I'm going to call this meeting to order.
Let me begin by saying that it's great to see the entire team and all our colleagues. I hope you had an enjoyable summer and got the chance to be with family and friends and meet with your constituents throughout the summer.
I may be a little biased, but I was just saying to the clerk and others that we're probably the hardest-working committee on the Hill. You should pat yourselves on the back for the number of meetings we had—60-plus meetings—in the last session, and I know we're going to have a very busy session this time.
Welcome to meeting number 57 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 108(2), the committee is meeting to discuss the current state of fiscal federalism in Canada.
Today's meeting is taking place in a hybrid format. Pursuant to the House order of November 25, 2021, members are attending in person in the room and remotely using the Zoom application.
I'd like to make a few comments for the benefit of the witnesses and members.
Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. For interpretation for those on Zoom, you have the choice, at the bottom of your screen, of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.
I will remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.
Go ahead, Mr. Beech.
Good afternoon, honourable members. Thank you so much for this invitation.
I'm delighted to have this opportunity to share a new idea with you, a proposal for a new federal institution that, I believe, speaks to the challenges of fiscal federalism in the context of the climate crisis and the urgent need to transition our economy.
I am joining you from the unceded territories of the Musqueam, Squamish and Tsleil-Waututh nations, otherwise known as Vancouver.
As noted, I am the team lead with the Climate Emergency Unit. I'm also the author of the book A Good War: Mobilizing Canada for the Climate Emergency, which I believe most of you have received, because prior to the last election, an enthusiastic reader from Kingston purchased and delivered a copy to every sitting MP.
My book is structured around the lessons drawn from Canada's historic mobilization during the Second World War—an earlier existential threat—and applies those lessons to the climate emergency. Of course, that earlier mobilization in the face of fascism 80 years ago also had to navigate political differences, the challenges of Canadian Confederation and extraordinary financial challenges, and retool the economy—twice, in fact—and an entire workforce needed to be recruited and trained up. Indeed, as challenging as the transition we now face to tackle the climate crisis is, arguably the task we undertook then was greater.
The comparison is imperfect, of course, but I draw hope and inspiration from this historic reminder as we again face the need to retool our economy, as we again face a civilizational threat, and as the future of our children and grandchildren is once again profoundly put at risk. The World War II story provides a reminder of the extraordinary transformation we're capable of as we rise to this task of our lives.
MP Daniel Blaikie, as I understand, asked for me to be invited here today. In particular, he wanted me to share an idea from the book that speaks to fiscal federalism at this historic moment, and that is the idea for a new federal transfer, which I call “the climate emergency just transition transfer”. I provided the clerk with a short policy brief of the idea yesterday for distribution to you, but it probably still needs to be translated.
I should say that the idea for this new transfer came out of a discussion with the president of the Alberta Federation of Labour, Gil McGowan, when I was interviewing him for my book. He was rightly making the case that Confederation needs to recognize and appreciate that certain regions of Canada—notably the oil-producing provinces—have more heavy lifting to do when it comes to energy and economic transition in the face of the climate crisis. What we believe is an innovative solution emerged from that discussion.
First of all, why do we need a new transfer? At the Climate Emergency Unit, we talk about the six markers of emergency, the key policy indicators that a government is genuinely in emergency mode. The first two of those markers are that, one, it spends what it takes to win and, two, it creates new economic institutions to get the job done. A third marker relevant to this topic is a commitment to leave no one behind.
The problem is that while the federal government has started to take some meaningful climate action, it's not yet hitting those markers. We're still trying to incentivize our way to victory, and I fear it will not work. We are not on a path to bending our GHG emissions curve at the pace and pitch required. We're not spending what it takes to win. We're not creating new transformative institutions to get this job done. And, frustratingly, we have yet to make a compelling counter-offer to the thousands of people understandably anxious about what this transition means for their jobs and their livelihoods.
In the face of the climate emergency, Canada needs to make an audacious and hopeful offer to those workers and communities whose employment and economic security are currently tied to the fossil fuel industry, or, to a lesser extent, the traditional auto industry, or steel and concrete, or the agriculture industry, all of which face substantial transition challenges, and to indigenous communities on the front lines of fossil fuel extraction.
