Skip header and navigation
CMA PolicyBase

Policies that advocate for the medical profession and Canadians


11 records – page 1 of 2.

Access to quality health care

https://policybase.cma.ca/en/permalink/policy323
Last Reviewed
2019-03-03
Date
1998-09-09
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Resolution
GC98-23
That access to quality health care must be available to all Canadians, in a manner consistent with provincial/territorial human rights legislation and the Canadian Charter of Rights and Freedoms.
Policy Type
Policy resolution
Last Reviewed
2019-03-03
Date
1998-09-09
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Resolution
GC98-23
That access to quality health care must be available to all Canadians, in a manner consistent with provincial/territorial human rights legislation and the Canadian Charter of Rights and Freedoms.
Text
That access to quality health care must be available to all Canadians, in a manner consistent with provincial/territorial human rights legislation and the Canadian Charter of Rights and Freedoms.
Less detail

Canada Health Act

https://policybase.cma.ca/en/permalink/policy621
Last Reviewed
2017-03-04
Date
1992-08-19
Topics
Health systems, system funding and performance
Resolution
GC92-22
That the Canadian Medical Association continue to lobby the federal government with respect to its obligations under Section 12.2 of the Canada Health Act.
Policy Type
Policy resolution
Last Reviewed
2017-03-04
Date
1992-08-19
Topics
Health systems, system funding and performance
Resolution
GC92-22
That the Canadian Medical Association continue to lobby the federal government with respect to its obligations under Section 12.2 of the Canada Health Act.
Text
That the Canadian Medical Association continue to lobby the federal government with respect to its obligations under Section 12.2 of the Canada Health Act.
Less detail

Canadians’ Access to Quality Health Care: A System in Crisis : Submitted to the House of Commons Standing Committee on Finance 1999 Pre-budget consultations

