Canadian health care system shows little improvement despite extra $36 billion in federal transfers since 1997

    VANCOUVER, March 13 /CNW/ - The federal government has provided provinces
with an extra $36 billion in transfers for health care since 1997, yet
Canada's health care system is in worse shape now than it was 10 years ago,
according to a new report from independent research organization The Fraser
    "Repeatedly we hear calls for the federal government to increase funding
to the provinces for health care. Yet here is empirical evidence showing we
have tried that and it's not working. Clearly, it's time for Canada to start
looking at other options to improve health care," said Nadeem Esmail, The
Fraser Institute's Director of Health System Performance and co-author of
Federal Health Cash Transfers to the Provinces: Expensive and Ineffective.
    "Since 1997, Ottawa has increased transfers to the provinces for health
care by nearly 13 per cent per year - well in excess of what was required to
account for population growth and inflation. With a new budget on the horizon,
the federal government seems prepared to further increase transfers despite
having no evidence that we're getting value for our money," added Jason
Clemens, The Fraser Institute's Director of Fiscal Studies and co-author of
the report.
    Federal Health Transfers to the Provinces looks at changes to federal
cash transfers to the provinces for health care spending since 1980, finding
that transfers began increasing significantly in 1998. It then examines a
series of indicators showing the performance of Canada's health-care system in
1997 and compares current performance to determine if any changes have
    Between 1980 and 1997, federal transfers for health care spending were
relatively stable. But the report found that fiscal year 1997/98 represents an
important turning point. Between 1988/89 and 1997/98, the average annual
growth rate in federal health care transfers was 1.4 per cent. But starting in
1997/98, it balloons to 12.9 per cent. The report notes that an increase of
just 3.1 per cent would have been required to keep pace with population growth
and inflation.
    In total, the federal government has provided the provinces with
$234.5 billion in cash transfers for health since 1980/81, but more than half
that amount - $115.7 billion - has come since 1997/98.
    "With almost 10 years of successive increases in federal health care
transfers and given that Canada's health care program is the second most
expensive universal access program in the developed world, you would expect we
would have one of the world's premier health care systems. But by almost all
measures, the extra funding has not produced the sort of improvements and
results one would expect," Esmail said.
    The report compared Canadian health performance in 1997 with current
performance and found some disturbing results.
    Wait times for health care in Canada have increased significantly since
1997 when the average Canadian could expect to wait 11.9 weeks from the time
of a referral from a General Practitioner to the time a specialist delivered
the treatment required. In 2006, the average Canadian could expect to wait
17.8 weeks, nearly 50 per cent longer.
    The increase in the total wait time for treatment was the result of a
72.5 per cent increase in the wait time to see a specialist after referral by
a general practitioner and a 32.4 per cent increase in the wait time to
receive treatment after an appointment with a specialist.
    One of the most stunning examples of how additional funding has not
resulted in better care is found in access to MRI and CT scanner technology.
New investments were made in these technologies that increased their
availability. But despite increased availability, Canadians did not experience
shorter wait times for scans in 2006 than in 1997. The wait time for a CT scan
increased from 4.1 weeks to 4.3 weeks between 1997 and 2006 while the wait
time for an MRI scan went from 9.6 weeks in 1997 to 10.3 weeks in 2006.
    "The federal government increased federal cash transfers for health care
by a staggering $36 billion since 1997 and what do we have to show for it?
Given that the overwhelming evidence shows we're actually worse off today than
we were 10 years ago, you have to wonder about the wisdom of throwing more
money at the system before considering other more effective options," Clemens

    The Fraser Institute is an independent research and educational
organization based in Canada. Its mission is to measure, study, and
communicate the impact of competitive markets and government intervention on
the welfare of individuals. To protect the Institute's independence, it does
not accept grants from governments or contracts for research. Visit

For further information:

For further information: Nadeem Esmail, Director of Health System
Performance Studies, The Fraser Institute, Tel. (403) 216-7175 ext: 222,
Email:; Jason Clemens, Director of Fiscal Studies,
The Fraser Institute, Tel. (604) 714-4544, Email:;
Dean Pelkey, Associate Director of Communications, The Fraser Institute, Tel:
(604) 714-4582, Email

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