As many have argued, and as is promised by the current federal government, we need a just transition act, but we also need this act to be paired with and backed up by a substantial investment in the jobs of the future so that the promise of just transition isn't a hollow one.
I believe a new federal climate emergency just transition transfer could be specifically linked to funding climate infrastructure projects that would create thousands of jobs, along with training and apprenticeships. Such a transfer could be a mechanism to renew Confederation while rising to the climate crisis.
The transfer should mean that as we embark on this grand transformation, we would be able to say this to thousands who currently work in the fossil fuel industry: “None of you will be out of work. We need your help to meet this moment. Your skills and strength will be deployed in building renewable energy projects, retrofitting buildings, building high-speed rail and public transit, renewing existing infrastructure to make it more resilient to extreme weather, and managing our forest to reduce wildfire risks in the years to come.”
How should this be structured? I believe the new transfer should be at least $25 billion a year, representing about 1% of Canada's GDP. It could and should fund much of the climate infrastructure needed in the coming years. The transfer would speak to a climate confederation conundrum, which is that most of the climate infrastructure needed logically comes under provincial, municipal or indigenous jurisdiction—energy, transit, housing—but it's the federal government that has the greatest capacity to pay.
Two features of the transfer would distinguish it from most other federal transfers. The first is that, unlike most transfers that allocate funding based on population, this transfer could distribute based on a formula linked to recent GHG emissions in each province, but fixed from that point forward so as not to perversely incentivize rising GHGs. Doing so would recognize that jurisdictions like Alberta, Saskatchewan and Newfoundland and Labrador face a more challenging task to transition their local economies. For example, Alberta, which currently produces 38% of Canada's GHG emissions, would receive 38% of the transfer money, quite a lot more than its share of the population.
The second distinguishing feature is that, rather than this transfer money being handed over to provincial governments, the funds would go to newly established just transition agencies, one in each province and territory, jointly governed by the federal government, by provincial, territorial and local governments, and by indigenous nations from each province, and with civil society representatives also on the boards. This would ensure that the transfer money isn't simply absorbed into provincial budgets or used to displace other infrastructure or training funds. It would ensure that the money is used for its intended purpose.
There are already models of joint governance structures like this in Canada, such as the port authorities. It may be that a separate transfer should be made directly to indigenous communities, but the benefit of structuring the transfer around local agencies like this is that it provides assurance that the projects undertaken are sensitive to the realities and needs of each locale. Each province and jurisdiction has a different GHG profile and its own local labour market and training needs. This model would allow for those differences.
There is a long list of worthwhile projects that a transfer like this could fund. The key is that the transfer would represent real dollars for actual transition and new jobs, not vague assurances and the historical false promises of just transition. An innovation like this could be a linchpin within an overall transition plan that is fair and just.
Thanks. I'd be happy to take your questions.
First of all, thank you for your comments and your words. I share your urgency.
I don't see another whole country hitting the six markers of emergency that I describe, although at the municipal level, there are places that are.
There are certainly countries, even within the G7, that are doing substantially better than we are. I would note that the two G7 countries that have made the most progress on reducing emissions are the U.K. and Germany. Much of that has been under conservative governments that haven't made climate into the wedge issue that it's too often made here.
In the case of the U.K., which is the best performer when it comes to lowering emissions, a big piece of that relevant to the work of your committee is the introduction of carbon budgets—going back some years now—where they have rolling five-year carbon budgets that decline over time. There is also an independent oversight committee, which ensures that the whole mechanics of government is meeting that goal.
Think about the work that your committee does now on the fiscal front. Your committee tours the country and solicits input. You meet with provincial governments. We have a Treasury Board that makes sure governments stay within their budgets. We have a Parliamentary Budget Officer who tries to inform all of this with the best evidence-based projections. That's what we need for climate, too, in order to vigorously drive down those emissions.
As some colleagues have mentioned already, it's nice to see everybody.
I say a big thank you to the staff who have reassembled here.
Thank you to Mr. Klein for appearing today and getting grilled by the committee for an hour, which, I'm sure, is a peculiar kind of pleasure.
I want to come back to some of the discussion that Mr. Lawrence started around the economy. He said that wealth is generated by real production and the production of real things in the economy, which I would agree with. He might find some disagreement, particularly by proponents of Bitcoin and other cryptocurrency, who are big on value that is not rooted in the real economy or real production, but purely speculative. He may want to check in if he knows anyone who's big on that and how they feel about his statement.