https://policybase.cma.ca/en/permalink/policy1987
Last Reviewed
2019-03-03
Date
1998-08-31
Topics
Health human resources
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1998-08-31
Topics
Health human resources
Health systems, system funding and performance
Text
I. INTRODUCTION The Canadian Medical Association (CMA) commends the federal government, in its second mandate, for continuing the public pre-budget consultation process. This visible and accountable process encourages public dialogue in the development of finance and economic policies of the country. As part of the 1999 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 While the current and future status of our health care system is a top priority for all Canadians, it is evident that their faith in the system’s ability to ensure access to quality care is eroding. In May 1991, 61% of Canadians rated the system as excellent/very good. By February 1998 that rating had slipped to 29% - a dramatic decrease in the confidence level of Canadians in the health care system. 1 Unfortunately, their outlook on the future of the health care system is not much better. Some 51% of Canadians believe that their health care will be in worse condition in 10 years than it is today. 2 It is not surprising that Canadians are losing confidence in the future sustainability of the health care system. They have experienced firsthand the decline in access to a range of health care services (see Table 1): * 73% reported that waiting times hospital emergency departments had worsened, up from 65% in 1997, and 54% in 1996 * 72% reported that waiting times for surgery had lengthened, up from 63% in 1997, and 53% in 1996 * 70% reported that availability of nurses in hospitals had worsened, up from 64% in 1997, and 58% in 1996 * 61% reported that waiting times for tests had increased, up from 50% in 1997, and 43% in 1996 * 60% reported that access to specialist physicians has worsened, up from 49% in 1997, and 40% in 1996 [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] Table 1 (a) [TABLE END] [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] Table 1 (b) [TABLE END] Clearly, these findings are significant, and demonstrate the public’s increasing concerns regarding current access to quality health care, as well as the future sustainability of our health care system. Canadians have made it clear that it is not, nor can it be, “business as usual” in attempting to meet their health care needs as we move into the next millennium. Medicare, Canada’s crowning social policy achievement, is in crisis. It is time for the federal government to re-establish its leadership role in this strategic priority area. The CMA has repeatedly placed its concerns about access to quality health care on the public record. Physicians, as patient advocates, have consistently expressed their frustration with the difficulties faced in accessing medically necessary services - only to fall on the deaf ears of the federal government. In surveying Canadian physicians on the front lines, they know the degree of difficulty in accessing services that their patients need: 3 * only 27% of physicians surveyed rated as excellent/very good/good their access to advanced diagnostic services (e.g., MRI) * only 30% of physicians surveyed rated as excellent/very good/good their access to long-term institutional care * only 45% of physicians surveyed rated as excellent/very good/good their access to psychosocial support services * only 46% of physicians surveyed rated as excellent/very good/good their access to acute institutional care for elective procedures These findings are cause for concern. Particularly troublesome is that only 63% of physicians surveyed rated as excellent/very good/good their access to acute institutional on an urgent basis. The cause for this crisis of confidence is clear - the federal government's unilateral and repeated decreases in the rate of increase in transfer payments beginning with Established Financing Programs (EPF), established in 1977, and continuing for the next decade-and-a-half. It culminated, in April, 1996, with the severe and successive cuts in cash transfers for health, post-secondary education (PSE) and social assistance via the Canada Health and Social Transfer (CHST). The CMA is not alone in its view. In addition to the public, other health groups and the Provincial and Territorial Premiers have expressed serious concern about the sustainability of the health care system and the urgent need for Federal leadership and reinvestment. Following their meeting in August, 1998, the Premiers "re-affirmed their commitment to maintaining and enhancing a high quality universal health care system for all Canadians and observed that every government in Canada but one - the federal government - has increased its funding to health care - the people's priority". 4 Underscoring the Premiers' view was a detailed proposal submitted to the federal government calling for an immediate increase in CHST cash transfers. From Federal Government Acknowledgement to Action At the 1997 Annual General Meeting of the CMA in Victoria, the federal minister of health, Allan Rock, stood before delegates and acknowledged "the very real anxiety that's being felt by Canadians" over the future of the health care system. 5 The minister also conceded that cuts to transfer payments have not been insignificant and have had an impact on the system, a point on which the CMA wholeheartedly agrees. The CMA recognizes that the federal government has made a series of difficult decisions when it comes to its funding priorities in order to restore our country’s fiscal health. However, the time has come to consider the fundamental issue of reinvesting in the health of Canadians. The federal government must move beyond the rhetoric in terms of acknowledging the pain and suffering that the cuts have caused, and move to an agenda of action by showing leadership and making the necessary and overdue re-investments in our health care. At a time when the federal government is beginning to reap the benefits of a fiscal dividend, it must recognize that health care is not simply a consumption good that, once spent, provides no additional benefits. Investments in the health care system provide a substantial and lasting social rate of return in terms of restoring, maintaining and enhancing Canadians health. Furthermore, in an increasingly interdependent and global marketplace, a sustainable health care system must be viewed as a necessary precondition for Canadians to excel, thus strengthening the link between good economic policy and good health care policy in Canada. They should not be viewed as competing against each other or that one must be sacrificed at the expense of the other. The 1998 federal budget ignored Canadians' number one concern and did nothing to bolster their confidence that the system will be there when they or their family need it. In responding to the massive reductions in cash transfers to the provinces and territories, in his February 24, 1998, budget speech, federal finance minister Paul Martin announced that he had increased the floor under cash transfers to the provinces in support of health and other programs from the $11.0 billion to $12.5 billion annually and further that it "will provide provinces with nearly $7 billion more in cash over the 1997/98 to 2002/03 period”. 6 While this was announced as an "increase" these statements are misleading. It must be remembered that this is not “new” money; the $12.5 billion represents nothing more than a partial restoration, which falls $6.0 billion (or 32%) short of the cash floor of $18.5 billion prior to the introduction of the CHST in 1996/97. To date, the cumulative impact of cuts to the Canada Health and Social Transfer (CHST) in 1996 and 1997 amounts to a $15.5 billion withdrawal in federal cash from health and social transfers. Their impact is still working its way through the system and being felt in patients' pain and suffering and unfortunately, even death. The CMA has consistently stated publicly that the integrity of the health care system is being jeopardized by reductions to federal cash transfer payments for health. The federal government, however, has failed to respond to these concerns. Unless the federal government reinvests in health care, it will only deepen the crisis of confidence Canadians share about the future sustainability of the health care system. III. HEALTH CARE FUNDING AND THE FEDERAL ROLE The Federal Role When it comes to the health care system, the federal government’s role is aimed at ensuring that Canadians have access to health care services under “uniform terms and conditions”. This derives from the government’s right to exercise its spending power and has been manifested over the past 40 years through a number of cash-transfer mechanisms to the provinces and territories, framed more precisely by the principles of the Canada Health Act (i.e., public administration, comprehensiveness, universality, portability and accessibility). Since the inception of national health insurance in Canada, the federal government has played a central role in the funding of health care. Until 1977, the government reimbursed each province 50 cents on each dollar spent in the areas of hospital and medical care insurance. Following a renegotiated formula, government moved from a “cost-sharing” to a “block funding” formula from 1977/78 to 1995/96. Federal-provincial transfers were distributed through a funding mechanism known as Established Programs Financing (EPF). Under EPF, a combination of (basic) cash and tax points were transferred to the provinces for health care and post-secondary education (PSE). While both the tax points and cash components are important in funding health care, there are those who argue that the level of federal cash should be viewed as a true reflection of the government’s commitment to health care. This is significant for two reasons. First, it demonstrates the priority the government places on our health care system, and secondly, the cash component (which can be withheld under the Canada Health Act) can play an important role in preserving and enhancing national standards. 7 The Origins of Federal Cash Withdrawal The genesis for the crisis in confidence about the future of Canada’s health care system can be traced to 1982, when the federal government introduced a series of unilateral decisions which reduced its cash contributions to the provinces and territories for health and other social programs. Figure 1 highlights the changes made to the EPF formula used to fund health and post-secondary education between 1977 and 1995. These unilateral changes, resulted in the withholding of approximately $30 billion in federal cash that would have otherwise been transferred to provincial and territorial health insurance plans (and an additional $12.1 billion for post-secondary education - for a total of $42.1 billion). 8 This dollar amount is of no small consequence when it comes to ensuring that all Canadians have access to quality health care. [FIGURE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] Figure 1 [FIGURE END] Into the Mist... Prior to April 1, 1996 the federal government's commitment to insured health services, post-secondary education and social assistance programs could be readily determined since the federal government made separate notional cash contributions to the provinces and territories in each of these areas. 9 Announced in the 1995 federal budget, the creation of the Canada Health and Social Transfer (CHST), on April 1, 1996, saw EPF merge with the Canada Assistance Plan (CAP). In effect, health, post-secondary education, and social assistance were collapsed into one large cash transfer. At the time, the government claimed that the CHST was “a new approach to federal-provincial fiscal relations marked by greater flexibility and accountability for provincial governments, and more sustainable financing arrangements for the federal government.” 10 In reality, the increased “flexibility and accountability” was accompanied by a $7.0 billion reduction in the cash portion of the new transfer, and introduced a lower level of transparency with respect to where and what proportion the federal government notionally allocated its dollars for health, PSE and the social programs previously funded under CAP. In its 1998 budget, the federal government moved to partially restore CHST funding by establishing a new cash floor of $12.5 billion (see Table 2) - however, this is still $6.0 billion short of the pre-CHST cash floor. To date, the cumulative impact of previous CHST cash reductions in 1996 and 1997 amounts to a $15.5 billion withdrawal of cash from health and social transfers to 1998/99. By 2002/03, it is estimated that $39.5 billion will have been removed from the CHST. This is in addition to the $30 billion withheld from fiscal transfers that would otherwise have gone to the provinces and territories for health between 1982 and 1995. 11 [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] [TABLE END] Furthermore, in addition to the current cash floor, the cash entitlement will stagnate at $12.5 billion, as adequate provision has not been made to maintain the value of the cash portion of the transfer. 12 This means the spending power of the cash entitlement will continue to erode as the health care system is forced to meet the changing needs of Canadians based on population growth, aging, epidemiology, new technologies and inflation. With the introduction of the CHST, the disappearance of health, post-secondary education and social assistance into the shadowy mist makes it impossible to hold the federal government accountable with respect to its relative commitment to each of these important policy areas. Using the pre-CHST percentage distribution, the federal government’s current cash allocation to health care stands at roughly $5.0 billion, or 7% of total health care expenditures. This is not surprising considering that the “H” in CHST was added later, only after health organizations protested its absence. Based on the reduced federal cash contribution to health care, it would appear that the government has made a conscious decision to abdicate its responsibility and leadership role in funding health care. While claiming to uphold the integrity of our national health care system, the reality of reduced cash transfers has forced all provinces and territories to make do with significantly fewer federal dollars for health. Federal “offloading” at its best has allowed the federal government to meet (and exceed) its own financial projections; at its worst it has forced the provinces and territories to consider a series of unattractive options: re-allocate program spending from within current budgets; deficit-financed program spending; or reduced program spending. To be clear, from a national perspective, the CMA believes that the single most important reason for the deterioration of the health care system is the significant decline in federal financial support for health care. It is critical that the federal government immediately signal its commitment to Canadians that the health care system is a high priority, and to immediately reinvest in a program that will restore the confidence of Canadians' that the system will be there for them when they need it. Now is the time for the federal government to demonstrate leadership and address the number one concern of Canadians by turning the "vicious cycle" of deficit reduction into a "virtuous cycle" of reinvesting in the health care system. This is not business as usual, and the status quo is not sustainable. IV. A TIME TO RE-ESTABLISH FEDERAL LEADERSHIP IN HEALTH CARE Stabilize the System Canadians, who strongly support a publicly-funded health care system - a conviction shared by the CMA - need to see some leadership from their federal government about how it perceives the future of the health care system unfolding. The failure to re-invest in health care in the last federal budget leaves them confused by the contradiction of seeing the government withdraw funding while at the same time talking about introducing new programs such as home care and pharmacare. Before the federal government can even contemplate future program expansion, it must move quickly to stabilize our current health care system. Canadians have made it very clear where they believe the federal government's spending priorities lie. Seventy-one percent (Angus Reid, November, 1997) want federal cash transfer restored and 81% (Ottawa Sun/Roper, June 1998) of Canadians want the federal government to dedicate more resources to Medicare. The CMA believes strongly that there is an immediate need for a measured, deliberate and responsible approach to re-invest in our health care system. Canadians need to be reassured that the system will be there for them and their families when they need it. To restore access to quality health care for all Canadians, the CMA respectfully recommends: 1. That in order to ensure greater public accountability and visibility, the federal government introduce a health-specific portion of the cash transfers to the provinces and territories. 