(Published as a leaflet in 1996)
Canada's health care under NAFTA: Gangland takeover
by David Orchard
The assault on Canada's health care system is a direct result
of the 1989 Canada-U.S. Free Trade Agreement and its 1994 extension,
NAFTA, and was predicted by virtually all the opponents of these
agreements at the time, including opposition leaders John Turner
and Ed Broadbent.
How does the FTA (and NAFTA) impact on Canada's health care system?
Introduction of the FTA in 1989 drove the Canadian economy into
a recession. 25% of Canada's manufacturing base and 1.4 million
jobs disappeared by 1992, reducing the tax revenue of both provincial
and federal governments. These jobs have not returned.
All of Canada's health services were included in the (NA)FTA.
U.S. private health corporations received the right to establish
themselves in Canada and all levels of government in Canada are
required to treat them equally to Canadian health service providers.
To create an opening for U.S. for-profit companies Canada's public
system must be reduced and broken down. As Kevin Taft writes in
his new bestselling expose of Ralph Klein's government, Shredding
the Public Interest:
"Who would pay hundreds of dollars for a service they could get
just as quickly without a charge? If the public health care system
is working well there is almost no market for a private system.
So as a matter of survival the private system must do what it can
to prevent the public system from functioning at its best."
Under (NA)FTA U.S. corporations can now target medicare as an
"unfair subsidy" to Canadian exporters. To avoid this the federal
government is rapidly cutting transfer payments for medicare to
the provinces. For example, a U.S. automotive employer pays almost
$9,000 per year per employee for medical insurance benefits. In
Canada, because of medicare, an employer in the same field pays
only a fraction of that amount.
Mel Clark, Canada's former deputy head negotiator at GATT, explains:
"What will NAFTA do to the health care now available to every
Canadian? The harsh but realistic answer is Medicare will be replaced
by a U.S. style profit driven health care where the level of service
will be determined by a patient's credit rating."
The biggest driver of costs in Canada's health system is drugs.
The cost of drugs to the health system is now $9 billion per year
and rising -- more than the entire federal contribution! Under the
FTA, and again in NAFTA, Canada agreed to give U.S. drug companies
greater rights, protection and profits. In a 1996 speech in Ottawa,
consumer rights advocate Ralph Nader said:
"Come back now to your Bill C-91, when the U.S. drug companies,
with the help of your government, engaged in what was virtually
a gangland takeover of the Canadian drug market... In 1989, before
C-91 was passed, Canada had the lowest pharmaceutical prices in
the Western world!... The drug companies were still making lots
of money, but not as much as they could if their monopoly patents
on new drugs was extended to 20 years."
"So the multinational drug companies, with the support of the
White House, went to Prime Minister Mulroney and told him that,
if he wanted to get Canada into NAFTA, he had to scrap your compulsory
drug licensing laws which were the envy of the world. And he did..."
In 1993, the Chretien Liberals promised to renegotiate or abrogate
both the FTA and NAFTA, and swore an "unwavering... commitment to
Instead, it ratified, and then began praising NAFTA -- and dramatically
increased the Mulroney cuts to health, social programs, and all
of Canada's national infrastructure. Parliamentary hearings on Bill
C-91 at the five year mark are now under way and the current minister
of Health and his officials have declared they now can't change
the Drug Patent law because of "international trade agreements."
The agreement in question, of course, is NAFTA which his own government
ratified against the wishes of the voters.
The wholesale adoption and escalation of Mulroney's policies by
the Liberals constitutes a betrayal that all concerned and informed
citizens must challenge -- there is virtually no Parliamentary opposition
willing or capable of doing so. Both the FTA and NAFTA have a cancellation
clause allowing Canada to withdraw at any time from these agreements,
by simply giving the U.S. and Mexico 6 months notice. They not only
must but can be cancelled.
In order to be successful, the campaigns being waged against cutbacks,
downsizing, offloading and amalgamation, must also incorporate the
demand for Canada's withdrawal from the FTA and NAFTA. Otherwise,
the campaigners will end up smashing their efforts against the brick
wall of these agreements.
The head of Ontario's Health Services Restructuring Commission,
Dr. Duncan Sinclair, echoing similar statements from other provinces,
declares, "We are out of money." This mantra needs closer scrutiny.
In 1972, when NDP leader David Lewis wrote his book about corporate
welfare bums, corporations were paying 21% of government tax revenues.
By 1992, they were paying 7%. In 1991, corporate tax breaks amounted
to a staggering $90 billion dollars, more than the combined amount
spent on medicare, unemployment insurance, old age security, education,
welfare and all other social programs. Alberta, the richest province,
while leading "the cupboard is bare" chorus, has cut the funding
of most public services to the lowest level of any province in Canada.
At the same time Alberta spends more on corporate sector subsidies
than any government in Canada; the Alberta taxpayer gives out more
in corporate subsidies than is collected in all corporate income
tax by the province.
So it's a question of priorities, not of cash. Canada spends less
(11% of the GDP) on health coverage for all its citizens than the
U.S. spends (15% of its GDP) for a health system full of exemptions
which provides no coverage for 40 million people and inadequate
coverage for 30 million others.
Medicare, which Ralph Nader calls "the best health care system
in the world ‹ by far," was introduced in dirt poor Saskatchewan
in 1961. Impoverished Cuba, struggling under the crippling U.S.
embargo operates a universal health system which has achieved a
lower infant mortality rate than Canada and U.S. Thus, "lack of
money" is not an obstacle for adequate medicare for all: lack of
political will is.
The lack-of-cash cry is a cover to bring Canada down to the U.S.
level and open up our $70 billion health services market to U.S.
industry. Let's not fall for it.
David Orchard is the author
of The Fight for Canada - Four Centuries of Resistance to American
Expansionism and was runner-up to Joe Clark in the 1998 federal
Progressive Conservative leadership contest. He farms in Borden,
SK and can be reached at tel (306) 664-8443 or by e-mail at email@example.com