resources that will be drawn upon (and taxed) at the time of retirement. If the government is looking to become more efficient in its delivery of public sector programs, it should also ensure that the private sector is allowed sufficient flexibility to meet its needs. In this context, the current retirement savings plans should be considered an investment in the future and should not be tampered with or diminished. Recommendations I THE ALLIANCE RECOMMENDS THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT. II THE ALLIANCE RECOMMENDS THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM SHOULD INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE. III THE ALLIANCE RECOMMENDS THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. _______________________ 1 Appendix A to this submission details the historical development of pension tax reform. 2 Taken from Sylvain Parent, FSA, FCIA, RRSP income replacement levels: a case study, 1993 Pension & Tax Reports; 4:93-94. 3 Further assumptions are as follows: rate of return is 7.5% per annum; yearly salary increases are 5.5% per annum; mortality is 80% of the average of the 1983 Group Annuity Mortality rates for males and females. 4 Perry, David B, Everyone's Tax Shelter At Risk, Canadian Tax Highlights, Volume 2, number 10, October 19, 1994; p. 75. 5 Andrews and Bradford, Savings Incentives in a Hybrid Income Tax, Studies of Government and Finance, The Brookings Institution, Washington, DC; February, 1988. 6 Department of Finance, January, 1994, p. 30. 7 Special Report, The Public Sector, October 24, 1994. 8 Government of Canada, Personal and corporate income tax expenditures, December 1993, p.4. 9 Ibid., p.53. 10 Feldstein, Martin. The Effects of Tax-Based Incentives on Government Revenue and National Saving, NBER Working Paper #4021, March 1992. This position has been dismissed, out of hand and with no reasons, by two Canadian commentators: Ingerman, Sid and Rowley, Robin, Tax Losses and Retirement Savings, Canadian Business Economics, Vol. 2, No. 4, Summer 1994, pp. 46-54.
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Statement to the Canadian panel on violence against women Ottawa -September, 1992

https://policybase.cma.ca/en/permalink/policy11956
Last Reviewed
2019-03-03
Date
1992-09-15
Topics
Health care and patient safety
Ethics and medical professionalism
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1992-09-15
Topics
Health care and patient safety
Ethics and medical professionalism
Text
The CMA is pleased to have this opportunity to address the Canadian Panel on Violence Against Women. As a professional organization with a leadership role in societal issues affecting health, it is both appropriate and important for the CMA to be actively involved in addressing the problems associated with violence. The extremely high incidence of abuse, the associated severe physical, mental and psychological health problems and the significant role played by physicians in recognizing and caring for victims make this a priority for organized medicine. The CMA has significant experience and expertise in this field. In 1984, the CMA General Council passed a resolution stating: "That Health and Welfare Canada and the Provincial Ministries of Health and Education alert the Canadian public to the existence of family violence, including wife assault, child abuse, and elder abuse, and to the services available which respond to these problems, and that organized medicine (through such vehicles as professional journals, newsletters, conferences and formal medical education) alert the physicians of Canada to the problem and that all physicians learn to recognize the signs of family violence in their daily contact with patients and undertake the care and management of victims using available community resources." (Resolution #84-47) The CMA calls the Panel's attention to four major areas of concern: Recognition and Treatment, Education and Training, Protocol Development and Research. 1. Recognition and Treatment: Recognition includes acknowledging the existence and prevalence of abuse and identifying victims of violence. Violence against women is clearly a health issue and one that should be given a very high priority. Statistics indicate that nearly one in eight Canadian women will be subject to spousal violence in her lifetime and that one in five will be a victim of sexual assault. Violence against women is a major determinant of both short -and long-term health problems including traumatic injury, physical and psychological illnesses, alcohol/drug addiction and death. Furthermore, although it is critically important to recognize that abuse crosses all racial and socio-economic boundaries, there are strong indications that certain groups are particularly vulnerable to abusive acts (e.g., pregnant, disabled and elderly women). Recognition includes acknowledging and understanding the social context within which violence occurs. Violence is not an isolated phenomenon, but is part of the much broader issue of societal abuse of women. Physicians are often the first point of contact for patients who have been abused physically, sexually, mentally and/or psychologically. They have a vital role to play in identifying victims and providing treatment and supportive intervention including appropriate referral. Abuse is not always readily apparent, however, and may go undetected for extended periods of time. Numerous studies have shown that both physicians and patients often fail to identify abuse as an underlying cause of symptoms. Such delays can result in devastating and sometimes fatal consequences for patients. Even in those cases where abuse is apparent, both physicians and patients often feel uncomfortable talking openly about the abuse and the circumstances surrounding it. It is the physician's role and responsibility to create a safe and supportive environment for the disclosure and discussion of