Skip to Content
Download as PDF

Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 49 - Evidence


OTTAWA, Thursday, March 7, 2002

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 11:06 a.m. to examine the state of the health care system in Canada.

Senator Marjory LeBreton (Deputy Chairman) in the Chair.

[English]

The Deputy Chairman: Our witnesses today are Ms Sharon Sholzberg-Gray from the Canadian Healthcare Association and Mr. Kenneth V. Georgetti from the Canadian Labour Congress. Ms Sholzberg-Gray, please proceed.

Ms Sharon Sholzberg-Gray, President and CEO, Canadian Healthcare Association: On behalf of the Canadian Healthcare Association's Board of Directors and our provincial and territorial members, thank you for the opportunity to appear before you today. As you will recall, I appeared before your committee on the first day of these hearings a long time ago. However, at that time I was not representing the Canadian Healthcare Association, CHA; rather I was here on behalf of the Health Action Lobby, HEAL. This is the first time that you will hear our point of view on the issues that we would like to present.

Through our provincial and territorial members, CHA represents the health system managers and trustees who will be responsible for implementing the various changes that may be suggested by your group and other review processes at the national, provincial and territorial levels that are taking place across this country. Health system managers and trustees have a unique perspective to offer this review and debate. After all, they are responsible for providing needed health services to Canadians within the realities of increasing health needs, decreasing per-capita budgets, ever- changing political landscapes, and often reduced control and autonomy over decision making.

We have brought with us today copies of CHA's ten-point plan for moving from discussion to action, entitled ``A Responsive, Sustainable, Publicly Funded Health System in Canada: The Art of the Possible.'' We submitted an earlier version to the Romanow Commission in October 2001; however, following a recent meeting of the CHA board of directors in February 2002, we updated this report and re-issued it. We have brought copies of our recent policy brief, which I believe have been distributed to you, on the public-private mix. These two documents form the basis of our review of some recent reports and, more specifically, ``The Health of Canadians — The Federal Role Volume Four: Issues and Options.''

While volume four is clearly intended to present options and not to recommend specific actions, policymakers and others have reviewed this report with an eye as to what the future may hold.

By presenting a wide range of issues and options, your committee has included options that are diametrically opposed to each other. We understand this was necessary in order to put everything on the table. However, CHA is concerned that some of these options have been portrayed by some spokespersons of the committee as the ``preferred option'' when, in fact, they could irreparably compromise our publicly funded health system — if implemented — particularly one of the basic tenets of our system: access by all Canadians to comparable, quality health services on the basis of health need and not on the basis of the ability to pay.

Perhaps our greatest concern is that the premise of the committee's report appears to rest on the myth that our publicly funded system is not sustainable, even though you did debunk many myths in volume one of your report.

CHA's response to volume four is based on the fact that public spending on health services is not out of control and our belief that Canada's publicly funded health system is sustainable if we do a number of things to make it so.

Before highlighting CHA's views on the options presented by the Senate committee in volume four, it is important to understand our view of the health system. We believe that to ensure the future sustainability of our publicly funded health system, we need strong leadership, appropriate system change, and adequate levels of funding from all levels of government.

In terms of strong leadership, CHA calls for strong leadership from all levels of government, from health system trustees and managers, from providers, from researchers and from the public. We support a strong role for the federal government in order to ensure access to comparable health services across Canada, and purposeful leadership is needed to move us from talk to action.

Health system managers and trustees know that, in order for our publicly funded health system to be sustainable, system change must occur. We continue to support system change that is appropriate, improves patient safety and quality care, ensures public accountability, and embraces the full continuum of care.

In terms of adequate levels of funding, all levels of government must provide adequate, long-range, predictable funding, along with concrete action plans to appropriately change the system to meet the current and future health needs of Canadians. We said in the past and we repeat again: Funding at the federal level should include a number of components, such as increasing the CHST base and providing an annual escalator in order to stabilize the existing system; targeting new funds to meet urgent needs, such as technology needs and medical equipment needs; transitional funds to support appropriate system change to promote primary care reform, palliative care and enhanced population health initiatives; and introducing new federal government funding to ensure that all Canadians have access to a broader continuum of care, including home, community and facility-based long-term care. We should explore alternate or additional funding mechanisms and examine the private-public mix in the funding and delivery of health services. These three conditions, leadership, system change and funding, are the basis of our analysis of volume four, and have led us to support some of the options you presented, recommend alternative options and suggest additions in some cases.

I will start with areas of agreement. Since you may not have had a chance to review our ten-point plan or private- public brief, I will highlight some of our key positions.

The CHA agrees with a number of options presented in the Senate committee's report, as they resonate well with our policy positions. Included in this list is the section of our report, which describes these particular areas in detail. Any options should include implementing primary health care reform; encompassing home care within the publicly funded health system; reorganizing pharmacare; developing a pan-Canadian strategy to address critical health human resource issues; increasing federal government commitment to health ``infostructure'' and infrastructure; promoting quality and accountability in health services; developing specific performance indicators and a minimum data set; encouraging intersectorial collaboration on the determinants of health and ensuring a population health approach; and supporting federal leadership in the area of health research.

There are options with which we strongly disagree, and we offer the following alternative approaches: We should broaden the concept of accountability to include more than reporting. We view accountability within the health system as more than a one-way process of reporting. Better communication and collaboration between trustees and managers with governments regarding their respective roles and responsibilities will facilitate the governance and management of the system. Governments must understand the necessity of ensuring public governance and independent management of the system, and clearly articulate and demonstrate support for it.

We recommend caution in looking at changes to the existing CHST funding mechanism and are proposing alternative funding mechanisms. Specifically, CHA does not support converting CHST cash transfers to tax points. What was done in 1977 is enough in that area. We support the continuation of a per-capita transfer within the CHST formula and, in the longer term, we would like governments to explore alternatives to the CHST funding mechanism, for example, a health-specific transfer which would aid in clarifying health spending by different levels of government. As well, in the future, we might want to look at the development of a needs-based formula.

An important point we wish to make is that we should consider the evidence and the political and administrative realities when talking about introducing user fees, premiums or medical savings accounts. There are compelling facts and arguments for not introducing user fees, premiums — even so-called progressive ones — or medical savings accounts for existing Canada Health Act services. We urge governments not to introduce any new funding mechanisms along these lines unless there is clear evidence quality of care and access to needed health services will be enhanced. We have yet to see any such evidence.

We must broaden, not narrow, the basket of publicly funded services. There is room within the federal spending power to increase government spending on health services. For example, the OECD public-private ratio is approximately 75/25 versus our 70/30 mix. There is room for improvement. This would include the development of a national publicly funded home, community and long-term care program supported by a national pharmacare program. This new program could be established outside the Canada Health Act, perhaps using the Social Union Framework Agreement, SUFA, with available federal funding, subject to the provinces and territories meeting mutually agreed-upon objectives.

