Canada, much like the United States, imported some aspects of the British Poor Laws. In that tradition, administration of welfare programs in Canada has always been partly regional. Provincial and territorial governments play a significant role in setting policy and administering welfare programs.” (1)
Since the 1980s Canada has experienced fundamental changes in its social and economic structure. The labor market has changed substantially, and the unemployment rate has climbed considerably since the end of World War II in 1945. The rate averaged more than 10 percent in the 1990s, up from about 4 percent in the 1950s.
As is the case in the United States, fewer full-time, permanent jobs are available than in the past, and the education and skill levels required to obtain these jobs has increased. In addition, the employable population is growing with women joining the workforce and increasing numbers of immigrants to Canada. The proportion of two-income families has increased by half in the past quarter-century to over 60 percent of all families.
The proportion of single-parent families also increased from about 11 percent of all families at the beginning of the 1980s to about 15 percent in early 1996. Available data suggest that almost 60 percent of Canadian children in single-parent families are poor and probably need welfare support, compared with 12 percent living with both parents.
In the 1990s rising welfare use and costs fueled calls for reform. Across the country, welfare recipients increased by 63 percent between 1989 and 1995. Also, government social expenditures and the cost of social insurance rose dramatically between the 1960s and the 1990s. Increasingly, Canada’s federal and regional governments have sought to scale back benefits and move unemployed recipients into the labor force. Mirroring developments in the United States, in the late 1990s the Canadian federal government embarked upon radical and often controversial reforms of Canada’s welfare programs.” (1)
Canada’s primary welfare system, called Social Assistance (SA), encompasses a number of programs. The federal government set the structure of the SA system with the passage of the Canada Assistance Plan (CAP) in 1966. Parts of SA resemble the former AFDC program in the United States, but SA is much more comprehensive and covers more types of households. Between the early 1980s and the early 1990s, recipients of SA doubled from about 1.5 million people to about 3 million. The legislation for SA also laid out arrangements for the division of welfare administration between the federal and regional governments. Canada’s provincial and territorial governments determined SA needs and managed distributions, while funding and broad policymaking were split between the federal and regional levels.
As part of its reforms in 1996 and 1997, the Canadian government is changing how it administers SA. In the newer system, called Canada Health and Social Transfer, the federal government gives block grants to provinces and territories.” (1)
In the early 1970s, the Canadian government greatly expanded the country’s Unemployment Insurance (UI) program, which had existed in other forms since 1940. UI became the most widely used Canadian social security program for adults. The program provides assistance to both unemployed and working Canadians as a supplement, with benefits exceeding those in most other developed nations.
Annual costs for the UI program roughly doubled between 1973 and 1994. In 1996 the federal government reformed UI and renamed it Employment Insurance. This new program of federal block grants to provinces and territories gave work incentives to people having difficulty finding desirable full-time jobs by providing wage supplements to part-time workers. It also provided funding for employers to create jobs, subsidies to employers who hired welfare recipients, and job-seeking assistance.” (1)
The Canadian welfare system is also strongly focused on providing health care to citizens. Between the mid-1950s and the 1970s, Canada’s federal, provincial, and territorial governments progressively joined together to create nationwide health-care programs and programs for the elderly. Unlike U.S. citizens, all Canadians receive health care as part of a national plan. Canada’s Medicare program-no relation to U.S. Medicare-is known as a single-payer system, and is funded primarily by income, corporate, sales, and other taxes. The governments, the so-called single payers, then fund private health-care providers to supply all basic and emergency medical services. Some services remain privately funded.” (1)
Health Care System in Canada, network of providers, institutions, and insurers that care for the health of Canadians. In Canada health care is delivered by private institutions-hospitals and physicians-that are not controlled directly by the government. This private delivery system is combined with a publicly financed health insurance system that is paid for by the provincial and federal governments. (In this article, the use of the term “provincial” refers to both provinces and territories, since territories and provinces play the same role in the health-care system.) This health insurance system is known as Medicare.