2. That in addition to the current level of federal cash transferred to the provinces and territories for health care, the federal government restore at a minimum $2.5 billion in cash on an annual basis to be earmarked for health care, effective April 1, 1999. 3. That beginning April 1, 2000, 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, aging, epidemiology, current knowledge and new technologies, and economic growth. The principles outlined in the above recommendations are fundamental and underscore the importance of establishing an accountable (i.e., linking sources with their intended uses) and visible transfer for federal cash that is targeted for reinvestment into health care. While there is ongoing discussion about the mechanism(s) to reinvest in health care, the minimum federal cash restoration of $2.5 billion on an annual basis into the health care system recognizes the high priority of placing health care on a more sustainable financial footing for the future. This figure is separate from the $5 billion notionally allocated to health care via the current CHST, and 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 dollars required to restore the CHST cash floor to $18.5 billion (1995/96 level). The recommendations also speak to the necessity of having in place a fully indexed escalator to ensure that the federal cash contribution will continue to grow to meet the future health care needs of Canadians, and with the economy. The escalator formula recognizes that health care needs are not always synchronized with economic growth. In fact, it could be argued that in times of economic hardship (i.e., unemployment, stress, anxiety), a greater burden is placed on the health care system. Taken together, the above recommendations are a targeted approach to reinvesting in health care, and serve to re-establish the federal government's leadership role when it comes to the current and future sustainability of our health care system. It also signals that the federal government is prepared to address, in a focused and strategic approach, Canadians' number one concern - access to quality health care. Finally, it is important to note that in principle the above recommendations are consistent with those of other groups such as the provincial and territorial ministers of finance, the Canadian public and other national health organizations, who are not asking for new resources but an immediate restoration of monies that have been taken out of the federal/provincial/territorial transfer envelope over the past three years. Looking to the Future At the same time that the federal government reinvests to stabilize the health care system, it must also consider the broader spectrum of health care services that must be in place to ensure that Canadians do not fall through the cracks. In addition to the re-investment required to stabilize our Medicare system, there is also an urgent need for investments into other components of the health system. In many ways, this suggests that new transitional funding is required to ensure that as the system evolves, it remains accessible, and can do so with minimal interruption of service to Canadians. Proposed by the CMA, the Health System Renewal Fund, is time limited, sector-specific, and strategically targeted to areas that are in transition. Funding is intended to meet defined need and give the federal government sufficient flexibility in how the funds will be allocated, with full recognition for the investment. The CMA respectfully recommends: 4. That the federal government establish a one-time Health System Renewal Fund in the amount of $3 billion to be disbursed over the three-year period beginning April 1, 1999, for the following areas of need: a. Acute care infrastructure support: assist health institutions to enhance the delivery of a continuum of quality patient care by improving their access to necessary services including new technologies, and modernizing health facilities and upgrading infrastructure. b. Community care infrastructure support: to enable communities to develop services to support the delivery of home and community-based care in the wake of the rapid downsizing of the institutional sector. c. Support Canadians at risk: to provide access to pharmacotherapy and medical devices to those in need, who are not adequately covered by public or private insurance (pending the development of a long-term solution). d. Health information technology: to allow the provinces and territories to put in place the transparent, clinically driven health information infrastructure necessary to support the adequate and appropriate management of access and delivery of health care. In implementing the health information infrastructure scrupulous attention must be paid to privacy and confidentiality issues. The Acute Care Infrastructure Support program is designed to ensure that targeted reinvestments are made in the institutional sector such that it has the necessary physical capacity and infrastructure to deliver quality health care. In a world where downsizing has become the accepted wisdom, health care facilities need to be modernized in terms of new technology and equipment to ensure the full continuum of patient care is available. The Community Care Infrastructure Support program speaks to the important need to develop adequate community-based systems before any reforms are introduced in the acute care sector. It also recognizes that community-based programs should not be implemented at the expense of the acute care sector, but rather, should be designed such that both sectors complement one another and add value to the health care system. The Support Canadians at Risk program focuses on those who with inadequate coverage and have compromised access to needed pharmacotherapy and medical devices. Currently, drug coverage is not universal nor is it comprehensive. In many cases, the working poor, those that are self-employed or employed by small businesses do not have drug coverage (nor are they eligible for government sponsored plans). In other cases, co-payments/deductibles of some public plans are so high that individuals must pay out-of-pocket (e.g., $850 deductible, semi-annually, in Saskatchewan, then 35% co-payment) for all necessary prescription drugs. As a result, this patchwork coverage may inhibit Canadians access to quality care and may place additional demands on the acute care sector. Similarly, Canadians may not have access to medical devices covered by the public and/or private plans. The Health Information Technology program speaks to the critical need to develop and implement a transparent and clinically driven information systems that will support better management, measurement and monitoring of the health care system. At the same time, scrupulous attention must be paid to privacy and confidentiality issues. To this end, the CMA has taken a proactive approach in addressing these issues by developing a health information privacy code. Taken together, our recommendations are a powerful and strategic package. They speak to the need to immediately stabilize the health care system - which is in crisis, and the need to look at the broader spectrum of health care services to ensure that Canadians in need do not fall through the cracks. V. REINFORCING GOOD ECONOMIC POLICY WITH GOOD HEALTH CARE POLICY IN CANADA While the system-wide issues related to the federal role in funding health care is clearly of importance to Canada's physicians, there are also other important issues that the CMA would like to bring to the attention of the Standing Committee on Finance. As mentioned earlier in the brief, good economic policy and good health care policy should go hand-in-hand. They should serve to reinforce, not neutralize, one another. They should not be viewed as one gaining at the expense of the other. Viewed in their proper context, they can be balanced such that policy decisions produce outcomes that are fair to all parties. Tobacco Taxation Policy Smoking is the leading preventable cause of premature mortality in Canada. The most recent estimates suggest that more than 45,000 Canadians die each year due to tobacco use. The estimated economic cost to society from tobacco use in Canada has been estimated between $11 billion to $15 billion 13. Tobacco use directly costs the Canadian health care system $3 billion to $3.5 billion 14 annually. These estimates do not take into account 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 age 10-14 15. The CMA congratulates the federal government’s February 13, 1998 initiative which selectively increased federal excise taxes on cigarettes and tobacco sticks. This is a first step towards an integrated tobacco tax strategy, and speaks to the importance of strengthening the relationship between good tax policy and good health 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 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 inter-provincial/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 apply the export tax and remove the exemption available on shipments in accordance with each manufacturers historic levels. 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 regarding harmonizing US tobacco taxes with Canadian levels at the factory gate. Alternatively, US tobacco taxes could be raised to a level that when offset with the US/Canada exchange rate differential renders international smuggling unprofitable. The objective of harmonizing US/Canadian tobacco tax levels (at or near the Canadian levels) would be to increase the price of internationally smuggled tobacco products to the Canadian and American consumers. The CMA's comprehensive tobacco taxation strategy is designed to achieve the following objectives: (1) to reduce tobacco consumption; (2) to minimize interprovincial/territorial smuggling of tobacco products; (3) to minimize international smuggling of tobacco products from both the Canadian and American perspective; (4) to reduce and/or minimize Canadian/American consumption of internationally smuggled tobacco products. The CMA recommends: 5. 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, bringing US tobacco tax levels in line with or near Canadian levels, in order to minimize international smuggling. The Excise Act Review, A Proposal for a Revised Framework for the Taxation of Alcohol and Tobacco Products (1996), proposes that tobacco excise duties and taxes (Excise Act and Excise Tax Act) for domestically produced tobacco products be combined into a new excise duty and come under the jurisdiction of the Excise Act. The new excise duty is levied at the point of packaging where the products are produced. The Excise Act Review also proposes that the tobacco customs duty equivalent and the excise tax (Customs Tariff and Excise Tax Act) for imported tobacco products be combined into the new excise duty [equivalent tax to domestically produced tobacco products] and come under the jurisdiction of the Excise Act. The new excise duty will be levied at the time of importation. The CMA supports the proposal of the Excise Act Review. It is consistent with previous CMA recommendations calling for tobacco taxes at the point of production. Support for Tobacco Control Programs Taxation should be used in conjunction with other strategies for promoting healthy public policy, such as public education programs to reduce tobacco use. The Liberal party, recognising the importance of this type of strategy , promised: "...to double the funding for the tobacco control programs from $50 million to $100 million over five years, investing the additional funds in smoking prevention and cessation programs for young people, to be delivered by community organizations that promote the health and well-being of Canadian children and youth." 16 The CMA applauds the federal government's efforts in the area of tobacco use prevention and cessation - particularly its intent to commit $50 million to public education through the proposed Tobacco Control Initiative. However, a time limited investment is not enough. Substantial and sustainable funding is required for programs in prevention and cessation of tobacco use. 17 A possible source for this type of program investment could be tobacco tax revenues or the tobacco surtax. The CMA therefore recommends: 6. That the federal government commit stable funding for a comprehensive tobacco control strategy; this strategy should include programs aimed at prevention and cessation of tobacco use and protection of the public from tobacco's harmful effects. 7. That the federal government clarify its plans for the distribution of the Tobacco Control Initiative funds, and ensure that the funds are invested in evidence-based tobacco control projects and programs. 8. That the federal government support the use of tobacco tax revenues for the purpose of developing and implementing tobacco control programs. Fair and Equitable Tax Policy? - The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) 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'etre of introducing the GST: to be an end-stage consumer-based tax, and having not 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. To be clear, 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 only seems 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. 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. By the end of this calendar year, physicians will have been unfairly taxed in excess of $480 million. Furthermore, with the introduction of the HST in Atlantic Canada, KPMG has estimated that it will costs physicians an additional $4.686 million per year. As it currently applies to medical services, the GST is bad tax policy and the HST will make a bad situation worse for physicians. Last year, the Standing Committee, in its report to the House of Commons stated: "According to the CMA, the GST is fundamentally unfair to physicians and is a deterrent in recruiting and retaining physicians in Canada. This issue merits consideration and further study". 18 The CMA believes that it has rigorously documented its case and further study is not required - the time has come for concerted action from the federal government to alleviate this tax impediment. 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 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. As it currently stands for medical services, the GST and HST is not a tax policy that reinforces good health care policy in Canada. The CMA view is not unique. The late Honourable Chief Justice Emmett Hall recognized the principles that underpin the fundamental issue of tax fairness by stating: "That the federal sales tax on medical supplies purchased by self-employed physicians in the course of their practices be eliminated". 