We are willing to consider that some publicly funded services must be 100 per cent covered, while others can be subject to copayments. CHA's members believe that acute care services, including acute care replacement home care services, should be 100 per cent publicly funded within an evidence-based approach, while home, community and long- term care services, or certain aspects of them, may be subject to some form of copayment. This will be a difficult area to determine. We know there are copayments, for example, in facility-based, long-term care. Whether they should be $3,000 a month in the Maritimes or $700 to $800 a month in Saskatchewan is an issue that has to be addressed. We do not believe that is within the spirit of the health care system in this country. We know we will not have a 100 per cent publicly funded system, so we must make careful choices be based on the bottom line of access to health care, health need, not on the ability to pay.

We must continue to debunk myths and disseminate facts, including the following: Public spending in health care is not out of control, particularly when examined over a 10-year period in real per-capita terms. In that period, in real per-capita terms, the increase has been 1 per cent per year. This is not much when compared to international figures. We cannot look at only the last five years. Remember, we are trying to make up for five years in which there were real per-capita cuts and a bust-boom approach. We do not agree with that kind of approach. We must note that our publicly funded system is not a drain on our economy, rather it is an essential investment in Canada's productivity and global competitiveness. We must continue to repeat that Canada currently has one of the lowest levels of public spending on health.

We must establish a framework regarding for-profit private sector delivery. In our policy brief on the private-public mix, we conclude that private involvement in the Canadian health care system is not inherently evil, nor is it a cure-all, which we have heard too many people say. The private-public delivery question centres on delivery of certain services under certain conditions. We pointed to a number of areas in our private-public brief where services might be delivered in an appropriate way, but we also pointed out a number of areas where they should not be. A delicate balance must be achieved that encourages public and private sector innovation in research, fosters high-quality services and ensures public accountability.

When partnering with a for-profit private sector to deliver services, there must be clear expectations, explicit quality standards and transparent accountability mechanisms, without which there will not be access to high-quality services. We must ensure that there are savings to be made. I have not yet heard of any case where savings can be made. Some people point to the fact that there might be the same costs in the private sector, but no savings.

I am reminded of the constant repetition of the Ontario Auditor General in analyzing the private cancer clinic at Sunnybrook Hospital, the after-hours clinic, where he points out that some of the reports have been comparing apples with oranges. Very routine, simple cases are being treated in the private, after-hours, clinic, and it is costing $3,500 a person. In the more complex variety of cases presented, in the for-profit delivery system, it is costing $3,000 a case. Granted, both are cheaper than in the United States, but clearly we have alternatives. We must consider them, but we must also consider what is good for the Canadian public.

We must monitor and assess the level and impact of private funding. Growing private sector funding may threaten access to necessary health services. I say again that our bottom line is access, and access must not be based on ability to pay.

We note that private funding in other countries has failed to reduce waiting lists. Volume one of your own report looks at the cases of New Zealand and Great Britain where waiting lists were not reduced by having extra private funding or a parallel private system, and private funding has increased, not decreased, total health costs. Greater private funding may also compromise our global competitiveness by shifting more costs to the private sector — something they have not said that they are inviting.

The jury is still out as to whether the magic number is 30/70. Perhaps it is; perhaps it is not. What we would ask governments and people making recommendations to do is not to recommend adding to private sector funding unless we know the impact on accessibility. We ought not do this unless we understand the evidence of its impact. All of this must be carefully monitored. That is our bottom line.

When preparing your final report, we urge you to deal with issues that we did not find to be adequately covered. For instance, we would like to add leadership as an additional role for the federal government. After all, the federal government is the only level of government that can ensure access for Canadians to comparable services, wherever they live in this country. No one provincial or territorial government that can ensure that. Only the federal government can do that, and it should take leadership in this area.

There must be meaningful consultation and agreed-upon roles and responsibilities between governments, health managers and trustees. We know from experience that this is not always the case. We must encompass facility-based long-term care as an essential component of the publicly funded system, albeit with some form of copayment, which exists currently. Long-term care is an important part of the continuum, and a lack of facility-based long-term care is one of the main reasons for hospital bed shortages. We cannot ignore that as an important part of the continuum.

We must address the urgent need for capital infrastructure. Your report focused on health information infrastructure, on medical equipment, on human resource infrastructure, but capital infrastructure cannot be ignored. We must provide additional funding for palliative care, and funding for emergency medical services including ambulances and emergency room services. We must involve the health sector in discussions regarding international trade agreements, and we must include ethical decision making as a key component of the ensuing decision-making processes regarding the future of our health system. For instance, in some countries, there is no access to kidney dialysis for people over 65 years old. Would Canadians agree with the ethics of that kind of approach?

There was a lot to cover in a short time, but I would like to leave you with a few key messages. The federal government can afford to devote more public money to health services, and it is not currently providing its fair share. The publicly funded system should include services that are 100 per cent publicly funded — more than currently — and could also include copayments for parts of the continuum, where appropriate. I have mentioned long-term care in particular. There is a role for for-profit private sector funding and delivery, but it must be within a very carefully controlled context. It must not interfere with access based on health need. We must ensure quality services based on national standards, and there must be transparent accountability mechanisms. System change is essential.

The last key point I would like to leave with you is that we must move from talk to action. In closing, I would urge this committee to make concrete recommendations for implementing changes at the federal level. Of course, this will need to be done within the parameters of economic and political realities; in other words, the art of the possible. I look forward to discussing with you what is possible and what is not.

The Deputy Chairman: I will now call on Mr. Georgetti and Ms Cindy Wiggins, who is a senior researcher in the social and economic policy department of the Canadian Labour Congress.

Mr. Kenneth V. Georgetti, President, Canadian Labour Congress: On behalf of the 2.5 million members of the Canadian Labour Congress, I would thank the Senate committee for the opportunity to present the views of the labour movement regarding the reform of Canada's public health care system. The CLC has written a comprehensive brief to the Commission on the Future of Health Care in Canada, which we have submitted to this committee as well.

I will summarize our key positions on public health care.

Affiliates of our Canadian Labour Congress represent a significant number of workers in the health care field including nurses, orderlies, laundry, maintenance and cleaning workers, as well as home and long-term care workers. The public health system has provided critical employment opportunities for Canadian women and men, who make up about 80 per cent of the work force, many of whom are members of unions. In addition to maintaining public health care, our members also have concerns about the issues related to health broadly, issues such as workplace health and safety, health promotion, disease prevention and the determinants of health.

The labour movement played a major role in supporting the establishment of medicare. Labour leaders of the day recognized the immense contribution of equitable access to health care services and what they would mean to raising the living standards of working people, and indeed of all Canadians. It was understood that a public health care system would contribute to an efficient, productive economy. A healthy work force, minimum labour relations strife over the bargaining of health benefits, and lower employer costs for health care still give a significant competitive advantage to Canadian employers.

