Trade treaties heighten privatization threat to Medicare and health care reform -- new study

July 27, 2004
Ottawa -- Trade treaty rules and proliferating health care privatization are a dangerous mixture that threatens Medicare and health care reform in Canada, warns a new study published by the Canadian Centre for Policy Alternatives.

Canada's trade treaty commitments could make health care commercialization a one-way street, not easily reversible experimentation as often assumed. Once foreign, investor-owned health care providers get established in Canada, trade treaties could require that they be compensated for future health care reforms that reduce their market share, the study concludes.

The study, entitled Bad Medicine: Trade treaties, privatization and health care reform in Canada, examines three major reports on health care reform (the Mazankowski report, the Kirby report and the Romanow report) through the lens of international trade treaty rules. "These three blueprints for health care reform define the intellectual framework for the current debate over the future of Medicare," said CCPA Research Associate Grieshaber-Otto, who co-authored the study.

"Adopting key Mazankowski and Kirby proposals would inevitably lead to greater reliance on private for-profit corporations--including foreign corporations--in the Canadian health care system. This would greatly increase the risk of trade treaty litigation against Canada," said Grieshaber-Otto. "Promoting public, non-profit delivery of core health care services, as Romanow proposes, would reduce that risk," he added.

The report discusses numerous examples of health care privatization now underway that heighten trade treaty hazards. The report contends that under trade treaties, so-called public-private partnerships (P3s) in health care are problematic: they diminish governments' regulatory ability, shift risk from investors and service providers to the public, and increase costs through potential trade fines or sanctions. "As a first step in avoiding unmanageable trade treaty risk," stated Grieshaber-Otto, "Ottawa and certain provincial governments should break their penchant for pushing P3s in health care."

Co-author Scott Sinclair, a CCPA Senior Research Fellow, observed that while the federal government has shown little reluctance in negotiating trade treaties that intrude heavily on health matters within provincial jurisdiction, it appears paralysed when it comes to enforcing the Canada Health Act. "This double standard calls into question the federal government's commitment to protecting the public, not-for-profit character of Canada's health care system," he noted. "Governments at both levels must now act decisively to reverse commercialization, before trade treaties lock it in," he stated.

The report also proposes basic changes to Canada's trade policy that are needed to safeguard Medicare from future threats. "From a trade treaty perspective, the sooner the widely-supported reforms to expand public insurance to new services such as homecare or prescription drugs occur, the better," Sinclair said. "Canada has a window of opportunity to reverse commercialisation and to expand its public health insurance system, but unless action is taken soon that window could close," he added.

To read Bad Medicine: Trade treaties, privatization and health care reform in Canada, visit our web site at: For more information or to arrange an interview, contact Kerri-Anne Finn at 613-563-1341 x306.


For more information contact Erika Shaker at 613-563-1341 x310.