Of course, the other thing that is critical to the economy is demand. You've talked already about some of the progress the other G7 countries have made in reducing their emissions. They're projecting further emissions reductions, which means a reduction in demand over time from the folks we hear some in the House say we should be selling our oil and gas to, particularly in this time.
Do you want to speak a bit about what it means for Canada in this moment to be structuring its economy to meet what may be transitory demand and ultimately going to where our allies are moving away from? What kinds of real production and value can Canada use to produce wealth for all of us by going where the puck is heading in terms of the global energy economy?
Thank you, Chairperson and members of the House of Commons Standing Committee on Finance. My name is Steven Staples. I am the national director of policy and advocacy for the Canadian Health Coalition, and I am soon to be joined by my colleague, board member and economist Keith Newman.
The Canadian Health Coalition was founded in 1979 to defend and expand public medicare in Canada. We are composed of frontline health care workers, unions, community groups and experts.
I am delighted to speak to you on the topic of the current state of fiscal federalism in Canada. The aspect we would like to address today is public health care spending. Today we would like to make three recommendations to the government through this committee: first, that the federal government must oppose increased reliance upon for-profit delivery of health care services; second, that the federal government should increase its funding to provinces and territories while ensuring accountability and outcomes for health care dollars; and third, that the federal government should deliver on its long-promised health care programs, especially a national universal pharmacare program.
Let's take these step by step. The Canadian Health Coalition is very concerned by statements made and actions taken by some premiers to the effect that they intend to devote more public dollars to private, for-profit health care providers. While these measures are occurring within their respective jurisdictions, the federal government is not a bystander. The government must state its opposition to this for-profit direction clearly and strongly, and take action by using the tools at its disposal to defend public medicare. This starts with increasing enforcement of the Canada Health Act's principles and conditions, which govern funding to the provinces through the Canada health transfer, or CHT.
The impasse between the federal government and the provinces and territories over funding formulas is preventing urgently needed action to address the crisis faced by patients, families and health care workers.
We support the call for more funding for health care by all levels of government. The federal government should increase its funding to provinces and territories. At the same time, federal dollars should not come without strings, and we expect accountability from the provinces and territories for health care dollars. Premiers should not use federal health care dollars for non-health care spending, such as tax cuts or rebates, and certainly they should not decrease their health care spending after receiving more federal dollars.
Along with increasing funding through the CHT, the federal government must work with provinces to ensure improved outcomes for people in Canada, and this can be accomplished by establishing new, long-promised universal programs such as pharmacare. Pharmacare, in particular, will create savings through reduced drug costs, which now account for as much health care spending as doctors do. Furthermore, public universal pharmacare will reduce the strain on our system. Full prescriptions mean empty emergency rooms.
Finally, we would like to suggest that the path through this crisis can be found in the commitments made by the government in its accord with the NDP. The confidence and supply agreement—or the CASA, as we call it—has four important health care commitments: public dental care, universal pharmacare, health care investments, and safe long-term care. Most, if not all, of these will require co-operation between the federal and provincial governments.
If it were negotiated alongside a commitment for increased CHT funding, which the provinces have been requesting, we can see the potential for a “grand bargain” on health care. The federal government would provide more health care funding. In exchange, provinces and territories would co-operate on new programs such as pharmacare. Parts of this bargain must include a focus on building our public health care system and not increasing the corrosive effects of for-profit delivery.
Thank you for inviting the Canadian Health Coalition to present today. We look forward to your questions.
The Canadian Union of Public Employees is Canada's largest union. It has over 700,000 members. CUPE members take great pride in delivering quality services in communities across Canada as they work in a broad cross-section of the economy, including health care, education, municipalities, libraries, universities, colleges, social services, public utilities, emergency services, transportation and airlines.
For all of our members, the pandemic has brought forward many underfunded, inadequate and altogether missing systems to the forefront. Now these workers need action. From our broken long-term care system, which still allows for-profit operators and poor working conditions, to the inadequate employment insurance system, we need substantial change to better serve workers in the services that we all rely on.
New programs such as the child care agreement, a national pharmacare program or a just transition require significant federal leadership and funding in order to be successful.
