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Fraser Institute

Ottawa’s health-care deal cements failed status quo in Canada

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4 minute read

From the Fraser Institute

By Mackenzie Moir and Jake Fuss

Canada will reach a projected $244.1 billion in 2023, which translates to $6,205 per person—nearly double the level of per-person spending (inflation-adjusted) three decades ago. And yet, last year Canadians endured the longest median wait time (27.7 weeks) ever recorded for non-emergency surgery.

Last week, as part of Ottawa’s promised $46 billion in additional health-care spending, the Trudeau government agreed to increase Quebec’s share of federal health-care dollars by $900 million annually. Quebec was the last province to reach an agreement with Ottawa before the March 31 deadline. With the closure of this agreement, Canadian taxpayers are on the hook for more health-care spending than ever before. For the same old broken health-care system.

Of course, it ultimately doesn’t matter whether the $46 billion originates from Ottawa or the provinces. In the end, Canadian taxpayers foot the bill. And what do we get in return for our health-care dollars?

In 2021, the latest year of comparable data, Canada’s total health-care spending (as a percentage of the economy) was the highest among 29 other comparable countries with universal health care (after adjusting for differences in population age). This isn’t a new development. Canada has a long history of having one of most expensive systems among high-income universal health-care countries.

Despite this, according to the latest comparable data, Canada ranks among the poorest performing universal health-care countries in key areas such as the number of physicians, hospital beds and diagnostic technology (e.g. MRI machines). Further, according to the Commonwealth Fund, in 2020 Canada ranked dead last on timely access to specialist consultations and non-emergency surgery.

Meanwhile, public health-care spending in Canada will reach a projected $244.1 billion in 2023, which translates to $6,205 per person—nearly double the level of per-person spending (inflation-adjusted) three decades ago. And yet, last year Canadians endured the longest median wait time (27.7 weeks) ever recorded for non-emergency surgery.

In short, Canada’s health-care system is in shambles, but the answer does not lie in simply throwing more money in its general direction. Federal politicians should instead look to the example of welfare reform during the Chrétien era in the 1990s. Those reforms, which reduced federal transfers to provinces and eliminated most of the “strings” attached to federal funding, resulted in increased provincial autonomy, greater policy experimentation, fewer Canadians needing welfare and savings for the federal government (i.e. taxpayers).

This is the opposite of today’s approach to health care, where the existing vehicle for federal funding (the Canada Health Transfer) is connected to the Canada Health Act (CHA), which prevents provincial governments from innovating and experimenting in health care by threatening financial penalties for non-compliance with often vaguely defined federal preferences. The result is a stalemate that satisfies no one and ensures that Canada’s policies remain at odds with the policies of our better-performing universal health-care peers.

While new federal dollars for health care are undoubtedly appealing to premiers, they will not improve the state of health care for Canadians. Until our federal politicians have the courage to reform the CHA and follow the example of 1990s welfare reform to improve outcomes, our health-care system’s unacceptable status quo will continue.

Business

Ottawa should end war on plastics for sake of the environment

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From the Fraser Institute

By Kenneth P. Green

Here’s the shocker: Meng shows that for 15 out of the 16 uses, plastic products incur fewer GHG emissions than their alternatives…

For example, when you swap plastic grocery bags for paper, you get 80 per cent higher GHG emissions. Substituting plastic furniture for wood—50 per cent higher GHG emissions. Substitute plastic-based carpeting with wool—80 per cent higher GHG emissions.

It’s been known for years that efforts to ban plastic products—and encourage people to use alternatives such as paper, metal or glass—can backfire. By banning plastic waste and plastic products, governments lead consumers to switch to substitutes, but those substitutes, mainly bulkier and heavier paper-based products, mean more waste to manage.

Now a new study by Fanran Meng of the University of Sheffield drives the point home—plastic substitutes are not inherently better for the environment. Meng uses comprehensive life-cycle analysis to understand how plastic substitutes increase or decrease greenhouse gas (GHG) emissions by assessing the GHG emissions of 16 uses of plastics in five major plastic-using sectors: packaging, building and construction, automotive, textiles and consumer durables. These plastics, according to Meng, account for about 90 per cent of global plastic volume.

Here’s the shocker: Meng shows that for 15 out of the 16 uses, plastic products incur fewer GHG emissions than their alternatives. Read that again. When considering 90 per cent of global plastic use, alternatives to plastic lead to greater GHG emissions than the plastic products they displace. For example, when you swap plastic grocery bags for paper, you get 80 per cent higher GHG emissions. Substituting plastic furniture for wood—50 per cent higher GHG emissions. Substitute plastic-based carpeting with wool—80 per cent higher GHG emissions.