Moreover, a single-payer, publicly funded system was seen as the best way to provide high-quality care at a much lower cost overall than a health care system based on taking profit. Sharing collectively the risks of ill health was then, and remains now, a core value held by Canadians. It must be remembered that medicare was put in place after we — labour, employers and government — agreed as a society that the cost of industrial accidents ought to be borne collectively by the whole economy and not just by the worker injured on the job.

The same principle, we argue, is at the heart of how the labour movement views the costs of ill health and access to health care in Canada. For the past few years, the issue of health care has been front and centre in the public policy debate. After the National Forum on Health issued its report, several provinces conducted their own commissions on health care. Now we have the Senate committee and a royal commission. It is safe to say that all of this activity indicates the importance we place on health care.

Many challenges face us as we struggle to find the way to ensure the future of our public health care system. Federal cuts in funding for health care over the last two decades put a financial burden on the system. At the same time, some provincial governments, claiming that medicare is unsustainable, chose to cut taxes rather than invest those revenues in health care. We think the federal government is somewhat justified in saying that the increased health funding it provided in the year 2000 is being used for provincial tax cuts.

In debating the future of public health care, certain interests argue that public health care is simply unsustainable. Their solution is to allow for a for-profit tier of health care and even a private tier of health insurance to cover services now publicly insured. This is an issue in this committee's Issues and Options paper where it was noted that the principle of public administration in the Canada Health Act prevents such private insurance.

The Canadian Labour Congress affirms the labour movement's commitment to a national system of public health care governed by the Canada Health Act with services delivered on a not-for-profit basis. Our views are anchored in the notions of the rights of citizenship, shared values, the benefits of democracy and the belief that a major role of government, if not the major role, is to act for the public good.

The attainment of the highest possible standard of health is a fundamental right for all people, recognized both here in Canada and internationally. Equal access to health care is one of the means through which that standard can be attained. It can be argued that, even if all other means to good health are available to people, in the absence of equitable access to the best quality of health care available, the highest standard of health care is not attainable. Thus, the CLC believes that equitable access to health care, as embodied in medicare, is a right of citizenship, not merely an entitlement.

The difference between a human right and an entitlement is important. A human right is inalienable and cannot be taken away or limited. An entitlement implies an agreed-upon privilege or a contract between society and its government that may be altered or limited under certain circumstances. We also believe that the right to equitable access to health care cannot be achieved by a system that has both public and for-profit tiers of care. All evidence shows that, in systems where profit is both the fundamental value and the responsibility of those systems, unequal outcomes are born by some people in terms of access, quality of care and cost burden.

Dr. Bernard Lown, winner of the 1985 Nobel Peace Prize, has this to say about for-profit health care and their values, and I quote:

For-profit health care is an oxymoron. The moment care is rendered for profit, it is empty of genuine caring. This moral contradiction is beyond repair. It entails abandoning values acquired over centuries of professionalizing health care into a humanitarian service.

I am sure no one is surprised that I quote Mr. Tommy Douglas in our brief. In his unfailing commitment to the establishment of a public health care plan, Mr. Douglas said:

I came to believe that health services ought not to have a price tag to them, and that people should be able to get whatever health services they require irrespective of their individual capacity to pay.

In other words, public health is a public good, not a commodity, primarily because health care is not a commodity like other goods and services. The bottom line in health care is good health outcomes for people, no matter what the cost. The bottom line in business is the best return possible on investment. These two perspectives are directly contrary and hold competing values.

This fundamental belief anchoring medicare is shared by the vast majority of Canadians. It is an expression of our core values as a society. These include compassion, fairness, the dignity of people, economic and social security, and a commitment to the equality of opportunity for all of our citizens.

Much of the debate today focuses on whether public health care is sustainable. It is worth noting that, while affordability of health care gets all of the ink, several other factors are critical elements of sustainability. These include prescription drug costs, health protection issues, workplace health and safety, the health of the environment, occupational disease, primary health care reform and demographics. The sustainability issue can be posed in this way: Do governments have the fiscal capacity to provide high-quality, comprehensive health care services under a single, fair, publicly funded system? Is it necessary to privatize health care costs by expecting some people to pay for health services beyond what they pay for them in their taxes?

In the context of the latter question, the for-profit delivery of health care is assumed to be integral to the question. However, this is really a separate issue from how we pay for health care. Even if there were a consensus that the public purse could not finance all of our health care needs, health services could still be delivered on a non-profit basis. However, those who favour the increased private payment also seem to favour the for-profit delivery of health services. The argument contends that for-profit delivery will ease the burden on the public treasury, therefore making health care costs sustainable.

In respect of the financing issue, there is nothing inherent in private spending that will constrain or lower overall health care costs. This can only be the case if fewer health services are provided or if health services are less expensive when paid for privately. Fewer services would imply that people would be going without care — an unacceptable outcome. If the volume of health services does not decline, overall costs will not be contained, no matter how they are paid for, publicly or privately. There is no evidence that health services cost less on a per-service basis when paid for privately. In fact, evidence shows that the opposite is primarily true because of higher administrative costs and, of course, a required profit margin that is inherent in such a system.

In a mixed system, costs could only be lower if services were tiered according to quality, with more expensive or higher quality services offered in a private for-profit tier and lower quality, less expensive services offered in a public tier. Some cost savings might be achieved, but this too is an unacceptable outcome in a society that places high value on equality in the accessibility, comprehensiveness and quality of health services. The same standard of care is highly valued by Canadians.

The for-profit delivery of health care services will not benefit anyone other than those who stand to make a profit or those who obtain quicker access to better care by virtue of having sufficient personal financial resources to pay for it. Few Canadians have those resources without sacrificing some aspect of their standard of living.

The CLC believes that, if we cannot afford to pay for health care publicly, then certainly we cannot afford to pay for it privately. The pot of money from which to draw for health care spending comes from only one source — individual people. If some people can afford to use more of their income or wealth to pay privately for health services, then there is a greater scope for progressive taxation, we would argue, with the positive outcome that everyone then has equitable access to the same quality of health care.

The CLC believes that the share of public resources devoted to health care is primarily a matter of political choice, barring catastrophic economic circumstances such that the economy stops growing for a very long time. We argue that to be an unlikely circumstance.

There is no magic number that we can say ought to be spent on public health care, however, we do know that we have decided, as a country, that we favour a publicly financed system of health, delivered on a non-profit basis for many reasons: its intrinsic fairness and efficiency, for sure, its low administrative costs, and its value for money spent. At the same time, we expect the system to be well organized, adaptable to change and capable of meeting the health needs of the population.

Governments do have the fiscal capacity to preserve and expand the integrity of medicare and they will continue to do so. It was always understood that health care costs would increase as the system matured, as medical science advanced and as our population aged. Growing health care costs are not a surprise to us. What is needed is political commitment, good judgment, investment in the kind of health care reform which will improve an already good system, and adequate, stable financing provisions between both levels of government.