19 Even though Mr. Hall's recommendation was made prior to the introduction of the GST and HST, the principles outlined above are unassailable and should be reflected in federal tax policy. Canadian physicians work hard to provide quality health care to their patients within what is a publicly funded health care system. Physicians are no different from Canadians in that they, too, are consumers (purchasers). Why then, they ask, has the medical profession been singled out for such unfair treatment under the GST regime? The CMA respectfully recommends: 9. That health care services funded by the provinces and territories be zero-rated. The above recommendation could 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: 5. "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. Our recommendation fulfils at least two over-arching policy objectives: (1) strengthening the relationship between good economic policy and good health policy in Canada; and (2) applying the fundamental principles that underpin our taxation system (fairness, efficiency, effectiveness), in all cases. 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 living standards upon retirement. Reviewing the demographic picture in Canada, we see that an increasing portion of society is not only aging, but is living longer. Assuming that current demographic trends will continue and peak in the first quarter of the next century, it is important to recognize the role that private RRSPs savings will play in ensuring that Canadians may continue to live dignified lives well past their retirement from the labour force. This becomes even more critical when one considers that Canadians are not setting aside sufficient resources for their retirement. Specifically, according to Statistics Canada, it is estimated that 53% of men and 82% of women starting their career at age 25 will require financial aid at retirement age - only 8% of men and 2% women will be financially secure. In its 1996 Budget Statement, the federal government announced that it froze the dollar limit of RRSPs 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 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 change in policy with respect to RRSP contribution limits run counter to the White Paper released in 1983 (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 endorsed. Furthermore, in three separate papers released by the federal government, the principle of pension parity would have been achieved between money-purchase (MP) plans and defined benefit (DB) plans had RRSP contribution limits risen to $15,500 in 1988. In effect, the federal government postponed the scheduling of the $15,500 limit for seven years - that is, achieving the goal of pension parity was delayed until 1995. The CMA has been frustrated that ten 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 (from 1988 to 2005). As a consequence, the current policy of freezing RRSP contribution limits and RPP limits without making adjustments to RRSP limits to achieve pension parity serves to maintain inequities between the two plans until 2004/2005. This is patently unfair for self-employed Canadians who rely on RRSPs as their sole vehicle for retirement planning. The CMA recommends: 10. That the dollar limit of RRSPs at $13,500 increase to $14,500 and $15,500 in 1999/00 and 2000/01, respectively. Subsequently, dollar limits increase at the growth in the yearly maximum pensionable earnings (YMPE). 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% 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 1998 pre-budget consultation , the Standing Committee on Finance made the following recommendation (p. 66): "...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." A recent study by Ernst & Young, demonstrated that Canadian investors would 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 and believes 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: 11. 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 1999. As part of the process to revitalize the economy, greater expectations are being placed on the private sector to create 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 role to play in fostering an environment that will stimulate 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 businesses and entrepreneurs. In this regard, the CMA would encourage the government to explore current regulatory impediments to bring together capital with small and medium-size businesses. The CMA, recommends the following: 12. That the federal government foster economic development by treating RRSP contributions as assets rather than liabilities and by exploring the regulatory changes necessary to ensure increased access to such funds by small and medium-size businesses. Non-Taxable Health Benefits In last year's federal budget, the CMA was encouraged by the federal government's announcement to extend the deductibility of health and dental premiums through private health services plans (PHSP) for the unincorporated self-employed. The CMA believes that this initiative is a step in the right direction when it comes to improving tax fairness. As well, the federal government is to be commended for its decision to maintain the non-taxable status of supplementary health benefits. This decision is an example of the federal government's serving to strengthen the relationship between good tax policy and good health care policy in Canada. If supplementary health benefits were to become taxable, it is likely that young healthy people would opt for cash compensation instead of paying taxes on benefits they do not receive. These Canadians would become uninsured for supplementary health services. It follows that employer-paid premiums may increase as a result of this exodus in order to offset the additional costs of maintaining benefit levels due to diminishing ability to achieve risk pooling. As well, in terms of fairness it would seem unfair to "penalize" 70% of Canadians by taxing supplementary health benefits to put them on an equal basis with the remaining 30%. It would be preferable to develop incentives to allow the remaining 30% of Canadians to achieve similar benefits attributable to the tax status of supplementary health benefits. The CMA therefore recommends: 13. That the current federal government policy with respect to non-taxable health benefits be maintained. Health Research in Canada At the same time that our health care system has been de-stabilized, so too has the role of health research in Canada. In response, the federal government announced in its 1998 budget that it would increase funding levels for the Medical Research Council of Canada (MRC) from $237.5 million (1997/98), to $267 million (1998/99), $270 million (1999/00) and $276 million (2000/01). While this is a step in the right direction, the $134 million over three years represents for the most part a restoration of previously cut funding - only $18 million would be considered new money. Furthermore, when compared against other countries, Canada does not fare well. Of the G-7 nations for which recent data were available, Canada ranks last in per capita spending for health research. France, Japan, the United States and the United Kingdom spend between 1.5 and 3.5 times more per capita than Canada. 20 In what is increasingly a knowledge-based world, the federal government must be reminded that a sustained and substantial commitment to health research in required. The CMA therefore recommends: 14. That the federal government establish a national target (either in per capita terms or as a proportion of total health spending), and an implementation plan for health research and development spending including the full spectrum of basic biomedical to applied health services research, with the objective of improving Canada's position relative to other G-7 countries. Brain Drain and Tuition Deregulation In June, 1998, the CMA met with the Standing Committee on Finance to discuss the issue of "brain drain" in Canada. At that time, the CMA expressed its serious concerns over the recent tuition deregulation policy in Ontario and its subsequent impact on the career choices of new medical graduates. Specifically, the CMA officially decries tuition deregulation in Canadian medical schools and believes that governments should increase funding to medical schools to alleviate the pressures driving tuition increases; that any tuition increase be regulated and reasonable; and that financial support systems be in place in advance of, or concomitantly with, any tuition increase. These measures will foster the education and training of a diverse population of health care givers, and will support culturally and socially sensitive health care for all Canadians. As new physicians graduate with substantial and growing debt loads, they will be attracted to more lucrative positions in order to repay their debts - particularly positions in the United States. As a consequence, tuition deregulation policies will have a direct and detrimental impact when it comes to retaining our best and brightest young physicians in Canada. The CMA is currently in the process of developing a position paper on this issue. VI. SUMMARY OF RECOMMENDATIONS With the future of access to quality health care for all Canadians at stake, the CMA strongly believes that the federal government must demonstrate that it is prepared to re-establish its leadership role and re-invest in the health care system that all Canadians cherish and closely identify with. The CMA therefore makes the following recommendations to the Standing Committee on Finance in its deliberations. Stabilize the System 1. That in order to ensure greater public accountability and visibility, the federal government introduce a health-specific portion of the cash transfers to the provinces and territories. 2. That in addition to the current level of federal cash transferred to the provinces and territories for health care, the federal government restore at a minimum $2.5 billion in cash on an annual basis to be earmarked for health care, effective April 1, 1999. 3. That beginning April 1, 2000, 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, aging, epidemiology, current knowledge and new technologies, and economic growth. Looking to the Future 4. That the federal government establish a one-time Health System Renewal Fund in the amount of $3 billion to be disbursed over the three-year period beginning April 1, 1999, for the following areas of need: a. Acute care infrastructure support: assist health institutions to enhance the delivery of a continuum of quality patient care by improving their access to necessary services including new technologies, and modernizing health facilities and upgrading infrastructure. b. Community care infrastructure support: to enable communities to develop services to support the delivery of home and community-based care in the wake of the rapid downsizing of the institutional sector. c. Support Canadians at risk: to provide access to pharmacotherapy and medical devices to those in need, who are not adequately covered by public or private insurance (pending the development of a long-term solution). d. Health information technology: to allow the provinces and territories to put in place the transparent, clinically driven health information infrastructure necessary to support the adequate and appropriate management of access and delivery of health care. In implementing the health information infrastructure scrupulous attention must be paid to privacy and confidentiality issues. Tobacco Taxation Policy 5. 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, bringing US tobacco tax levels in line with or near Canadian levels, in order to minimize international smuggling. Support for Tobacco Control Programs 6. That the federal government commit stable funding for a comprehensive tobacco control strategy; this strategy should include programs aimed at prevention and cessation of tobacco use and protection of the public from tobacco's harmful effects. 7. That the federal government clarify its plans for the distribution of the Tobacco Control Initiative funds, and ensure that the funds are invested in evidence-based tobacco control projects and programs. 8. That the federal government support the use of tobacco tax revenues for the purpose of developing and implementing tobacco control programs. Goods and Services Tax (GST) 9. That health care services funded by the provinces and territories be zero-rated. Registered Retirement Savings Plans (RRSPs) 10. That the dollar limit of RRSPs at $13,500 increase to $14,500 and $15,500 in 1999/00 and 2000/01, respectively. Subsequently, dollar limits increase at the growth in the yearly maximum pensionable earnings (YMPE). 11. 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 1999. 12. That the federal government foster economic development by treating RRSP contributions as assets rather than liabilities and by exploring the regulatory changes necessary to ensure increased access to such funds by small and medium-size businesses. Non-Taxable Health Benefits 13. That the current federal government policy with respect to non-taxable health benefits be maintained. Health Research in Canada 14. That the federal government establish a national target (either in per capita terms or as a proportion of total health spending), and an implementation plan for health research and development spending including the full spectrum of basic biomedical to applied health services research, with the objective of improving Canada's position relative to other G-7 countries. 1 Angus Reid, February, 1998. 2 Angus Reid, February, 1998. 3 Canadian Medical Association. January 1998 Physician Resource Questionnaire. 4 39th Annual Premiers’ Conference, Saskatoon Saskatchewan, August 5-7, 1998. Press Communique. 5 Rock A. Speech to the Canadian Medical Association’s 130th General Council Victoria, Aug 20, 1997. 6 The Budget Plan, 1998. Building Canada for the 21st Century, February 24, 1998. 7 The tax point transfer refers to the dollar value of ?tax points? that were negotiated with the federal government and the provinces. Specifically, where the federal government reduced personal and corporate income tax rates, the ?tax room? that was created was then occupied by the provinces. This is an important point because even though the federal government collects taxes on behalf of the provinces (with the exception of Quebec), it is argued that the value of the tax point transfer belongs to the provinces and is not considered as a true “federal contribution”. The last time this issue was negotiated was in 1965. 8 Thomson A. Federal Support for Health Care - A Background Paper. Health Action Lobby, Ottawa, 1991. 9 Thomson, A., Diminishing Expectations - Implications of the CHST, [report] Canadian Medical Association, Ottawa. May, 1996. 10 Federal Department of Finance. 11 Thomson A. Federal Support for Health Care - A Background Paper. Health Action Lobby, Ottawa, 1991. 12 Currently, the CHST cash entitlement has an escalator attached to it, however, it is scheduled to begin in 2000/01, 2001/02, 2002/03, at a rate of GDP- 2% (year 1), GDP-1.5% (year 2), and GDP-1% (year 3). 13 Health Canada, Economic Costs Due to Smoking (Information Sheet). Ottawa: Health Canada, November 1996. 14 Health Canada, Economic Costs Due to Smoking (Information Sheet). Ottawa: Health Canada, November 1996. 15 Health Canada, Youth Smoking Behaviour and Attitudes (Information Sheet). Ottawa: Health Canada, November 1996. 16 Liberal Party, Securing Our Future, Liberal Party of Canada, Ottawa, 1997. p. 77. 17 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. 18 Report of the Standing Committee on Finance. December, 1997. 19 Hall Emmett (Special Commissioner). Canada?s National-Provincial Program for the 1980s, p. 32. 20 Organization for Economic Cooperation and Development. OECD Health Data 97. Paris: OECD, 1997.
Documents
Less detail

