NAFTA and GATS Undermine Canada's Health Care System

MAIN ARTICLE: INEQUALITY AND HEALTH

Gautam Dutta

Amidst growing concerns (at least some of which seem justified) among the Canadian public about whether their health care system will be there for them if and when they need it, the Government of Alberta has again fanned into flame the smouldering issue of the role of the private sector in Canada's health care system. Premier Klein's proposal, declared on November 17, 1999, introducing legislation allowing private, for-profit facilities to offer over-night care, has raised the spectre of a parallel private hospital system potentially undermining Medicare. The provincial government argues, to the contrary, that private facilities will be under contract to the Regional Health Authorities, and will be reimbursed for all insured services through the public Medicare program.

The Alberta proposal risks undermining Medicare across the whole country by exposing it to the full force of the "liberalizing" thrust of current international trade agreements. Both the North American Free Trade Agreement (NAFTA) and the General Agreement on Trade in Services (GATS) of the World Trade Organization have as their over-riding objective the removal of all barriers to international trade in goods and services in any form, including health care services, and correspondingly the reduction of the jurisdiction and powers of national governments.

The Alberta government has previously imposed radical funding cuts onto the public system. Between 1992 and 1995, Alberta cut provincial government spending (per capita) on hospitals by 30%, from $874 to $614. Moreover, relative to provincial GDP, the Alberta government's expenditure on hospitals was, in 1999, estimated to be 22.4% below the national average (2.01% vs. 2.59%) (Canadian Institute for Health Information, 1999). Appleton, for example, concludes that NAFTA "irreversibly protect[s] the trend towards private health care, while eroding the ability of governments to reverse this trend." (1999, p.87).

The Canadian government favours a broad interpretation of the terms "social service" and "public purpose," thus ensuring a continued wide scope for public policy. But as of 1995 the U.S. Office of the Trade Representative "[held] that where commercial services existed, that sector no longer constituted a social service for a public purpose." (ibid. p.96).

Two major points emerge from NAFTA that are reiterated and reinforced in GATS. First, all sectors that are not explicitly and exclusively reserved for public action are to be open to international trade and competition, if not immediately, then as soon as possible. Second, this opening is a one way process. Under NAFTA, for example, if a government chooses to enter a new field of activity, or return to one previously vacated, it incurs potentially prohibitive penalties in the form of compensation to any commercial interest that can claim lost business opportunities. These rivers are all flowing toward international waters. And Canadian governments are not salmon.

(Adapted from the article "Private Highway, One-Way Street: The Decline and Fall of Canadian Medicare?" Robert G. Evans, Morris L. Barer, Steven Lewis, Michael Rachlis, Greg L. Stoddart. Published by The Centre for Health Services and Policy Research, March, 2000).


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