I recognize that borrowing in the current environment would be considered inflationary by the Bank of Canada and so lead to a further hiking of interest rates. However, the federal government has cut taxes for corporations and the wealthy over the past 20 years, which means that we have significant room to increase these taxes.
The tax rate for large profitable corporations was cut from 27% in the year 2000 down to 15% in 2007. The capital gains inclusion rate was cut from 75% to 50%. Just for the information of the members and those watching, capital gains is income from selling an investment asset, like real estate, other than your primary residence, or stocks. It's treated differently than employment income is. This is one way in which our tax system privileges wealth over income. The inclusion rate is used to calculate what portion of the profit is considered income for tax purposes. Research shows us that 90% of the benefit from this goes to the top 10% of income earners.
Stephen Harper also made steep cuts to the federal government's fiscal capacity, cutting the GST by two percentage points before the 2008 recession. Together, these cuts under Jean Chrétien, Paul Martin and Stephen Harper resulted in the federal government's revenue falling from 18% of GDP in the year 2000 to 14% in 2010. Under the current government, this percentage has risen slightly, to 15%. Just for reference, 1% of GDP is around $24 billion. That is, in current dollars, a significant amount of money.
This left a huge hole in the federal budget and has had a ripple effect across provincial budgets. When Stephen Harper cut the GST, he suggested that provinces could easily recover the lost revenue by raising provincial sales taxes, but provincial governments have faced backlash at the ballot box when they attempted to do so, and they've only managed to maintain the status quo on revenue as a share of GDP. It's much easier for the federal government to raise revenue than it is for provincial governments, which face real competition in terms of tax prices with their neighbours.
The result is that provincial governments have picked up a larger and larger share of total government spending in Canada, with no additional revenue sources to fund the critical services they provide. Restoring federal revenues to 2000 levels would mean at least an extra $50 billion a year to fund expanded public services. We recognize that with this additional funding it's essential that there be strong conditions to ensure that it is additional financing and not merely replacing what provinces are already spending.
This is especially true in health care, which is under threat of further privatization. We need strong national standards on how provinces and territories are allowed to spend these funds. CUPE wants to ensure that provinces and territories are prevented from using Canada health transfer funds on privatized health services, including for-profit medical facilities and for-profit care delivered through virtual health care systems.
Finally, municipalities own or control about 60% of Canada's core infrastructure. They should have the funding and authority to manage it and maintain it publicly. The federal government could play an important role in this by scrapping the current privatization mandate of the Canada Infrastructure Bank. The bank would better fill its purpose for the public if it prioritized direct financing to help local governments build public infrastructure.
Thank you very much.
The pandemic has renewed calls for major changes to Canadian fiscal federalism on pretty well all sides. The motion currently under consideration definitely calls for a reform of current challenges.
I do think it's important to look back historically and recognize that Canadian fiscal federalism is incredibly far from where the system was designed to be almost 150 years ago. The trend in recent years has been for the federal government to increase transfers to the provinces to face growing health care system issues. The problem here is that doing that obscures accountability and allows the level of government with the greatest revenue, in this case in Ottawa, to exert control over choices provincial policy-makers can make.
In a paper that I wrote when I was in the Ph.D. program at the University of Toronto, we spoke of the dangers of what we called “entanglement”. This is the idea that while one level of government has the taxation power to fund programs, there is a constitutional responsibility to another level of government. By having different levels of government funding and operating social programs, Canadians are in many ways losing out on the ability to hold the appropriate level of government accountable for failures within the system when they do occur.
We've known about funding problems within the framework of Canadian fiscal federalism for decades. The Rowell-Sirois Commission, which made recommendations on the state of fiscal federalism in 1940, noted that there was a significant imbalance between the revenue-generating capacity and spending responsibilities of the federal government and those of the provincial governments. I think we can consider the fact that in 1937, when the commission was created, the federal government generated revenues amounting to double those of all the provincial governments combined. The Rowell-Sirois Commission made some sweeping recommendations for reform, and most of them were never actually adopted. What we've ended up with is a complex web of transfer payments from the federal government to the provinces. Canadian fiscal federalism in many ways is broken.
At the time of Canada's founding, the provinces were given responsibility over issues like health care and education. These were seen as more minor issues at the time. These costs have ballooned, and that has led to ballooning spending at the provincial levels, as many have mentioned, but ultimately the taxation power is still in Ottawa. To fund these programs effectively but to also allow for greater responsibility, the federal government should look at transferring taxation points to provincial governments so they can raise the revenue, spend it, and then be accountable to the voters with respect to how that money is being spent.
