Federalism is a legal term and its existence is based on the constitution (Richer, 2007)). For many people, federalism may be defined in terms of the division of power or authority based on territory or geography rather than function (Bakvis, 2015). Through the help of the Canadian constitution, which is also known as the premier political institution, power is divided between the federal government and the provincial government. As a result, these two autonomous levels of government are provided with their own constitutional power and jurisdictions. Federalism aims to enhance the sense of unity without being strictly unified. However, despite this unity, one of the critical issues of Canadian federalism has been the delivery of some policies such as health care. These issues and conflicts are seen to have risen mainly due to federal financing and support. Moreover, despite the tensioned animosity, Canada has been able to endorse nationwide health policy for its residents and citizens as a whole. This paper however, aims to highlight the relationship between the two levels of government in relation to the making of healthcare policy as well as the conflicts that have arisen over spending and policies.
To begin with, health care in Canada is funded and administered by the provincial and territorial government as stated in the Canadian constitution (Johnson et al., 2012). In light of this, the provinces have the jurisdiction over the establishment and management of hospitals, asylums and eleemosynary institutions in and for the province (Vayda et al., 1984). However, over the course of time, the courts extended provincial authority to other areas of health care delivery including insurance regulation, the distribution of prescription drugs and the training, licensing and terms of employment for health care professional, such as doctors and nurses (Makarenko, 2008). Nevertheless, while the provinces have been given majority authority over the establishment of health facilities, the federal government also has power, which enables it play, an important role in the development and implementation of the health care policy. Firstly, the most important power of the federal government is its spending power. With this, the federal government gets the opportunity to place conditions on funds been transferred to the provinces. Also, the federal government is responsible for health care delivery to certain groups of Canada such as the First Nations peoples on reserves, refugee protection claimants and serving members and veterans of the Canadian forces (Johnson et el., 2012). Alongside, they also have the authority to legislate in the remaining areas, which were not assigned to the provincial government such as the marine hospitals and also legislate in areas outside its normal control in times of a national emergency such as a widespread epidemic (Maple web, 2008). Through this, the federal government is allowed to take over nationwide healthcare only temporarily until the issue is resolved.
Moreover, in the 19th century, healthcare was considered to be a local and private matter rather than a governmental responsibility (Rocher et al., 2002). Through this, doctors and surgeons operated privately whiles Canadian individuals paid for their medical services. However, by 1947, Tommy Douglas, the premier of Saskatchewan in conjunction with his government paved the way for the first universal hospital. In light of this, the federal government became involved through the passage of the Hospital Insurance and Diagnostic Services Act. With this act, it was the intention of the federal government to finance 50% of the cost of provincial health care and publicly funded hospital care plans in all provinces (Johnson et al., 2012). In 1966, the federal government introduced the Medical Care Act (Medicare), which committed the federal government to sharing cost with the provinces for all health care services. However, in order to get this funding, provinces have to meet a certain criteria. This act commenced the tension between the provincial government and the federal government. Medicare required all provinces provide coverage for all medically necessary services rendered by medical professionals and provide portability of residents when outside of the province.
In all of this, it is fair to say that funding and federalism had a significant influence on health care in Canada. The period between the 1950’s and the 1970’s saw tensions between these levels of government mainly due to federal funding. This was mainly because the federal government pulled from its initial commitment to cover 50% of what the provinces spent. Another factor that increased animosity was the fact the federal enforcement of federal criteria on how the provinces could operate their health plans (Makarenko, 2008). While the introduction of Medicare committed the federal government to paying 50% of the health care cost, they became concerned over the rapidly increasing costs of social services. As a result, the federal government altered the nature of funding for health care. They announced they would no longer pay the costs they committed to. Instead, they would increase funding to the provinces by a certain percentage – which would not necessarily cover the cost of their initial agreement (Makarenko, 2008). This was not the only time the federal government pulled out of their commitment. In 1980’s and 1990’s, due to the efforts of the federal government to control rising budget deficit, they had to reduce their funds to their provinces one more time. This reduction introduced the Canada Health and Social Transfer (CHST). With the CHST, the funding received from the federal government was merged into one block grant with conditions on how to spend the money. Under the CHST, not only were provinces faced with reductions in these federal transfers, but also there was a reliance on tax points, which posed challenges (Makarenko, 2008). The provinces were required to bear an increased share of the costs for social programs such as Medicare. This action worsened the relationship between the two levels of government because the federal government was not contributing its fair share to the public health care system.
On the other hand, these reductions of funds led to the provinces using controversial measures such as user fees and extra billing (Makarenko, 2008). User fees refer to the charges a patient is billed for specific medical services such as a hospital visit and extra billing however refers to a practice where doctors charge patients fees for services in addition to seeking reimbursement for the provision of those services from the provincial government (Makarenko, 2008). This act led to the federal government intruding the Canada Health Act which laid out conditions that the provinces would have follow in order to receive health care funds. Under this Act, the provinces had to end extra billing and user fees and rather employ the use of a five basic criteria, which was supposed to be helpful for provincial health care services. These criteria stated that health plans must be: public administered, universal (to cover all), portable so as to be used in other areas, comprehensive and accessible to all. According to the federal government the Act was an important instrument to maintaining certain standards in health care.
Besides, after some time, there was the first significant change in health care plans. Under the Social Union Framework Agreement (SUFA), the provinces agreed to eliminate policies that constrained social programs for migrants. Also, the government of Canada agreed to a multi billion-dollar increase in transfers to the provinces. This increase was intended to lessen the financial burden on the provinces. Another important development to the health care was the Royal Commission on the Future of Health Care. Their mandate was to recommend measures for reform. Firstly, there was a recommendation that Canada should continue to pursue a public health care system where both covered the cost of medical services
In all, in as much as federalism aims to unite a country, there are some policies and implementation process that cause a lot of controversy between the two levels of government. However, we see that with the Canadian health policy, factors like funding contributed greatly to the outcome of the policy.