The Fight for Medicare in Canada

The Fight for Medicare in Canada

by Susan Rosenthal

(Chapter 6 of Sick and Sicker: Essays on Class Health and Health Care)

The story of how Canadian medicare was won and how it is being lost provides many valuable lessons.

Until the 1960’s, the Canadian medical system was dominated by the private sector. Charitable organizations provided minimal care for the poor. Regular medical care was reserved for those who could pay and for those whose employers would pay for them.

Like their American counterparts, Canadian physicians and insurance companies vigorously opposed any reforms that smacked of “state medicine” or “socialism.” Neither business nor government supported universal access to medical care.

Like the United States, Canada was deeply affected by the social protest movements of the 1960s, which included the demand for universal health care. In 1962, the Canadian Labour Congress (CLC) declared its preference:

“We favor a system of public health care that will be universal in application and comprehensive in coverage. We favor a system that will present no economic barrier between the service and those who need it. We are opposed to any provision which will require some people to submit themselves to a means test in order to obtain service. We look to a system of health care that will be regarded as a public service and not as an insurance mechanism.”1

Despite the popular demand for socialized medicine, where the State is both payer and provider, the Canadian Medical Care Insurance Act of 1966 established socialized insurance, a publicly-financed, private enterprise system “free of government control or domination.” It took five more years to implement the Medical Care Insurance Act in all the provinces.

In the province of Quebec, union demands peaked in the 1972 general strike. To buy labor peace, Quebec incorporated medical services into a broad social benefits system, paid for and provided by the provincial government. The Quebec working class is rarely credited for winning the most comprehensive socialized health-care system in North America.

Rolling Back the Gains

Under the initial funding arrangement for medicare, the federal and provincial governments agreed to split the cost 50-50. In 1977, the federal government dropped its share of medical funding to 20 percent. Because the provinces varied in their ability to pay for medical programs, the principle of equal access was eroded. Reduced funding resulted in rounds of cuts to hospital budgets and medical services.

Medical care was still free, but there was less of it available.

Private insurers rushed into the breach. The more services were cut from the medicare basket, the more individuals had to purchase insurance, pay out of pocket or go without.

In 1984, the federal government passed the Canada Health Act to reassure nervous Canadians that medicare was safe. While universal access was promised on paper, not enough funds were provided to make it happen. There was a reason for this. Behind the scenes, politicians were preparing to open medicare to the private sector.

In 1994, the Ontario government stated,

“To have the effective launching pad it needs, the health industries sector must expand its share of its own home market. Steps must be taken to ensure that, as in other countries, the domestic market supports the development of globally competitive companies.”2

To boost profits in the nursing-home industry, the province scrapped regulations that ensured a minimum level of daily care for nursing-home patients. And during the 1990s, hospital funding was cut significantly.

Before the cuts, Ontario’s Emergency Departments were moderately congested 9 percent of the time and severely congested 0.5 percent of the time. After the cuts, they were moderately congested 23 percent of the time and severely congested 6 percent of the time.3

The hospital cuts were so unpopular that the Ontario Conservative Party was voted out of office in favor of the Liberal Party, which implemented an even deeper round of cuts.

While the Ontario government squeezes public hospital budgets, it has gone hundreds of millions of dollars over budget to establish “P3” hospitals (public-private-partnership).

A 2008 Provincial Auditor’s report found that the total cost of just one P3 hospital was $300 million more than it would have cost to build and operate the hospital publicly. However,

“…the only advisors that the government listens to are those who come from the P3 industry – the financiers, law firms, service privatizers and giant construction firms who directly benefit from the exorbitant costs of this privatization policy.”4

The federal government supports the privatization agenda. In 1997, it declared,

“Promoting Canadian companies as global health-keepers is the main objective driving the strategies and plans of the government for the medical devices, pharmaceutical and health-services sector.”5

Behind the mask of healthcare “reform” and “restructuring,” the Canadian medical system is being handed, piece-by-piece, to private industry in a manner similar to the dismantling of Britain’s National Health Service.6

Public medical care is under-funded to the point of crisis, then condemned for its inadequacies. The private sector is proclaimed the only possible savior, and opponents are ridiculed as old-fashioned and sentimental. When the market fails to deliver, the public is told to adapt to “the new reality.”

Hospital cuts and closures are the primary means of moving medical services (and funding) from the public to the private sector. This is  accomplished in a three-step process.

First, hospitals are funded below the level required to match the rate of inflation and population growth, then they are forced to cut services to balance their budgets. Ontario hospitals must sign “Hospital Accountability Agreements,” that compel them to meet restricted budgets by cutting services. Those that don’t “agree” have the cuts imposed by government bureaucrats.

Finally, Canadian law mandates that medical services provided in hospital must be publicly funded and provided to patients free of charge. Forcing these services out of hospitals makes it possible for them to be taken over by the private sector.

Ironically, while most Americans long for a Canadian-style medical system, that system is disintegrating under the pressure of market forces.

Tens of thousands of hospital nursing jobs have disappeared at the same time that hospital stays have been cut, so that fewer nurses care for much sicker patients. Deadly, infectious diseases sweep through hospitals that no longer have enough cleaning staff.7

Most rehabilitation and chronic-care facilities have closed or gone private, transferring the burden of caring for the sick, injured and frail to their families.

Hospital out-patient clinics have closed, so discharged patients are directed to private clinics or family doctors for follow-up. However, there are not enough family doctors to meet the demand.