Two points are worth noting in respect of public spending on health care as a share of GDP. Canada ranks eighth of 17 industrialized countries, according to the OECD Health Data 2000 report. This indicates to us that public spending on health care is well within our means as a nation. When it comes to total spending on health care, public and private, we rise to the fifth highest in health expenditures. This ought to give us pause for thought, particularly when we see that Canada ranks 21st in public expenditures as a share of total expenditures. Many more nations, therefore, publicly finance a greater share of health spending than does Canada.

In summary, Canada has one of the finest health care systems in the world. Contrary to the media reports of a system in extreme crisis, our public system meets the health needs of Canadians extremely well. We do need to find solutions to pressing problems in many areas such as, the waiting lists for critical treatments, access to affordable home care, long-term and palliative care, soaring prescription drug costs and the fee-for-service payment method for paying physicians.

We must take a long and careful look at the implications of ongoing international trade agreements and how they pose a threat to the viability of public health care systems, particularly the current negotiations on trade in services. This is an area that the federal government must be completely honest and forthcoming about.

Our key recommendations are as follows: First, replace the Canada Health and Social Transfers with three individual programs for health, education, and social assistance. Second, expand public health care to include a national system of home care, long-term care and palliative care. Third, explore ways to contain prescription drug costs, including a national pharmacare program, and review the Patent Act legislation to ensure that prescription drugs are considered to be a public good. Fourth, protect health care from international rules of trade. Fifth, increase federal cash funding to 25 per cent of health care spending, with a view to increasing the federal share to 50 per cent. In addition, the federal government must guarantee stable, predictable funding and return to enforcing the provisions of the Canada Health Act. Sixth, implement regulations that will protect the public health with respect to the safety of our food, drugs, and medical products, including regulation with respect to the safety and labelling of genetically engineered food.

Senator Morin: Ms Sholzberg-Gray, I read both of your documents with great interest and found them to be very well prepared. However, I wish to address the points on which we do not agree.

The matter of accountability is important. You broaden the concept of accountability on defining roles and responsibilities, the roles of management and of the providers. This is really the issue. That is one idea which certainly resonates with the committee and we will address that.

Public reporting is an issue that requires a good information system, which we do not have at the present.

I was interested in the matter of ethical decision making. With good reason, you raised the issue of the ethics of health rationing and restriction. Much work has to be done there. I do not believe our committee has addressed that. That is a recommendation we will consider.

Without passing judgment as to whether funding in the past was sufficient, providing more federal funding is an important issue. The debate, of course, is whether federal funding should be targeted or not. The provincial governments would prefer it not be targeted. There is some evidence funds that are not targeted go into a black hole. Rather than improving services, the money goes elsewhere; paving the parking lot or changing light bulbs. We have no evidence that there is an improvement in health services when funding which is not targeted is sent to the provinces.

We agree on the matter of user fees and medical savings accounts.

I could find nothing on the subject of premiums in your report. You maintain, with reason, that there is an issue with respect to user fees and medical savings accounts. Perhaps you could address that.

You also raise the issue of publicly funded services. I recognize that minor changes can be made to the basket of public funding. For example, medical expenses related to tattoo removal or chiropractic services. However, if we include home care and pharmacare, this raises the issue of our balance of public funding and private funding, 70/30, as compared to an average of 75/25 in the OECD. I believe the figure in Sweden is 85 per cent. I think we are already moving towards a 75/25 split. You state that the system is underfunded and you recommend a 1 per cent increase in the base budget, which would amount to $1 billion in a $100-billion system.

With respect to infrastructure, according to information studies, we require $1 billion a year for at least 10 years to be invested in infrastructure. That brings funding up to 22 per cent. When people think about funding, they do not think about research, but that is a major part of what the federal government spends. The government has committed to increase funding to $1 billion. That is a doubling, another $0.5 million. The Canadian Association of Radiologists says that they require $3 billion to $5 billion to bring the system up to where it should be now.

Just to correct the present situation, without introducing new programs, would bring us fairly close to the 25 per cent public funding level. The public sector, not the private sector, has been increasing its funding. There is no evidence that private funding has been increasing proportionately. To simply correct the current problems in the health care system we must increase our funding. That would not take into account the introduction of expensive programs such as pharmacare, home care and so forth. I would like your thought on that.

I agree with you that public spending in health care is not out of control. As you state in your green document, what is out of control is the underfunding of the system and not the costs. Everyone recognizes that there has been underfunding over the last few years.

I would agree with your statement that there is a role for the for-profit, private sector as long as the access is based on need, that there is the provision of quality services based on national standards, and that there are good accountability mechanisms. I would go along with that statement.

I am surprised that you include in your list of areas where there should be increased funding certain institutions. For example, you feel we should fund facility-based long-term care. To me, home care is more important than that. If I had money, I would put it in home care rather than facility-based long-term care. Emergency medical services and the ambulance service, as compared to pharmacare, for example, may be a priority. I have already commented on the ethical decision making. I personally agree with most of what you have stated and you have provided us with two excellent documents.

Ms Sholzberg-Gray: I would start by responding to your final comment related to facility-based long-term care. We did not focus on pharmacare and home care because that is one of the areas where we agreed with you. It is included in our list of agreements. We wanted to add items that we thought were missing in the options, and we think that any health system that does not look at facility-based long-term care would not provide a good continuum of care.

Our members represent the entire continuum — home care, long-term care and hospitals. Most of the provinces in this country have an integrated approach. We believe any approach that, for instance, looks at home care at the expense of long-term care, or at hospitals at the expense of long-term care, is not a good approach. The pressure on long-term beds today is due not only the absence of home care but also on the absence of long-term care beds.

That is an area where the private sector has not worked very well. Of those people who believe that private sector solutions are the answer, one would ask: Why is there a problem in long-term care, home care or pharmacare at all in this country? After all, those are the areas where free market solutions can prevail. There are no limitations on them. However, that has not resolved the problem of Canadians having complete access to those areas of care. That is food for thought.We believe the government has to focus on all areas and ensure that Canadians have access to the whole range of services. We agree with home care and pharmacare but you ought not to ignore the fact that with our increasing population of people aged over 80, 85, 90 or 95, provision of those services will pose a challenge in the future. In fact, it is presently a challenge in the province of Ontario where long-term care facilities will not be built for another five years, and they have been waiting 10 years. That is why you cannot get a bed in the Queensway-Carleton Hospital or the Ottawa Hospital.

To return to the issue of targeted funding, our organization was one of the first to talk about targeted and transitional funding as opposed to throwing more money into the CHST. We believe federal government money should be used to buy change and to buy something specific. That would alleviate the black hole problem that you mentioned. I used the words ``black hole'' in a presentation I made at McGill University two weeks ago.

Senator Morin: That is probably where I got it.

