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Or sign-in if you have an account.Ottawa’s threats of financial penalties and political fallout hold the provinces back from useful health care reforms. Photo by Marvin Samuel Tolentino Pineda/Getty ImagesWhatever their level of co-operation may be in other policy areas, Alberta and Ottawa are clearly working at cross purposes on health care. Premier Danielle Smith’s government wants to allow more private participation in Alberta’s health care system. In response, the Carney government has said it will be the “guardian” of the Canada Health Act (CHA) — thus demonstrating precisely what’s wrong with the federal-provincial health care relationship.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe Smith government is currently working on policy changes that will allow Albertans to purchase non-urgent health care services privately — as is allowed in Quebec and every other country in the developed world that offers universal health care. The new policies will also allow doctors working in the government system to see patients privately — again, as in the vast majority of universal health care countries.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againOutside Canada there would be nothing controversial or unusual about what Alberta is planning. And for good reason. A private alternative improves the performance of the government system by expanding access to services and encouraging better performance through competition. When the government prevents private providers from delivering timelier, more patient-focused care, that reduces the incentive to do so anywhere else in the system. And allowing physicians to work in both public and private settings expands the volume of care over and above what’s currently provided in the often-restricted government system.So where does Ottawa fit in?For Alberta to receive its full federal health care cash transfer, the Smith government must adhere to the federal template for health care laid out in the CHA. In practice, this means ensuring Ottawa approves Alberta’s policy reforms. If it doesn’t, but Alberta follows through anyway, the feds may withhold health care transfers. That’s no empty threat. Between 2014-15 and 2023-24, Ottawa cut $267 million in transfers from provinces that did not fully comply with its reading of the CHA. Provinces that then fell back in line were reimbursed $195 million of those penalties.Although the penalties represented only a small fraction of total federal health care transfers, over this period no province dared enact any large-scale reform — e.g., a competitive, universal health insurance market — that could have run afoul of the CHA.Combined with the potential political consequences of being branded a violator of the CHA, the punitive withholding of transfers is a powerful disincentive for provincial governments to innovate and reform, even if reform involves nothing more than copying other universal health care countries whose systems routinely out-perform Canada on many key indicators, including wait times.Rather than being the “guardian” of the CHA maybe Ottawa should take a page from its own playbook. In the 1990s, facing serious debt and deficit problems, the Chrétien government reduced its transfers for welfare and allowed provinces more flexibility in policy-making. The policy innovations that followed reduced welfare dependency and government spending on social assistance, with savings for taxpayers. When Ottawa stepped back and allowed the provinces to vary policy to their unique circumstances, Canadians got improved outcomes for fewer dollars.We need that same approach in health care today. So long as provinces maintain the foundational principle of universality, a reformed CHA should allow them to explore alternate policy approaches. And it should hold nominal-dollar cash transfers for health care constant, thus gradually reducing their real value, or even reduce or eliminate them entirely while at the same time reducing federal taxes. That would give provinces greater freedom to pursue whatever health care reforms they think are in the best interests of their residents, while at the same time helping Ottawa address its worsening debt and deficit problems.Ottawa’s threats of financial penalties and political fallout hold the provinces back from useful reforms. It should stop being a “guardian” of the failed status quo and instead make room for the provinces to fix their underperforming health care systems.Nadeem Esmail and Mackenzie Moir are analysts at the Fraser Institute. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.