abuse. Furthermore, the lack of resources for support services or the lack of awareness of what services are available to provide immediate and follow-up care to patients in need may discourage physicians from acknowledging the existence of abuse and identifying victims. It is clear that improvement in the ability and the degree to which victims of abuse are recognized and given appropriate assistance by physicians and other caring professionals in a non-threatening environment is urgently required. Individuals who are abused usually approach the health care system through primary contact with emergency departments or other primary care centres. The care available in such settings is acute, fragmented and episodic. Such settings are not appropriate for the victims of violence. The challenge that we, as physicians, recognize is to be able to provide access in a coordinated way to medical, social, legal and other support services that are essential for the victim of violence. This integration of services is essential at the point of initial recognition and contact. The CMA has been involved with eight other organizations in the Interdisciplinary Project on Domestic Violence (IPVD), the primary goal of which is to promote interdisciplinary co-operation in the recognition and management of domestic violence. 2. Education and Training: The spectrum of abuse is complex; the victims are diverse; expertise in the field is developing. The current system of medical education neither provides health care personnel with the knowledge or skills nor does it foster the attitude to deal adequately with this issue. Some of CMA's divisions have played an active role in this area. For instance, the Ontario Medical Association has developed curriculum guidelines and medical management of wife abuse for undergraduate medical students. It is ,important that there be more involvement by relevant medical groups in developing educational and training programs and more commitment from medical educators to integrate these programs and resources into the curriculum. Programs must be developed and instituted at all levels of medical education in order that physicians can gain the requisite knowledge and skills and be sensitive to the diversity of victims of violence. The CMA believes that the educational programs must result in: 1) understanding of the health consequences of violence; 2) development of effective communication skills; and, 3) understanding of the social context in which violence occurs. Understanding of the social context in which violence occurs will require an examination of the values and attitudes that persist in our society, including a close consideration of the concepts of gender role socialization, sexuality and power. This is required in order to dispel the pervasive societal misconceptions held by physicians and others which act as barriers to an effective and supportive medical response to patients suffering the effects of violence. 3. Development of Protocols: The CMA recognizes the need for more effective management and treatment of the spectrum of problems associated with violence against women. Health care facilities, professional organizations and other relevant groups are challenged to formulate educational and policy protocols for integrated and collaborative approaches to dealing with prevention of abuse and the management of victims of violence. The CMA and a number of its divisions have been active in this area:
In 1985, the CMA prepared and published Family Violence: Guidelines for Recognition and Management (Ghent, W.R., Da Sylva, N.P., Farren, M.E.), which dealt with the signs and symptoms, assessment and management, referral assistance and medical records with respect to wife battering, child abuse and abuse of the elderly;
The Ontario Medical Association published Repons on Wife Assault in January 1991. This document, endorsed by the CMA, examines the problem of wife assault from a medical perspective and outlines approaches to treatment of the male batterer and his family;
The Medical Society of Nova Scotia has developed a handbook entitled Wife Abuse: A Handbook for Physicians, advising on the identification and management of cases involving the battering of women;
The New Brunswick Medical Society has produced a series of discussion papers on violence and in conjunction with that province's Advisory Council on the Status of Women, has produced a graphic poster depicting physical assault on pregnant women as a way of urging physicians to be alert for signs of violence against women; The Medical Society of Prince Edward Island has worked cooperatively with the provincial Department of Health and Social Services and the Interministerial Committee on Family Violence to produce a document entitled Domestic Violence: A Handbook for Physicians. The CMA encourages continued involvement by the medical profession in the development of initiatives such as these and welcomes the opportunity to work in collaboration with other professionals involved in this area. 4. Research The CMA has identified violence against women as a priority health issue. Like rriany other areas in women's health, there is a need for research focusing on all aspects of violence and the associated problems. More specifically, the CMA maintains that there should be more research on the incidence of abuse (particularly as it relates to particular groups), on ways to facilitate the disclosure by victims of abuse and on the effectiveness of educational and prevention programs. The CMA recognizes that the medical profession must show a greater commitment to ending abuse of women and providing more appropriate care and support services to those who are victims of violence. The CMA possesses unique skills and expertise in this area and welcomes the opportunity to work with the Panel on this challenging social and health problem.
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