CMA Pre-budget Submission

https://policybase.cma.ca/en/permalink/policy14259
Date
2020-08-07
Topics
Physician practice/ compensation/ forms
Health information and e-health
Health care and patient safety
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2020-08-07
Topics
Physician practice/ compensation/ forms
Health information and e-health
Health care and patient safety
Health systems, system funding and performance
Text
RECOMMENDATION 1 That the government create a one-time Health Care and Innovation Fund to resume health care services, bolster public health capacity and expand primary care teams, allowing Canadians wide-ranging access to health care. RECOMMENDATION 2 That the government recognize and support the continued adoption of virtual care and address the inequitable access to digital health services by creating a Digi-Health Knowledge Bank and by expediting broadband access to all Canadians. RECOMMENDATION 3 That the government act on our collective learned lessons regarding our approach to seniors care and create a national demographic top-up to the Canada Health Transfer and establish a Seniors Care Benefit. RECOMMENDATION 4 That the government recognize the unique risks and financial burden experienced by physicians and front line health care workers by implementing the Frontline Gratitude Tax Deduction, by extending eligibility of the Memorial Grant and by addressing remaining administrative barriers to physician practices accessing critical federal economic relief programs. RECOMMENDATIONS 3 Five months ago COVID-19 hit our shores. We were unprepared and unprotected. We were fallible and vulnerable. But, we responded swiftly.
The federal government initiated Canadians into a new routine rooted in public health guidance.
It struggled to outfit the front line workers. It anchored quick measures to ensure some financial stability.
Canadians tuned in to daily updates on the health crisis and the battle against its wrath.
Together, we flattened the curve… For now. We have experienced the impact of the first wave of the pandemic. The initial wake has left Canadians, and those who care for them, feeling the insecurities in our health care system. While the economy is opening in varied phases – an exhaustive list including patios, stores, office spaces, and schools – the health care system that struggled to care for those most impacted by the pandemic remains feeble, susceptible not only to the insurgence of the virus, but ill-prepared to equally defend the daily health needs of our citizens. The window to maintain momentum and to accelerate solutions to existing systemic ailments that have challenged us for years is short. We cannot allow it to pass. The urgency is written on the faces of tomorrow’s patients. Before the onset of the pandemic, the government announced intentions to ensure all Canadians would be able to access a primary care family doctor. We knew then that the health care system was failing. The pandemic has highlighted the criticality of these recommendations brought forward by the Canadian Medical Association. They bolster our collective efforts to ensure that Canadians get timely access to the care and services they need. Too many patients are succumbing to the gaps in our abilities to care for them. Patients have signaled their thirst for a model of virtual care. The magnitude of our failure to meet the needs of our aging population is now blindingly obvious. Many of the front line health care workers, the very individuals who put themselves and their families at risk to care for the nation, are being stretched to the breaking point to compensate for a crumbling system. The health of the country’s economy cannot exist without the health of Canadians. INTRODUCTION 4 Long wait times have strangled our nation’s health care system for too long. It was chronic before COVID-19. Now, for far too many, it has turned tragic. At the beginning of the pandemic, a significant proportion of health care services came to a halt. As health services are resuming, health care systems are left to grapple with a significant spike in wait times. Facilities will need to adopt new guidance to adhere to physical distancing, increasing staff levels, and planning and executing infrastructure changes. Canada’s already financially atrophied health systems will face significant funding challenges at a time when provincial/territorial governments are concerned with resuscitating economies. The CMA is strongly supportive of new federal funding to ensure Canada’s health systems are resourced to meet the care needs of Canadians as the pandemic and life continues. We need to invigorate our health care system’s fitness to ensure that all Canadians are confident that it can and will serve them. Creating a new Health Care and Innovation Fund would focus on resuming the health care system, addressing the backlog, and bringing primary care, the backbone of our health care system, back to centre stage. The CMA will provide the budget costing in follow-up as an addendum to this submission. RECOMMENDATION 1 Creating a one-time Health Care and Innovation Fund 5 It took a global pandemic to accelerate a digital economy and spark a digital health revolution in Canada. In our efforts to seek medical advice while in isolation, Canadians prompted a punctuated shift in how we can access care, regardless of our location or socio-economic situation. We redefined the need for virtual care. During the pandemic, nearly half of Canadians have used virtual care. An incredible 91% were satisfied with their experience. The CMA has learned that 43% of Canadians would prefer that their first point of medical contact be virtual. The CMA welcomes the $240 million federal investment in virtual care and encourages the government to ensure it is linked to a model that ensures equitable access. A gaping deficit remains in using virtual care. Recently the CMA, the Royal College of Physicians and Surgeons of Canada and the College of Family Physicians of Canada established a Virtual Care Task Force to identify digital opportunities to improve health care delivery, including what regulatory changes are required across provincial/territorial boundaries. To take full advantage of digital health capabilities, it will be essential for the entire population, to have a functional level of digital health literacy and access to the internet. The continued adoption of virtual care is reliant on our ability to educate patients on how to access it. It will be further contingent on consistent and equitable access to broadband internet service. Create a Digi-Health Knowledge Bank Virtual care can’t just happen. It requires knowledge on how to access and effectively deliver it, from patients and health care providers respectively. It is crucial to understand and promote digital health literacy across Canada. What the federal government has done for financial literacy, with the appointment of the Financial Literacy Leader within the Financial Consumer Agency of Canada, can serve as a template for digital health literacy. We recommend that the federal government establish a Digi-Health Knowledge Bank to develop indicators and measure the digital health of Canadians, create tools patients and health care providers can use to enhance digital health literacy, continually monitor the changing digital divide that exists among some population segments. Pan-Canadian broadband expansion It is critical to bridge the broadband divide by ensuring all those in Canada have equitable access to affordable, reliable and sustainable internet connectivity. Those in rural, remote, Northern and Indigenous communities are presently seriously disadvantaged in this way. With the rise in virtual care, a lack of access to broadband exacerbates inequalities in access to care. This issue needs to be expedited before we can have pride in any other achievement. RECOMMENDATION 2 Embedding virtual care in our nation’s health care system 6 Some groups have been disproportionately affected by the COVID-19 crisis. Woefully inadequate care of seniors and residents of long-term care homes has left a shameful and intensely painful mark on our record. Our health care system has failed to meet the needs of our aging population for too long. The following two recommendations, combined with a focus on improving access to health care services, will make a critical difference for Canadian seniors. A demographic top-up to the Canada Health Transfer The Canada Health Transfer (CHT) is the single largest federal transfer to the provinces and territories. It is critical in supporting provincial and territorial health programs in Canada. As an equal per-capita-based transfer, it does not currently address the imbalance in population segments like seniors. The CMA, hand-in-hand with the Organizations for Health Action (HEAL), recommends that a demographic top-up be transferred to provinces and territories based on the projected increase in health care spending associated with an aging population, with the federal contribution set to the current share of the CHT as a percentage of provincial-territorial health spending. A top-up has been calculated at 1.7 billion for 2021. Additional funding would be worth a total of $21.1 billion to the provinces and territories over the next decade. Seniors care benefit Rising out-of-pocket expenses associated with seniors care could extend from 9 billion to 23 billion by 2035. A Seniors Care Benefits program would directly support seniors and those who care for them. Like the Child Care Benefit program, it would offset the high out-of-pocket health costs that burden caregivers and patients. RECOMMENDATION 3 Ensuring that better care is secured for our seniors 7 The federal government has made great strides to mitigate the health and economic impacts of COVID-19. Amidst the task of providing stability, there has been a grand oversight: measures to support our front line health care workers and their financial burden have fallen short. The CMA recommends the following measures: 1. Despite the significant contribution of physicians’ offices to Canada’s GDP, many physician practices have not been eligible for critical economic programs. The CMA welcomes the remedies implemented by Bill C-20 and recommends the federal government address remaining administrative barriers to physicians accessing federal economic relief program. 2. We recommend that the government implement the Frontline Gratitude Tax Deduction, an income tax deduction for frontline health care workers put at risk during the COVID-19 pandemic. In person patient care providers would be eligible to deduct a predetermined amount against income earned during the pandemic. The Canadian Armed Forces already employs this model for its members serving in hazardous missions. 3. It is a devastating reality that front line health care workers have died as a result of COVID-19. Extending eligibility for the Memorial Grant to families of front line health care workers who mourn the loss of a family member because of COVID-19, as a direct result of responding to the pandemic or as a result of an occupational illness or psychological impairment related to their work will relieve any unnecessary additional hardship experienced. The same grant should extend to cases in which their work contributes to the death of a family member. RECOMMENDATION 4 Cementing financial stabilization measures for our front line health care workers 8 Those impacted by COVID-19 deserve our care. The health of our nation’s economy is contingent on the health standards for its people. We must assert the right to decent quality of life for those who are most vulnerable: those whose incomes have been dramatically impacted by the pandemic, those living in poverty, those living in marginalized communities, and those doubly plagued by experiencing racism and the pandemic. We are not speaking solely for physicians. This is about equitable care for every Canadian impacted by the pandemic. Public awareness and support have never been stronger. We are not facing the end of the pandemic; we are confronting an ebb in our journey. Hope and optimism will remain elusive until we can be confident in our health care system. CONCLUSION
Documents
Less detail

Decentralization of health care planning and management

https://policybase.cma.ca/en/permalink/policy622
Last Reviewed
2017-03-04
Date
1992-08-19
Topics
Health systems, system funding and performance
Resolution
GC92-26
That the Canadian Medical Association continue to document decentralization of health planning/management initiatives and to provide the information necessary for members and divisions to have effective input into the development of decentralization policies and system management processes
Policy Type
Policy resolution
Last Reviewed
2017-03-04
Date
1992-08-19
Topics
Health systems, system funding and performance
Resolution
GC92-26
That the Canadian Medical Association continue to document decentralization of health planning/management initiatives and to provide the information necessary for members and divisions to have effective input into the development of decentralization policies and system management processes
Text
That the Canadian Medical Association continue to document decentralization of health planning/management initiatives and to provide the information necessary for members and divisions to have effective input into the development of decentralization policies and system management processes
Less detail

Expansion of the health care system through new funding

https://policybase.cma.ca/en/permalink/policy332
Last Reviewed
2019-03-03
Date
1998-09-09
Topics
Health systems, system funding and performance
Resolution
GC98-32
That expansions or broadening of the health care system should be done with new funding and not through reallocations from medical care budgets.
Policy Type
Policy resolution
Last Reviewed
2019-03-03
Date
1998-09-09
Topics
Health systems, system funding and performance
Resolution
GC98-32
That expansions or broadening of the health care system should be done with new funding and not through reallocations from medical care budgets.
Text
That expansions or broadening of the health care system should be done with new funding and not through reallocations from medical care budgets.
Less detail

Fees for on call service

https://policybase.cma.ca/en/permalink/policy442
Last Reviewed
2019-03-03
Date
1998-09-09
Topics
Health systems, system funding and performance
Health human resources
Resolution
GC98-44
That the Canadian Medical Association support in principle that fees be paid to physicians for the service of being on call.
Policy Type
Policy resolution
Last Reviewed
2019-03-03
Date
1998-09-09
Topics
Health systems, system funding and performance
Health human resources
Resolution
GC98-44
That the Canadian Medical Association support in principle that fees be paid to physicians for the service of being on call.
Text
That the Canadian Medical Association support in principle that fees be paid to physicians for the service of being on call.
Less detail

