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CMA presentation to the House of Commons Standing Committee on Finance on Bill C-38

https://policybase.cma.ca/en/permalink/policy10441
Date
2012-05-31
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2012-05-31
Topics
Health systems, system funding and performance
Text
Thank you for this opportunity to appear before this committee on behalf of the CMA and its 76,000 members. Canadians believe that transforming our health care system to meet the needs of 21st century Canada must be among the highest priorities for all levels of government, including the federal government. I would like to begin by commenting on the health transfer framework announced by the Minister of Finance in December. This announcement provided some predictability for the years ahead. However, with the federal government reducing its involvement in several areas affecting health or health care, added costs will end up in the laps of the provinces and territories. So while this budget may enhance the federal government's fiscal prospects, it will do so to the detriment of the provinces and territories. But there's more to this debate than funding. We believe that Canadians would be better served if federal health care transfers came with specific guidelines ensuring that the system provides care of comparable access and quality to Canadians across the country, regardless of their circumstances. We are encouraged that the Minister of Health has indicated she wants to collaborate with the provinces and territories on developing accountability measures to ensure value for money and better patient care. We look forward to the minister's plan for accountability. This budget is notable for other missed opportunities. For many years, groups across the political spectrum have called for a pharmaceutical strategy to reduce national disparities. In fact, such a strategy was committed to by governments under the 2004 Health Accord. Minister Kenney referred to this issue indirectly when he said the recent cancellation of supplemental health benefits for refugee claimants is justified because refugees should not have access to drug coverage that Canadians do not have. Rather than cutting off those desperately vulnerable people, Canada's physicians urge the federal government to work with the provinces and territories to develop a plan that ensures all Canadians have a basic level of drug coverage. Indeed, we now appear to be in a race to the bottom in the way we treat vulnerable groups - by, for example, deferring Old Age Security for two years; and changing service delivery to veterans, mental health programs for our military and the Employment Insurance program. Significant policy changes have been announced since the budget, with little opportunity for debate and little evidence provided. We note, as well, the lack of open consultation with Canadians on matters of great import to their lives. Successful policy requires buy-in, which is best achieved when those interested are able to participate in the policy-making process. This brings me to a wider concern shared by our members - that policy-makers are not paying adequate attention to the social determinants of health, factors such as income and housing that have a major impact on health outcomes. We remind the government that every action that has a negative effect on health will lead to more costs to society down the road. The federal government is the key to change that benefits all Canadians. While there are costs and jurisdictions to consider, the CMA believes the best way to address this is to make the impact on health a key consideration in every policy decision that's made. The federal government has used this approach in the past, in considering rural Canadians, for example. We therefore call for a new requirement for a health impact assessment to be carried out prior to any decision made by cabinet. This would require that, based on evidence, all cabinet decisions take into account possible impacts on health and health care, and whether they contribute to our country's overall health objectives. A similar model is in use in New Zealand and some European countries. For instance, what health impact will cuts in funding to the tobacco strategy have? Such an assessment would in particular have a dramatic impact with regard to poverty. Poverty hinders both human potential and our country's economic growth - and needlessly so as there are many ways to address it effectively. The National Council on Welfare - which will disappear as a result of this budget - reported last fall that the amount it would have taken in 2007 for every Canadian to have an income over the poverty line was $12.6 billion, whereas the consequences of poverty that year added up to almost double that figure. Close to 10 per cent of Canadians were living in poverty in 2009, many of them children, as UNICEF underlined yesterday. This is a huge challenge for our country. In closing, as this budget cycle ends and as you begin to prepare for the next, please bear in mind that as prosperous as our country is, if we do nothing for the most vulnerable in our society - children, the elderly, the mentally ill, Aboriginal peoples - we will have failed. Thank you.
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CMA's Response to Questionnaire From the House of Commons Standing Committee on Finance: 2012-2013 Pre-Budget Consultation

https://policybase.cma.ca/en/permalink/policy10445
Date
2012-08-03
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2012-08-03
Topics
Health systems, system funding and performance
Text
Question 1: Economic recovery and growth (What federal measures are required for sustained economic recovery and growth?) The health sector has an important role in sustaining Canada's economic recovery and enhancing economic growth beginning with supporting a healthy and productive workforce and providing over one million high value jobs, representing about 10 per cent of the labour force. Despite the importance of the sector, there is general agreement that Canada's health care system is no longer a strong performer when compared to similar nations. While the OECD's 2011 Health Data ranks Canada 7th highest of 34 member states in per capita health care spending, the performance of Canada's health care system continues to rank below most of our comparator countries. Health spending accounts for an increasing proportion of provincial and territorial budgets, and many warn of increasing future demands on the overall system. In his Economic and Fiscal Outlook Report of May 17, 2012, the Parliamentary Budget Officer stated that "the provincial-territorial long-term fiscal situation has deteriorated." Taken together, these issues highlight significant potential for the health sector, through efficiency improved gained by health care transformation, to support long-term economic recovery and growth in Canada. While the provinces and territories have initiated positive steps to collaborate on sharing best practices, there are key responsibilities under federal leadership that would contribute to these efforts by addressing the overall performance of the health care system in Canada. The CMA recommends that: - The federal government recognize the relationship of the social determinants of health on the demands of the health care system and that it implement a requirement for all cabinet decision-making to include a Health Impact Assessment (see Question 5 for more detail). - Further to the comments by the Health Minister following the new fiscal arrangement announcement, the federal government should prioritize federal-provincial-territorial engagement focused on accountability and undertake a consultative process with the aim of identifying pan-Canadian metrics and measurement that will link health expenditures and comparable health outcomes. Question 2: Job creation (What federal actions should be taken to promote job creation in a context of enhanced internal and international trade?) A high performing health care system across the country will help support labour mobility and job creation. An effective, comprehensive public health care system provides an important international competitive advantage. The contribution of Canada's health care system to the international competitiveness of our economy has been repeatedly demonstrated in KPMG's Competitive Alternatives report. However, there are several signs that indicate health care services and coverage are not keeping up with Canadians' needs and vary depending on where one lives in Canada. For instance, long wait times for medical care can be found in smaller provinces, while drug coverage and services for seniors are particularly poor in Atlantic Canada. Wide variation in access to pharmaceutical treatments remains the most glaring example of inequity in our health care system-all Canadians should have a basic level of drug coverage. These variations are growing and will hinder job creation in some regions, serving as barriers to labour mobility for Canadians wishing to seek work elsewhere in the country. We believe that Canadians would be better served if federal health care transfers came with specific guidelines ensuring that the system provides care of comparable access and quality to Canadians across the country, regardless of their circumstances. Recognizing the contribution of the health care system to Canada's international competitive advantage, improvements in Canada's health care system would further support job creation. The federal government should focus its efforts towards supporting the transformation of our health care system to better meet the objectives of better care, better health and better value. The CMA recommends that: - The federal government, in consultation with provincial, territorial and other stakeholders, 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 drugs. - The federal government, together with the provinces and territories, develop and implement a pan-Canadian strategy for continuing care which would integrate home care and facility- based long-term, respite and palliative care services fully within health care systems. Question 3: Demographic change (What federal measures should be implemented to help address the aging population and skills shortages?) The CMA remains concerned about the status of Canada's retirement income system and the ability of Canada's seniors to adequately fund their long-term and supportive care needs. Steps need to be taken to ensure that Canada is prepared to handle the long-term care needs of its citizens, including the funding of necessary infrastructure and additional support for both health care providers and informal caregivers. The availability of long-term care facilities has an important role in the efficiency of the overall health care system. For example, in its most recent report, the Wait Time Alliance noted that dementia is a key diagnosis related to the rise in alternate-levels-of-care (ALC) patient stays in hospitals. This is yet another issue facing all provinces and territories for which the federal government is well positioned to coordinate a pan-Canadian strategy. In addition, as part of the next long-term infrastructure program, the federal government should include a targeted health sector infrastructure fund for long-term care facilities as part of a pan-Canadian strategy to redirect care from the hospitals to homes, communities and long-term care facilities, where better care is provided at a lower cost. The CMA recommends that: - The federal government establish programs to encourage Canadians to save for their long- term care needs by pre-funding long-term care, including private insurance, tax-deferred and tax-prepaid savings approaches, and contribution-based social insurance, such as an RESP- type savings vehicle. - That a targeted health infrastructure fund be established as part of the government's long- term plan for public infrastructure. The purpose of this fund would be to address infrastructure shortages in the health sector that prevent the optimization of health human resources and exacerbate wait times. The CMA has supported the federal government's efforts to expand retirement savings options by establishing the Pooled Retirement Pension Plans. However, as highlighted by federal, provincial and territorial finance ministers, this is only one component of a larger pension reform framework to address the retirement income adequacy needs of Canadians. The CMA encourages the federal government to continue working with the provinces, territories and stakeholders to implement all elements of this framework. Question 4: Productivity (What federal initiatives are needed to increase productivity in light of labour market challenges such as the aging of Canada's population?) An effective and comprehensive health care system supports the productivity of the Canadian workforce. Failure of our health care system to respond to workers' health needs, on the other hand, leads to loss of productivity and high costs both in terms of lost income for Canadian families as well as foregone tax revenues for governments. Numerous studies have pointed out the enormous cost of waiting (in the billions of dollars per year) affecting both individuals and the economy. Another related issue that has the potential to increasingly affect productivity is the burden of providing care to family members. Without adequate provision of long-term care resources and support for home care, Canada's labour force may experience a productivity drag through increased leaves and absenteeism to care for elderly relatives. The 2011 federal budget took a first step at providing tax relief for informal caregivers through the Family Caregiver Tax Credit. However, this credit of a maximum of $300 per year by no means provides sufficient support for informal caregivers. A 2004 Canadian study estimated that the annual cost of a caregiver's time at market rates for moderately to severely disabled home care clients ranged from $5,221 to $13,374 depending on the community in which they reside. An increase to the Family Caregiver Tax Credit is positive for the development of one aspect of the necessary support informal caregivers require but the CMA believes other enhancements will also be needed in the coming years. In order to meet the needs of our country's aging population, the CMA recommends that: - The federal government expand the relief programs for informal caregivers to provide guaranteed access to respite services for people dealing with emergency situations, as well as increase the Family Caregiver Tax Credit to better reflect the annual cost of family caregivers' time at market rates. - That a targeted health infrastructure fund be established as part of the government's long-term plan for public infrastructure. The purpose of this fund would be to address infrastructure shortages in the health sector that prevent the optimization of health human resources and exacerbate wait times. Question 5: Other challenges (Who is facing most challenges, what are they and what federal action is required?) Despite significant investments in health and improvements in medical treatment and technologies, health outcomes in Canada have not been moving in the right direction. Chronic diseases such as diabetes and the corresponding risk factors, among them obesity, continue to rise. These negative outcomes can have a significant impact on the prosperity of the country as health is necessary for individuals to lead a prosperous and autonomous life. Research suggests that 50 per cent of population health is determined by our social and economic environment. While a strong health care system is vital, changes to medicare alone will not improve health outcomes or reduce the disparities that currently exist in disease burden and health risks. What is needed is a process to address the social determinants of health that can be barriers or enablers to health, a process to ensure healthy public policy for all Canadians. A Health Impact Assessment (HIA) is a systematic process for making evidence-based judgments on the health impacts of a policy and to identify and recommend strategies to protect and promote health. HIA is used in several countries, including Australia, New Zealand, Norway, the Netherlands and the United States. HIA is also used in Canada, most extensively for policy appraisals in Quebec. HIA is necessary for ensuring that all government departments are able to consider the health impacts of their work. Such a tool would have been very beneficial in assessing cuts to program spending to ensure the impact on health would not be counterproductive (i.e., lead to higher overall costs to society once the health impact is taken into account). The adoption of an evidence-based HIA is one way in which the federal government can play a leadership role in health care. The CMA recommends that: - The federal government include a Health Impact Assessment as part of its policy development process to ensure that the health of Canadians is a key factor in every policy decision it makes. - The federal government recognize the relationship of the social determinants of health on the demands of the health care system.
