Jul. 11, 2021

The doconstruction of confederation – Chapter 1

It started long ago – in March, 1941 when Mackenzie King was Prime Minister. King was, among other less desirable traits, unforgiving and vengeful. He still smarted over the King-Byng affair (1926) when Governor General Julian Byng refused to grant King a request to dissolve parliament and call a general election. That was and still is the prerogative of the GG.

The Governor General is not secretary to the Prime Minister of the day.

The Secretary to the Cabinet had retired in December 1940. Governor General Sir John Buchan suffered a heart attack and died in February 1941. King saw his chance and created the dual role of Cabinet Secretary and Privy Council Clerk reporting to him. King’s excuse was that Canada was at war, and he needed the Privy Council staff to help the Cabinet get its work done.

The change was made by an Order in Council that required Royal Assent, but that was impossible with the office vacant. The constitution is clear that the Privy Council is under the command of the Governor General.

Prime ministers have long perpetuated the fiction that the federal government is superior to and above provincial governments. That is not true. The ten provinces are all sovereign states insofar as their powers under Section 92 of the Constitution are concerned. The federal government is sovereign over its powers under Section 91.

The federal government has abused its taxation powers to interfere in provincial jurisdictions for decades. The most flagrant abuses are concerning health care.

 In 1947, the social democratic premier of Saskatchewan, Tommy Douglas of the Co-operative Commonwealth Federation (CCF) established Canada’s first publicly funded hospital insurance plan. Other provinces - including British Columbia, Alberta, and Ontario, introduced their own insurance plans, with varying degrees of coverage, and varying degrees of success. 

These policy initiatives increased pressure on the federal government, flush with post-war financial resources, to buy-in to health care both for its electoral appeal and to extend public financing to provinces whose citizens did not yet have full coverage for hospital care.

The result was that the Progressive Conservative government of John Diefenbaker, introduced and passed (with all-party approval) the Hospital Insurance and Diagnostic Services Act of 1957. This shared the costs of covering hospital services. By the start date (July 1, 1958) five provinces - Newfoundland, Manitoba, Saskatchewan, Alberta, and British Columbia—had programs in place which could receive the federal funds. By January 1, 1961, when Quebec finally joined, all provinces had universal coverage for hospital care.
By this time, the Liberals, under Lester B. Pearson were in power. Following intense debate, the Pearson government introduced the Medical Care Act which was passed in 1966 by a vote of 177 to two. These two Acts established a formula whereby the federal government paid approximately 50% of approved expenditures for hospital and physician services. By 1972, all provinces and territories had complying plans. However, the fiscal arrangements were seen as both cumbersome and inflexible. By 1977, a new fiscal regimen was in place. 

Ref: https://en.wikipedia.org/wiki/Canada_Health_Act

Constitutionally, the federal government must provide health care to indigenous people, military personnel, prison inmates, consular and embassy staff. The federal government is required to build and maintain military hospitals.

The federal government has dumped its health care responsibilities on the provinces by contract. The military hospitals have been sold to the provinces. Coverage for people under federal jurisdiction is far broader than for provincial residents, so we provide superior services to federal charges while provincial residents face waiting lines for many procedures.
Worse, the federal government uses threats of reducing health care transfers to coerce provinces into accepting other federal incursions into their affairs.

When Paul Martin was federal Finance Minister in the Chretien government, he balanced the books by arbitrarily reducing federal transfers to the provinces. The provinces faced diminished incomes, but costs remained the same. It took years for the provinces to recover from the financial hit.

The federal share of health care costs diminished from 50% in 1966 to 21% in 2012 and stood at 23.5% in 2019. Government spending is dependent on whether an election is on the horizon. When an election is over, a government will make budget cuts and hope that the hurt will be forgotten by the time the next election is due.  

We remain vulnerable to arbitrary reductions in transfers considering the wild borrowing by this government over the past five years. 

We need the federal government to transfer tax points to the provinces to have stable and predictable health care income and to innovate to improve the efficiency of delivery. We must cut strings attached to federal funding.  

Another installment to follow