Virtual care will break the Canada Health Act—and that’s a good thing

From the Fraser Institute

The leadership of the Canadian Medical Association (CMA) is facing sharp criticism for its recent proposal to effectively ban private payment for virtual care. In a clear example of putting politics before patients, this would only erect additional barriers for those seeking care.

Moreover, it’s a desperate bid to cling to an outdated—and failed—model of health care while underestimating modern-day innovations.

Virtual care—online video doctor consultations—is a private-sector innovation. In response to our government system’s inability to provide timely care, private companies such as Maple have been offering these services to Canadians for almost a decade. In fact, the public system only pushed meaningfully into the virtual space during COVID when it established partnerships with these private companies alongside setting up new fee codes for virtual consultations.

In return for improving access to physician consultations for thousands of Canadians, these virtual care companies have been rewarded with increased government scrutiny and red tape. The weapon of choice? The Canada Health Act (CHA).

Specifically, sections 18 to 21 of the CHA prohibit user fees and extra billing for “medically necessary” services. Further, the insurance plan of a province must be publicly administered and provide “reasonable access” to 100 per cent of insured services. Provinces found in violation are punished by the federal government, which withholds a portion (or all) of federal health-care transfer payments.

Until recently, there had been no obvious conflict between the CHA and privately paid-for virtual care—primarily because the provinces are free to determine what’s medically necessary. Until recently, many provinces did not even have billing codes for virtual care. As virtual services are increasingly provided by the public sector, however, the ability to innovatively provide care for paying patients (either out-of-pocket or through private insurance) becomes restricted further.

Within this context, the CMA recently recommended formally including virtual care services within the public system, alongside measures to ensure “equitable access.” At the same time, it reiterated its recommendation that private insurance to access medically necessary services covered by the CHA be prohibited.

See where this is going?

The kicker is an additional recommendation banning dual practice (i.e. physicians working in both the public and private sector) except under certain conditions. This means doctors in the public system who could otherwise allocate their spare hours to private appointments online would now have to choose to operate exclusively in either the public or private system.

The combined effect of these policies would ensure that innovative private options for virtual care—whether paid for out-of-pocket or though private insurance—will either be overtaken by bureaucracies or disappear entirely.

But what the CMA report fails to recognize is that virtual care has expanded access to services the government fails to provide—there’s little reason to suspect a government takeover of the virtual-care sector will make things better for patients. And even if governments could somehow prevent Canadian doctors and companies providing these services privately, virtual care is not beholden to Canada’s physical borders. Patients with a little bit of technical knowhow will simply bypass the Canadian system entirely by having virtual consultations with doctors abroad. If Canadians can figure out how to access their favourite show in another country, you can be sure they’ll find a way to get a consultation with a doctor in Mumbai instead of Montreal.

Instead of forcing physicians and patients to operate within the crumbling confines of government-run health care, the CMA’s leadership should be grateful for the pressure valve that the private sector has produced. We should celebrate the private innovators who have provided Canadians better access to health care, not finding ways to shut them down in favour of more government control.

Author:

Bacchus Barua

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Federal government’s accounting change reduces transparency and accountability

Published on May 3, 2025

Todayville

From the Fraser Institute

By Jake Fuss and Grady Munro

Carney’s deficit-spending plan over the next four years dwarfs the plan from Justin Trudeau, the biggest spender (per-person, inflation-adjusted) in Canadian history, and will add many more billions to Canada’s mountain of federal debt. Yet Prime Minister Carney has tried to sell his plan as more responsible than his predecessor’s.

All Canadians should care about government transparency. In Ottawa, the federal government must provide timely and comprehensible reporting on federal finances so Canadians know whether the government is staying true to its promises. And yet, the Carney government’s new spending framework—which increases complexity and ambiguity in the federal budget—will actually reduce transparency and make it harder for Canadians to hold the government accountable.

The government plans to separate federal spending into two budgets: the operating budget and the capital budget. Spending on government salaries, cash transfers to the provinces (for health care, for example) and to people (e.g. Old Age Security) will fall within the operating budget, while spending on “anything that builds an asset” will fall within the capital budget. Prime Minister Carney plans to balance the operating budget by 2028/29 while increasing spending within the capital budget (which will be funded by more borrowing).

According to the Liberal Party platform, this accounting change will “create a more transparent categorization of the expenditure that contributes to capital formation in Canada.” But in reality, it will muddy the waters and make it harder to evaluate the state of federal finances.

First off, the change will make it more difficult to recognize the actual size of the deficit. While the Carney government plans to balance the operating budget by 2028/29, this does not mean it plans to stop borrowing money. In fact, it will continue to borrow to finance increased capital spending, and as a result, after accounting for both operating and capital spending, will increase planned deficits over the next four years by a projected $93.4 billion compared to the Trudeau government’s last spending plan. You read that right—Carney’s deficit-spending plan over the next four years dwarfs the plan from Justin Trudeau, the biggest spender (per-person, inflation-adjusted) in Canadian history, and will add many more billions to Canada’s mountain of federal debt. Yet Prime Minister Carney has tried to sell his plan as more responsible than his predecessor’s.