Protecting and supporting Canada’s health-care providers during COVID-19

https://policybase.cma.ca/en/permalink/policy14260
Date
2020-03-23
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
Health human resources
  1 document  
Policy Type
Parliamentary submission
Date
2020-03-23
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
Health human resources
Text
Dear First Ministers: Re: Protecting and supporting Canada’s health-care providers during COVID-19 Given the rapidly escalating situation both globally and in our country, we know that the health and safety of all people and health-care providers in Canada is uppermost on your minds. We appreciate the measures that have been taken by all levels of government to minimize the spread of COVID-19. However, we must ensure those working directly with the public, including physicians, nurses, pharmacists, and social workers, are properly protected and supported, so that they can continue to play their role in the response. First and foremost, we urge all levels of government to put measures in place to ensure the personal protective equipment that point-of-care providers require to deliver care safely throughout this outbreak is immediately deployed and ready to use. Coordinated measures and clear, consistent information and guidelines will ensure the appropriate protection of our health-care workforce. Given the increased pressure on point-of-care providers, we ask that all governments support them by providing emergency funding and support programs to assist them with childcare needs, wage losses due to falling ill or having to be quarantined, and support of their mental health needs both during and after the crisis has subsided. We also expect all governments to work together to provide adequate, timely, evidence-based information specifically for health-care providers. Clear, consistent and easily accessible guidance will enable them to do their jobs more efficiently and effectively in times of crisis. This can and should be 1/2… done on various easily accessible platforms such as online resources, an app, or through the creation of a hotline. We know there will be challenges in deploying resources and funding, particularly around the supply of personal protective equipment. We ask that you consider any and all available options to support health-care providers through a coordinated effort both during and following this crisis. Our organizations look forward to continuing to work with you in these difficult times. If there is anything we can do to help your teams, you need only ask. Sincerely, Claire Betker, RN, MN, PhD, CCHN(C) President, Canadian Nurses Association president@cna-aiic.ca Jan Christianson-Wood, MSW, RSW President, Canadian Association of Social Workers kinanâskomitin (I’m grateful to you) Lea Bill, RN BScN President, Canadian Indigenous Nurses Association president@indigenousnurses.ca Sandy Buchman, MD, CCFP(PC), FCFP President, Canadian Medical Association sandy.buchman@cma.ca
Documents
Less detail

Recommendations for Canada’s long-term recovery plan - open letter

https://policybase.cma.ca/en/permalink/policy14262
Date
2020-08-27
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2020-08-27
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Text
Re: Recommendations for Canada’s long-term recovery plan Dear Prime Minister Trudeau, We would like first to thank and commend you for your leadership throughout this pandemic. Your government’s efforts have helped many people in Canada during this unprecedented time and have prevented Canada from facing outcomes similar to those seen in other countries experiencing significant pandemic-related hardship and suffering. We are writing to you with recommendations as you develop a plan for Canada’s long-term recovery and the upcoming Speech from the Throne on September 23rd. The COVID-19 pandemic has further exposed and amplified many healthcare shortfalls in Canada such as care for older adults and mental health-care. Added to that, the economic fallout is impacting employment, housing, and access to education. These social determinants of health contribute to and perpetuate inequality, which we see the pandemic has already exacerbated for vulnerable groups. Action is needed now to address these challenges and improve the health-care system to ensure Canada can chart a path toward an equitable economic recovery. To establish a foundation for a stronger middle class, Canada must invest in a healthier and fairer society by addressing health-care system gaps that were unmasked by COVID-19. We firmly believe that the measures we are recommending below are critical and should be part of your government’s long-term recovery plan: 1. Ensure pandemic emergency preparedness 2. Invest in virtual care to support vulnerable groups 3. Improve supports for Canada’s aging population 4. Strengthen Canada’s National Anti-Racism Strategy 5. Improve access to primary care 6. Implement a universal single-payer pharmacare program 7. Increase mental health funding for health-care professionals We know the months ahead will be challenging and that COVID-19 is far from over. As a nation, we have an opportunity now, with the lessons from COVID-19 still unfolding, to bring about essential transformations to our health-care system and create a safer and more equitable society. 1. Ensure pandemic emergency preparedness We commend you for your work with the provinces and territories to deliver the $19 billion Safe Restart Agreement as it will help, in the next six to eight months, to increase measures to protect frontline health-care workers and increase testing and contact tracing to protect Canadians against future outbreaks. Moving forward, as you develop a plan for Canada’s long-term recovery, we strongly recommend the focus remains in fighting the pandemic. Beyond the six to eight months rollout of the Safe Restart Agreement, it is critical that a long-term recovery plan includes provisions to ensure a consistent and reliable availability of personal protective equipment (PPE) and large-scale capacity to conduct viral testing and contact tracing. 2.Invest in virtual care to support vulnerable groups The sudden acceleration in virtual care from home is a silver lining of the pandemic as it has enabled increased access to care, especially for many vulnerable groups. While barriers still exist, the role of virtual care should continue to be dramatically scaled up after COVID-19 and Canada must be cautious not to move backwards. Even before the pandemic, Canadians supported virtual care tools. In 2018, a study found that two out of three people would use virtual care options if available.i During the pandemic, 91% of Canadians who used virtual care reported being satisfied.ii We welcome your government’s $240 million investment in virtual health-care and we encourage that a focus be given to deploying technology and ensuring health human resources receive appropriate training in culturally competent virtual care. We also strongly recommend accelerating the current 2030 target to ensure every person in Canada has access to reliable, high-speed internet access, especially for those living in rural, remote, northern and Indigenous communities. 3.Improve supports for Canada’s aging population Develop pan-Canadian standards for the long-term care sector The pandemic has exposed our lack of preparation for managing infectious diseases anywhere, especially in the longterm care sector. The result is while just 20% of COVID-19 cases in Canada are in long-term care settings, they account for 80% of deaths — the worst outcome globally. Moreover, with no national standards for long-term care, there are many variations across Canada in the availability and quality of service.iii We recommend that you lead the development of pan-Canadian standards for equal access, consistent quality, and necessary staffing, training and protocols for the long-term care sector, so it can be delivered safely in home, community, and institutional settings, with proper accountability measures. Meet the health-care needs of our aging population Population aging will drive 20% of increases in health-care spending over the next years, which amounts to an additional $93 billion in spending.iv More funding will be needed to cover the federal share of health-care costs to meet the needs of older adults. This is supported by 88% of Canadians who believe new federal funding measures are necessary.v That is why we are calling on the federal government to address the rising costs of population aging by introducing a demographic top-up to the Canada Health Transfer. This would enhance the ability of provinces and territories to meet the needs of Canada’s older adults and invest in long-term care, palliative care, and community and home care. 4.Strengthen Canada’s National Anti-Racism Strategy Anti-Black racism exists in social structures across Canada. Longstanding, negative impacts of these structural determinants of health have created and continue to reinforce serious health and social inequities for racialized communities in Canada. The absence of race and ethnicity health-related data in Canada prevents identification of further gaps in care and health outcomes. But where these statistics are collected, the COVID-19 pandemic has exploited age-old disparities and led to a stark over-representation of Black people among its victims. We are calling for enhanced collection and analysis of race and ethnicity data as well as providing more funding under Canada’s National Anti-Racism Strategy to address identified health disparities and combat racism via community-led projects. 5. Improve access to primary care Primary care is the backbone of our health-care system. However, according to a 2019 Statistics Canada surveyvi, almost five million Canadians do not have a regular health care provider. Strengthening primary care through a teambased, interprofessional approach is integral to improving the health of all people living in Canada and the effectiveness of health service delivery. We recommend creating a one-time fund of $1.2 billion over four years to Page 3 of 4 expand the establishment of primary care teams in each province and territory, with a special focus in remote and underserved communities, based on the Patient’s Medical Home visionvii. 6. Implement a universal single-payer pharmacare program People across Canada, especially those who are vulnerable, require affordable access to prescription medications that are vital for preventing, treating and curing diseases, reducing hospitalization and improving quality of life. Unfortunately, more than 1 in 5 Canadians reported not taking medication because of cost concerns, which can lead to exacerbation of illness and additional health-care costs. We recommend a comprehensive, universal, public system offering affordable medication coverage that ensures access based on need, not the ability to pay. 7.Increase mental health funding for health-care professionals During the first wave of COVID-19, 47% of health-care workers reported the need for psychological support. They described feeling anxious, unsafe, overwhelmed, helpless, sleep-deprived and discouraged.viii Even before COVID- 19, nurses, for instance, were suffering from high rates of fatigue and mental health issues, including PTSD.ix Furthermore, health-care workers are at high risk for significant work-related stress that will persist long after the pandemic due to the backlog of delayed care. Immediate long-term investment in multifaceted mental health supports for health-care professionals is needed. We look forward to continuing to work with you and your caucus colleagues on transforming the health of people in Canada and the health system. Sincerely, Tim Guest, M.B.A., B.Sc.N., RN President Canadian Nurses Association (CNA) president@cna-aiic.ca Tracy Thiele, RPN, BScPN, MN, PhD(c) President Canadian Federation of Mental Health Nurses (CFMHN) tthiele@wrha.mb.ca Lori Schindel Martin, RN, PhD, GNC(C) President Canadian Gerontological Nursing Association (CGNA) lori.schindelmartin@ryerson.ca E. Ann Collins, BSc, MD President Canadian Medical Association (CMA) Ann.collins@cma.ca Miranda Ferrier President Canadian Support Workers Association (CANSWA) mferrier@opswa.com Dr. Cheryl L. Cusack RN, PhD President Community Health Nurses of Canada (CHNC) president@chnc.ca Lenora Brace, MN, NP President Nurse Practitioner Association of Canada (NPAC) president@npac-aiipc.org ~ r. Cheryl Cusack, RN PhD CC.: Hon. Chrystia Freeland, Minister of Finance Hon. Patty Hajdu, Minister of Health Hon. Deb Schulte, Minister of Seniors Hon. Navdeep Bains, Minister of Innovation, Science and Industry Ian Shugart, Clerk of the Privy Council and Secretary to Cabinet Dr. Stephen Lucas, Deputy Minister of Health Dr. Theresa Tam, Chief Public Health Officer of Canada
Documents
Less detail