Ms Sholzberg-Gray: You have read our documents as they relate to the issue of private delivery. Just to clarify, we are concerned about private delivery in the area of complex care. We recognize that we have private blood testing companies such as Gamma-Dynacare. Doctors refer many of their patients to those private companies and there is no evidence that the blood testing done by those companies costs more than it would at a tertiary care hospital or that it is not quality-based or inappropriate. We are willing to consider those kinds of areas and other ancillary services, particularly in the diagnostic area. That might be where we can contemplate private delivery, but always with the caveat that they must be quality, value-for-money, proper services to the public. That is why we are cautious as to where that should be done.

You read our report in such detail that you understood that we did not discuss, in particular, the area of premiums, even though we asked you to refer to a section that dealt with premiums, medical savings accounts and user fees. We thought that user fees for services provided under the Canada Health Act were a bad idea. We were very concerned because to us it looked, at least from press reports and interviews, as if some members of this committee might have thought that adding user fees to existing Canada Health Act services would be a way of bringing on needed access to pharmaceuticals, home care and that kind of thing. From our perspective, that is not on.

You are right in saying that we do not address the issue of premiums, in particular, in that section. We contend that, if premiums are a tax — they are a regressive tax — what is the point of using premiums? We can make our income tax system more progressive.

Senator Morin: You say ``even progressive'' in the document. If it is progressive, it is not regressive.

Ms Sholzberg-Gray: I agree. We are saying it is useless to do it that way. In other words, rather than have a premium that is so-called ``progressive'' and have it separate —

Senator Morin: It must be dedicated to health otherwise it will fall into another black hole.

Ms Sholzberg-Gray: It would not cover all health expenses. From our perspective, it would create more administration. Dedicated taxes is an issue that has to be considered but, by and large, governments are loath to do that, and we would look with suspicion at the whole notion of dedicated taxes. We think the government collects taxes in a progressive way from the population and, in its wisdom, decides to spend it in a number of areas. If you had pots of dedicated tax income, that could create a problem. That is the reason we are concerned about a so-called ``progressive premium,'' a dedicated tax that would cover some 20 per cent of health costs as opposed to using the tax revenue from everybody to cover much-needed health services. That is our position.

You also talked about accountability and our notion of it being more than reporting with roles and responsibilities being crucial. Our members are the provincial and territorial hospital and health associations across this country. Our members are the managers and trustees of the system. They think they are accountable to the public, and they act in the public interest. Those managers are given budgets from provincial governments with which to manage the health system. Their roles and responsibilities are not carefully defined. When regional health authorities, district health councils or hospitals have deficits, those managers are blamed for that. Yet, they are not given marching orders by the government. They are told that they must not turn away patients and that they must deliver all of the services that meet the health needs of Canadians. They are also told that, if they spend any more than the envelope that they are given, they are not good managers.

That is not the way to run a health system. We must have a clear indication as to roles and responsibilities. The managers have to know what they are responsible for delivering, and they have to deliver it in the most efficient and effective way. There is no evidence that administrative costs are out of control in Canada.

Mr. Georgetti said, and I agree with him, that that is not the problem with our health system. The real issue is that we must take an evidence-based approach to how we deliver services; we must have all the system changes that I mentioned; we must meet the health needs of Canadians; and governments must be realistic and not ask the managers to deliver the moon when they only deliver enough money for a half moon.

You asked about the basket of services. We are quite flexible on that subject. We have a Canada Health Act basket that could be added to in terms of acute care and home care services. At the same time, a wide variety of services would enhance the health status of Canadians, but they are more in the social services area. For example, there are meals-on- wheels programs, which bear the saying: ``They should be delivered free of charge to all Canadians.'' Another example would be in the area of pharmaceuticals, where we want to have a staged approach — perhaps where catastrophic or chronic illnesses would be covered, or pharmaceuticals needed as a result of an acute care hospital stay. However, one would not want an absolutely universal pharmacare program until we have smart cards, electronic health records, appropriate drug utilization, appropriate drug prescribing and a whole host of other things. That is why we must move in this area in a reasoned and evidence-based way.

There is much to chew on because we have many large reports. I am not certain that I have addressed all of your issues. You said that we could easily achieve a 75/25 split. That is assuming, for instance, that the federal government will give more money for information technology, will give more money for equipment, and will address all of the issues that you have outlined; and we have not seen evidence that it will.

In terms of bringing on home care and pharmacare, all provinces have programs in those areas right now, and we are saying that with an additional $1 billion to $1.5 billion per year of federal money, we could begin to achieve access in a comparable way across this country, instead of the patchwork quilt that we have. We do not agree with the patchwork quilt approach.

We cannot do everything at once, but we have to distinguish between $3 billion and $5 billion for medical equipment. On a yearly basis, an extra $5 billion can do a great deal if it is properly invested in the right places.

Senator Cordy: Mr. Georgetti, in your report you mention the health care funding that goes into ``the black hole'' or, as you said, that some provinces may have used for tax cuts. This intermeshes with targeted funding accountability. What would you suggest is a solution? You are not the only person who has made that comment. Some witnesses said that the money went towards tax cuts and others suggested that it was used for highways. Lots of people are asking what happened to the money that was given to the provinces by the federal government in the fall of 2000. They have not seen improvements in health care in the province in which they live.

What do you suggest the federal government should do when it provides money to the provinces? There is a sense of ownership, such that the provinces take ownership of delivering health care services and they do not want any intrusion in terms of how they spend the money.

Mr. Georgetti: First, I would argue that the federal government has to more tightly enforce the Canada Health Act. Second, there were a couple of programs where the federal government made transfers that were targeted to specific programs and they ensured that the provinces used that money only for those specific programs. There is clearly a problem in the way the federal government transfers funds to the provinces for the delivery of health care. I do not shy away from the argument that, when the federal government transfers money with no conditions and the provinces subsequently allow their tax base to be diminished by tax cuts rather than apply that money, the federal government should not continue transferring money to the provinces.

Clearly, the federal government needs to sit down with the provinces and be clear that when they transfer money for health care, it must be accounted for and used for the delivery of health care in the provinces. That needs to be part of a federal-provincial negotiation, and there must be very clear understandings on those line items that that money is to be used for the purposes for which it is transferred.

The other problem is the flexibility that is allowed inside the system when the federal government does a broad transfer. We suggest in our brief that they break it into three sets, instead of one social health transfer. We believe that would be a better and easier way for the federal government, in the relationship with the provinces, to control where that money is transferred and how it is applied.

Senator Cordy: Ms Sholzberg-Gray, in your presentation today and in your documentation, you deal with accountability. Senator Morin made reference to the fact that you say we should broaden accountability to include more than reporting. I think of reporting as the bottom line. What do you mean by that?

