The Logic Behind the Conservatives’ Plan for Healthcare Transfers

Julian Wolfe
December 24th, 2011

Federal Finance Minister Jim Flaherty, right, speaks to Bank of Canada governor Mark Carney prior to to a provincial, territorial and federal finance ministers meeting in Victoria Monday.
The Conservatives have announced that cuts will be made to healthcare and let’s face it, it had to happen sooner or later. While the Conservative approach may be against that of the Canadian will and may also align with a stern ideological aspect, the economic logic makes sense.

We are spending a lot of money in healthcare, more so than ever, and will be paying a lot more in about 5 years time. The cost of healthcare is growing faster than the rate of economic growth which if you’re good at math means that the two lines will eventually intersect and lead to a cost over-run that is simply unsustainable and leads to a harsh structural deficit. Now we know that a structural deficit is bad because it means that no matter how well Canada is performing it will always be paying more than it can generate and the debt to GDP ratio will rise and interest payments will increase with every added dollar to debt and eventually we find a Canada that is imploding and in economic chaos. This is strictly based on numbers and numbers don’t lie, draw the two graphs, one with a rate of change of 3 and one with a rate of change of 6, they will certainly intersect and the one with the bigger slope will dominate therein.

We have spent a lot of money into healthcare and as I discussed in a previous article. all we have been doing is turning the tap on a broken hose, waiting for better results and being let down. The system is inefficient and broken and needs change.

The provincial finance ministers may be crying crocodile tears over Harper’s ruling to pair financial funding with economic strength, but this funding scheme is necessary. Even if we scrap everything but healthcare and put all of our resources into healthcare we will still have a lousy system and an eventual budgetary overrun.

By 2019, the federal government will be paying $38 billion, up from $19 billion this year, into the healthcare system. For years, money has been pumped through and how has medical serviced improved for you? Dismally.

The NDP are putting their foot down to the cuts proving simply how illogical and how ineffective their financial methods would be. They claim that even though the economy is only growing at 3% at best, the country should be spending twice as much into healthcare and make the 6% annual increases permanent. Incrementally increase the pressure of the broken hose and tell me at what rate will we see improvement for all of that wasted money.

The NDP would raise taxes which means that you and I would be paying more for a broken system and they believe that the solution to everything is to throw money at it which is simply illogical and irresponsible.

Canada needs healthcare reform, reforms that will tailor services to meet demographic needs, reforms that will slice through administrative and bureaucratic fat in the system, new wings should be for patients, not for bureaucrats! Canadian doctors are among the best paid in the world now, increasing their salary is too much of a burden. It is important that patients have more control over their records and that an online system is created.

We must have this discussion, a discussion the NDP doesn’t want to make. The NDP would have you paying much higher taxes and create new spending that is unsustainable and reckless all in the name of their 1900’s ideology.

While the Conservatives may be fundamentally wrong about their take it or leave it approach and while they may be wrong about leaving provinces to figure it all out themselves – which has obviously failed since it is a provincial jurisdiction anyways, but in terms of the logistics of the sustainability of the healthcare system, they are spot on, we cannot afford annual 6% increases in spending, especially not if the increases that we’ve already made didn’t work at all.

“Stephen Harper says we have to slash stable increases to our healthcare funding – but let his wealthy friends keep their tax breaks,” Brian Topp, an NDP leadership candidate who has set out a bold plan to raise everyone’s taxes for his party’s ideology writes. “I think he’s dead wrong.”


The increases are not stable, and never will be because our growth is not more than 6%, and if you think that making growth 6% with tax increases will help the situation, perhaps you should call a plumber to replace the hose for you as you will continue to turn the faucet and get dismal results.

Anyone who believes in the pubic system must wake up and get ready to make reforms because once the system implodes, the public system will be privatized to keep the country afloat. By finding new ways of approaching healthcare, including providing resources for home care, specializing clinics for certain needs and setting new guidelines and cutting administration, the cost of Canadian healthcare can be greatly diminished and the money that does get invested in the system will actually flow through the system properly and not get leaked out to several waste points, and this is how you build and sustain a strong public healthcare system that should put quality first.

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   Categories: Conservative, Economy, Healthcare, NDP

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