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CMA's Submission to Finance Canada's 2012 Pre-budget Consultations

https://policybase.cma.ca/en/permalink/policy10350
Date
2012-01-12
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2012-01-12
Topics
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) appreciates the opportunity to provide additional comments and recommendations as part of Finance Canada's 2012 pre-budget consultations. The health sector provides essential services and high value jobs supporting communities across Canada. Statistics Canada reports that employment in the health sector accounts for 10% of the Canadian labour force.i In considering possible additional economic stimulus measures that build on the success of Canada's Economic Action Plan, the CMA encourages the federal government to consider investments that target efficiency improvements in the health sector. Efficiency improvements in the health sector yield benefits to all orders of government and Canadians. The following recommendations are advanced for Finance Canada's consideration: * In order to improve the delivery of better care, better health, and better value, the CMA recommends that the federal government work with the provinces, territories and health sector stakeholders to develop a model for accountability and patient-centred care. The CMA encourages the federal government to adopt the Principles to Guide Health Care Transformation, developed by the CMA together with the Canadian Nurses Association and since endorsed by over 60 organizations, as the basis of a pan-Canadian model for accountability and patient-centred care. * Recognizing the significance of nationally comparable metrics on health outcomes and the health care system together with the effectiveness of national public reporting in demonstrating accountability, the CMA recommends that the federal government undertake efforts towards identifying pan-Canadian metrics and measurement that will link health care expenditures to comparable health outcomes. * As the federal government prepares to engage with the provinces and territories to further map out improvements to Canada's health system, the CMA strongly encourages consideration be given to the federal role in coordinating the development of pan-Canadian clinical practice guidelines (CPGs). * While, as previously indicated, the CMA supports the federal government's proposal to expand access to pensions, specifically by developing pooled registered retirement plans (PRPPs), the limitations to PRPPs should be addressed to ensure that they provide value to self-employed Canadians, including physicians. Specifically, addressing the limitations would include: (1) expanding the PRPP framework to include defined benefit and targeted benefit pension plans; (2) increasing the retirement savings capacity of self-employed individuals by either raising the RRSP limit or providing a distinct limit for PRPPs; and, (3) ensuring the PRPP framework expands the eligibility of administrators beyond financial institutions. Introduction The Canadian Medical Association (CMA) appreciates the opportunity to provide additional recommendations to the Government of Canada as part of its 2012 Pre-Budget consultation. Building upon the CMA's recommendations to the House of Commons' Finance Committee, this submission focuses on three issues: (1) improving accountability and patient-centred care in the delivery of new federal health care funding; (2) coordinating the development of pan-Canadian clinical practice guidelines; and (3) addressing limitations in the federal framework for pension reform. 1. Accountability and patient-centred care "Raising sufficient money for health is imperative, but just having the money will not ensure universal coverage. Nor will removing financial barriers to access through prepayment and pooling. The final requirement is to ensure resources are used efficiently." World Health Organization (2010) As the federal government finalizes the Strategic and Operating Review and considers other measures to eliminate the deficit, including scaling down the Economic Action Plan, it must be recognized that improved health systems and the resultant improved productivity pay economic dividends for the country; and, further, that "health" by today's standards is not just the assessment and treatment of illness, but also the prevention of illness, and the creation and support of social factors that contribute to health should also be considered. With the recent announcement by Minister Flaherty with respect to the Canada Health Transfer (CHT) and Canada Social Transfer (CST), the financial parameters for future health care funding have been established. Consistent with previous public opinion research, recent polling by Ekos Research Associates shows that 76% of Canadians identify improving health care as the leading priority for the federal government, ahead of reducing the national debt and deficit.ii However, as we have learned with the 2004 Health Accord, funding alone is not sufficient to ensure Canadian taxpayers benefit from improvements in health care, health outcomes, and value for money. Despite laying out laudable objectives, progress to improve our health care system has been slow following the 2003 and 2004 agreements. There is a general agreement that Canada's health care system is no longer a strong performer when compared to similar nations. The OECD's Health Data, 2011 ranks Canada eighth highest of 34 member states in per capita health care spending, the second highest in hospital spending per discharge, and the seventh lowest in the number of physicians per capita. While Canada outperforms the U.S. on most measures, we fall below the median performance of the OECD on common health quality and system measures. With the new health care funding commitment to 2024, it is now time to plan how to transform the health care system. Principles-based approach is required The CMA is advocating built-in accountability mechanisms to ensure Canada's health care system is focused on delivering improved patient outcomes. Developing a system that is accountable and patient-centred depends on continuously striving to achieve the Institute for Healthcare Improvement's (IHI) Triple Aim objectives of better care, better health and better value. Launched in 2007, the IHI Triple Aim initiative was designed to direct the improvement of the patients' experience of care (including quality, access, and reliability) while lowering the per capita cost of care. It was with the Triple Aim objectives in mind that the CMA jointly developed Principles to Guide Health Care Transformation in Canada with the Canadian Nurses Association (CNA). It is our strong belief that discussions about the future of health care in Canada must be guided by these principles. The CMA-CNA principles are summarized as follows: * Patient-centred: Patients must be at the centre of health care, with seamless access to the continuum of care based on their needs. * Quality: Canadians deserve quality services that are appropriate for patient needs, respect individual choice and are delivered in a manner that is timely, safe, effective and according to the most currently available scientific knowledge. * Health promotion and illness prevention: The health system must support Canadians in the prevention of illness and the enhancement of their well-being, with attention paid to broader social determinants of health. * Equitable: The health care system has a duty to Canadians to provide and advocate for equitable access to quality care and commonly adopted policies to address the social determinants of health. * Sustainable: Sustainable health care requires universal access to quality health services that are adequately resourced and delivered across the board in a timely and cost-effective manner. * Accountable: The public, patients, families, providers and funders all have a responsibility for ensuring the system is effective and accountable. In order to ensure that future federal funding delivers on the Triple Aim objectives of better care, better health and better value, a model for accountability and patient-centred care is required. Such a model would expand upon the CMA-CNA Principles through the development of a set of measurable indicators related to each principle that can be used for setting national standards, monitoring progress and demonstrating accountability to Canadians. The CMA therefore urges the federal government to facilitate discussions with the provinces and territories to identify how resources will be used to improve patient care and health outcomes across the country. To this end, the CMA has urged the Minister of Health to move quickly to engage the provincial and territorial health ministers on transforming the health care system. The CMA recommends that the federal government work with provinces and territories, in consultation with national health sector stakeholders, to develop a model for accountability and patient-centred care. The CMA encourages the federal government to adopt the CMA-CNA Principles to Guide Health Care Transformation as the basis of a pan-Canadian model for accountability and patient-centred care. Improving public reporting: The cornerstone of accountability The federal government has a significant stake in national public reporting on the health of Canadians and on the performance of the health care system. As required by the Canada Health Act, the Minister of Health must publicly report administration, operation and adherence to the Act each year. Further, as the largest contributor to the single-payer system, the federal government has a unique role in demonstrating value for money and reporting on strategies to improve the quality, effectiveness and sustainability of the health care system. To facilitate public reporting, in addition to Statistics Canada, the federal government is supported by the Health Council of Canada and the Canadian Institute for Health Information, both established as government-funded non-profits, however, with distinct mandates. Despite pan-Canadian efforts such as provincial health quality councils and federal and non-governmental reporting, there remains significant room for improvement in the area of monitoring and reporting, both on health outcomes and system performance. As noted in the Commonwealth Fund's report on international health care systems, "reporting on health system performance [in Canada] varies widely across the provinces and territories...there is so far little connection between financial rewards and public reporting of performance." Not surprising, this issue was also identified by the Health Council of Canada in its Progress Report 2011. It highlights the challenges in reporting progress and explains the difficulties inherent to the current patchwork, "[w]here provinces and territories had set and publicized targets, it was easier for us to track progress. Where we could not find targets, assessing progress was more difficult." The CMA has long supported improved pan-Canadian public reporting on health and health care. Most recently, the CMA hosted a symposium with health reporting stakeholders to discuss the current status of national reporting and the need for the development of a pan-Canadian reporting framework. As recognized by the symposium's participants, there is a great deal of excellent data collection work occurring across the country. However, these efforts are largely uncoordinated and do not tell the full story of the health of Canadians or adequately assess the performance of the health care system. Indeed, despite an abundance of metrics and measurement, in many cases, data is not necessarily usable by the public or decision-makers and, unfortunately, is not necessarily comparable between jurisdictions. The CMA recommends that the federal government recognize the significance of nationally comparable metrics on health and the health care system and national public reporting in demonstrating accountability (i.e. better health, better care, and better value). In achieving these objectives, the CMA recommends that the federal government mandate an appropriate national organization, such as the Health Council of Canada, to undertake a consultative process with the aim of identifying pan-Canadian metrics and measurement that will link health expenditures and comparable health outcomes. 2. Coordinate the development of pan-Canadian Clinical Practice Guidelines As the federal government prepares to engage with the provinces and territories to further map out improvements to Canada's health system, the CMA strongly encourages consideration be given to the federal role in coordinating the development of pan-Canadian clinical practice guidelines (CPGs). Such a role would build upon the commitment made by the provinces and territories under the auspices of the Council of the Federation to collaborate on the development of three to five CPGs over the coming year. CPGs are systematically developed, evidence- or consensus-based statements to assist health care providers in making decisions about the most appropriate health care to be provided in specific clinical circumstances. There is compelling evidence in the literature, supported by the experience of other countries, that well-designed and disseminated CPGs can enhance the clinical behaviour of providers and provide a positive impact on patient outcomes. The principle argument in support of CPGs is their ability to enhance quality of care and patient outcomes. In addition, CPGs have been found to: * Provide publicly accessible descriptions of appropriate care by which to gauge health care performance; * Help to reduce inappropriate variations in care across diverse geographical and clinical settings; * Offer the potential of empowering patients as to appropriate care expectations; and, * Contribute to public policy goals, such as cost containment, through encouraging more appropriate provider use of resources. However, in the absence of a pan-Canadian approach, CPGs across Canada are of uneven quality and even excellent guidelines may not be effectively disseminated or implemented. In contrast to Canada, peer-nations such as the United Kingdom, the United States and Australia have committed at a national level to support the development and dissemination of CPGs. In November 2011, the CMA, together with leading national medical and health sector stakeholders, convened a Canadian Clinical Practice Guidelines Summit, attended by representatives of the federal and most provincial and territorial governments, to explore key components of a pan-Canadian strategy on CPGs. Emerging from this summit was a clear consensus that it was the federal role to provide the infrastructure support necessary to facilitate the development and dissemination of high-quality CPGs, customizable to the needs of all jurisdictions in Canada. Guideline development and implementation is a complex, lengthy and resource-intensive process. In the absence of federal coordination in Canada, guidelines are produced by disparate, disease-specific groups, often funded by the pharmaceutical industry. This creates an obvious potential for conflict of interest where the guideline development process is far from transparent. Many guidelines are published without disclosure on conflict of interest or methodology applied. Concern over the quality of guidelines presents one the most persistent barriers to adoption by physicians of the recommended practice. The resulting underutilization of CPGs in Canada is widely documented. Clearly, the development and dissemination of pan-Canadian CGPs present a unique and significant opportunity for improvement in Canada's health care system. The CMA recommends that as part of further discussions with the provinces and territories, the federal government commit to working with the provinces, territories and health sector stakeholders towards the development of a pan-Canadian clinical practice guideline initiative. In particular, the CMA recommends that the federal government commit support for the infrastructure necessary for the development, maintenance, and active dissemination of relevant, high-quality clinical practice guidelines. 3. Address the limitations proposed under the pension reform framework As previously indicated in the August 2011 submission to Finance Canada by the Retirement Income Improvement Coalition (RIIC), the CMA supports the federal government's proposal to expand access to pensions, specifically by developing pooled registered retirement plans (PRPPs). While we are currently assessing the package of proposed Income Tax Act amendments and will provide more detailed comments as part of the legislative process, the CMA is concerned that the framework, as proposed, limits the potential for PRPPs to expand physician access to, and investment in, pensions. Based on preliminary analysis, it is our understanding that the core benefit of the PRPP framework is in providing small businesses access to low-cost pension plans, thereby providing a vehicle to encourage employers to establish, and contribute to, pensions for their employees. Given that a significant proportion of physicians are self-employed, they would not benefit from employer contributions to a PRPP. Further, as proposed, the contribution limit to PRPPs would be calculated as an element of the current RRSP and pension contribution limit. Finally, further clarification is required on the type of organization that may qualify as a PRPP administrator. 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. While the CMA supports the proposed PRPP framework in principle, the limitations to PRPPs should be addressed to ensure that they provide value to self-employed Canadians, including physicians. The CMA recommends that Finance Canada consider amendments to the proposed Income Tax Act amendments to address limitations to PRPPs, specifically: (1) expanding the PRPP framework to include defined benefit and targeted benefit pension plans; (2) increasing the retirement savings capacity of self-employed individuals by either raising the RRSP limit or providing a distinct limit for PRPPs; and, (3) ensuring the PRPP framework expands the eligibility of administrators beyond financial institutions. Conclusion The comments and recommendations provided herein represent the CMA's priority recommendations for targeted federal funding towards the achievement of efficiency improvements in Canada's health sector. It is the CMA's position that these measures will contribute to a healthy, more productive and innovative economy by contributing to better care, better health and better value in the health care system. Once again, the CMA appreciates the opportunity to provide these additional comments and recommendations. i 2006 Census data ii http://www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Media_Release/2011/Dec-Poll_en.pdf
