O Canada

Canada, our usually quiet neighbor to the north, has been in the news lately -- mostly for disagreeing with George W. Bush about Iraq. It should, however, be in the news for another reason: it is in the process of solving some high-profile domestic problems that are bedeviling Americans and their leaders.

Perhaps that's why Canadians (according to a recent survey by the Pew Global Attitudes Project) are more satisfied with the current state of their country than the citizens of any other Western nation, including the US. Over half of them report general satisfaction with the way things are going and credit government with contributing positively to the feel-good mood.

And why not? In contrast to American federal and state governments, which remain paralyzed by the influence of money and in thrall to free-market ideologues, the Dominion and its provinces are vigorously addressing issues like energy and health policy with a commitment to policies beneficial to average people rather than special economic interests. At the provincial level, for example, Canada is backing away from a brief, American-inspired romance with electricity deregulation.

Ontario, Canada's largest province, has just gone through a California-style energy crisis brought on by its ruling, right-of-center Progressive Conservative party (PC), which opened the generation side of the electricity market to private competition last May. This produced an immediate dramatic spike in retail prices and howls of outrage from the public. But unlike state governments in the US, which pushed ahead with deregulation despite warning signs (resulting in economic disaster in California and Montana), the Province of Ontario moved quickly to reverse course and contain the looming crisis. Ontario's Conservative government acted for political reasons (basic electoral survival), but at least it acted, freezing utility rates for the next four years, authorizing rebates to overcharged power customers, and returning the price structure to the pre-May status quo ante. Deregulation, provincial observers agree, is dead for the foreseeable future.

The Ontario lesson is instructive for Americans. Deregulation began there as the brainchild of a former politician turned businessman named Donald Macdonald. In 1996, Macdonald, who also sold the Canadian government on NAFTA some years ago, authored a report that prompted the then-premier of Ontario, a Conservative, to initiate deregulation plans. His theory, based on free-market theology, was as simple as it was simplistic: Higher electricity prices resulting from deregulation would encourage the private sector to build new generating plants; the new plants, in turn, would produce so much electricity that prices would then fall. Alas, it didn't work. When the market was finally opened in 2002, Ontario consumers got the higher prices all right, but not the new plants. The money that was to have been invested in production capacity somehow found other uses.

The odd thing is that deregulation was ever tried in the first place. Its implementation represented a triumph of ideological dogma and market greed over history, experience, and common sense. Canada's predominantly public-power utility system -- public power, most of it hydroelectric, surpassed investor-owned generation in 1955 -- has given the country the world's cheapest electricity, with average rates a third lower than those in the US. Ontario itself converted to public power in 1910, when it created the provincially owned Ontario Hydro-Electric Power Commission, an agency that provided good service for nearly a century until its partial breakup a year ago.

Ontario is now grappling with where to go next, once the present price freeze expires in 2006. One approach garnering increased support is a modified reconstitution of the old Ontario Hydro to provide "power at cost," a proposal made by the nominally socialist New Democratic party (NDP), whose polls have shot up in tandem with its harsh, ongoing critique of deregulation. Even the more circumspect PC and Liberal parties, however, have advanced no plans to curtail re-regulation. Except in archconservative Alberta, which has stubbornly clung to its 2001 deregulation scheme despite soaring utility rates, the Canadian free market in electricity appears to be an idea whose time has come -- and gone.

Health policy is another area where Canada is leading the way toward solving an intractable problem common to all advanced industrialized nations. The combination of aging populations and accelerating medical technology is putting extreme financial pressure on health systems worldwide. To date, the US has chosen the route of inaction, hoping the marketplace can find a solution. This has resulted in such phenomena as "boutique medicine" for the rich, the rise of for-profit hospitals and HMOs, and increased millions of uninsured Americans.

Canada has gone in a different direction. Confounding right-wing critics of its single-payer national health-care system, who regularly predict the popular program's demise, the Dominion has elected not only to maintain but expand it. Recent negotiations between the federal and provincial governments, which jointly run Canadian "Medicare" -- the universal system covers everyone, not just the elderly as in American Medicare -- determined that Ottawa would increase its share of public outlays by billions of dollars in exchange for tightened national standards and oversight. In the process, it would address weaknesses in the program, mostly caused by funding shortfalls, and add to the comprehensiveness of coverage.

The pending reforms are an outgrowth of the so-called Romanow report, itself the product of the federal Commission on the Future of Health Care in Canada, chaired by former Premier Roy Romanow of Saskatchewan, the province where universal health insurance on the Canadian plan first emerged 40 years ago. Presented last fall following 18 months of nationwide hearings, the report called on the government to adopt a "Canadian Health Covenant" that would update and revitalize the existing Medicare program enacted in the late 1960s and reaffirm the nation's commitment to equal health care for all, as a right, within a tax-supported framework. Its recommendations, which attracted broad public endorsement, include major expansions in drug coverage, preventive treatment, home care, rural medicine, and diagnostic services.

The Romanow report amounted to a total rejection of what Canadians call "two-tiered" medical care -- partial privatization, with the affluent opting out in favor of elaborate, for-profit coverage in the private sector. Upon accepting Romanow's blueprint at year's end, Liberal Prime Minister Jean Chrétien proclaimed, "There is a large consensus in Canada. There will be no privatization of health care." The notion of a two-tiered approach, which surfaced in the last federal election, was, he said, off the table.

In a twist of irony from the American perspective, Canadian Medicare enhancement will be initially financed by spending down some of the country's record national budget surplus built up during the 1990s, an option that exists because, in contrast to the US, Canada has neither enacted massive, deficit-inducing tax cuts for the wealthy, nor engaged in the kind of military spending necessitated by a policy of preemptive war. (There are costs to empire.) To wistful American health reformers, that fact just adds insult to injury. Small wonder that Canadians view the future, even in an age of terrorism, with comparative equanimity.

Wayne O'Leary is a writer in Orono, Maine.

Home Page

News | Current Issue | Back Issues | Essays | Links

About the Progressive Populist | How to Subscribe | How to Contact Us

Copyright © 2003 The Progressive Populist