Submission in Response to the Consultation on the Canada Emergency Wage Subsidy: Keeping Medical Clinic Employees on the Payroll

https://policybase.cma.ca/en/permalink/policy14258
Date
2020-06-05
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2020-06-05
Topics
Physician practice/ compensation/ forms
Health systems, system funding and performance
Text
Submission in Response to the Consultation on the Canada Emergency Wage Subsidy: Keeping Medical Clinic Employees on the Payroll June 5, 2020 Since the outset of the COVID-19 pandemic, the CMA has been actively engaged as part of Canada’s domestic response. In addition to our engagement on key public health issues such as the supply and distribution of personal protective equipment, the CMA has addressed physician practice needs, including releasing a Virtual Care Playbook to support the rapid conversion of medical practices to virtual care delivery. In the context of physician practices operating as small businesses, the CMA strongly supports the federal government’s emergency economic relief programs. Access to these programs is critical to the viability of many physician practices — and the ability of medical clinics across Canada to retain vital front-line health care workers (FLHCWs) and keep their doors open to continue serving the needs of their patient population. However, despite the dire need for these programs by medical professionals — who constitute a strategic resource and sector at the best of times, but particularly in a pandemic — presently, the CMA is concerned that many physicians are experiencing administrative barriers to accessing these critical federal support programs for their employees. This submission provides a briefing on physician practices and the need to access the CEWS, an overview of the technical and administrative factors impeding access, as well as proposed remedies to enable a rapid federal response. Physician Practices and Access to the CEWS While health care in Canada is predominantly publicly funded, it is primarily privately delivered. In Canada’s health care system, the vast majority of physicians are self-employed professionals operating medical practices as small business owners. Physician-owned and -run medical practices ensure that Canadians are able to access the health care they need, in communities across all jurisdictions. In doing so, Canadian physicians are directly responsible for 167,000 jobs across the country, contributing over $39 billion to Canada’s GDP. Including the expenses and overhead associated with running physician practices, nearly 289,000 jobs indirectly relate to physician practices. However, as much as physician practices resemble small businesses on the basis of key criteria like employing staff and paying rent, it is imperative to recognize that they are in fact core stewards of a substantial portion of Canada’s health care system and critical health system infrastructure. It is a national imperative to ensure the viability of such a core component of Canada’s health care system as our medical clinics and the staff they employ. To this end, both federal and provincial/territorial governments have a role in ensuring Canada’s medical clinics are there to serve the health care needs of Canadians, through the pandemic and beyond. Physician practices have experienced significant impacts related to changing volumes of patient care and delivery models of care in light of public health restrictions since the pandemic was declared on Mar. 11, 2020. The CMA commissioned an economic impact analysis to better understand the impacts across various practice settings. This analysis reveals that across the range of practice settings, the after-tax monthly earnings of physician practices are estimated to decline between 15% and 100% in the low-impact scenario, and between 25% and 267% in the high-impact scenario. Despite meeting the revenue reduction and employer eligibility factors, the CMA is concerned that many physicians are ineligible for the CEWS because of technical and administrative factors that are inconsistent with other existing federal legislative frameworks. The CMA conducted a survey of its membership between May 22 and June 1 to better understand physicians’ experiences accessing the federal economic relief programs; 3,730 physicians participated in this survey. Overall, about a third (32%) of physicians polled had attempted to apply to at least one of the federal programs available and 15% of all physicians who responded applied for the CEWS, making it the second most applied-to program. Of those physicians who applied to the CEWS, 60% were successful, 7% were denied and the remaining 33% were still awaiting response at the time of the survey. Of those who applied but were denied the CEWS, a third (33%) indicated it was because of their cost-sharing structure, 3% responded it was because they worked in a hospital-based setting and a further 22% simply didn’t know. Finally, as part of the survey, physicians shared comments that speak to the issues outlined in this brief. A few excerpts are below:
“We are a group of 4 surgeons and have a cost sharing agreement to pay our office expenses. Our office is outside of the hospital. We tried to apply for the CEWS but have recently received accounting advice supported by legal advice that cost sharing agreements will not be candidates for the CEWS. We are therefore presently exploring other options such as a work share situation or temporary/permanent layoffs.” CMA member, survey respondent
“I work in a group with 11 other OBGYNs. We are still unsure to this point about whether the CEWS applies to our situation. Our revenue is certainly down by ~30% or more. The issue is that our structure doesn't fall into one of the neat categories for CEWS … We are awaiting clarification from our accountant on our status but it seems that the way the rules are currently written, we will not benefit from CEWS, and unfortunately, we are reducing staff hours to cope with our reduction in revenue.” CMA member, survey respondent
“My main frustration is that I can't find a clear answer on whether a clinic made up of multiple doctors with a cost sharing agreement is eligible for CEWS for our employees. I imagine many family practice clinics are set up this way … So as it stands we have not been able to access any financial programs in order to help pay our overhead/staff despite 50% reduction in patient volume.” CMA member, survey respondent A. Cost-Sharing Arrangements — Front-Line Health Care Workers Employed in Physician Clinics One of the main types of practices that are unable to access the CEWS because of technical administrative barriers, despite meeting the key eligibility criteria, are physicians operating independently within a cost-sharing business structure. Like many other independent professionals, physicians operate in group settings. In fact, according to the Canadian Institute for Health Information, in 2019, 65% of family practices operated in a group setting. However, unlike other independent professionals, physicians have been encouraged to operate in a group setting, both by accreditation bodies as well as by provincial health authorities, to meet system delivery goals. Appendix A provides a case study based on Sudbury Medical Associates (SMA), an illustrative example of three doctors (Dr. Brown, Dr. Lee and Dr. Assadi) who coordinated the operations of their medical practices together to open an integrated health care clinic. While they provide care to their own respective patient rosters, these three physicians share in the clinic space rent and employ 10 employees together. Because of the way SMA is structured, these physicians are unable to access the CEWS for their proportionate share of their employees’ salaries. Each physician has met all the CEWS criteria except for the fact that SMA administers the payroll for their 10 employees under its own payroll number. SMA illustrates a typical family medicine clinic representative of the many medical practices in Canada who employ numerous FLHCWs. B. Cost-Sharing Arrangements — Front-Line Health Care Workers Employed by Specialist Physicians Practising in a Hospital-Based Environment Another type of physician structure unable to access the CEWS because of the use of cost-share arrangements are specialist physicians practising in a hospital-based environment or academic health science centre (an “AHSC”). The purpose of an AHSC is to provide specialized health care services, carry out medical research and train the next generation of Canada’s health care professionals. Provincial funding agreements are designed to align the interest of all parties in an AHSC (clinical care, teaching, research and innovation) and often contain governance and accountability requirements. In order to discharge responsibilities under provincial funding agreements and to run a practice that can meet certain metrics, physicians are required to hire their own staff. Consequently, cost-sharing arrangements are utilized by these physicians to efficiently hire staff while meeting their other responsibilities. In response to the COVID-19 pandemic, hospitals have implemented strategies designed to protect the health care system from collapsing or being overwhelmed. For example, many hospitals have cancelled elective surgeries; coupled with the fear many patients have of going to the hospital, this has resulted in a decline in patient care volume as hospitals and physician practices adhere with public health guidelines. This has led to a significant decline in revenue, requiring physicians to access the CEWS program in order to continue to employ their staff. Like all physicians in Canada, specialist physicians practising in a hospital-based health care setting are responsible for significant levels of fixed overhead expenses related to a medical practice. This includes medical insurance, licensing fees, maintaining an office and other professional fees. As a standard practice, employees of physicians who practise in AHSCs are often paid by a third party. In many instances, physicians have established an agency relationship pursuant to which they delegate authority to the hospital to act as their agent with respect to withholding taxes, source deductions and filing T4 returns. The main reason for this agency is to ensure that the physician focuses on teaching, researching and patient care. For clarity, the administrator (hospital) has no legal authority to conclude on any employment matter such as the determination of a bonus or a wage increase or the payout of any severance. All these matters would be the responsibility of the physician in his/her capacity as employer. Anticipating a second wave of COVID-19, many physicians are concerned about maintaining their staff during a future work stoppage given their current inability to apply for the CEWS. As employers, physicians can appreciate that the hospital’s payroll number is creating additional administrative complexity for the Canada Revenue Agency (CRA). However, as an employer and small business, their ability to access the CEWS program is an integral part of their strategy to retain and maintain their staff. C. Technical Analysis — CEWS Legislation and the Principal-Agent Relationship i) CEWS Legislation — Qualifying Entity Pursuant to the COVID-19 Emergency Response Act, an entity will qualify for CEWS to the extent that it is a Qualifying Entity under ss. 125.7(1) of the Income Tax Act (ITA). One of the criteria to be a qualifying entity is that the entity had, on Mar. 15, 2020, a business number in respect of which it is registered with the Minister to make remittances required under ITA s. 153. By virtue of how cost-sharing arrangements are structured, the administrator (agent) handles the payroll filings using their own payroll number, which can be different from the employing physician (principal). On the basis of the uniqueness of cost-sharing structures and the definition in the legislation, physicians who employ individuals under these arrangements need to rely on principal-agent concepts in order to qualify for the CEWS provided all other criteria are met. Presently, the CEWS application portal does not recognize principal-agent arrangements, which are common among physician practices as they employ FLHCWs. It is recognized that each participant or physician in a cost-sharing arrangement is in fact its own business and that physicians share the costs of certain overhead expenses, which include wage-related costs for FLHCWs. In these structures, the payroll number for the employee(s) may be associated with one of the independently operating physicians or it may be associated with a separate entity. As such, these physicians are not likely to have a distinct payroll number associated with their eligible employee under the CEWS. The case law and the administrative position of the CRA demonstrate the following: 1. The principals in a cost-sharing arrangement are the employers; and 2. The agent’s payroll number should be considered the payroll number for the principal for the purposes of making a CEWS application. ii) Case Law Subsection 9(1) of the ITA provides for the basic rules as they relate to computing the income or loss from business or property. In both Avotus Corporation v The Queen and Fourney v The Queen , the Tax Court of Canada determined that where a person carries on business as agent for another, it is the principal that is carrying on the business and not the agent. The Fourney case provides for several concepts that extend to the unique nature of cost-sharing arrangements. These concepts should provide clarity about a principal’s ability to make a CEWS claim if it had a payroll agent that had a business number to make remittances before Mar. 15, 2020. The concepts are summarized as follows: 1. Corporations can act as Agent In Fourney, at paragraphs 41 and 42, it was concluded that a corporation can act as its shareholder’s agent: It is established, then, that corporations can act as agents, and this concept is not repugnant to the rule that corporations have separate legal personality a matter addressed in the oft-cited Salomon case. 2. Business Activities belong to the Principal At paragraphs 60 and 65 of Fourney, the Tax Court examined the following activities and ultimately concluded that the activities were in fact the activities of the principal and not the agent. The following conclusions can be drawn from the case:
Payments made to the corporate agent were found to be revenues of the principal.
Contracts entered into by the corporate agent were contracts entered into by the principal.
T4s issued under the corporate agent’s name were deductible expenses to the principal. Lastly, at paragraph 65, the Tax Court characterized the corporate agent as a mere conduit for the appellant. iii) Administrative Policy For GST/HST purposes, the CRA accepts the concept of an agency relationship typically utilized by physicians in cost-sharing practices. In RITS 142436 “Implementation of Cost Sharing Arrangement,” the CRA concluded that GST/HST does not apply to payments made to “Company A” because it was an agent in relation to remuneration paid to the employees of Company B and Company C. In this ruling, Companies A, B and C were all employers with Company A administrating the payroll as agent. The CRA’s conclusions appear to take the follow matters into account:
Employees are jointly employed by the principals in the cost-sharing arrangement.
Principals have legal responsibility for the employees.
The principals would delegate responsibility or authority to an agent, which could be a corporation or another physician.
That agent would be given discretion to pay the employees, withhold and remit the appropriate amount of taxes, file T4 slips, hire and terminate at the determination of the principals.
Each principal would pay the agent for their proportionate share of payroll and report such payroll on their respective financial statements and tax returns. The CRA also concluded that the “employment status of a person for GST/HST purposes is the same for income tax purposes.” The Department of Finance provides that the CEWS helps businesses keep employees on the payroll, encourages employers to rehire workers previously laid off, and better positions businesses to bounce back following the crisis. In keeping with this objective, a payroll number for an agent should extend itself to the principals for the purposes of applying for the CEWS because it is supported by case law and the administrative practices of the CRA. Application of any federally legislated program should be conceptually consistent with historical frameworks already established. Recommendations: The CMA holds that the legislation as written can remain as currently drafted as it provides for the majority of applicants looking to access the CEWS. However, to address the unintended exclusion of cost-sharing arrangements, the CMA recommends that the CRA provide administrative guidance consistent with and based on existing case law and administrative positions. The CMA recommends that the Federal Government and the CRA enable physicians to claim their proportionate share of eligible remuneration paid through a cost-sharing arrangement provided all other program eligibility criteria are met. Administratively, this may be achieved by the following:
a “check-box” on the application denoting the applicant is a participant in a cost sharing arrangement
identification of the cost-sharing arrangement payroll number
a joint election between the agent and employer allowing the employer to utilize the agent’s payroll number and denoting the percentage allocation of salary costs to the particular employer If this recommendation is not feasible, the CMA recommends that the Federal Government and the CRA implement an alternate approach whereby a cost-share administrator is permitted to make a CEWS claim in their capacity as agent on behalf of each eligible entity (principal). Since period 3 is almost complete, there could be less administration regarding these claims as agents have not made application. Similar to the preferred remedy above, this may be achieved by the following:
a “check box” on the application indicating that an “agent” is filing the claim on behalf of eligible employers
the applicant could also provide (either initially or upon desk audit) the business numbers to CRA for each employer
a joint election among the agent and the employers allowing the agent to act on behalf of the employers for purposes of the CEWS This would provide ease of audit for the CRA as the claim can be verified against the T4 and payroll remittances. The election and disclosure requirements would also alleviate any concerns the CRA or Department of Finance may have regarding potential abuse of the program. In Appendix B we also outline supporting documentation to be retained for a CEWS Claim by a Cost-Sharing Entity, which will ensure cost-sharing entities have the appropriate documentation to submit a claim and also assist the CRA in conducting pre-assessment audits. The CMA would be pleased to provide further detail on this issue or consider other alternatives to ensure FLHCWs receive wages during these unprecedented times. Conclusion Canada’s physicians are important employers. Not only are they responsible for almost 167,000 in direct employment, together with their staff, they are at the front lines of Canada’s response to the COVID-19 pandemic. Our health care system cannot withstand loss of employment or risks to the viability of medical clinics, at this crucial time — and indeed at any time. The CMA strongly encourages the Federal Government to address the issues outlined above in preventing physicians from accessing this critical economic relief program. On behalf of the doctors of Canada, the CMA stands ready to collaborate in resolving these technical and administrative barriers. Appendix A: Welcome to Sudbury Medical Associates (SMA) Dr. Christopher Brown (60) settled in his hometown of Sudbury to practise family medicine about 30 years ago. He operated in his own space, with his own employees until SMA was formed. Dr. Jennifer Lee (45) has been practising in Sudbury for her entire career. Dr. Lee handles all family patients with a special focus on maternity and young family care. Dr. Sarah Assadi (30) recently completed her residency. Dr. Assadi spent time in Sudbury as a locum and enjoyed the strong community feel. Dr. Brown and Dr. Lee are long-time colleagues and recently approached Dr. Assadi to open an integrated health care clinic. Together they would require 10 employees (comprised of nurse practitioners, medical assistants and receptionists) to effectively operate the clinic. Optically, SMA appears to be one business when in fact it is comprised of three distinct medical practices. Each physician or their professional corporation maintains their own distinct patient list. Upon the advice of professional advisors, the physicians entered into a cost-sharing agreement to realize cost efficiencies related to the integrated health care clinic (administration and lease). This structure will ensure the needs of the community are met by the expansion of operating hours facilitated by a flexible staffing model. Understanding that cost-sharing arrangements are accepted by provincial health authorities and the Canada Revenue Agency (CRA), Dr. Brown, Dr. Lee and Dr. Assadi documented this arrangement, which includes the following details: Dr. Brown Dr. Lee Dr. Assadi SMA Legal entity Prof corp Prof corp Sole-proprietor Corp Proportionate share of costs 20% 40% 40%
0% Legal employer (10 staff) ü ü ü Legally responsible — all contracts ü ü ü Payroll, T4 and remittances ü Report for income tax purposes:
Individual billings
Proportionate share of costs administered by SMA including payroll ü ü ü The impact of COVID-19 resulted in a significant slowdown of patient visits between Mar. 15 and May 31 as the residents of Sudbury were social distancing and were only leaving their homes for urgent matters. Dr. Brown, Dr. Lee and Dr. Assadi are concerned about keeping their front-line health care workers employed and at the same time maintaining a sufficient level of family health care in the community. Considering a possible second wave of COVID-19, these physicians need to ensure that their community health clinic remains open and safe so there is no unintended stress on hospitals. Like many small businesses that have experienced significant revenue declines, these physicians are hopeful to access the Canada Emergency Wage Subsidy (CEWS) to ensure they can retain their specialized employees and pivot to the new environment they need to operate within. Upon further review, only Dr. Lee and Dr. Assadi experienced sufficient revenue declines to access the CEWS, but currently they do not qualify because of how they structured the payroll for these 10 employees. They are concerned that without the CEWS, they will not be able to retain all of their staff or see as many patients. The following table summarizes the CEWS analysis: CEWS criteria Dr. Brown Dr. Lee Dr. Assadi SMA Eligible entity ü Prof corp ü Prof corp ü Sole proprietor ü Corp Revenue decline test: March 2020 Not met ü ü No revenues to report Payroll number
ü Payroll expense (eligible remuneration ) ü ü ü
Qualified for the CEWS No (revenue decline test not met) No (payroll account number held by SMA, which manages payroll on behalf of Dr. Lee) No (payroll account number held by SMA, which manages payroll on behalf of Dr. Assadi) No (has no revenue and is not the legal employer) As employers, Dr. Lee and Dr. Assadi do not understand why their businesses are unable to access the CEWS for their proportionate share of their employees’ salaries. Each has met all of the CEWS criteria except for the fact that SMA administers the payroll for their 10 employees under its own payroll number. Appendix B: Illustration of Supporting Documentation to be Retained for a CEWS Claim by Cost-Sharing Entity To the extent that employers operating through a cost-sharing structure are permitted to make a CEWS claim, the following documentation could be requested by the CRA to verify the claim upon desk audit. For illustrative purposes, let’s assume that Dr. Lee and Dr. Assadi both made a CEWS claim. Supporting Documentation Request 1. The legal documentation establishing the agency relationship pursuant to which Dr. Lee and Dr. Assadi delegated authority to SMA to handle the income tax remittances, source deductions and T4 reporting. 2. The employment contracts, which clearly indicate that each of Dr. Lee, Dr. Assadi (and Dr. Brown) are the employers. Alternatively, confirmation from the employees that SMA is not the employer and that they are employed by Drs. Lee, Assadi and Brown. 3. SMA’s accounting records or financial statements, which clearly support its position as an agent. Note: Typically, most cost-share administrators will have NIL revenue and account for all cash inflows and outflows on their balance sheet in a manner similar to a lawyer’s trust account. 4. An analysis demonstrating the revenue decline for the relevant period for Dr. Assadi’s business and Dr. Lee’s business. 5. Calculations supporting the proportionate share of “baseline remuneration” and “eligible remuneration” paid to the employees by Dr. Assadi’s business and Dr. Lee’s business. 6. A reconciliation of the wage subsidy received along with their proportionate share of the wage subsidy so it can be properly accounted for and taxed.
Documents
Less detail

11 records – page 1 of 2.