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Maintaining Ontario’s leadership on prohibiting the use of sick notes for short medical leaves

https://policybase.cma.ca/en/permalink/policy13934
Date
2018-11-15
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2018-11-15
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) submits this brief to the Standing Committee on Finance and Economic Affairs for consideration as part of its study on Bill 47, Making Ontario Open for Business Act, 2018. The CMA unites physicians on national, pan-Canadian health and medical matters. As the national advocacy organization representing physicians and the medical profession, the CMA engages with provincial/territorial governments on pan-Canadian health and health care priorities. As outlined in this submission, the CMA supports the position of the Ontario Medical Association (OMA) in recommending that Schedule 1 of Bill 47 be amended to strike down the proposed new Section 50(6) of the Employment Standards Act, 2000. This section proposes to reinstate an employer’s ability to require an employee to provide a sick note for short leaves of absence because of personal illness, injury or medical emergency. Ontario is currently a national leader on sick notes In 2018, Ontario became the first jurisdiction in Canada to withdraw the ability of employers to require employees to provide sick notes for short medical leaves because of illnesses such as a cold or flu. This legislative change aligned with the CMA’s policy position1 and was strongly supported by the medical and health policy community. An emerging pan-Canadian concern about the use of sick notes As health systems across Canada continue to grapple with the need to be more efficient, the use of sick notes for short leaves as a human resources tool to manage employee absenteeism has drawn increasing criticism in recent years. In addition to Ontario’s leadership, here are a few recent cases that demonstrate the emerging concern about the use of sick notes for short leaves:
In 2016, proposed legislation to end the practice was tabled in the Manitoba legislature.2
The Newfoundland and Labrador Medical Association and Doctors Nova Scotia have been vocal opponents of sick notes for short leaves, characterizing them as a strain on the health care system.3,4
The University of Alberta and Queen’s University have both formally adopted “no sick note” policies for exams.5,6
The report of Ontario’s Changing Workplaces Review summarized stakeholder comments about sick notes, describing them as “costly, very often result from a telephone consultation and repeat what the physician is told by the patient, and which are of very little value to the employer.”7 Ontario’s action in 2018 to remove the ability of employers to require sick notes, in response to the real challenges posed by this practice, was meaningful and demonstrated leadership in the national context. The requirement to obtain sick notes negatively affects patients and the public By walking back this advancement, Ontario risks reintroducing a needless inefficiency and strain on the health system, health care providers, their patients and families. For patients, having to produce a sick note for an 4 employer following a short illness-related leave could represent an unfair economic impact. Individuals who do not receive paid sick days may face the added burden of covering the cost of obtaining a sick note as well as related transportation fees in addition to losing their daily wage. This scenario illustrates an unfair socioeconomic impact of the proposal to reinstate employers’ ability to require sick notes. In representing the voice of Canada’s doctors, the CMA would be remiss not to mention the need for individuals who are ill to stay home, rest and recover. In addition to adding a physical strain on patients who are ill, the requirement for employees who are ill to get a sick note, may also contribute to the spread of viruses and infection. Allowing employers to require sick notes may also contribute to the spread of illness as employees may choose to forego the personal financial impact, and difficulty to secure an appointment, and simply go to work sick. Reinstating sick notes contradicts the government’s commitment to end hallway medicine It is important to consider these potential negative consequences in the context of the government’s commitment to “end hallway medicine.” If the proposal to reintroduce the ability of employers to require sick notes for short medical leaves is adopted, the government will be introducing an impediment to meeting its core health care commitment. Reinstating sick notes would increase the administrative burden on physicians Finally, as the national organization representing the medical profession in Canada, the CMA is concerned about how this proposal, if implemented, may negatively affect physician health and wellness. The CMA recently released a new baseline survey, CMA National Physician Health Survey: A National Snapshot, that reveals physician health is a growing concern.8 While the survey found that 82% of physicians and residents reported high resilience, a concerning one in four respondents reported experiencing high levels of burnout. How are these findings relevant to the proposed new Section 50(6) of the Employment Standards Act, 2000? Paperwork and administrative burden are routinely found to rank as a key contributor to physician burnout.9 While a certain level of paperwork and administrative responsibility is to be expected, health system and policy decision-makers must avoid introducing an unnecessary burden in our health care system. Conclusion: Remove Section 50(6) from Schedule 1 of Bill 47 The CMA appreciates the opportunity to provide this submission for consideration by the committee in its study of Bill 47. The committee has an important opportunity to respond to the real challenges associated with sick notes for short medical leaves by ensuring that Section 50(6) in Schedule 1 is not implemented as part of Bill 47. 5 1 Canadian Medical Association (CMA). Third-Party Forms (Update 2017). Ottawa: The Association; 2017. Available: http://policybase.cma.ca/dbtw-wpd/Policypdf/PD17-02.pdf (accessed 2019 Nov 13). 2 Bill 202. The Employment Standards Code Amendment Act (Sick Notes). Winnipeg: Queen’s Printer for the Province of Manitoba; 2016. Available: https://web2.gov.mb.ca/bills/40-5/pdf/b202.pdf (accessed 2019 Nov 13). 3 CBC News. Sick notes required by employers a strain on system, says NLMA. 2018 May 30. Available: www.cbc.ca/news/canada/newfoundland-labrador/employer-required-sick-notes-unnecessary-says-nlma-1.4682899 4 CBC News. No more sick notes from workers, pleads Doctors Nova Scotia. 2014 Jan 10. Available: www.cbc.ca/news/canada/nova-scotia/no-more-sick-notes-from-workers-pleads-doctors-nova-scotia-1.2491526 (accessed 2019 Nov 13). 5 University of Alberta University Health Centre. Exam deferrals. Edmonton: University of Alberta; 2018. Available: www.ualberta.ca/services/health-centre/exam-deferrals (accessed 2019 Nov 13). 6 Queen’s University Student Wellness Services. Sick notes. Kingston: Queen’s University; 2018. Available: www.queensu.ca/studentwellness/health-services/services-offered/sick-notes (accessed 2019 Nov 13). 7 Ministry of Labour. The Changing Workplaces Review: An Agenda for Workplace Rights. Final Report. Toronto: Ministry of Labour; 2017 May. Available: https://files.ontario.ca/books/mol_changing_workplace_report_eng_2_0.pdf (accessed 2019 Nov 13). 8 Canadian Medical Association (CMA). One in four Canadian physicians report burnout [media release]. Ottawa: The Association; 2018 Oct 10. Available: www.cma.ca/En/Pages/One-in-four-Canadian-physicians-report-burnout-.aspx (accessed 2019 Nov 13). 9 Leslie C. The burden of paperwork. Med Post 2018 Apr.
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A More Robust Economy through a Healthier Population: Canadian Medical Association 2012-2013 pre-budget submission

https://policybase.cma.ca/en/permalink/policy10635
Date
2012-11-01
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2012-11-01
Topics
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) submission to the House of Commons Standing Committee on Finance discusses the important role of the federal government in ensuring Canada's health care system is cost-effective, accountable and accessible across the country in order to support the country's economic advantage. Investing in health and health care is required to generate wealth. As in other leading industrialized countries, the federal government needs to play a stewardship role in the effective allocation of health-related resources to foster a productive workforce and a strong economy. The purpose of this brief is to provide decision-makers with information on areas in which the federal government can contribute to improving the health of Canadians and the health care system - an issue Canadians consistently rank as their top concern. The CMA recommends that: Recommendation # 1 The federal government endorse the Principles to Guide Health Care Transformation, developed by the CMA together with the Canadian Nurses Association and since endorsed by over 120 national organizations. Recommendation #2 The federal government engage the provinces and territories in a consultative process to identify pan-Canadian metrics and measurement that link health expenditures to nationally comparable health outcomes. The purpose of which is to demonstrate accountability to Canadians. Recommendation # 3 The federal government recognize the implications of the social determinants of health on the demands on the health care system. Recommendation # 4 The federal government require that the federal cabinet's decision-making process include a Health Impact Assessment. Recommendation # 5 The federal government, in consultation with provincial and territorial governments and other stakeholders, establish a program of comprehensive prescription drug coverage to be administered through provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drugs. Recommendation # 6 The federal government, together with the provinces and territories, develop and implement a pan-Canadian strategy for continuing care, which would integrate home care and facility-based long-term, respite and palliative care services fully within health care systems. Recommendation # 7 A targeted health infrastructure fund be established as part of the federal government's long-term plan for public infrastructure. The purpose of this fund would be to address infrastructure shortages in the health sector that prevent the optimization of health human resources and exacerbate wait times. Recommendation # 8 The federal government expand the relief programs for informal caregivers to provide guaranteed access to respite services for people dealing with emergency situations, as well as increase the Family Caregiver Tax Credit to better reflect the annual cost of family caregivers' time at market rates. Recommendation # 9 The federal government establish programs to encourage Canadians to save for their long-term care needs by pre-funding long-term care through for example, private insurance, tax-deferred and tax-prepaid savings approaches, and contribution-based social insurance, such as an RESP-type savings vehicle. Recommendation # 10 The federal government develop and implement a national dementia strategy. Such a strategy will contribute to addressing the alternative level of care crisis impacting the efficiency of the overall health care system. Introduction Despite significant investments in health care and improvements in medical treatment and technologies, health outcomes in Canada are not improving. The incidence of chronic disease, such as diabetes and the corresponding risk factors, among them obesity, continues to rise. These negative outcomes can have a significant impact on the prosperity of the country as health is necessary for individuals to lead a prosperous and autonomous life. While the federal government's investment in the sector has continually increased, it is generally agreed that, in terms of its health care system, Canada is no longer a strong performer compared to similar nations. As in other leading industrialized countries, the Government of Canada needs to play a stewardship role in the effective allocation of health-related resources, which in turn will foster a productive workforce and a strong economy. The federal government also has a role in addressing the social and economic factors that affect the health of Canadians. These factors are often referred to as the social determinants of health and were a central theme at the CMA's annual General Council meeting this year. This brief provides tangible recommendations on how the federal government can contribute to the transformation of Canada's health care system and to improving the health of Canadians. 1. The Role of the Federal Government Issue: The federal government has the levers to foster a healthy, productive workforce. This section discusses opportunities for the federal government to address the challenges facing Canada's overall health care system. Even though the fiscal arrangement for the future Canada Health Transfers has been established, the federal government has other significant responsibilities with respect to the health of Canadians and the overall health care system. This view is shared by a majority of Canadians. Recent polling found that: 75 per cent of Canadians believe health care should be the federal government's top priority; 87 per cent believe that the federal government should pay more attention to health care, and 85 per cent believe the federal government should play a leading role in protecting and strengthening the health care system. An important role to be fulfilled by the federal government is to ensure Canada's health care system is cost-effective, accountable and accessible across the country. Health expenditures account for an increasing proportion of provincial and territorial budgets, and many warn of increasing future demands on health care. In his Economic and Fiscal Outlook Report of May 17, 2012, the Parliamentary Budget Officer stated that "the provincial-territorial long-term fiscal situation has deteriorated." Measures that transfer costs from one level of government to another do not improve Canada's overall fiscal situation. Despite the importance of the health care sector to Canada's economy and quality of life, it is generally agreed that in health care, Canada is no longer a strong performer relative to similar nations. For instance, OECD Health Data 2012 ranks Canada seventh highest of 34 member states in per capita health care spending,1 while Canada's health care system continues to rank below most of our comparator countries in terms of performance. In addition, recent projections indicate that the overall spending on health as a percentage of GDP will continue to increase.2 However, the health sector has an important role in sustaining Canada's economic recovery and enhancing economic growth. In fact, the health sector supports a healthy and productive workforce by providing over one million high-value jobs, representing about 10 per cent of Canada's labour force. The contribution of Canada's health care system to the international competitiveness of our economy has been repeatedly demonstrated in KPMG's Competitive Alternatives report.3 Taken together, these issues highlight significant potential for the health sector, through efficiency improvements gained by health care transformation, to support long-term economic recovery and growth in Canada. Finally, while the provinces and territories have initiated positive steps to collaborate on the sharing of best practices in health care, federal leadership could contribute to these efforts by addressing the overall performance of the health care system in Canada. The federal government should collaborate with the provinces and territories to introduce a pan-Canadian framework for reporting to Canadians on performance, outcomes and expenditures, including on whether national standards of quality and timeliness have been met. The federal government would also fall under this framework, as it is responsible for the delivery of health care services to a large population. In fact, in health care delivery, it is the fifth-largest jurisdiction in Canada. The CMA recommends that: * The federal government engage the provinces and territories in a consultative process to identify pan-Canadian metrics and measurement that link health expenditures to nationally comparable health outcomes. The purpose of which is to demonstrate accountability to Canadians. 