In addition to obscuring the amount of borrowing, splitting the budget allows the government to get creative with its accounting. Certain types of spending clearly fall into one category or another. For example, salaries for bureaucrats clearly represent day-to-day operations while funding for long-term infrastructure projects are clearly capital investments. But Carney’s definition of “capital spending” remains vague. Instead of limiting this spending category to direct investments in long-term assets such as roads, ports or military equipment, the government will also include in the capital budget new “incentives” that “support the formation of private sector capital (e.g. patents, plants, and technology) or which meaningfully raise private sector productivity.” In other words, corporate welfare.

Indeed, based on the government’s definition of capital spending, government subsidies to corporations—as long as they somehow relate to creating an asset—could potentially land in the same spending category as new infrastructure spending. Not only would this be inaccurate, but this broad definition means the government could potentially balance the operating budget simply by shifting spending over to the capital budget, as opposed to reducing spending. This would add to the debt but allow the government to maneuver under the guise of “responsible” budgeting.

Finally, rather than split federal spending into two budgets, to increase transparency the Carney government could give Canadians a better idea of how their tax dollars are spent by providing additional breakdowns of line items about operating and capital spending within the existing budget framework.

Clearly, Carney’s new spending framework, as laid out in the Liberal election platform, will only further complicate government finances and make it harder for Canadians to hold their government accountable.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute

Business

New federal government plans to run larger deficits and borrow more money than predecessor’s plan

Published on April 30, 2025

Todayville

Fr0m the Fraser Institute

By Jake Fuss and Grady Munro

The only difference, despite all the rhetoric regarding change and Prime Minister Carney’s criticism of the Trudeau government’s fiscal approach, is that the Carney government plans to run larger deficits and borrow more money.

As part of his successful election campaign, Prime Minister Mark Carney promised a “very different approach” to fiscal policy than that of the Trudeau government. But when you peel back the rhetoric and look at his plan for deficits and debt, things begin to look eerily similar—if not worse.

The Carney government’s “responsible” new approach is centered around the idea of “spending less” in order to “invest more.” The government plans to separate spending into two budgets: the operating budget (which appears to include bureaucrat salaries, cash transfers and benefits) and the capital budget (which includes any spending that “builds an asset”). The government plans to balance the operating budget by 2028/29 (meaning operating spending will be fully covered by revenues) while funding the capital budget through borrowing.

Aside from the fact that this clearly complicates federal finances, this “very different” approach to spending actually represents more of the same by continuing to pursue endless borrowing and a larger role for the government in the economy.

The chart below compares projected annual federal budget balances for the next four years, from both the 2024 Fall Economic Statement (FES)—the Trudeau government’s last fiscal update—and the 2025 Liberal Party platform. Importantly, deficits from the 2025 platform show the overall budget balance including both operating and capital spending.

CanvasJS.com

Let’s start with the similarities.

In its final fiscal update last fall, the Trudeau government planned to borrow tens of billions of dollars each year to fund annual spending, with no end in sight. Based on its election platform, the Carney government also plans to run multi-billion-dollar deficits each year with no plan to balance the overall budget. The only difference, despite all the rhetoric regarding change and Prime Minister Carney’s criticism of the Trudeau government’s fiscal approach, is that the Carney government plans to run larger deficits and borrow more money.

In the current fiscal year (2025/26) the Trudeau government had planned to run a $42.2 billion deficit. The Carney government now plans to increase that deficit to $62.3 billion. Trudeau’s most recent fiscal plan forecasted annual deficits from 2025/26 to 2028/29 representing a cumulative $131.4 billion in federal government borrowing. Over that same period, the Carney government now plans to borrow a cumulative $224.8 billion.

The Carney government’s fiscal plan does include a number of tax changes that are expected to lower revenues in years to come—including (but not limited to) a personal income tax cut, the elimination of the GST for some first-time homebuyers, and the cancelling of the planned capital gains tax hike. But even if you exclude these factors from the overall budget, the Carney government still plans to borrow $52.9 billion more than the Trudeau government had planned over the next four years.

By continuing (if not worsening) this same approach of endless borrowing and rising debt, the Carney government will impose real costs on Canadians. Indeed, 16-year-olds can already expect to pay an additional $29,663 in personal income taxes over their lifetime as a result of debt accumulation under the previous federal government, before accounting for the promised increases.

One of the key promises made by Prime Minister Carney is that his government will take a different approach to fiscal policy than his predecessor. While we won’t know for certain until the new government releases its first budget, it appears this approach will continue the same costly habits of endless borrowing and rising debt.