In 2006, fewer than 10 percent of Ontario family doctors were accepting new patients and five million Canadians (one in six) had no family doctor. Patients can wait weeks to see a family doctor, months to see a specialist and many more months for treatment.

Canadian medicare is so under-funded that, in 2004, Canada’s Supreme Court declared,

“The Canada Health Act [does] not promise that any Canadian will receive funding for all medically required treatment.”

Funding cuts have severely damaged Quebec’s model medical system. In 2005, Canada’s Supreme Court ruled that lack of timely access to treatment in Quebec was so serious that the province could no longer prohibit private funding for medically necessary services. Similar legal challenges are expected in the other provinces.

The CUPE Hospital Strike

Unionized hospital workers have been the strongest opponents of privatization, fighting cuts to hospital staff and programs and the out-sourcing of hospital services to for-profit, non-union corporations.

In 1981, hospital workers organized in the Canadian Union of Public Employees (CUPE) struck the Ontario Hospital Association. At one hospital, workers locked out management and continued working under their own elected committee.

For seven days, 13,000 strikers defied provincial back-to-work legislation, the jailing of top union officials and the firing of key strike leaders.

When management refused to budge, the next logical step would have been to mobilize the other sections of CUPE for an all-out public-sector strike. Unwilling to take that step, union officials caved. The defeat was substantial.

Many small, local hospitals were closed. Other hospitals were merged into giant conglomerates managed by business consultants.

Although Canadian hospital workers continue to fight, they have not yet mobilized sufficient forces to reverse the cuts.

What Have We Learned?

The Canadian experience has taught us that:

  • Governments will under-fund medical systems to meet the needs of the capitalist class.
  • Changing politicians and political parties does not change the priorities of the capitalist system.
  • Education is not enough. Capitalism is structured to prevent the majority from changing society regardless of what they know.
  • Union professionals will sacrifice the needs of workers and patients rather than challenge the capitalist system.
  • Only rank-and-file health workers fight consistentlyfor patients’ rights.

Most pro-medicare organizations are dominated by liberal professionals who promote a two-pronged strategy: educate the public on how bad things are; and plead with the people in power to make more humane decisions.

Professionals do not call for an end to capitalism. They do not advocate democratic decision-making in the medical system, where those who do the work decide how it will be done. On the contrary, they call for more intelligence at the top of the capitalist hierarchy.

Liberal professionals refuse to acknowledge that the people in power know exactly what they are doing – putting profits first.

If we are serious about putting people first, we must reject capitalism and build a working-class alternative.

Class Solidarity is the Best Medicine

Support for universal medicare remains strong in Canada and in the United States.(8) However, capitalism is not a system of majority rule but a system of class rule. That leaves only one way forward – building a mass movement that is large enough, strong enough, clear enough and determined enough to advance our demands over the opposition of the ruling class.

It took a revolution in Paris to scare Germany into establishing Europe’s first national medical plan in 1883. In Britain, the National Insurance Act of 1911 was rushed through Parliament during a strike wave. And Canadian medicare was consolidated in 1972, the year of the Quebec General Strike.

During the social crisis of the 1930s, President Roosevelt conceded the New Deal, but excluded national medicare. To quell the protests of the 1960s, President Johnson conceded Medicare and Medicaid, but held the line on universal coverage.

The US remains the only industrialized country without a national medical plan because the American labor movement has not been strong enough to wring this concession from the world’s most powerful ruling class.9

We need to build a fighting labor movement that will reject medical rationing, fight for universal health care and keep on pushing to create a truly healthful society. To succeed, such a movement must be led by ordinary workers who will put human need above corporate greed, without compromise.

Health workers are key to the struggle for universal health care. In 2007, union drives in the US medical industry enjoyed a higher-than-average rate of success.10 Despite opposition from union bureaucrats, health workers are pushing for real improvements in working conditions and patient care, fighting for more services, higher staff-to-patient ratios and the right to blow the whistle on deficient and dangerous patient-care conditions.11

Ironically, by turning hospitals into factories, capitalism has increased the power of workers in the medical industry.


1. Cited in Fuller, C. (1998). Caring for profit: How corporations are taking over Canada’s health care system. Ottawa: Canadian Centre for Policy Alternatives.

2. Healthy and wealthy, a growth prescription for Ontario’s health industries. (1994). Report of the Health Industries Advisory Committee to the Ontario Ministry of Health, March.

3. Reported at the annual conference of the Ontario Health Coalition, Toronto, January 31, 2009.

4. Ontario Health Coalition. (2008). When public relations trump public accountability: The evolution of cost overruns, service cuts and cover-up in the Brampton Hospital P3. January 7.

5. National Sector Team: Health Industries. (1997). Canadian international business strategies – ‘97-’98, Report for Industry Canada, March 20.

6. Pollock, A.M. (2004) NHS plc: The privatization of our health care. New York: Verso.

7. Valiquette, L. et. al. (2004). Clostridium difficile infection in hospitals: A brewing storm. CMAJ. July 6, Vol.171, No.1.

8. CBS News/New York Times poll. (2009). American public opinion: Today vs 30 years ago. Conducted January 11-15.

9. Quadagno, J. (2006). One nation uninsured: Why the US has no national health insurance. Oxford U. Press.

10. ASHHRA 30th Semi-Annual Labor Activity Report.

11. Prendiville, E. (2009). We are the union.

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