Flaherty urges U.S. to ensure health care competition
Janet Whitman, Financial Post
Published: Monday, March 15, 2010
“I would hope that any country looking at the Canadian system would make sure that they include in their system an element of competition,” said Finance Minister Jim Flaherty Monday.
NEW YORK – As U.S. lawmakers struggle with the overhaul of America's pricey health care system, Canada's top finance official is offering a prescription: keep it competitive.
"I would hope that any country looking at the Canadian system would make sure that they include in their system an element of competition," said Finance Minister Jim Flaherty, who was in New York Monday to give a speech touting Canada's sound financial health. "I think that makes a big difference in terms of controlling costs."
Contrary to popular belief, Canada doesn't have completely government-funded health care, said Mr. Flaherty, who waded into the U.S. health care debate in response a question from the audience at the luncheon event hosted by the Canadian Association of New York.
Instead, about one-third of Canada's annual health care bill, including things, for example, such as most laboratory services, is covered by private funds, he said. "It's not 100% government."
While Canada offers wonderful acute care coverage, the downside is people might have to wait longer for less urgent care like a hip replacement and the system is expensive - and keeping costs under control in Canada is getting more challenging, he said.
Asked later by reporters whether Canada's health care system needs more competition, Mr. Flaherty declined to comment, except to quip, "I'm not the health minister."
He joked during the Q&A with the audience that in his previous job as Minister of Finance for Ontario, he might as well have been Minister of Health because health care is such a huge part of the budget for provinces, accounting for between 38% and 43% overall.
He said the federal government picks up about one-third of the tab.
Mr. Flaherty, who became Finance Minister in 2006 in Prime Minister Stephen Harper's newly elected Conservative cabinet, said besides Canada's financial strength, he's also been fielding lots of questions from U.S. lawmakers about Canada's health care system as he has travelled in the United States.
Barack Obama, the U.S. president, was in Ohio Monday to try to build support for an overhaul of the U.S. health care as it appears uncertain whether the legislation will garner enough votes to get passed. Without some reform, America's health care costs, already the most expensive in the world, are expected to spiral out of control over the next several years.
Mr. Flaherty - who spoke to an audience largely made up of U.S. investors and businesses with interests in Canada as well as people following the Group of Seven meetings and financial reform - said Canada is in good financial shape compared with most other countries.
"We think the economic recovery is showing good signs, but it is still fragile," he said. "We are going to continue to run a deficit and stimulate the economy."
After the stimulus ends, he expects the country to be close to balancing its budget in 2014-15.
He reiterated Canada's aim to have the lowest corporate tax rate in the G7, at 25% by 2012-13.
Mr. Flaherty said Canada is in favour of certain financial reforms, such as putting a cap on the amount of leverage financial firms can use to ramp up their profits.
But the country is opposed to moves by some countries, particularly in Europe, to impose a global tax on transactions and deals by banks. He said Canada wouldn't impose a tax on its banks and is hoping to convince other countries to do the same.
"We are against raising taxes period," Mr. Flaherty said. "The ideas that are being supported by some in Europe about capital taxes and taxes on financial transactions are mistaken. Canada will not follow that course. I expect that the United States would also not follow that course."
The Finance Minister is scheduled to arrive in London Tuesday to address the Canada-U.K. Chamber of Commerce and meet with Chancellor of the Exchequer Alistair Darling and Shadow Chancellor of the Exchequer George Osborne.
