Home Business Chrétien’s 1990s welfare cuts ‘a blueprint’ for health-care reform, says Fraser Institute

Chrétien’s 1990s welfare cuts ‘a blueprint’ for health-care reform, says Fraser Institute

Conservative think tank chooses a Liberal government’s strategy as an example to emulate

Fundamental reform of Canada’s health care system should start by following the example of changes made in the 1990s when former Prime Minister Jean Chrétien’s Liberal government removed strings attached to federal welfare funding and the provinces got more flexibility and autonomy, concludes a new study released last week by the Fraser Institute.

Canada poor to moderate

“COVID-19 has exacerbated two of the most important ongoing public policy challenges facing Canada: the deterioration of government finances and the comparative underperformance of our health care system,” said Ben Eisen, senior fellow at the Fraser Institute.

The co-author of ‘Less Ottawa, More Province, 2021: How Decentralized Federalism Is Key to Health Care Reform’ noted in his study that despite high spending levels in Canada, compared to other universal health care countries, this country’s performance has been poor to moderate on most measures.

Reforming health care

According to the institute, Canada ranks fifth-highest out of 28 universal health care countries examined in terms of age-adjusted health care expenditures per capita, as well as 26th for physicians, 14th for nurses, 25th for acute care beds, and 24th for psychiatric care beds per thousand population on an age-adjusted basis.

Despite the institute’s well-known politically-conservative leaning (it does not accept grants from governments), its study highlighted successes emerging from the Liberal Party of Canada’s Chrétien-era welfare reforms, which the Fraser Institute claims are providing a blueprint for health-care reforms today.

Welfare budgets were high

The Fraser Institute notes that in 1994, more than 10 per cent of Canadians – over 3.1 million people – were on welfare, and it was at that time consuming large portions of provincial budgets. So, as part of its deficit reduction plan, the federal government cut federal welfare transfers to the provinces while also eliminating most strings attached to the funding, thus spurring innovation and reform by the individual provinces.

The institute goes on to note that as reforms were subsequently introduced by the provinces, particularly programs like workfare and limiting benefits periods for employable people, the proportion of Canadians on welfare dropped to less than five per cent, while welfare spending as a share of provincial program spending had dropped to less than four per cent by 2008.

Chrétien still active

“Cutting the strings attached to the health-care transfers from Ottawa – as the Chrétien government did with welfare – while maintaining the principles of universality and portability, would free the provinces to experiment and reform health-care delivery and financing,” suggested Eisen.

For his own part, Jean Chrétien, who served as Prime Minister from 1993 to 2003 and is now 87, is still partly active from the sidelines in Canadian politics, commenting to journalists who seek him out from time to time for reactions to the current Trudeau Liberal government’s policies and actions.

Critical of Trudeau Liberals

In a televised interview with CBC TV last weekend, Chrétien said the government should have moved earlier to resolve the issue of the detention of Canadians Michael Kovrig and Michael Spavor who were kept under arrest in China for three years and were tried and found guilty of espionage.

“They should have moved earlier,” he said regarding the Trudeau government’s handling of the situation. Chrétien’s comments came as he was in the midst of promoting a new book, My Stories, My Times, Vol. 2, in which he contends, among other things, that the standoff with China was a political problem and not a legal one.

Says China has changed

On the other hand, Chrétien acknowledged that China had changed since the time he led Canada and this played a role in the Trudeau government’s reaction to the crisis.

Welfare spending by provinces dropped to less than four per cent by 2008 after the federal cuts, says the institute

“We had disagreements, but now they have become a power, and they’re playing as a power,” he said.

He suggested that the Trudeau government might have done better with China had it reached out to the older generation of Liberals like himself for advice, while insisting he wasn’t passing judgment on the current government’s way of doing things.