The status quo in equalization is also in need of reform. We have taxpayers from some provinces who have ended up sending money to other provinces with little in return. Again, the issue is accountability. Provinces that receive equalization funding don't have adequate incentive to strive for improvement. The program is unfair to many provinces, not just Alberta. We've noticed, for example, that Newfoundland and Labrador has been considered to be a “have” province but at the same time has received a $5.2-billion backdoor bailout from the federal government. This is a program as well that has discouraged resource development in provinces other than those provinces that have used that revenue, which has then been transferred to other provinces as part of the equalization formula.
Ultimately, the Canadian Taxpayers Federation, which has been around for more than 30 years now, believes that accountability is one of the most important things you can have in government. If we are going to have government deliver important health care, education or other services, it ought to be the case that voters, when they go to the ballot box, are able to hold politicians accountable for whether or not they've delivered on their priorities, whether those are health care, long-term care, or other areas.
Obviously, the pandemic has certainly brought about a conversation about the appropriate extent of government involvement in health care, the delivery of health care and issues involving long-term care, and I think those are all conversations that can be had. However, the major danger we have gone through here in Canada over the past several decades is having one government sending money to another level of government without an adequate level of responsibility and without being held accountable at the ballot box. If voters cannot hold the appropriate level of government accountable for problems with our health care system, well, that's what's leading to so many of the broken things we see today.
I will just close by saying that we think it's absolutely essential that the government that is delivering services be at the same level as the government that is funding those and that it can be held accountable for the mistakes and the problems that are happening in those areas. That's not the case now, and it's something we need to rectify.
I'll defer a little bit to my colleague Keith Newman about this. He is an economist, and he may have some comments.
I actually find myself in agreement with Mr. Goldberg, because the problem has been that the provinces have successfully managed to play a bit of a blame game here and point the finger at the federal government for areas that they are responsible for. I think the federal government and quite rightly pushed back on that over the summer, following the meetings of the premiers in Victoria, by saying, look, we do fund a lot, and we expect to see some outcomes. They took issue with the numbers.
Our current, modern health care system wasn't even envisioned in 1867. While it does fall largely to the provinces, it is a shared responsibility. The federal government does have a role in it. Its major role is through the landmark legislation that governs the billions of dollars in transfers, which is the Canada Health Act. The five principles of the Canada Health Act are designed to make sure that we don't have the kind of balkanization and disparities in our country that I think some of the measures Mr. Goldberg is putting forward would result in.
You know, I'm from New Brunswick. We are part of a national project here. We want to have a Canada Health Act that ensures that health care services are accessible and affordable across the country. The federal government plays an essential role in that.
So yes, the federal government is putting up money. It has historically come to arrangements with the provinces. But it does have the right, I think, to ensure that there's accountability for that and to look for some outcomes under the Canada health transfer and, at a minimum, the five principles of the Canada Health Act. Plus, bans on extra billing and user fees have to be in place. We need to see a strengthening of the Canada Health Act in particular, but also special programs for health care programs like the ones we're seeing with dental, we've seen with child care, and we would hope to see with pharmacare, where outcomes are guaranteed for the federal dollars. Increasingly, I think, that's what Canadians are looking for.
Could I add a point on that?
Mr. Heath MacDonald: Sure.
Mr. Keith Newman: The idea that we would have a balkanized system with every province running about doing its own thing, I obviously don't agree with. There are things that have to be coordinated nationally. For example, my colleague mentioned pharmacare. Well, with a universal public pharmacare plan, we could, as a country, negotiate our prices. Now, we have 110,000 plans. We'd be much better off having one plan that we can bargain with for the drugs, for prices and for access and all these kinds of things. It makes no sense to have a super balkanized system. Frankly, I'm confused about that.
Second, this whole pharmacare thing, because it would be a national plan with all these various benefits, would save massive amounts of money: according to the Hoskins report, $16 billion a year just for employers. I mean, yay, employers will save $16 billion a year. Individuals will save $6 billion or $7 billion a year. Now, it's true that the federal government will pick up some of that money, but it will be able to save all of us a lot of money: at least $5 billion a year, probably more. That's a great thing. That would be a federal government program, and there is no alternative to that.