2. The need for a Health Impact Assessment (HIA) Issue: All federal government decisions need to be viewed through the lens of their possible impact on health, health care and Canada's overall health objectives. While a strong health care system is vital, improvements to it alone will not improve health outcomes or reduce the disparities that currently exist in disease burden and health risks. Research suggests that 50 per cent of population health is determined by our social and economic environment.4 What is needed is a process to address the social determinants that can be barriers or enablers to health and to ensure healthy public policy for all Canadians. A Health Impact Assessment (HIA) is a systematic process for making evidence-based judgments on the health impacts of any given policy and to identify and recommend strategies to protect and promote health. The HIA is used in several countries, including Australia, New Zealand, Norway, the Netherlands and the United States. The HIA can ensure that all government departments are able to consider the health impacts of their programs and policies by anticipating possible unintended health consequences or impacts on health care spending. The implementation of an evidence-based HIA is one way in which the federal government can play a leadership role in health care and strengthen accountability to Canadians. The CMA recommends that: * The federal government recognize the implications of the social determinants of health on the demands on the health care system; and that, * The federal government require that the federal cabinet's decision-making process include a Health Impact Assessment to ensure that the health of Canadians is a key factor in every policy decision it makes and unintended consequences are avoided. 3. Contribute to Health Care Transformation (HCT) Issue: A transformed health care system will be more effective and comprehensive and will strengthen Canada's competitive advantage. In 2010, as part of its Health Care Transformation (HCT) initiative, the CMA broadly consulted Canadians across the country on their views on health care. Canadians said they do not believe they are 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. Following this consultation, in partnership with the Canadian Nurses Association, the CMA developed Principles to Guide Health Care Transformation in Canada to guide the transformation of Canada's health care system. To date, over 120 national medical, health and organizations have endorsed these principles. During the HCT consultation, we also heard that Canadians are concerned about inequities in access to care beyond the basic medicare basket, particularly in the area of prescription drugs. In fact, reports in 2002 by the Senate Standing Committee on Social Affairs, Science and Technology (Kirby) and the Commission on the Future of Health Care in Canada (Romanow) forged a consensus on the need for "catastrophic" pharmaceutical coverage, which may be defined as out-of-pocket prescription drug expenditures that exceed a certain threshold of household income. Under the National Pharmaceuticals Strategy (NPS), cost projections of catastrophic pharmaceutical coverage were explored and seemed to favour the use of a variable percentage threshold linked to income. However, there has been no public reporting on progress since 2006.5 Moreover, there is also an issue of expensive drugs that may be used for common diseases. Finally, as highlighted by recent experiences, Canada does not have a monitoring and early notification system for drug shortages nor a systematic mechanism to prevent interruptions in the provision of medically necessary medications. Thus far, the term "catastrophic" has been used by First Ministers and the NPS to describe their vision of national pharmaceutical coverage. As defined by the World Health Organization, catastrophic expenditure reflects a level of out-of-pocket health expenditures so high that households have to cut down on necessities such as food and clothing and items related to children's education.6 In the CMA's view, this does not go far enough and what Canada must strive for is "comprehensive" coverage that covers the whole population and effectively pools risk across individuals, public and private plans, and jurisdictions. There are several indicators that show health care services and coverage are not keeping up with Canadians' needs and vary depending on where one lives in Canada. Wide variation in access to pharmaceutical treatments remains the most glaring example of inequity in our health care system - all Canadians should have a basic level of drug coverage. Further, long wait times for medical care can be found in smaller provinces and drug coverage and services for seniors are particularly poor in Atlantic Canada. The fact remains that one in 10 Canadians cannot afford the medications they are prescribed.7 For this reason, ensuring access by all Canadians to needed prescription drugs is an essential element in the CMA's proposed framework for Health Care Transformation. By working to establish comprehensive prescription coverage, the federal government would not only uphold its commitment to ensure the best health for Canadians, but also contribute to the transformation of our country's most cherished social program. The CMA recommends that: * The federal government endorse the Principles to Guide Health Care Transformation, developed by the CMA together with the Canadian Nurses Association and since endorsed by over 120 organizations. * The federal government, in consultation with provincial, territorial and other stakeholders, establish a program of comprehensive prescription drug coverage to be administered through provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drugs. 4. Meeting the health and health care needs of Canadians Issue: Measures should be taken to prepare for the looming demographic change and address the needs of Canada's aging population Steps need to be taken to ensure that Canada is prepared to handle the growing long-term care needs of its citizens. These should include funding for much-needed infrastructure and additional support for both health care providers and informal caregivers. In its most recent report, the Wait Time Alliance noted a link between the rise in diagnosis of dementia and the rise in alternate-levels-of-care (ALC) patient stays in hospitals. These are patients who are in hospital while they await an alternative level of care in a more appropriate setting, often a long-term facility. The shortage of long-term care facilities is a major impediment to achieving efficiency in the health care system and yet another issue for which the federal government is well positioned to collaborate and coordinate on a pan-Canadian strategy. Under its next long-term infrastructure program, the federal government should include a targeted health sector infrastructure fund for long-term care facilities. This should be part of a pan-Canadian strategy to redirect care from hospitals to homes, communities and long-term care facilities, where patients can receive more appropriate care at a lower cost. We can expect that many more facilities will be required to meet the long-term care needs of Canadians. The most recent census data shows that over the last decade there has been a 38 per cent increase in the number of seniors living in special care facilities.8 Based on residency rates of the present population, Canada will need over 800,000 long-term care beds by 2047. Considering the average size of existing long-term care facilities it is estimated that meeting this future demand will require construction of almost 6,000 additional long-term care facilities over the next 35 years, almost 170 a year.9 Another related issue that has the potential to affect productivity is the burden of providing care to family members. Without adequate long-term care resources and support for home care, Canada's labour force may experience a productivity drag as a result of increased leave and absenteeism to care for elderly relatives. The 2011 federal budget took a first step at providing tax relief for informal caregivers with the introduction of the Family Caregiver Tax Credit. However, this credit of up to $300 a year by no means provides sufficient support for informal caregivers. A 2004 Canadian study estimated that the annual cost of a caregiver's time at market rates for moderately to severely disabled home care clients ranged from $5,221 to $13,374, depending on the community in which they reside.10 Expanding the Family Caregiver Tax Credit would help, but the CMA believes that additional support for informal caregivers will also be needed in the coming years. Also, according to a 2012 World Health Organization (WHO) report on dementia,11 Canada is one of the few members of the G7 without a national strategy on dementia. There is a lack of awareness and understanding of dementia, which results in stigmatization and barriers to diagnosis and care, and has an impact on caregivers, families and societies - physically, psychologically and economically. Canada's aging population, and the projected rise in Alzheimer's disease and related dementias, pose an emerging health crisis that require federal leadership. The CMA recommends that: * The federal government, in partnership with the provinces and territories, develop and implement an integrated, pan-Canadian strategy for continuing care, which would integrate home care and facility-based long-term, respite and palliative care services fully within health care systems. Such a strategy would help prepare for the looming demographic change and the address the needs of Canada's aging population. * A targeted health infrastructure fund be established as part of the federal government's next long-term plan for public infrastructure. The purpose of this fund would be to support communities across Canada in addressing infrastructure shortages in the health sector that prevent the optimization of health human resources and exacerbate wait times. * The federal government expand the relief programs for informal caregivers to provide guaranteed access to respite services for people dealing with emergency situations, as well as increase the Family Caregiver Tax Credit to better reflect the annual cost of family caregivers' time at market rates. * The federal government establish programs to encourage Canadians to save for their long-term care needs by pre-funding long-term care through for example, private insurance, tax-deferred and tax-prepaid savings approaches, and contribution-based social insurance, such as an RESP-type savings vehicle. * The federal government develop and implement a national dementia strategy. Such a strategy will contribute to addressing the alternative level of care crisis impacting the efficiency of the overall health care system. 1 OECD Health Data 2012 - http://www.oecd.org/health/healthgrowthinhealthspendinggrindstoahalt.htm 2 CD Howe Commentary Chronic healthcare spending disease: a macro diagnosis and prognosis and Livio Di Matteo and ROSANNA DI MATTEO, The Fiscal Sustainability of Canadian Publicly Funded Healthcare Systems and the Policy Response to the Fiscal Gap CHSRF series of reports on financing models: Paper 5, January 2012. http://www.chsrf.ca/Libraries/Commissioned_Research_Reports/Dimatteo-Fiscal-E.sflb.ashx 3 KPMG. Competitive Alternatives: KPMG's Guide to International Business Location Costs. 2012 edition 4 The Standing Senate Committee on Social Affairs, Science and Technology Final Report of Senate Subcommittee on Population Health. June 2009. 5 Federal/Provincial/Territorial Ministerial Task Force on the National Pharmaceutical Strategy Progress Report. June 2006. http://www.hc-sc.gc.ca/hcs-sss/alt_formats/hpb-dgps/pdf/pubs/2006-nps-snpp/2006-nps-snpp-eng.pdf. Accessed 08-05-08. 6 Xu K, Evans D, Carrin G, Aguillar-Riviera A. Designing health financing systems to reduce catastrophic health expenditure. Geneva: World Health Organization, 2005. 7 Law MR, Cheng L, Dhalla IA et al. The effect of cost on adherence to prescription medications in Canada. CMAJ February 21, 2012 vol. 184 no. 3 8 Statistics Canada. September 19, 2012. Living arrangements of seniors: Families, households and marital status Structural type of dwelling and collectives, 2011 Census of Population. 9 According to the Canadian Healthcare Association (New Directions for Facility-Based Long-Term care), in 2007 there were 2,577 long-term care facilities in Canada and 217,969 beds. We used the average number of beds per facility to calculate the number of facilities required to meet expected future demand. 10 Chappell, N.L., B.H. Dlitt, M.J. Hollander, J.A. Miller and C. McWilliam. 2004. "Comparative Costs of Home Care and Residential Care." The Gerontologist 44(3): 389-400 11 http://www.who.int/mental_health/publications/dementia_report_2012/en/
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Towards a Sustainable Health Care System in the New Millennium : Submission to the House of Commons Standing Committee on Finance 2000 Pre-Budget Consultation Process

https://policybase.cma.ca/en/permalink/policy1977
Last Reviewed
2018-03-03
Date
1999-09-10
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
  2 documents  
Policy Type
Parliamentary submission
Last Reviewed
2018-03-03
Date
1999-09-10
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Text
On the cusp of the new millennium, it is appropriate to reflect with pride on our nation's past and to plan with compassion, innovation and creativity for our nation's future. The new century will present us with many challenges-an ageing population, increased knowledge with corresponding advances in technology and research, competitiveness at home and abroad- to meet the needs of Canadians. CMA recognizes that we live in a world that is increasingly interdependent. A world where globalization has meant that we, as a country, must look forward and beyond our borders when it comes to determining how we can reach our collective potential. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] As we plan for the future it is vital to recognize the importance of the social programs that must remain essential features of our society. Our health care system is an important and defining feature of what it is to be Canadian. CMA believes a well funded, sustainable, quality health care system must be at the forefront of the federal government's strategic priorities. The haste to reduce health care costs over the past several years has left a destabilized and demoralized health system in its wake. Diminished access to critical health care services and insufficient human resources are only part of the legacy. Rebuilding Canadians' confidence in the health care system will not be easy. CMA noted the important first step that was taken by the federal government in its 1999 budget. A reinvestment of $11.5 billion earmarked for health care was an important signal to Canadians. However, with the complete restoration of funds in 2003/04 the health care system will only be back to its 1995 nominal spending levels, some seven years after the fact - with no adjustment for the increasing health care needs of an increased number of more aged Canadians, inflation or economic growth. CMA is encouraged with federal government's recent initiatives to increase health research funding. This is of direct benefit to the health of Canadians; to the health care system; to foster the development of health care as an industry and to ensure our best and brightest medical scientists and health researchers are educated and remain in Canada. However, we know that more needs to be done to ensure innovation and competitiveness. We would like to echo the words of the Prime Minister who said we consider Medicare to be the best example of how good social policy can be good economic policy, too. While reflecting the desire of Canadians to show compassion for their fellow citizens, Medicare also serves as one of our key competitive advantages. A sustained health care system will ensure a healthy population, and a healthy labour force that contributes to the productivity of the nation. In seeking to place the health care system on the road to long-term sustainability, the CMA is committed to working in close partnerships with the federal government and others in identifying, developing and implementing policy initiatives that serve to strengthen Canadians' access to quality health care The CMA looks forward to contributing to the search for solutions. To work with the federal government and others in building a responsive, flexible and sustainable health care system for all Canadians. In this spirit of co-operation the CMA offers the following recommendations: 1. That the federal government fund Canada's publicly financed health care system on a long-term, sustainable basis to ensure quality health care for all Canadians. 