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Sean Speer: Ontario’s health-care reforms are a sign of Left-Right policy convergence

Commentary

The reaction to this week’s announcement from Ontario Premier Doug Ford that his government is expanding the role of private delivery within the province’s publicly-funded health-care system was swift and predictable. We heard various claims that it reflects a “purely ideological path” and a “fatal threat” to public health care that will ultimately risk lives

The real story here though isn’t the Ford government’s ideological fervour. It’s actually the growing ideological convergence—from the NDP government in British Columbia to the United Conservatives in Alberta to the Legault government in Quebec and now the Progressive Conservatives in Ontario—around the need to leverage private diagnostic and surgical capacities to address pandemic-induced backlogs in the short term and prepare for demographic pressures on health-care services over the long term. 

These governments have each come to their own pragmatic conclusion that the supply-demand quandary at the heart of Canada’s health-care woes can no longer be met merely by rationing through backlogs and waitlists. We need surge capacity

Ontario’s diagnostic and surgical backlog isn’t a new development. The government estimates that it was roughly 200,000 people even prior to the pandemic. But it increased markedly at the height of the pandemic as the province’s health-care system reallocated its capacity and resources to deal with the crisis. The province’s Financial Accountability of Office estimated in a 2021 report that it could take three years to clear the pandemic-induced backlog that resulted. 

There’s reason to believe however that these even estimates may understate the problem. Delays in diagnostic testing underplay the magnitude of incipient health-care demand. There was also a problem with self-reporting during the pandemic. The Quebec government, for instance, reported a 24-percent drop in requests to be placed on a surgical waitlist during the pandemic compared to non-pandemic years. The net result is what’s become described as an “invisible waitlist” and the “crisis behind the crisis” in the context of the pandemic. 

Provincial governments started to roll out plans to deal with these growing backlogs as early as spring 2020. The plans typically involved some combination of more public funding, expanding the number of surgeries and tests within the public system (including running MRI machines and operating rooms on evenings and weekends), and leveraging private diagnostic and surgery capacity in particular areas such as cataracts, hips, and knees. 

The Ford government’s initial plan to cut its backlogs was an outlier among the provinces for its limited use of private provision. As I wrote in a policy brief with former BC Premier Gordon Campbell in February 2022: “The provincial government’s plan essentially aims to clear these backlogs without drawing any surge capacity into the system.”

This stood in stark contrast with other provinces, including the NDP government in British Columbia which first announced its plan to leverage private delivery in May 2020. The province’s Surgical Renewal Plan specifically committed to “increase capacity at contracted private surgical clinics that agree to follow the Canada Health Act and not extra bill patients.”

It’s worth noting that this is essentially the same promise since made by the Ford government. Its press release quotes the premier himself: “Our government is taking bold action to reduce wait times for surgeries, all while ensuring Ontarians use their OHIP card to get the care they need, never their credit card.”

Notwithstanding the rhetoric from unions and left-wing academics, it’s difficult to argue that the Ford government is driven by a hard-right, anti-public health-care ideology if it’s merely matching an NDP government’s plan more than two-and-a-half years later. 

The real story may be less pleasing to ideologues and partisans, but it doesn’t make it less true. These governments with different priorities and preferences have come to the same conclusion: we need to expand health-care supply to meet demand and it would be irresponsible to forgo private diagnostic and surgical capacity solely for ideological reasons. 

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There are legitimate questions about billing, staffing, and standards between public and private delivery, but these are mostly technocratic undertakings. They can be easily solved through a combination of regulation, funding conditions, and market forces. Ontario isn’t the first jurisdiction in the world to confront these elementary questions. The government may even consult with other provinces as well as international peers on how best to introduce greater private provision without undermining the public health-care system. 

The key point though is that the lazy critique that the Ford government is comprised of right-wing dogmatists hellbent on eroding the principle of universal health care simply belies the facts. Its plan is run-of-the-mill stuff that should help to dig the province out of its pandemic-induced hole without confronting the Canada Health Act and more fundamental questions about how we finance and deliver health care in Canada on a more efficient and sustainable basis. 

Health-care reform won’t be achieved without any opposition. There are of course certain groups and voices who are committed to protecting the failing status quo due to a combination of ideology and self-interest. But the conditions for reform have never been greater and the ad hominem attacks have never been weaker. The Ford government should be lauded for its pragmatic, common-sense steps to address Ontario’s diagnostic and surgical backlog—even if just it’s borrowing from its provincial peers, including progressive ones, elsewhere in the country. 

Sean Speer: Ontario desperately needs to get back to growth

Commentary

An end-of-year news release caused a major economic story to go mostly unreported late last year. The federal government’s announcement of its major fiscal transfers to the provinces and territories for 2023-24 revealed that the Province of Ontario will receive an equalization payment for the eleventh time since the program’s launch in 1957 and the first time in five years. 