I have a few remarks before I begin my questions, which are for Mr. Staples. My remarks are unrelated to my questions.
Firstly, I would like to remind my colleagues that the provinces are grouped for negotiating drug prices in order to reduce costs. So there is some leverage.
Secondly, in response to what Mr. Goldberg said, I never suggested that Quebec would be unwilling to develop its natural resources in order to receive higher equalization payments. I am dumbfounded by that statement; I cannot believe it. It shows how little is known about Quebec.
Quebec develops its natural resources. That includes mines, hydraulic resources, forestry and fisheries. Clearly, we do not have the same resources as other parts of the country. Quebec does develop its resources, however, and does so sustainably, at least that is my commitment.
We also want to develop our manufacturing sector. Yet it is very difficult to develop the manufacturing sector when only half the government supports it. The federal government focuses more on other areas of economic development, especially if you factor in the value of our currency, the Canadian dollar. This is known as Dutch disease.
When the value of the dollar climbed on the strength of natural resource exports, starting with hydrocarbons, that really hurt the manufacturing sector, which was a strength of Quebec's economy.
Considering what the federal government does in terms of economic development, stimulus and mobilization of its apparatus, equalization payments are poor consolation. We would rather see our sectors of the economy achieve their full potential.
I wanted to make that clear. It is absolutely not the case that Quebec does not develop its resources in order to receive equalization payments. Even someone with advanced degrees needs to do their homework on this topic.
I will now move on to my questions for Mr. Staples.
In the first hour of our meeting, we heard from Mr. Seth Klein. We know his sister wrote the book, The Shock Doctrine, which suggests that crises are created in order to get people to accept privatization, for instance.
Mr. Staples, you say you are opposed to privatization, as is Ms. MacEwen. Would you agree that chronic underfunding may have led to the degradation of public services, which in turn leads the provinces to turn to the private sector because of that underfunding?
If so, do you understand that federal budget cuts to health care date back to the 1990s, when the federal government wanted to wipe out its deficit by reducing health and social services transfers?
My questions are for Mr. Staples, But Ms. MacEwen may also answer if she wishes.
You are completely right in saying that the federal government failed in its responsibilities, so to speak, in the 1980s. It did indeed try to reduce its budget deficit on the backs of Canadians, which was obviously a very bad thing. We were completely opposed to that.
Austerity was a pretext. The government said it had to balance the federal budget, which is by no means necessary. As we have seen recently, the issue is not accounting. The federal government is responsible for balancing the Canadian economy, not on the basis of some financial figures, but rather in accordance with the needs of all Canadians and Quebeckers, and it failed to do so. You are completely right.
Our organization, the Canadian Health Coalition, does in fact push the government to fund national programs across the nation, including insurance for prescriptions and dental care, and so forth. As an economist, I would say that these programs are much more effective when they are centrally administrated and funded, by the federal government, and when they are not for profit, a point I wish to emphasize.
We are not necessarily opposed to the private sector, but we are opposed to making profits on the backs of the sick. In this regard, we would like the federal government to set rules for...
Thank you very much. I may engage with Mr. Newman, as well, on this. He has more historical knowledge than I do.
I would say that, for one thing, the tax transfer system that was employed for health care funding in previous accords did not really yield very much benefit. The federal government still gets blamed for not spending enough, even though it tried to redo the calculations.
I think there has been a lot of fudging of these percentages over the last number of months with the provinces, because it's cases of.... The fifty-fifty split, for instance, was originally envisioned for doctors and hospitals, but the health care envelope has expanded a great deal. They're being blamed for not doing it fifty-fifty, but the overall calculation is being used for all health care costs. I think there is some fudging around the numbers here.
Essentially, we have to have some kind of negotiation. We have to find some way to break through this stalemate that we have, because the crisis continues in terms of the wait times and the terrible toll being taken on frontline health care workers. Meanwhile, it's just a blame game going on, which we saw in Victoria this year, and we need to somehow break through this impasse between the federal government and the provinces.