Ms Sholzberg-Gray: We mean that there are many lines of accountability. It is not simply a question of governments or the health system reporting to the public on outcomes and whether the health system is meeting certain goals. It is a question of different people being accountable in different ways. For instance, it is not appropriate for governments to tell health system managers to deliver all services without providing enough funding. That does not create an accountability framework. We should send you our document on accountability.

On the issue of the federal government transferring bigger and better, they thought, block funds to the provinces with the loose conditionality of the Canada Health Act, that is not asserted very often, but there are areas where it could be asserted right here today, as we speak. Some of those areas may include affordability; whether diagnostic services are being paid for privately; and allowing people to receive treatment in the public system because they can invest $800 in faster diagnostics. Those are some of the issues that have to be addressed.

Asserting the Canada Health Act is an important issue. Whether a block fund is the right way to do that is an issue, but targeted funds are an important consideration.

You asked why we would not see any difference for the new federal money transferred in September 2000, and I indirectly referred to that in my remarks. There were five years of substantial reductions. Canada was one of the only countries in the world that had a real per-capita cut for five years, from 1992 to 1997. New money invested — coming on stream — in 2000 will only make up for the cuts. It will go towards trying to restore some of the damage that was done during that period.

This is not a negative comment, but there was tremendous pent-up demand in terms of union contracts. Workers who had borne the burden of the cuts in those five years were asking for their position to be somewhat restored. That involves a cost. In other words, in the long run, cuts such as that, do not improve the system. They do not help the managers to negotiate contracts and they do nothing to enhance the retention of workers; rather they encourage nurses to leave the system. Those five years of cuts and the need to make up for them have led to no real change, even though you say more money is coming. We have to put the money into a more realistic context. It is not very much more if it is the same as it was in 1994.

Senator Morin: Much of it has been going into tax cuts. B.C., Ontario, Quebec, in fact, most provinces have cut taxes. If more goes into tax cuts, who wins?

Ms Sholzberg-Gray: I agree with you. That is why we say that targeted funds is the way to go. We mentioned the tax cuts in our brief and we also note that all levels of governments are responsible for the cuts. Provincial cuts preceded the federal cuts.

Senator Cordy: You say that you support the continuation of the per-capita transfer. Everyone would have to agree that per-capita transfers are probably the fairest way to send out the money. I am from the Halifax area where there is high-density population. Have you given any thought to how you would deal with rural areas?

Ms Sholzberg-Gray: Yes. Ours is an association of federal, provincial and territorial hospital organizations, which means that our members have different concerns. If they come from a province where there are many remote communities or rural communities, access to care is much more difficult. It can actually be more expensive. People have come to our board table recommending that there should be a federal needs-based approach to determining transfers. This is being discussed at our national board level. We are asking that this be put on the table as something that could be dealt with in the future because a discussion of a needs-based approach could include whether some provinces have a more aged population than others.

Senator Cordy: That would be the case in Nova Scotia.

Ms Sholzberg-Gray: It would look at whether they have more remote and rural populations and whether they have populations with greater health needs. This could apply as much to inner-city Toronto, with its huge immigrant population, as it could to rural Nova Scotia. It might balance in the end. However, someone ought to look into that.

We do not mean to take away from the per-capita approach. Perhaps there should be an augmented formula. We note, however, that equalization is an important way of ensuring access to comparable health and social services across this country. Certain provinces benefit from equalization, which is a no-strings transfer that does enable them to provide services.

All of these things ought to be on the table. For now it looks like per capita is the easiest way to transfer, especially given the fact that the federal government, when it transfers money for health, is acting in an area that is under provincial jurisdiction. The extent to which the federal government can micromanage and have detailed arrangements are important issues, as well.

Senator Cordy: They are very important issues, I would say.

Mr. Georgetti, focussing on public health care, you made reference to whether or not it is sustainable and the critical elements of sustainability. You made excellent points regarding drug costs, health protection issues and workplace health and safety. Have you thought about wellness? Have you considered incentives that an individual would have in order to maintain good health?

Mr. Georgetti: I do not know that we thought about it on an individual basis but we did in terms of the workplace. Let me provide some interesting information. Up to one in three people in a line-up for health services right now have workplace related problems. One in three of those problems is as a result of either a workplace accident or an industrial disease. The burden on the health care system as a result of those factors is enormous.

Prevention at the workplace would save our health care system countless billions of dollars annually. That could be done by way of wellness program in the workplace. We attempt to include such incentives during the negotiation of collective agreements. We notice that the incidence of industrial disease in union workplace settings versus non-union settings is far lower because we put those on the bargaining table as a personal issue. They do speak to a productivity issue that gets short shrift in this dialogue on health care. We are undertaking a study, which we will share with you, on the productivity advantage of the health care system to Canadian business based only on the cost of medical premiums, let alone industrial accidents and disease. Our rough calculations are that it costs between $7 and $9 an hour.

The example of British Columbia that you use, Senator, is a good one. After they cut the taxes and the medical services, they doubled the medical premiums. From our standpoint in the union setting, that was not an issue because it doubled the cost of health premiums to our employers, not to us, because we include items like that in our bargaining strategy. Any time any health care item is delisted, or taken off, we deal with it at the bargaining table. That is easy to do in the short term but, in the medium term, we lose other economic benefits that we may have gotten in terms of wages and other items because we must concentrate on an artificial issue that is brought forward. However, at the bargaining table we try to prevent the use of the health care system by encouraging health, safety awareness, and accident prevention.

I am not equipped to talk about the wellness issue as it relates to the broader community.

Senator Cordy: What is your definition of a workplace disease? I always think of workplace health and safety.

The Deputy Chairman: Is it, for example, a disease that results from the inhalation of paint fumes in an auto factory?

Mr. Georgetti: At last count there were approximately 70,000 different chemicals and related items that could affect the health of workers. The accidents are demonstrable. We have difficulty keeping up with the number of chemicals and other substances that come into the workplace. We try to monitor and know their effects. Although we can identify some, we have been unable to identify other substances. People go into the medical system with ailments that are caused by the workplace, but we do not yet know the precise effect of exposure.

The Deputy Chairman: Did you say that applies to one in three people, Mr. Georgetti?

Mr. Georgetti: One in three people in a health care line-up is there due to injuries or diseases related to the workplace.

The Deputy Chairman: Are you doing an impact study on what this means on productivity? It must be immense.

Mr. Georgetti: There is data available already, and we can supply that to you. It is well-documented, both in terms of the line-ups and the cost to the system.

The Deputy Chairman: If one-third of the population has a health-related issue directly related to the workplace, whether it is an injury or an illness, and you factor that into production lines, it would result in an interesting figure.

Mr. Georgetti: Let us remember, we are only relating the people who are actually physically at work to the whole population, so it is a more skewed number. There are no children or seniors in that number. It is only related to people of working age who are in the system.

