Alberta's September health-care reform faces federal compliance questions

Alberta's new health-care reform, set to take effect this September, is drawing scrutiny from the federal government over whether it complies with the Canada Health Act.

The Smith government's plan allows patients to purchase non-urgent health-care services privately from doctors who also work in the public system. The federal government has suggested this change may violate the federal law, even as many opponents have made the same argument since the reform was announced last year. The Smith government maintains the reforms do not breach federal law and argues Ottawa should respect provincial authority over health-care policy.

The question of compliance carries significant financial stakes. Because health care is constitutionally a provincial responsibility, Alberta can choose its own health policies. However, the cost of adopting policies the federal government opposes is a potential reduction or even total withdrawal of federal cash transfers for health care—an estimated $7 billion this year. Provinces must adhere to federal terms and conditions outlined in the Canada Health Act to receive their full health-care transfer.

The Fraser Institute, a think tank that advocates free-market policies, argues the question of whether the Smith reforms comply with the Act is both complex and simple. The Canada Health Act outlines five required program criteria: public administration, comprehensiveness, universality, portability and accessibility. It also sets out dollar-for-dollar reductions in transfers if provinces allow patients to pay any portion of physician and hospital services that have been funded by government.

A careful review of the Act finds it contains few clear restrictions on provincial health policy to receive federal transfers. Provinces are restricted from allowing patient charges for government-funded physician and hospital services and required to have their plans administered by a public authority. The Act is otherwise unclear about what other policies might be permissible, especially regarding the undefined requirement that "medically necessary" care must be publicly insured and that provinces ensure "reasonable access" to those services.

But final authority rests with the federal government. It maintains sole and final authority for interpretation and discretionary enforcement of the Canada Health Act, meaning it's up to Ottawa to determine whether Alberta's reforms comply and what penalties might apply. Until the federal government makes its final determination, Canadians remain in limbo as to whether their federal health-care tax dollars will be withheld from the province.