I believe the key is in the terms of the confidence and supply agreement between the Liberals and the NDP. The four health care points are excellent, and I think they can help us rise to a new level of negotiation between the levels of provinces and the federal government to get both programs that have deliverable outcomes and investments in the Canada health transfer that are governed by the terms of the Canada Health Act and the five principles. Bans on extra billing and user fees are absolutely critical if provinces are going down this for-profit privatization model.
Go ahead, Keith.
We need a model with the federal government demanding accountability—I totally agree with that—for the money that is spent, as long as it's spent on health care and not used to do other things, such as reducing taxes. For example, I live in the province of Quebec. The Charest government—I think it was in 2004, but I forget right now—provided us with a tax break of $600 million. The Conservative government was appalled by that, because it had sent the money for the health care system. So what happened? Personally, I had no health problems, and I got a tax break.
However, that's not the kind of country I want to live in. I believe in a country that takes care of its people. We have a duty to our country to care for people and to help those in our community. Cutting back on these programs and finding ways to engage in double-talk and blame the next guy is wrong.
I would add this. If the federal government has a good program and offers good money with strings attached, would somebody tell me that the provincial governments will not say, “Okay, we're going to reject $5 billion, or $3 billion, or whatever it is for health care or for pharmacare”? Of course they won't. They will take the money as long as the federal government maintains its availability and the strings that must be attached.
Thank you very much, Mr. Chair.
I would like to say something about the first hour of our meeting. In view of the current climate crisis, I am very pleased that we welcomed Mr. Klein. This is not the first time we have faced crises, and, as we have seen a number of times before, it is also an opportunity to emerge stronger.
If we look at all the major economies in the world, they are all making the transition to a green economy, and I do not want us to miss the boat. A responsible plan will truly focus on innovation so that we can come out ahead. As with all transitions, there are winners and losers. I don't know about you, but I would like to be among the winners.
I am very pleased that we had this discussion.
I'll turn to the question for Mr. Staples.
I have one question. What would be the impact, in your view, of providing dental care, but also day care, as you mentioned? Also, is your coalition supportive?
Thank you very much for the question.
Absolutely, we are in support of the public dental program that's being proposed. It is definitely an issue that we have long monitored. We have greater expertise on pharmacare, but these are equally parts that were left out of the original medicare system. I think this is an excellent opportunity to address some of those gaps through this dental program.
Millions of Canadians are now going to benefit from that. I think that's very good for people who are trying to deal with affordability issues right now—as everybody is—with rising inflation and interest rates. This is going to be a great help. These programs also help relieve pressures on our own health care system, because if people let dental care issues go for too long, they end up in emergency rooms, and that's not where we want to be.
I would add that we are supportive of universal social programs. We do recognize that this will help many people, many Canadians, but not everybody. We are concerned that at the end of this, there may still be some gaps. We have spoken to some members of Parliament who do support this eventually being a stepping stone to a universal program under which everybody is covered, and we're certainly hopeful for that. We realize that getting this program through will help a lot of people and also pave the way for the other commitments that are in the confidence and supply agreement.
As you know, the four health care commitments are spread out over time—the three years of the agreement—and next in line is pharmacare. We should be seeing a draft of a Canada pharmacare act this fall. I hope that we have a good discussion with the committee again when that comes, so certainly it's good all around.
To start, I'll direct my question to Ms. MacEwen, who I think hasn't had an opportunity to answer many questions. If there's time remaining and folks from the Canadian Health Coalition want to jump in, I would invite them to do that.
I want to return directly to the question of privatization, first of all. I think Mr. Staples just touched on this. We're seeing right now a huge spike in the extent to which nursing agencies are used to fill vacancies in the public system. These are people who are available to work. They work in that industry. Canadians are actually paying outrageous premiums in order to hire these nurses right now from private nursing agencies that are making a profit on that expenditure to have them come and work in public institutions.
Clearly, there is a question about appropriate spending. One of the places we might hope to see some remedy for that, in the case of provincial governments that are bound and determined to carry on this expensive and broken course, is at a table that the federal government has the power to convene with its spending power for provinces to talk about best practices, including when it comes to privatization and the inordinate amount of spending that's going on through private nursing agencies right now.
Perhaps you can speak, first of all, to how Canadians benefit when governments pay for private nurses over public nurses, if they do at all—it seems to me perhaps not. How can the convening power of the federal government be used in order to establish some fairer criteria that are co-determined with the provinces that would govern the way new health spending is done in Canada?