A few substitutions were GHG neutral, such as swapping plastic drinking cups and milk containers with paper alternatives. But overall, in the 13 uses where a plastic product has lower emissions than its non-plastic alternatives, the GHG emission impact is between 10 per cent and 90 per cent lower than the next-best alternatives.

Meng concludes that “Across most applications, simply switching from plastics to currently available non-plastic alternatives is not a viable solution for reducing GHG emissions. Therefore, care should be taken when formulating policies or interventions to reduce plastic demand that they result in the removal of the plastics from use rather than a switch to an alternative material” adding that “applying material substitution strategies to plastics never really makes sense.” Instead, Meng suggests that policies encouraging re-use of plastic products would more effectively reduce GHG emissions associated with plastics, which, globally, are responsible for 4.5 per cent of global emissions.

The Meng study should drive the last nail into the coffin of the war on plastics. This study shows that encouraging substitutes for plastic—a key element of the Trudeau government’s climate plan—will lead to higher GHG emissions than sticking with plastics, making it more difficult to achieve the government’s goal of making Canada a “net-zero” emitter of GHG by 2050.

Clearly, the Trudeau government should end its misguided campaign against plastic products, “single use” or otherwise. According to the evidence, plastic bans and substitution policies not only deprive Canadians of products they value (and in many cases, products that protect human health), they are bad for the environment and bad for the climate. The government should encourage Canadians to reuse their plastic products rather than replace them.

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Automotive

Governments in Canada accelerate EV ‘investments’ as automakers reverse course

Published on

From the Fraser Institute

By Kenneth P. Green

Evidence continues to accrue that many of these “investments,” which are ultimately of course taxpayer funded, are risky ventures indeed.

Even as the much-vaunted electric vehicle (EV) transition slams into stiff headwinds, the Trudeau government and Ontario’s Ford government will pour another $5 billion in subsidies into Honda, which plans to build an EV battery plant and manufacture EVs in Ontario.

This comes on top of a long list of other such “investments” including $15 billion for Stellantis and LG Energy Solution, $13 billion for Volkswagen (with a real cost to Ottawa of $16.3 billion, per the Parliamentary Budget Officer), a combined $4.24 billion (federal/Quebec split) to Northvolt, a Swedish battery maker, and a combined $644 million (federal/Quebec split) to Ford Motor Company to build a cathode manufacturing plant in Quebec.

All this government subsidizing is of course meant to help remake the automobile, with the Trudeau government mandating that 100 per cent of new passenger vehicles and light trucks sold in Canada be zero-emission by 2035. But evidence continues to accrue that many of these “investments,” which are ultimately of course taxpayer funded, are risky ventures indeed.

As the Wall Street Journal notes, Tesla, the biggest EV maker in the United States, has seen its share prices plummet (down 41 per cent this year) as the company struggles to sell its vehicles at the pace of previous years when first-adopters jumped into the EV market. Some would-be EV makers or users are postponing their own EV investments. Ford has killed it’s electric F-150 pickup truck, Hertz is dumping one-third of its fleet of EV rental vehicles, and Swedish EV company Polestar dropped 15 per cent of its global work force while Tesla is cutting 10 per cent of its global staff.

And in the U.S., a much larger potential market for EVs, a recent Gallup poll shows a market turning frosty. The percentage of Americans polled by Gallup who said they’re seriously considering buying an EV has been declining from 12 per cent in 2023 to 9 per cent in 2024. Even more troubling for would-be EV sellers is that only 35 per cent of poll respondents in 2024 said they “might consider” buying an EV in the future. That number is down from 43 per cent in 2023.

Overall, according to Gallup, “less than half of adults, 44 per cent, now say they are either seriously considering or might consider buying an EV in the future, down from 55 per cent in 2023, while the proportion not intending to buy one has increased from 41 per cent to 48 per cent.” In other words, in a future where government wants sellers to only sell EVs, almost half the U.S. public doesn’t want to buy one.

And yet, Canada’s governments are hitting the gas pedal on EVs, putting the hard-earned capital of Canadian taxpayers at significant risk. A smart government would have its finger in the wind and would slow down when faced with road bumps. It might even reset its GPS and change the course of its 2035 EV mandate for vehicles few motorists want to buy.

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