2. That the federal government introduce a health-specific portion of federal cash transfers to the provinces and territories to promote greater public accountability, transparency and visibility. 3. That the federal government, at a minimum, increase federal cash for health care by an additional $1.5 billion, effective April 1, 2000. 4. That beginning, April 1, 2001, the federal government fully index the total cash entitlement allocated to health care through the use of a combination of factors that would take into account the changing needs of Canadians based on population growth, ageing, epidemiology, current knowledge and new technologies, and economic growth. 5. That the federal, provincial and territorial governments adopt the guiding principle of national self-sufficiency in the production and retention of physicians to meet the medical needs of the population, including primary to highly specialized medical care, and the requirements for a critical mass for teaching and research. 6. That the federal government establish and fund a national pool of re-entry positions in postgraduate medical education. 7. That the federal government establish a National Centre for Health Workforce Research. 8. That the federal government enhance financial support systems, such as the Canada Student Loans Program, for medical students in advance of any future tuition increase, and ensure that these support systems are set at levels that meet the financial needs of students. 9. That health care services funded by the provinces and territories be zero-rated. 10. That the federal government establish a National Health Technology Fund to increase country-wide access to needed health technologies. 11. That the federal government continue to increase funding for health research on a long-term, sustainable basis. 12. That the federal government commit stable funding for a comprehensive tobacco control strategy; this strategy should ensure that the funds are invested in evidence-based tobacco control projects and programs, which would include programs aimed at prevention and cessation of tobacco use and protection of the public from tobacco's harmful effects. 13. That the federal government support the use of tobacco tax revenues for the purpose of developing and implementing tobacco control programs. 14. That the federal government place a high priority for funding tobacco prevention and evidence-based cessation programs for young Canadians as early as primary school age. 15. That the federal government follow a comprehensive integrated tobacco tax policy a) To implement selective stepwise tobacco tax increases to achieve the following objectives: (1) reduce tobacco consumption, (2) minimize interprovincial/territorial smuggling of tobacco products, and (3) minimize international smuggling of tobacco products; b) To apply the export tax on tobacco products and remove the exemption available on tobacco shipments in accordance with each manufacturers historic levels; and c) To enter into discussions with the US federal government to explore options regarding tobacco tax policy, raising Canadian tobacco price levels in line with or near the US border states, in order to minimize international smuggling. 16. That the dollar limit of RRSPs at $13,500, increase to $15,500 for the year 2000/01. 17. That the federal government explore mechanisms to increase RRSP contribution limits in the future given the delay in achieving pension parity, since 1988. 18. That the 20% Foreign Property Rule for deferred income plans such as Registered Retirement Savings Plans and Registered Retirement Income Funds be increased in 2% annual increments to 30% over a five year period, effective the year 2000. 19. That the federal government explores the regulatory changes necessary to allow easier access to RRSP funds for investment in small and medium-size businesses. 20. That the federal government undertake the necessary steps to creditor-proof RRSPs and RRIFs. I. INTRODUCTION The Canadian Medical Association (CMA) commends the federal government in its second mandate, for continuing with the pre-budget consultation process. This visible and accountable process encourages public dialogue in the consideration and development of finance, economic and social policies of the country. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] As part of the 2000 pre-budget consultation process, the CMA welcomes the opportunity to submit its views to the House of Commons Standing Committee on Finance, and looks forward to meeting with the Committee at a later date to discuss our recommendations and their rationale in greater detail. II. POLICY CONTEXT Over the past few years, there has been a significant amount of attention placed on the fact that Canada is living in a world that is increasingly interdependent. A world where globalization has meant that we, as a country, must look forward, outward and with others when it comes to determining how we can reach our collective potential. While further political and economic change is likely to continue, it is important to recognize that there are important social programs that must remain essential features of our society. One such program is our health care system - an important and defining feature of what it is to be Canadian. The CMA believes that when it comes to maintaining and enhancing the health of Canadians, a well-funded, sustainable health care system must be at the forefront of the federal government's strategic priorities. By 2002, it is estimated that there will be 2.3 million more Canadians and 444,000 more Canadians over the age of 65. As a consequence, Canada's health care system will continue to face significant challenges in the near future. The pan-Canadian haste of governments across the country to reduce health care costs as quickly as possible over the past several years left a destabilized and demoralized health system in its wake. Diminished access to critical health care services and insufficient human resources are only part of the legacy. The initial federal reinvestment will help ease some of the pressures but it will not be much more than a short-term solution given that expectations and demands on the system will continue to rise. Rebuilding Canadians' confidence in the health care system will not be easy. Reports of overcrowded emergency rooms, physician and nursing shortages, and of patients being sent to the United States for treatment to reduce waiting times will not help restore their faith. The CMA fully recognises the importance of the first step taken by the federal government. However, fundamental questions remain about future steps needed to sustain our cherished health care system over the short-, medium- and long-term - ensuring that all Canadians will have ready access when they or their families are in need. Given this first step, the CMA believes that we must shift our focus to the vision and overarching strategic framework the federal government must develop to ensure that the health care system will be funded on a sustainable basis. In seeking to place the health care system on the road to long-term sustainability, the CMA is committed to working closely with the federal government in identifying, developing and implementing policy initiatives that serve to strengthen Canadians' access to quality health care. III. TOWARDS A SUSTAINABLE HEALTH CARE SYSTEM In its 1999 budget, the federal government took an important first step forward toward stabilizing Canada's health care system. The government announced a five-year fiscal framework, effective April 1, 1999 that reinvested $11.5 billion, on a cumulative basis, in the health care system. While this is an important first step, it must be placed in perspective. The $11.5 billion is a cumulative figure over five consecutive years. On an annual basis, this means that federal cash for health care is scheduled to increase by $2.0 billion for 1999/2000; it will remain at the same level for 2000/01 and then increase by $500 million (to $2.5 billion) in 2001/02, and remain at that level for the years 2002/03 and 2003/04. Only in year 4 does the CHST cash floor increase by a total of $2.5 billion. 1 Restoring $2.5 billion to the Canada Health and Social Transfer (CHST) cash floor in 2002/03, the fourth year of the government's five-year timetable, means that the health system will only be back to its 1995 nominal spending levels, 7 years after the fact - with no adjustment for the increasing health care needs of Canadians, inflation or economic growth. 2 [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [TABLE END] In current dollars, it is estimated that the federal government allocates approximately 41% of CHST cash for health care. Based on a cash floor of $12.5 billion this amounts to $5.13 billion. The CMA recognizes that the federal amount has increased cash by a minimum of $2.0 billion in 1999/00 to $7.13 billion, however, once again this figure must be placed in context; $7.13 billion represents only 9 cents of each dollar spent on health care in Canada. Another way to express the $11.5 billion is to adjust the figure by the number of Canadians (i.e., a per capita basis - see Figure 1). 3 Scenario 1 illustrates nominal per capita federal CHST cash for health care prior to the 1999 budget with projections to 2003/04. In absence of a five-year fiscal framework introduced by the government, federal CHST cash (formerly Established Programs Financing and the Canada Assistance Plan) would have gone from $247 in 1990/01 to $163 per Canadian in 2003/04 - a decrease of 34%. Adjusting for inflation, federal CHST cash for health care would have dropped from $247 to $131 per Canadian - a decrease of 47%. With the introduction of the $11.5 billion in 1999 (Scenario 2), nominal per capita CHST cash for health care increases from $168 to $233 in 1999/00. This, however, falls short of the $258 per capita in 1995/96. With an estimated population of 30.6 million Canadians, the CHST shortfall is estimated to be $765 million (i.e., $258 - $233 x 30.6 million). Recognizing that inflation since 1995 has eroded the value of the federal CHST cash in 1999, the figure is estimated to be closer to $1.5 billion than $1.0 billion. Furthermore, there is no escalator attached to the federal CHST cash to account for inflation, a growing and ageing population, epidemiological trends or the diffusion of new technologies. This is a departure from previous formulae under Established Programs Financing (EPF) and the CHST which included an escalator (i.e., a three-year moving average of nominal Gross Domestic Product) to grow the value of the cash transfer. 4 In summary, the context placed around $11.5 billion is important, for it underscores the importance of the initial step that has been taken by the federal government when it comes to shoring up funding for health care in Canada. However, the critical issue now becomes what immediate and successive steps will be taken by the government to place the funding of our health care system on a longer-term and sustainable basis. The CMA is not alone in its view that there must be a full restoration of CHST cash. The Communiqué issued by the First Ministers at the recent 40th Annual Premiers Conference in Quebec City was clear in the interpretation of sustainability. While we consider how to ensure that the health care system will be here for all Canadians over the short, medium and long-term, we know that our society is growing and ageing. It is projected that individuals over the age of 65 will increase from just over one in ten (12.2%) in 1996 to one in five (21.7%) in 2031. 5 [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] The combination of population growth and ageing will place additional pressure on health expenditures. Estimated per capita health expenditures by age for 1994 (see Table 1), shows that per capita expenditures for the 65 and over age group were $8,068, in comparison to $2,478 for the population as a whole-just over a three-to-one ratio. 6 Of interest, while the 65 and over population represented less than 12% of the population in 1994, it is estimated to have accounted for almost 40% of total health expenditures. The Auditor General of Canada, using age-specific per capita health spending, has projected that government health expenditures may reach 12% of GDP. 7 This is a large estimated increase given that the 1998 total health expenditures, which includes both government and private sources, is approximately 9% of GDP. [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] Table 1 Per Capita Health Expenditures By Age Group, 1994 Age Group Expenditures per capita 0-14 $1,156 15-44 $1,663 45-64 $2,432 65+ $8,068 Source: National Health Expenditures, CIHI, 1996. [TABLE END] While it may be argued that those are only estimates, the OECD study on population shows that they are not at all atypical of the international experience. 8 This information alone will present the health care system with a number of challenges when it comes to meeting the future needs of the population. Given the current and impending pressures on the health care system, it is incumbent on the federal government - the guardian of Medicare - to think how we, as a society, will be able to maintain our health care system well beyond the new millennium. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] The CMA therefore recommends: 1. That the federal government fund Canada's publicly financed health care system on a long-term, sustainable basis to ensure quality health care for all Canadians. 2. That the federal government introduce a health-specific portion of federal cash transfers to the provinces and territories to promote greater public accountability, transparency and visibility. 3. That the federal government, at a minimum, increase federal cash for health care by an additional $1.5 billion, effective April 1, 2000. 4. That beginning April 1, 2001, the federal government fully index the total cash entitlement allocated to health care through the use of a combination of factors that would take into account the changing needs of Canadians based on population growth, ageing, epidemiology, current knowledge and new technologies, and economic growth. Recommendation 1 is principle-based and speaks to the importance of moving away from managing Canada's health care system on a crisis-to-crisis basis. While the balance between affordability and sustainability of our system should be at the forefront of our thinking, it must not deny Canadians reasonable access to quality health care. It also recognizes that although the federal government has an essential role to play, it cannot do it alone; it must work in close partnership with the provinces and territories. Consistent with the Minister of Health's call for increased accountability and transparency in our health care system, Recommendation 2 calls on the federal government to be measured by the very same principle when it comes to funding Canada's health care system. It is also consistent with the Social Union Agreement calling for greater public accountability on all levels of government. While last year's allocation under the CHST for health care sends an important message, consideration must be given as to how the CHST can be restructured to promote greater transparency and linkage between the sources of federal funding for health care and their intended uses at the provincial/territorial level. This is particularly important when one considers the need to better understand the relationship between defined health care expenditures and their relationship to health outcomes. In fact, it could be argued that last year's federal budget implicitly re-introduced the concept of earmarking CHST cash to health care. At a time of increased demand for accountability, the CHST mechanism appears to be anachronistic by having one indivisible cash transfer that does not recognize explicitly the federal government's contribution to health in a post-Social Union Agreement world. Last year, the CMA recommended to the federal government that it reinvest a total of $3.5 billion effective April 1, 1999 into the health care system with the principal objectives of: stabilizing the health care system; and assisting in the transitional process of expanding the continuum of care. As part of the $3.5 billion, the CMA recommended the creation of a Health System Renewal Fund which focused on four discrete areas of need: (1) acute care infrastructure; (2) community care infrastructure; (3) support Canadians at risk; and (4) health information technology. Given that the government reinvested $2.0 billion in 1999/2000, the CMA recommends that the federal government move immediately to reinvest an additional $1.5 billion for health care to facilitate continued system stabilization as well as further development toward an expanded continuum of care. These additional and necessary resources would be welcomed in addressing strategic policy challenges related to health human resource requirements - particularly those associated with the need for an adequate and stable supply of physicians and nurses; the cornerstone of our health care system. Furthermore, these resources would assist in the development of necessary capital infrastructure required to assist in the transition from institutional to community-based models of care, within a more integrated framework. While more specific and substantial funding announcements would be expected with any new shared programs announced by the federal and provincial/territorial governments (e.g., home care and pharmacare), there is a need now, while the system is in flux to ensure that no one falls through the cracks. This transitional funding will assist in the stabilization of the system and will also serve to ensure that as the system evolves toward an expanding continuum of care, it will remain accessible, with minimal interruption of service to Canadians. Based on recent estimates of the government's surplus in 1999 (standing at $4.8 billion through the first three months of fiscal 1999) and beyond, (9) it would appear that the government has an opportunity to make good on its commitment to make health care a key priority for future action. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] Recommendation 4 addresses the need for a fully indexed escalator to ensure that the federal cash contribution will continue to grow to meet the future health needs of Canadians. The escalator formula recognizes that health care needs are not always synchronized with economic growth. In fact, in times of economic hardship (e.g., unemployment, stress, and familial discord), a greater burden is placed on the health care system. If left as is, the current federal cash value will continue to erode over time with increasing demands from an ageing and growing population, and inflation. Combined, these recommendations speak not only to the fundamental principles of the necessity of having a sustainable health care system, but also in terms of the federal government continuing to take the necessary concrete leadership steps to ensure that adequate and long-term funding is available to meet the health care needs of all Canadians. The recommendations are strategic and targeted, and serve to build on and strengthen the core foundation of our health care system. If Canada's health care system is not only to survive, but thrive in the new millennium, we must give serious consideration to a range of possible solutions that place our system, and the federal role in that system, on a more secure and sustainable financial foundation. The CMA is prepared to continue to work with governments and others in developing innovative and lasting solutions to the challenges that face the health care system. IV. SUSTAINABLE HEALTH CARE AND PRODUCTIVITY In last year's report tabled in the House of Commons, the Standing Committee on Finance proposed the development of a productivity covenant. The Covenant "should subject all existing government initiatives (spending, taxation, regulation) to an assessment which evaluates their expected effects on productivity and hence the standard of living of Canadians. Every new budgetary initiative should be judged according to this productivity benchmark." 10 [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] In the context of reinvesting in health care, the Standing Committee's Covenant asks that a "business case" be made. The CMA is of the view that there exists an important relationship between a well-funded, sustainable, public health care system and economic productivity. Just as strong economic fundamentals are generally viewed as an essential requirement for Canada's prosperous future, stable, adequate and where required, increased resources for health and health care funding should also be considered as an investment in the future well-being of Canadians, and by extension, our economic ability to compete. Framed in this context, these "investments" strengthen the capacity of Canadians to live rewarding and productive lives. From a structural perspective, studies have recognized the link between a well-funded, sustainable health care system as an important contributor to Canada's economic performance. 11 [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] The studies suggest that the nature in which Canada largely finances its health care system through general taxes is more efficient compared to the United States which finances its system predominantly through employer-sponsored programs. Compared to the United States, Canada finances its health care system more equitably by spreading the financial risk across all taxpayers. As well, issues related to job mobility and the portability of health care benefits are not in question in the Canadian system. However, recent federal underfunding in health care has significantly contributed to impaired access to care by injured and sick workers delaying their return to work, decreasing productivity and increasing the cost of doing business and the cost to society. 12 A well-funded, sustainable health care system can be viewed as an important component in the decision-making process of businesses to locate in Canada. 13 In this context, there are a number of benefits that may accrue to Canadians at the individual and societal level, for example: * it can attract medium- and long-term business investment; * lead to the development of new infrastructure (e.g., facilities, equipment); * nurture the development of new long-term (value-added) jobs; * generate real and growing incomes; * increase individual and societal economic activity/consumption, wealth and investment capital; * reduce overall dependence on publicly funded social programs (e.g., employment insurance, income support programs); and * contribute to a growing and sustainable tax base. Underscoring the important linkages between the quality of life of Canadians and productivity is the important role of an efficient and well-funded public health care system and sustained economic growth. Given that policy decisions impact on the economy, health and health care should not necessarily be considered in isolation. In fact, wherever possible, good economic policy and good health and health care policy should be mutually reinforcing, or at a minimum, better synchronized. In an increasingly global, interdependent and competitive marketplace, businesses are not looking to assume greater costs. When it comes to health care, they are not looking to absorb high risk and high cost cases that are currently funded through the public sector. Instead, it would appear that they prefer a well-funded, sustainable health care system that is responsive to the health and health care needs of Canadians. 14 As well, a sustainable publicly funded health care system affords Canadians full mobility (i.e., portability) when it comes to pursuing job opportunities, which in turn, improves productivity. Good economic policy and good health care policy are compatible Canadian societal priorities. One need not be sacrificed to achieve the other nor should they be considered to be in competition with each other. Access to quality health and health care services is an important contributor towards Canada's ability to remain competitive in an increasingly complex global economic environment. Governments at all levels, must take responsibility to ensure that the health system remains on a long-term sustainable financial footing to the extent that it continues to benefit Canadians at the individual and societal level, and in terms of maximizing our quality of life and our ability to be productive. V. PHYSICIAN WORKFORCE ISSUES Canada is now beginning to experience a physician shortage that will be significantly exacerbated in the early decades of the next century. One of the chief contributing factors to the emerging shortage of physicians has been the almost singular focus of governments in their efforts to contain health care costs in the 1990s. A key policy approach introduced by governments to reduce cost growth in health has been to decrease the supply of physicians. A 12-point accord on physician resource management reached by Health Ministers in Banff, Alberta in 1992 included a recommendation for a 10% reduction in undergraduate enrolment in medical schools, which was implemented in the fall of 1993, and a recommendation for a similar percentage reduction in the number of postgraduate training positions. In addition, the introduction in 1992 of the requirement for a minimum of 2 years of prelicensure training removed most of the flexibility that used to exist in the number of postgraduate training slots. For instance, the opportunity for re-entry was no longer available to practising physicians; these re-entry opportunities ensured that young graduates (in general and family medicine) who had opted to go out and do locums or rural placements could then come back into the system at a later date for skills enhancement or speciality training. What the federal/provincial/territorial Ministers of Health did not take into account, however was that the output of Canada's medical schools peaked in the mid-1980s. Between 1986 and 1989, physician supply increased on average by 1,900 per year. This growth was halved between 1989 and 1993 - dropping to an average increase of 960 physicians per year. After 1993, total physician supply dropped in three successive years. This period of declining growth occurred well before the 1993 reductions have had an opportunity to work through the undergraduate education and post-MD training systems. Part of the reason for the decrease in supply is fewer Canadian medical graduates, but a significant part is due to increased attrition from the physician population. One factor has been increased retirement of physicians. The annual number of physicians retiring increased by 40% between the 1985-1989 and 1990-1995 periods. Although there have been up turns in the total supply of physicians in 1997 (285) and 1998 (960), this is unlikely to be sustained, given our lower levels of output from the educational system and higher attrition. The removal of most of these positions was unfortunate because re-entry can provide for more flexibility in the system and can allow for a more rapid adjustment in the physician workforce to meet the health needs of the public. For the Committee's information, appended to the Brief is the CMA's Draft Principles for a Re-entry System in Canadian Postgraduate Medical Education. According to the CMA's projection via the Physician Resource Evaluation Template (PRET), if the current levels of enrolment and attrition patterns continue, Canada will definitely experience a physician shortage in the first decades of the next century, especially after 2011, when the baby-boomer cohort of physicians will begin to retire. There is additional evidence that Canada is experiencing a physician shortage. First, it can be demonstrated that physicians are working harder than ever. Data from the CMA Physician Resource Questionnaire survey show that the mean hours per week worked by physicians (excluding on-call) have increased from 46.9 per week in 1993 to 54.1 hours in 1999 - an increase of 15.4%. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] Second, population-based data suggest that it is becoming more difficult to access physician services. Tracking surveys conducted by the Angus Reid group on behalf of CMA show that in 1998, an estimated 60% of the population believed that access to specialist services has worsened in the past couple of years - up from 41% in 1996. Similarly, in 1998 27% of Canadians reported that access to services from a family physician had worsened - almost double the level of 14% that was reported in 1996. 15 An August 1999 poll conducted by Angus Reid asked Canadians to assess the availability of physicians in their own communities. Only a little over one half of Canadians (52%) feel there are enough physicians available to meet their community's needs. Furthermore, they expect the situation to worsen over the next five years. Less than one third (29%) feel that five years from now there will be enough physicians to meet the health care needs in their communities. 16 In summary, there is ample evidence that not only is Canada heading for a severe physician shortage, but that a shortage has been developing over the past few years. At the same time, it must be recognized that it takes on average six years to train a general practitioner and 8-12 years to train a specialist from the time one enters medical school. If we are to avoid what appears to be a significantly worsening crisis, planning for the future must begin immediately. The CMA therefore recommends: 5. That the federal, provincial and territorial governments adopt the guiding principle of national self-sufficiency in the production and retention of physicians to meet the medical needs of the population, including primary to highly specialized medical care, and the requirements for a critical mass for teaching and research. 6. That the federal government establish and fund a national pool of re-entry positions in postgraduate medical education. In close consultation and collaboration with the provinces and territories, the federal government could play an increasingly vital role when it comes to ensuring that Canada produces an adequate supply of physicians. Furthermore, it could play a role in giving physicians the flexibility they need should they require additional training to meet the emerging needs of Canadians. Cost containment initiatives have also led to decreased numbers of other health care providers all across the country, particularly nurses. The federal government could play a major role in funding and coordinating research across all jurisdictions in Canada on the appropriate supply, mix and distribution of the entire health workforce. Strategic planning in the short, medium and long-term would be greatly facilitated through the establishment of a national institution that could draw on existing national databases and compile research from all the centres in the jurisdictions across the land. The CMA therefore recommends: 7. That the federal government establish a National Centre for Health Workforce Research. RURAL-REMOTE ISSUES While there are physician shortages across the country, it is particularly acute in rural and remote regions of Canada. For a number of personal and professional reasons, physicians are not finding rural and remote practice as rewarding nor sustainable. In 1999, CMA conducted a survey of rural physicians who were asked to rate their level of satisfaction with rural medical practice both from a personal and professional perspective; this study was funded by Health Canada. A similar survey was previously done in 1991. 17 There has been little change in the level of satisfaction for the personal and family factors. However, the level of satisfaction with the professional factors has fallen significantly. In 1991, the proportion indicating they were very satisfied with work hours, professional backup, availability of specialty services and continuing medical education opportunities all decreased by at least 10 percentage points. Similarly, the percentage who were very satisfied with hospital services fell by more than half from 40% in 1991 to 17% in 1999. Likewise, in 1991 42% were very satisfied with their earning potential compared with 23% in 1999. ESCALATION AND DEREGULATION OF TUITION FEES The CMA remains very concerned about high, and rapidly escalating, medical school tuition fee increases across Canada. The CMA is particularly concerned about their subsequent impact on the physician workforce and the Canadian health care system. In addition to the significant impact of high tuition fees on current and potential medical students, the CMA believes that high tuition fees will have a number of consequences, they will: (1) create barriers to application to medical school and threaten the socioeconomic diversity of future health care providers serving the public; and (2) exacerbate the physician 'brain drain' to the United States so that new physicians can pay down their large and growing debts more quickly. In support of this priority matter, the CMA Board has struck a working group to develop a position paper on tuition fee escalation and deregulation; the working group is also planning a national, multiprofession stakeholder conference on this issue. In addition to the recommendation that follows, the CMA believes that governments should increase funding to medical schools to alleviate the pressures driving tuition increases, and that any further tuition increases should be regulated and reasonable. The CMA decries tuition deregulation in Canadian medical schools and recommends: 8. That the federal government enhance financial support systems, such as the Canada Student Loans Program, for medical students in advance of any future tuition increase, and ensure that these support systems are set at levels that meet the financial needs of students. BRAIN DRAIN The net loss of physicians from Canada to other countries has doubled since the beginning of the 1990s. Whereas a net loss of 223 physicians due to migration was recorded in 1991, the corresponding figure for 1997 was 432 physicians - which represents roughly the annual output of four to five medical schools. While these physicians leave for a variety of professional and personal reasons, what is particularly telling is that the figure has doubled over the course of the 1990s. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] For several years, the CMA has warned governments and policy makers about the impending crisis of physician shortages and their implications for the health care system. Regrettably, the calls for a more measured, responsible and deliberate approach to physician resource planning has fallen on deaf ears. There are a number of factors that contribute to physicians leaving Canada. While they would appear to be a combination of personal, professional and economic considerations, the bottom line is our brain drain is a de facto brain gain for another country - predominantly the United States. In reviewing the brain drain issue, Statistics Canada concludes that "there is significant net brain drain in the health professions. Brain gain in health is not enough to make up for brain drain to the United States." 18 This issue is very real for physicians - who are being asked to do more where colleagues are no longer practising; and to the public - who are being asked to be patient as access to the system is delayed or compromised. In the absence of timely, strategic and lasting policy measures, we are likely to continue to risk losing physicians - many of them our best and brightest - to other countries. In this regard, the CMA is of the view that the federal government has an important role to play when it comes to synchronizing policy in the areas of health care, finance and economics. One factor that may contribute to a physician's decision to leave or think about leaving Canada is our tax structure. It is important to note that Canada relies more heavily on personal income taxes than any other G-7 country. 19 While this is important, what is more of concern is how Canada's marginal tax structure compares to that of the United States. While it is understood that Canada has taken a fundamentally different approach with regard to the magnitude and role of the tax system in social policy, the gap between the two systems can no longer be ignored in a world of increasing globalization, economic interdependence and labour mobility. While Canada's personal income tax schedule should be reviewed, it should not come as a surprise to this Committee that other tax policies - such as the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) only serve to remind physicians of the severity and inequity of the problem. GOODS AND SERVICES TAX (GST) In its 1997 report to the House of Commons the Standing Committee noted the concerns of the medical profession about the application of the GST and by 1998 indicated that this issue merits further consideration by the government. The CMA believes that it has rigorously documented its concerns and further study is not required (20) - the time has come for concerted action from the federal government to remove this tax impediment. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] When it comes to tax policy and the tax system in Canada, the CMA is strongly of the view that both should be administered in a fair and equitable manner. This principle-based statement has been made to the Standing Committee on a number of different occasions. While these principles are rarely in dispute, the CMA has expressed its strong concerns regarding their application - particularly in the case of the goods and services tax (GST) and the recently introduced harmonized sales tax (HST) in Atlantic Canada. By designating medical services as "tax exempt" under the Excise Tax Act, physicians are in the unenviable position of being denied the ability to claim a GST refund (i.e., input tax credits - ITCs) on the medical supplies necessary to deliver quality health care, and on the other, cannot pass the tax onto those who purchase such services. This is a critical point when one considers the raison-d'être of introducing the GST: to be an end-stage consumer-based tax, and not having a producer of a good or a service bear the full burden of the tax. Yet this tax anomaly does precisely that. As a result, physicians are "hermetically sealed" - they have no ability to claim ITCs due to the Excise Tax Act, or pass the costs to consumers due to the Canada Health Act. The CMA has never, nor is currently asking for, 'special treatment' for physicians under the Excise Tax Act. However, if physicians, as self-employed individuals are considered as small businesses for tax purposes, then it is clearly reasonable that they should have the same tax rules extended to them that apply to other small businesses. This is a fundamental issue of tax fairness. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] While other self-employed professionals and small businesses claim ITCs, an independent (KPMG) study has estimated that physicians have "overcontributed" in terms of unclaimed ITCs by $57.2 million per year. Furthermore, with the introduction of the HST in Atlantic Canada, KPMG has estimated that it will cost physicians an additional $4.686 million per year. By the end of this calendar year, physicians will have been unfairly taxed in excess of $500 million. As it currently applies to medical services, the GST is bad tax policy and the HST will make a bad situation much worse for physicians. There are other health care providers (e.g., dentists, physiotherapists, psychologists, chiropractors, nurses) whose services are categorized as tax exempt. However, there is an important distinction between whether the services are publicly insured or not. Health care providers who deliver services privately have the opportunity to pass along the GST costs through their fee structures. It must be remembered that physicians are in a fundamentally different position given that 99% of their professional earnings come from the government health insurance plans: under the GST and HST, "not all health care services are created equal". There are those who argue that the medical profession should negotiate the GST at the provincial/ territorial level, yet there is no province or territory that is prepared to cover the additional costs that are being downloaded onto physicians as a result of changes to federal tax policy. Nor do these governments feel they should be expected to do so. The current tax anomaly, as it affects the medical profession, was created with the introduction of the GST - and must be resolved at the federal level. The principles that underpin the fundamental issue of tax fairness outlined by Chief Justice Hall are unassailable and should be reflected in federal tax policy. Clearly, it is fairness, not special treatment that the profession is seeking. As it currently stands for medical services, the GST and HST is bad tax policy that does not reinforce good health care policy in Canada. The CMA strongly recommends: 9. That health care services funded by the provinces and territories be zero-rated. This recommendation would be accomplished by amending the Excise Tax Act as follows: (1). Section 5 part II of Schedule V to the Excise Tax Act is replaced by the following: "A supply (other than a zero-rated supply) made by a medical practitioner of a consultative, diagnostic, treatment or other health care service rendered to an individual (other than a surgical or dental service that is performed for cosmetic purposes and not for medical or reconstructive purposes)." (2). Section 9 Part II of Schedule V to the Excise Tax Act is repealed. (3). Part II of Schedule VI to the Excise Tax Act is amended by adding the following after Section 40: 41. A supply of any property or service but only if, and to the extent that, the consideration for the supply is payable or reimbursed by the government under a plan established under an Act of the legislature of the province to provide for health care services for all insured persons of the province. The CMA's recommendation fulfils at least two over-arching policy objectives: (1) it strengthens the relationship between good economic policy and good health policy in Canada; and (2) it applies the fundamental principles that underpin our taxation system (fairness, efficiency, effectiveness), in all cases. In this regard, the CMA is committed to working closely, and on an ongoing basis, with the government to develop collaborative solutions to this tax anomaly. DIFFUSION OF HEALTH TECHNOLOGIES Recently, concerns have been raised about the lack of access to necessary diagnostic and treatment technologies in Canada. Many of the technologies are essential in the early detection of cancers (e.g., breast, prostate, lung), tumours, circulatory complications (e.g., stroke, hardening of the arteries) and other illnesses. A recent study concluded that Canada is generally in the bottom third of OECD countries in availability of technology. Canada ranks 18th (of 29 OECD countries) in making available computed tomography; 19th (of 24 OECD countries) in lithotriptor availability; and 18th (of 27 OECD countries) in availability of magnetic reasonance imagers. Canada ranks favourably only in the availability of radiation equipment (5th out of 16 OECD countries). 21 [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] Given the very real concerns that have been raised with regard to waiting lists across the country, Canadians deserve better when it comes to making available needed health technologies that can effectively diagnose and treat disease. Furthermore, it is clear that we must facilitate the diffusion of new cost-effective health technologies that are properly evaluated and meet defined standards of quality. While physicians are trained to provide quality medical care to all Canadians- they must, at the same time, have the "tools" to do so. In this context, the federal government should establish a National Health Technology Fund that would allow the provinces and territories to access funds. While the provinces and territories would be responsible for determining their respective technological priorities, the federal government would very clearly link the sources of funding with their intended uses, with full recognition for an essential investment in the health care of Canadians. The CMA recommends: 10. That the federal government establish a National Health Technology Fund to increase country-wide access to needed health technologies. The CMA is prepared to work closely with the federal government to assist in the development of objectives and deliverables of such a fund within a reasonable period of time. In so doing, the federal government would work in a strategic partnership with the provinces and territories such that monies from the fund to purchase equipment would be supported by ongoing operational resources at the site of delivery. VI. SYNCHRONIZING FEDERAL GOVERNMENT POLICY: WHERE FINANCE, ECONOMICS AND HEALTH CARE COME TOGETHER In appearing before the House of Commons Standing Committee on Finance, the CMA is well aware that policy considerations in finance and economics have an important and direct impact on the funding and delivery of health care in Canada. In the world of public policy, rarely are difficult decisions portrayed as simply being black or white. In most instances, where tough choices are made amongst a series of competing ends, they are often in varying shades of grey. While this is true when it comes to health care policy in Canada or any other discipline, it is important that it be placed in a broader context in terms of being consistent with, or reinforcing other good policy choices that have been implemented. This concept is critical to ensure that, if possible, all policy decisions are moving consistently in the same direction. In effect, synchronized in a way that the "policy whole" is greater than the sum of its individual parts. Such an approach also ensures that policy decisions taken in one sector are not countering decisions taken in other sectors. HEALTH RESEARCH IN CANADA In previous submissions to the Standing Committee on Finance, the CMA has encouraged the federal government to take the necessary steps to establish a national target and implementation plan for health research in Canada. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] The CMA was very encouraged with the federal government's announcement in last year's budget to set aside significant resources to develop the Canadian Institute for Health Research (CIHR). By 2001, funding for the CIHR is expected to increase to $484 million. The CMA was also pleased with the Minister's recent announcement to earmark $147 million to attract and retain health researchers in Canada. In offering a vision and structure to facilitate health research in Canada, the government should be congratulated. The CMA believes that significantly increasing funding in support of health research is of direct benefit to: (1) the health of Canadians; (2) Canada's health care system; and (3) to foster the development of health care as an industry. This is where good economic policy goes hand-in-hand with good health and health care policy in Canada. The CMA strongly supports the CIHR model and is prepared to work closely with government and others to do what is necessary to make this become a reality. Recognizing that Canada is moving into a new phase when it comes to funding and undertaking health research, the government is taking an important step to ensure our best and brightest medical scientists and health researchers are developed and remain in Canada. [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] As a national organization representing the views of practising physicians across the country, the CMA strongly believes it has a meaningful contribution to make in moving the CIHR model forward. Specifically, in the areas of: * knowledge management (the CMA contributed greatly to stimulating clinical and health services research in Canada) * contributing to the research agenda (the CMA contributes to the research agenda in health services research, for example the Western Waiting List project funded by the Health Transition Fund) * ensuring quality peer-reviewed research (the CMA publishes the leading peer-reviewed medical journal in Canada) * research transfer (the CMA plays a leading role in developing tools to transfer research into practice - such as the Clinical Practice Guideline Database) * ethics (the CMA maintains a standing committee on ethics) * sustainability (the CMA has advocated for a strong Canadian presence in health research) While the CIHR will have a broad mandate for health research, physicians will have a key role to play in medical and health services research. The CMA looks forward to playing a more substantive role as the model moves to become reality. The CMA recommends: 11. That the federal government continue to increase funding for health research on a long-term, sustainable basis. TOBACCO CONTROL PROGRAMS Tobacco taxation policy should be used in conjunction with other strategies for promoting health public policy, such as public education programs to reduce tobacco use. The CMA continues, however, to maintain that a time-limited investment is not enough. Substantial and sustainable fund-ing is required for programs in prevention and cessation of tobacco use. 22 [BOX CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [BOX END] A possible source for this type of program investment could be tobacco tax revenues or the tobacco surtax. The CMA believes that that the federal government should designate 0.6 cents per cigarette sold to a fund to defray the costs of tobacco interventions, including those provided by physicians with the expertise in the treatment of nicotine addiction. This would generate approximately $250 million per year to help smokers quit. 23 The CMA recommends: 12. That the federal government commit stable funding for a comprehensive tobacco control strategy; this strategy should ensure that the funds are invested in evidence-based tobacco control projects and programs, which would include programs aimed at prevention and cessation of tobacco use and protection of the public from tobacco's harmful effects. 13. That the federal government support the use of tobacco tax revenues for the purpose of developing and implementing tobacco control programs. 14. That the federal government place a high priority for funding tobacco prevention and evidence-based cessation programs for young Canadians as early as primary school age. TOBACCO TAXATION POLICY Smoking is the leading preventable cause of premature mortality in Canada. The most recent estimates suggest that more than 45,000 deaths annually in Canada are directly attributable to tobacco use. The estimated economic cost to society from tobacco use in Canada has been estimated from $11 billion to $15 billion. 24 Tobacco use directly costs the Canadian health care system $3 billion to $3.5 billion (25) annually. These estimates do not consider intangible costs such as pain and suffering. CMA is concerned that the 1994 reduction in the federal cigarette tax has had a significant effect in slowing the decline in cigarette smoking in the Canadian population, particularly in the youngest age groups - where the number of young smokers (15-19) is in the 22% to 30% range and 14% for those aged 10-14. 26 A 1997 Canada Health Monitor Survey found that smoking among girls 15-19 is at 42%. 