The International Agency for Research on Cancer recognizes 24 substances that cause lung cancer. One is tobacco. The other 23 substances were identified through studies of workers who died as a result of exposure to carcinogens on the job. The only cause of lung cancer that is not job-related is smoking. The others are work-related.

The Deputy Chairman: I mentioned paint because my husband was a body shop worker. All kinds of concerns are now being identified. However, he is no longer doing that.

Mr. Georgetti: Think about what fire fighters are exposed to when they run into a burning building. They do not know what is stored in the building. It is an enormous issue.

Senator Morin: My comments concern the corporate advantage of our health care system. While in Montreal, we met with the Conseil du patronat, an employers association that only Quebec has which represents all employers. They were criticizing our health care system. I asked about the corporate advantage. The president of the Royal Bank, as you will remember, made an important speech on that. They said that there was not one at all. They told us that when they are recruiting executives, the first thing demanded of them is private insurance to cover treatment in the U.S. As you know, insurance coverage for Canadian executives is quite extensive and expensive. You can find this information on our Web site as it was discussed it at some length. As far as they were concerned, this was no longer a corporate advantage. If they recruited people from the outside, it was fairly expensive.

I have a son who works for a corporation. He has, as part of his employment package, insurance that covers any medical treatment in the U.S. He is based in Montreal.

They state that the health care system no longer provides the advantages it did 10 years ago.

Mr. Georgetti: Do those corporations offer that American service to all their employees, or just their executives?

Senator Morin: Of course, only their executives.

Mr. Georgetti: You make my point.

The other argument is that they cannot attract executives because of our tax system. They want us to change our tax system. I wonder why we want to change our systems for non-citizens who do not want to come to our country.

Ms Sholzberg-Gray: Most of the workers in this country are not executives, they are workers. Employers have to worry about all of their employees, not only their executives, though we have had some interesting stories in the press where obviously the reverse has been true.

It seems to me that the competitive advantage is there. Look at the auto industry. We would not have as much automotive manufacturing in our country if not for the competitive advantage,which is due to our low Canadian dollar and the productivity of Canadian workers. It is also due to the fact that Canadian workers are not as expensive in terms of health insurance as American workers. More money in the United States goes into health insurance for autoworkers than components for the car. It is important to note that each Canadian employer is spending less on health insurance. If they have to spend more due to lower funding of the public health system there will be quite a difference.

Mr. Georgetti: I do not believe the explanation you received spoke to the productivity issue. They are talking about recruitment of executives.

When we have completed our independent study, we will send it to you. It looks at the effects of health care premiums on the productivity of Canadian business.

The Deputy Chairman: One of the issues that we have been confronted with as we have gone around the country is the two-tier system. Witnesses say we have a two-tier system, and it is called the Workers' Compensation Board. This is where hospitals have designated hospital beds for people on Workers' Compensation, even though other patients are lining up.

Senator Morin: They are sending their patients to private clinics.

The Deputy Chairman: That is to get them back on the job more quickly.

Senator Morin: They are operated on in private clinics.

The Deputy Chairman: How would you respond to that?

Mr. Georgetti: There are two ways I would respond to that. If they are queue-jumping and have special privileges, that is contrary to the Canada Health Act. I know that exists. The reason it exists is because of business pressure on the productivity issue. Businesses are saying that they are losing productivity because the system is not returning their injured workers to the job fast enough. We argue, of course, if you do not injure them, you will not have a problem. However, the cost of prevention is also expensive.

In my former life in British Columbia, I found that, of all the forestry companies, one had a lower number of injuries and accidents. They were spending more money on prevention, but they were not being rewarded. They were paying the same premiums. Activists have told me that company is cutting back on its prevention expenditures because they are spending more money than their competitors and not getting any reward for it.

In the current system, there is a disincentive to spend money because, if you injure your workers, a payroll tax and the tax base take care of the problem. Rather than expending money on prevention, there is a disincentive because the system picks up the slack.

Senator Morin: That was not the chairman's question. If one of your unionised workers hurts his foot on Sunday, he may wait six months for an operation, but if he hurts his foot on Monday, he is operated on the next day.

Mr. Georgetti: Are you that saying one is a workplace injury, and one is not?

Senator Morin: Yes, although his productivity is no different if he hurts his foot on Sunday rather than on Monday. He is not at work on Tuesday in both instances.

Mr. Georgetti: The pressure to put him into the system as an injured worker, comes from the employer.

Senator Morin: As a union leader, why do you accept that?

Mr. Georgetti: We do not accept it.

Senator Morin: Should we eliminate preferred treatment throughout the country for people on Workers' Compensation?

Mr. Georgetti: Absolutely. The point is, the employers put the pressure on the system because Workers' Compensation has an experience rating in it, and the longer the person is off, the higher the employer's premiums will be in the next year.

Senator Morin: I understand that. Should there not be pressure from other Canadians who are not employees to be treated as quickly as the others? Why do employers have preferential treatment in our Canadian system?

Mr. Georgetti: Perhaps you could answer that question for me.

Senator Morin: As a union representative, you are against this system.

Mr. Georgetti: We are against a system that gives anybody a leg up or preference. It should be on the basis of need, not on the basis of whether you are working or not, or whether you live in a rich or a poor neighbourhood.

The Deputy Chairman: It is interesting that you use the British Columbia example where many hospitals and private clinics are opening.

Mr. Georgetti: When I was there, the employers got a hospital to open for a night shift and they paid for the cost to treat injured workers and get them back to work. It was the union movement's protest that stopped that process.

Senator Cordy: Ms Sholzberg-Gray, will you send the information on accountability that you had to the clerk?

Ms Sholzberg-Gray: Yes, we will. We believe it is a misunderstood area. We have a description of what it means and how some of the issues need to be resolved, however we cannot just talk about accountability, we have to do it.

Senator Morin: Do you have anything on ethics?

Ms Sholzberg-Gray: We do not have very much on ethics. We have had some discussion at our board meeting, noting that it had to be part of any discussions. We talk about evidence-based approaches to decide what should be in the publicly funded Canada Health Act set list of services. We do not believe that lists work. Something that is appropriate for one person is not always appropriate for another. If there were a list of screens to determine what should be included in the Canada Health Act services, ethical decision making would have to be there as one of the screens. In other words, we have to take into account that even though the person did not pass through the first three screens, we could not, because of the nature of our society, deprive someone access to services. That has to be brought into everything we do.

Senator Morin: That is an important issue which we did not consider.

Ms Sholzberg-Gray: A lot of people do. The Catholic Health Association of Canada has done important work there. I think we should look at that work and inform ourselves of it when we make decisions as to what should and should not be in.

The Deputy Chairman: A point of clarification on your targeting of new funds to meet urgent needs. You talk about information technology and medical equipment. Did you arrive at a figure of what would be required in the system for new technologies?

Ms Sholzberg-Gray: In speaking to people who are knowledgeable in the field, we hear figures of $3 billion to $5 billion. That is why we are concerned about the federal government's investment of half a billion dollars through the new corporation that was set up. It will not resolve the issue.