There are extenuating circumstances at play. The interaction between high inflation and the equalization program’s design (which sees its funding envelope grow in parallel with nominal GDP growth) automatically led to an increase in the program’s overall spending and an equalization entitlement for Ontario. University of Calgary economist and regular Hub contributor Trevor Tombe has written a first-rate explainer on the policy peculiarities that produced such an outcome.

But it would be wrong to totally dismiss the news as an arithmetic aberration. Just because Ontario’s fiscal capacity exceeds the national average is hardly a sign of a dynamic and robust economy. It’s notable for instance that even before accounting for resource-based revenues, the province’s fiscal capacity lags that of Alberta and British Columbia.

This trend towards a middling economy didn’t happen overnight. As co-authors and I outlined in a 2020 policy paper, Ontario’s rate of economic growth has been in secular decline for decades. Over this entire century, its annual average growth is barely 2 percent. 

Slow growth isn’t without consequence. It’s become a cumulative drag on Ontarians’ living standards including relative to its U.S. neighbours. The province’s GDP per capita (which is a good barometer of its standard of living) exceeded that of its neighbouring states like Michigan, Ohio, and Pennsylvania when I was born 40 years ago. Today Ontarians are poorer than their American peers from Warroad, Minnesota to Buffalo, New York. 

There’s a case that Ontario has in effect become the “sick man” of North America. And there’s reason to think it’s actually bound to get sicker.

RBC Economics projects that Ontario’s real GDP growth will be the worst among the provinces in 2023 and second worst in 2024. In fact, RBC anticipates that Ontario’s economy is the only one across the country that will actually contract over the coming 12 months. 

One would think that such a distinction would jolt Ontario policymakers into a pro-growth policy agenda. The province’s economy needs “shock therapy.” But it probably wouldn’t get it. 

The Ford government first came to office in 2018 with bold promises of an “open-for-business” agenda that has never quite materialized. That doesn’t mean there haven’t been any positive policy developments. Examples include: early regulatory reforms; tax reductions (including accelerated depreciation on capital investment as well as lowering business property taxes, and employer health taxes); significant investments in public infrastructure; some interesting developments on intellectual property; and Labour Minister Monte McNaughton’s ambitious agenda in the labour, skills training, and immigration portfolio.

But it’s fair to say that in overall terms the government’s record is underwhelming. Its early ambitions have mostly narrowed to an odd mix of populist economics, left-wing accommodation on COVID-19, education, and public spending, and a tendency to find itself in political controversy without the accompanying conservative reforms to show for it.

The province now finds itself at a crossroads. It’s stuck in a slow-growth cycle of sclerosis and stagnation. It’s no longer enough for the government to focus on frivolous issues. It needs to recommit itself to growth.

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The good news is that Queen’s Park already has something of a blueprint for a renewed focus on a pro-growth agenda. It just has to deliver on its own outstanding policy commitment to develop, implement, and monitor a long-term growth agenda for the province. As the 2021 provincial budget set out (italics added): 

The government will take further steps to create a more competitive environment for job creators through a plan for long‐term economic growth, informed by business leaders and entrepreneurs, workers and labour representatives, community organizations, experts and most importantly, the people of Ontario. Ontario will outline a long‐term growth plan that: 

  • articulates a clear vision for attaining higher rates of economic and productivity growth that will ultimately lead to a more prosperous provincial economy for all the people of Ontario;
  • undertakes an in‐depth analysis of the province’s competitive strengths and challenges;
  • provides goals to work towards over a five to 10‐year timeframe; and 
  • identifies initiatives that will achieve those goals.

Research tells us that such a clear, coherent, and transparent long-term growth strategy can tilt policymaking in a more pro-growth direction and mitigate some of the political economy pressures towards short-termism and special-interest policymaking. It can anchor the government’s policy agenda and enable greater alignment across ministries and policy areas.

Bringing expression to long-term growth ought to be the top priority in the lead-up to this year’s provincial budget. It’s hard to overstate how important it is that the Ford government reorients its attention to economic growth. A sustained period of economic underperformance will shift this year’s formulaic dip into equalization-receiving status into a new norm. Ontario is at risk of permanently becoming a “have-not” province.

The province’s only path back to economic health is through higher rates of productivity. There’s no other way around it. That means reckoning with its unhealthy dependence on the real estate sector, its wrong-headed emphasis on GDP growth in and of itself than rather than rising GDP per capita, and its geographical concentration of economic activity. It means in short getting back to broad-based growth.

The Ford government’s forthcoming budget therefore is a crucial moment for the province’s economic future and its own policymaking legacy. Will we get a long-term growth strategy or a smattering of “business-as-usual” policies? One should hope for the former but anticipate the latter.