27 A Quebec study found that smoking rates for high school students went from 19% to 38%, between 1991 and 1996. 28 The CMA congratulates the federal government's initiatives to selectively increase federal excise taxes on cigarettes and tobacco sticks. This represents the first step toward the development of a federal integrated tobacco tax strategy, and speaks to the importance of strengthening the relationship between good health policy and good tax policy in Canada. The CMA understands that tobacco tax strategies are extremely complex. Strategies need to consider the effects of tax increases on reduced consumption of tobacco products with increases in interprovincial/ territorial and international smuggling. In order to tackle this issue, the government could consider a selective tax strategy. This strategy requires continuous stepwise increases to tobacco taxes in those selective areas with lower tobacco tax (i.e., Ontario, Quebec and Atlantic Canada). The goal of selective increases in tobacco tax is to increase the price to the tobacco consumer over time (65-70% of tobacco products are sold in Ontario and Quebec). The selective stepwise tax increases will approach but may not achieve parity amongst all provinces; however, the tobacco tax will attain a level such that interprovincial/territorial smuggling would be unprofitable. The selective stepwise increases would need to be monitored so that the new tax level and US/Canadian exchange rates do not make international smuggling profitable. The selective stepwise increase in tobacco taxes can be combined with other tax strategies. The federal government should be congratulated for reducing the export exemption available on shipments in accordance with each manufacturers' historic levels, from 3% of shipments to 2.5%. However the CMA believes that the federal government should remove the exemption. The objective of implementing the export tax would be to make cross-border smuggling unprofitable. The federal government should establish a dialogue with the US federal government. Canada and the US should hold discussions regarding harmonizing US tobacco taxes with Canadian levels at the factory gate. Alternatively, Canadian tobacco tax policy should raise price levels such that they approach US tobacco prices. The CMA therefore recommends: 15. That the federal government follow a comprehensive integrated tobacco tax policy (a) To implement selective stepwise tobacco tax increases to achieve the following objectives: (1) reduce tobacco consumption, (2) minimize interprovincial/territorial smuggling of tobacco products, and (3) minimize international smuggling of tobacco products; (b) To apply the export tax on tobacco products and remove the exemption available on tobacco shipments in accordance with each manufacturers' historic levels; and (c) To enter into discussions with the US federal government to explore options regarding tobacco tax policy, raising Canadian tobacco price levels in line with or near the US border states, in order to minimize international smuggling. REGISTERED RETIREMENT SAVINGS PLANS (RRSPS) There are at least two fundamental goals of retirement savings: (1) to guarantee a basic level of retirement income for all Canadians; and (2) to assist Canadians in avoiding serious disruption of their pre-retirement standard of living upon retirement. Reviewing the demographic picture in Canada, we know that an increasing portion of society is not only aging, but is living longer. Assuming that current trends will continue and peak in the first quarter of the next century, it is important to recognize the role that private RRSP savings will play in ensuring that Canadians may continue to live in dignity well past their retirement from the labour force. In its 1996 budget statement, the federal government announced that the contribution limits of RRSPs was to be frozen at $13,500 through to 2002/03, with increases to $14,500 and $15,500 in 2003/04 and 2004/05 respectively. As well, the maximum pension contribution limit for defined benefit registered pension plans will be frozen at its current level of $1,722 per year of service through 2004/05. This is a de facto increase in tax payable. This policy runs counter to the 1983 federal government White Paper on The Tax Treatment of Retirement Savings where the House of Commons Special Committee on Pension Reform recommended that the limits on contributions to tax-assisted retirement savings plans be amended so that the same comprehensive limit would apply regardless of the retirement savings vehicle or combination of vehicles used. In short, the principle of 'pension parity' was explicitly recognized and endorsed. Since that time, in three separate papers released by the federal government (1983, 1984, 1987), the principle of pension parity would have been achieved between money-purchase (MP) plans (i.e., RRSPs) and defined-benefit (DB) plans (i.e., Registered Pension Plans) had RRSP contribution limits risen to $15,500 in 1988. As a founding member of the RRSP Alliance, the CMA, along with others has been frustrated that eleven years of careful and deliberate planning by the federal government around pension reform has not come to fruition. In fact, if the current policy remains in place it will have taken more than 17 years to implement needed reforms to achieve parity (from 1988 to 2005). While pension parity will be achieved between RRSP plans and RPP plans in 2004/05, it will have been accomplished on the backs of Canadians whose RRSP contribution levels have been frozen for far too long. As a consequence, the current policy of freezing RRSP contribution limits and RPP limits without adjusting the RRSP contribution limits to achieve pension parity serves to maintain inequities between the two plans until 2004/05. This situation is further compounded by the implementation of this policy because the RRSP/RPP plans are frozen and therefore unable to grow at the rate in the yearly maximum pensionable earnings (YMPE) Specifically, if the recommended policy of pension parity had been implemented in 1988, the growth in RRSP and RPP contribution limits could have grown in line with the yearly maximum pensionable earnings - and would be approximately $21,000 today. [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] TABLE 2 - RRSP Contribution Limits Adjusted by the Yearly Maximum Pensionable Earnings (YMPE Earnings (YMPE) Year YMPE % change RRSP Limits 1988 $27,700 $15,500 1989 $28,500 2.89 $15,948 1990 $28,900 1.40 $16,171 1991 $30,500 5.54 $17,067 1992 $32,200 5.57 $18,018 1993 $33,400 3.73 $18,690 1994 $34,400 2.99 $19,249 1995 $34,900 1.45 $19,529 1996 $35,400 1.43 $19,809 1997 $35,800 1.13 $20,032 1998 $36,900 3.07 $20,648 1999 $37,400 1.36 $20,928 YMPE Source: Revenue Canada, April 1999 [TABLE END] Each year the Department of Finance publishes revenue cost to the federal treasury of a number of policy initiatives. For RRSP contributions, the net tax expenditure (i.e., tax revenue not collected) is estimated to be $7.5 billion in 1998. The net tax expenditure associated with registered pension plans is estimated to be $6.2 billion in 1998. In this context, it is critical to understand the difference between tax avoidance and tax deferral. RRSPs allow Canadians to set aside necessary resources to provide for their retirement years. In the medium and longer-term, when RRSPs are converted to annuities, they bring increased tax revenues to government. While current contributions exceed withdrawals, this will not continue indefinitely as the baby boom generation retires at an accelerated rate. In sum, at a time when the government is reviewing the role of public benefits in society, there is a social responsibility placed on government to ensure a stable financial planning environment is in place which encourages greater self-reliance on private savings for retirement. From the standpoint of synchronizing good tax policy with good social policy, it is essential that the RRSP system be expanded such that it gives Canadians the means and incentive to prepare for retirement, while at the same time, lessening any future burden on public programs. The CMA recommends: 16. That the dollar limit of RRSPs at $13,500 increase to $15,500 for the year 2000/01. 17. That the federal government explore mechanisms to increase RRSP contribution limits in the future given the delay in achieving pension parity, since 1988. Under current federal tax legislation, 20% of the cost of an RRSP, RRIF or Registered Pension Plan's investments can be made in 'foreign property'. The rest is invested in 'Canadian' investments. If the 20% foreign content limit is exceeded at the end of a month, the RRSP pays a penalty of 1% of the amount of the excess. In its December 1999 pre-budget consultation, the Standing Committee on Finance made the following recommendation (p. 58): "The Committee recommends that the 20% Foreign Property Rule be increased in 2% increments to 30% over a five year period. This diversification will allow Canadians to achieve higher returns on their retirement savings and reduce their exposure to risk, which will benefit all Canadians when they retire." A study by Ernst and Young demonstrated that Canadian investors have experienced substantially better investment returns over the past 20 years with higher foreign content limits. As well, the Conference Board of Canada concluded that lifting the foreign content limit to 30% would have a neutral effect on Canada's economy. The CMA strongly supports the Standing Committee's position that there is sufficient evidence to indicate that Canadians would benefit from an increase in the Foreign Property Rule, from 20% to 30%. The CMA therefore recommends: 18. That the 20% Foreign Property Rule for deferred income plans such as Registered Retirement Savings Plans and Registered Retirement Income Funds be increased in 2% annual increments to 30% over a five year period, effective the year 2000. As part of the process to revitalize and sustain our economy, greater expectations are being placed on the private sector to create long-term employment opportunities. While this suggests that there is a need to re-examine the current balance between public and private sector job creation, the government nonetheless has an important responsibility in fostering an environment that will accelerate job creation. In this context, the CMA strongly believes that current RRSPs should be viewed as an asset rather than a liability. With proper mechanisms in place, the RRSP pool of capital funds can play an integral role in bringing together venture capital and small and medium-size business and entrepreneurs. The CMA would encourage the federal government to explore current regulatory impediments to bring together capital with small and medium-size businesses. The CMA recommends: 19. That the federal government explores the regulatory changes necessary to allow easier access to RRSP funds for investment in small and medium-size businesses. Currently, if an individual declares bankruptcy, creditors are able to launch a claim against their RRSP or RRIF assets. As a consequence, for self-employed Canadians who depend on RRSPs for retirement income, their quality of life in retirement is at risk. In contrast, if employees declare bankruptcy, creditors are unable to lay claim on their pensionable earnings. This is an inequitable situation that would be remedied if RRSPs were creditor-proofed. The CMA recommends: 20. That the federal government undertake the necessary steps to creditor-proof RRSPs and RRIFs. ENDNOTES: 1. It is important to keep in mind that in addition to the CHST, a separate accounting procedure was established through what is called a CHST Supplement. The Supplement, which totals $3.5 billion, was charged to the 1998 federal government public accounts, but is allocated over a three-year period (i.e., $2.0 billion, $1.0 billion, and $0.5 billion). However, at any point in time, a province or territory can take its portion of the $3.5 billion. 2. The $2.5 billion dollars to be reinvested represents the amount of federal cash that was removed with the introduction of the Canada Health and Social Transfer (CHST) beginning in April 1996 through to 1998. The amount is calculated on the basis of the recent historical federal cash allocation (approximately 41%) under EPF and CAP (now the CHST) to health care as a proportion of the $6.0 billion required to restore the CHST cash floor to $18.5 billion (1995/96 level). 3. The data sources for Figure 1 are: (1) CHST: Canadian Medical Association, Looking Toward Tomorrow, September 1998, p. 4.; (2) Historical national cash transfer to health from Established Programs Financing Reports, Federal-Provincial Relations Division, Department of Finance; (3) Population Statistics: Statistics Canada Catalogue no. 91-213; (4) CPI annual % change: Source for 1990-96 is Canadian Economic Observer, cat. No. 11-210-XPB, Historical Statistical Supplement 1996/97, p. 45. For 1996, 1997 and 1998 the source is Canadian Economic Observer, cat. No. 11-010-XPB, April 1999. For 1999 and 2000 the source is Royal Bank of Canada Econoscope, May 1999, p.14. For 2001, 2002 and 2003 CPI % change is assumed to stay constant at the 2000 level of 1.3%. 4. Thomson A. Federal Support for Health Care. Health Action Lobby. June 1991, p. 13. 5. Statistics Canada, Population Projections for Canada, Provinces and Territories, Medium Growth Scenario, 1993-2016, December, 1994 (Catalogue #91-520). 6. Health Canada. National Health Expenditures in Canada, 1975-1994. January 1996. 7. 1998 Report of the Auditor General of Canada, Chapter 6, Population Aging and Information for Parliament: Understanding the Choices, April. WWW: http://www.oag-bvg.gc.ca/domino/reports.nsf/html/9860xe12.html, available on 06/09/99 at 17:38:37. 8. Maintaining Prosperity in an Ageing Society. Organization for Economic Cooperation and Development, Paris, 1998. 9. The Fiscal Monitor, Department of Finance. August 1999. Current Analysis, The Royal Bank of Canada, August 1999. The Bank estimates that the fiscal dividend will reach $25.9 billion in 2004/05, and $41.2 billion in 2007/08. 10. Facing the Future - Challenges and Choices for A New Era. Report of the Standing Committee on Finance, December 1998, p. 30-31. 11. Green JP, MacBride-King J. Corporate Health Care Costs in Canada and the U.S.: Does Canada's Medicare System Make a Difference? Conference Board of Canada, 1999. Purchase B. Health Care and Competitiveness. School of Policy Studies, Queen's University, 1996. KPMG. The Competitive Alternative: A Comparison of Business Costs in Canada and the United States, 1996. Amanor-Boadu, Martin LJ. Canada's Social Programs, Tax System and the Competitiveness of the Agri-Food Sector, Guelph, Agri-Food Competitiveness Council, 1994. 12. Green JP, MacBride-King J. Corporate Health Care Costs in Canada and the U.S.: Does Canada's Medicare System Make a Difference? Conference Board of Canada, 1999. 13. KPMG. The Competitive Alternative: A Comparison of Business Costs in Canada and the United States, 1996. 14. Baillie C. Health Care in Canada: Preserving a Competitive Advantage, Speech to the Vancouver Board of Trade, April, 1999. 15. National Angus Reid Poll, 1998. 16. National Angus Reid Poll, 1999. 17. Canadian Medical Association. The 1991 Survey of Physicians in Rural Medical Practice, 1991. Canadian Medical Association. Survey on Rural Medical Practice in Canada, 1999. 18. Presentation by Statistics Canada Officials to the Standing Committee on Industry, May 1999. 19. Business Council on National Issues: Creating Opportunity, Building Prosperity. October 1998, p. 6. 21. KPMG, Review of the Goods and Services Tax on Canadian Physicians, June 12, 1992. KPMG, Review of the Impact of a Provincial Value Added Tax on Physicians in New Brunswick, Nova Scotia and Newfoundland, August 12, 1996. 21. Harriman D, McArthur W, Zelder M. The Availability of Medical Technology in Canada: An International Comparative Study. The Fraser Institute. August 1999. 22. In California, between 1988 and 1993, when the state was carrying on an aggressive public anti-smoking campaign, tobacco consumption declined by over 25%. Goldman LK, Glantz SA. Evaluation of Antismoking Advertising Campaigns. JAMA 1988; 279: 772-777. 23 In 1998, 45.613 billion cigarettes were sold in Canada. Statistics Canada, Catalogue #32-022, December, 1998. In 1997/98, total tobacco revenues were $2.04 billion, Public Accounts, Volume II, Part 1, Excise Tax Revue. The rationale for 0.6 cents per cigarette is based on a total amount of 25 cents per pack, of which the federal and provincial/territorial governments would contribute on an equal basis (i.e., 12 cents each). Recently, California passed Proposition 99 which added 25 cents to each pack of cigarettes. 24. Health Canada, Economic Costs Due to Smoking (Information Sheet). Ottawa: Health Canada, November 1996. 25. Health Canada, Economic Costs Due to Smoking (Information Sheet). Ottawa: Health Canada, November 1996. 26. Health Canada, Youth Smoking Behaviour and Attitudes (Information Sheet). Ottawa: Health Canada, November 1996. 27. Canada Health Monitor, Highlights Report, Survey #15. Price Waterhouse, January-February 1997. 28. Editorial. Raise Tobacco Taxes. The Gazette [Montreal] 1997 Sept 23. Sect B:2.
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