Each province in Canada has a separate health insurance system funded by provincial government revenues and contributions from the federal government. The federal government provides funding in a lump sum based on the province’s population. Of the total spending on health care in Canada in 2005, provincial expenditures made up 59 percent and federal transfers to the provinces made up 14 percent. Private spending accounted for the remaining 27 percent. The largest outlays in 2004 were in these sectors: hospitals, 31 percent; drugs, 15 percent; and doctors, 13 percent.” (1)
Although health care in Canada is expensive, the country’s expenditures on health care resemble those in other industrialized countries and are considerably less than in the United States. In 2005 Canada spent a little more than C$130 billion, or about C$4,000 per person, on health care, representing 9.1 percent of Canada’s gross domestic product (GDP). In contrast, health-care expenditures in the United States in the same year totaled 13.5 percent of the U.S. GDP, representing approximately C$5,700 per person. In Canada, about 69 percent of total health expenditures are publicly funded, whereas in the United States 45 percent of health expenditures are funded by the government.
Despite these differences in spending, the number of hospital beds per person in Canada is comparable to the United States (1 for every 270 people in Canada, and 1 for every 370 people in the United States). There is 1 physician for every 524 Canadians (compared to 1 for every 375 people in the United States). Canadian physicians are fairly evenly split between general practitioners and specialists. Hospitals in Canada are as well-equipped to deliver technologically advanced medical procedures as hospitals in other industrialized countries. However, the cost constraints of the Canadian system have made the use of certain expensive diagnostic equipment, such as MRIs, considerably less widespread than in the United States.
There is some debate among economists about the role of national health insurance in controlling health-care costs, but it is evident that the Canadian health-care sector, because of the government’s involvement, spends considerably less on health care than the United States. There are numerous reasons for the cost difference, but the major factors include the lower administrative costs associated with single-payer insurance, the yearly spending caps set by global hospital budgets, and the negotiation of uniform billing fees with provincial physician associations.” (1)
The Constitution Act of 1867 made the provinces responsible for matters of health policy (see Constitution of Canada). As a result, instead of national health insurance, Canada has ten provincial and three territorial health insurance systems. Although the federal government has a strong presence in the health sector, the provinces are primarily responsible for health care. Each province and territory has its own statute that regulates its health-care system. The provincial governments administer health insurance programs and make decisions about funding hospitals and reimbursing physicians. Most provinces fund their health insurance out of general revenues and do not impose a specific health tax on individuals or businesses. Only Alberta and British Columbia levy health-care insurance premiums for their public insurance. Health insurance is an expensive operation, and provinces spend from 30 to 35 percent of their total budget on health care.
The federal government contributes to the provincial systems as part of the Canada Health and Social Transfer (CHST), a block grant that includes the federal contributions to health care, higher education, social assistance, and other social services. The federal government also links the provincial health-care systems together with a set of principles, commonly referred to as national standards. These standards were articulated in the Canada Health Act, which the Canadian Parliament passed in 1984.
Under that law, provinces must ensure that their health-care systems respect five criteria: (1) public administration-the health insurance plans must be administered by a public authority accountable to the provincial government; (2) comprehensive benefits-the plan must cover all medically necessary services prescribed by physicians and provided by hospitals; (3) universality-all legal residents of the province must be covered; (4) portability-residents continue to be covered if they move or travel from one province to another; and (5) accessibility-services must be made available to all residents on equal terms, regardless of income, age, or ability to pay. In the 1980s and 1990s the federal government began to contribute a lower percentage of provincial health insurance funding. In response some critics questioned the extent to which the federal government could continue to expect the provinces to uphold the national standards of the Canada Health Act with less funding.
In addition to setting standards and providing funds for the provincial health systems, the federal government is required by the constitution of Canada to provide health care to military personnel and veterans, members of the Royal Canadian Mounted Police, and inmates of federal prisons. The federal government is also directly responsible for the health needs of aboriginal Canadians living on reserves. The federal government promotes public health through activities such as prenatal nutrition programs and youth antismoking campaigns. It also maintains laboratories for disease control and product safety.” (1)