People who have been involved in review commissions say that we must invest more money in information technology, and do it as soon as possible because we cannot go forward on some of the reforms that we want. I have to ask, ``What front-line care do you want to reduce today in order to invest in that information technology?''

It has to be a separate, targeted fund. We cannot take funds away from front-line care today and tell people that five or ten years from now it will be better because we will have more information.

The Deputy Chairman: It goes in lock-step.

Ms Sholzberg-Gray: Yes. You have to do both at the same time. One of the problems with this sector is that you have to continue to treat people from day-to-day in the current system while trying to move to the next one. I heard an academic at the University of Toronto, Carolyn Tuohy, note that there is not enough slack in the system to spend money on the transitional areas, on the targeted areas, that need new investment without sacrificing treatment for people and increasing the waiting lists.

Senator Cook: When you began your presentations you used the word ``sustainability.'' I have problems with what that word means across the spectrum of health care, particularly with respect to this study.

In your recommendation you recommend that we replace the Canada Health and Social Transfer by breaking it into separate envelopes for health, education and social assistance. Ms Sholzberg-Gray, you talked about going back to using the Social Union Framework Agreement. Would you comment on those two matters?

Why did we amalgamate those items, Mr. Georgetti? At one time they were separate, and then they were combined. Apparently you do not see it as working and you would like to break it apart. What would that achieve? It suggests to me that the Social Union Framework Agreement is loose and that, in fact, there are some holes. Perhaps we could tighten it up. I am having difficulty with the sustainability issue.

Ms Sholzberg-Gray: Many people are equating sustainability with affordability. In Canada a number of provincial governments claim that they cannot afford to spend 40 per cent to 55 per cent of their provincial budgets on health care because it will crowd out all of the important areas in which they need to invest. We agree that those other areas are crucial. In fact, they are crucial to the health of our nation. If you do not have an educated population, environmental expenditures or expenditures in housing and proper infrastructure, you will also not have a high health status. We would not want to crowd that out.

That all has to be put into perspective, though. One of the reasons that the program spending at those provincial levels has increased so much is that they have cut program spending in favour of tax cuts. We have to make a decision about which way we want to go — that is at the provincial level.

At the federal level, we believe that there is more room to spend money, and I have noted the ways in which we can do that. A certain number of billions of dollars per year could make up for past cuts, assure system change that will move in the right direction, and ensure access to comparable services.

As to the issue of the CHST and its murkiness, the truth is that we have had block funding since 1977. At the time it was introduced — forget about the tax cuts because that was a mistake — block funding was a good idea because it enabled provincial governments to spend money in health areas other than hospitals and physician services. That led to the development of community services, which was a good thing in the sense that they did not have to track dollars. Therefore, block funding is not bad provided it is not linked to conditions, criteria and standards, which are carefully enforced, to ensure access for Canadians.

However, the CHST might not be working because we have these arguments between the various levels of government about who is spending what, who is not spending what, who is using the money for tax cuts and who is not using the money for tax cuts; and that is why we suggest looking at other mechanisms.

I meant to include the Social Union Framework Agreement in my comments, although it is not necessarily directly related to the discussion on the CHST. We have a Canada Health Act with very specific, though not well-defined, criteria and two other important principles: no user fees and no extra billing. We could expand the publicly funded system on a national basis to include a range of other services, noting that those services all exist in the various provinces in various ways. One way to do that might be to invoke the provisions of Social Union Framework Agreement specifically where it states that, if six provinces agree to common objectives, you can have a new, shared federal-provincial program and the objectives can be reasonably loose, although they should be tight enough to ensure that Canadians have reasonably comparable access, and you do not have to include every province. It also mentions provinces that currently meet the benchmark. For instance, let us say that Manitoba has a very strong home care program that would meet the new federal objectives, then it would receive the money and use it in other areas of the health system that are in need in that province. Similarly, New Brunswick has a good acute care replacement extramural hospital program, it might use the money to build up some other part — let us say its community services that might not be as good in the home support area — provided the common objectives were agreed to.

We are suggesting that the Social Union Framework Agreement i a way to enable the federal and provincial governments to come together to do something for Canadians without having to open up the Canada Health Act right now and having to make decisions on whether all of those principles should apply to the rest of the continuum.

For example, I do not see a situation in our country where the public would agree for one minute that people could not buy home support services if they wanted to because they needed more than was provided in the publicly funded system. Yet, they are happy to accept the fact that physician and hospital services should be presented in a more restricted way. That is why we would suggest using SUFA.

Mr. Georgetti: From our perspective, the CHST was designed to mask the responsibility that the federal government used to have in terms of its transfer. We think that bringing it back to three individual programs would bring back three critical elements: control, accountability and, most importantly, transparency. Some schemes have political usefulness and this one has that. From the federal government's standpoint, in particular its relationship with the provinces, this would give it much more credibility with the Canadian public in respect of paying its share of the transfers for those areas and allowing the public to have an eye and a view to watch who is delivering on its commitment to the citizens in terms of responsibility.

I suspect that education will be next in this debate about whether we fund adequately. I watch across the country with interest what is happening in the area of our rhetorical commitment to education. The amount of money being injected is decreasing.

There should transparency so that Canadians can see exactly where their money is spent, how it comes back and where it is directed. It is nobody's fault but everybody's problem. I find that sad because rhetoric should not get in the way of making informed public policy decisions. Canadians are confused about who is paying for it and why the system is not working.

Ms Sholzberg-Gray: Sustainability sometimes means affordability. It means the kind of system we are talking about will change. The health system is sustainable if we have primary care reform, the appropriate information technology, the different ways of delivering services, services provided in the appropriate place by the appropriate provider, resolve all scope-of-practice issues, have appropriate drug utilization policies, et cetera. In other words, we have a sustainable system and we can make it affordable if we implement all of those system changes.

Forget people who think the whole solution is to privatize everything and that is that. Many people have said that we need this list of system changes. The real problem is that we keep saying we need them but we do not move to achieve them. That is the challenge. We have to do it so that we can have a sustainable system.

You cannot make straight-line projections based on today's expenditures as to what might happen 20 years from now. Twenty years ago, hospitals accounted for 45 per cent of our health budget. Today, because of new technologies, day surgery and shorter hospital stays, hospitals account for only 32 per cent. Twenty years ago we would have been wrong if we had said it would be 45 per cent today. We have to make our projections on the basis of the system change that we must implement.

The Deputy Chairman: I believe there is general confusion in the public about block funding and tax points, and we have to acknowledge that. It equates with the line in the old Abbott and Costello movie, ``Who's on First?'' I think the public is confused as to who is responsible for what.

I thank our witnesses, Mr. Georgetti and Ms Sholzberg-Gray, for their enlightening and informative presentations.

The committee continued in camera.