Health care spending is unsustainable, former finance minister Bill Morneau says in new book

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Former finance minister Bill Morneau says political leaders in Canada have for too long fixed the health care system’s problems by spending more and more money, and that now is the time to make the hard choices they have avoided in the past.

More than two years after resigning from cabinet and the House of Commons, Mr. Morneau is about to release a book – titled Where To From Here – that looks back on his five years in Prime Minister Justin Trudeau’s government and offers a 325-page road map for navigating the country’s economic and social challenges. Fixing health care programs that cost $300-billion annually, with spending set to soar as the population ages, is a central theme.

“We are the proverbial frog in the pot of water heated on the stove where funding for our health care system is concerned. We need to recognize that steadily rising health care costs are unsustainable,” Mr. Morneau writes in the book, an advance copy of which was shared with The Globe and Mail. “The causes are many, but one of the core problems is the belief that our current method of delivering health care is somehow sacrosanct. It is not.”

In Mr. Morneau’s view, he and other political leaders have avoided the hard work of health care reform, and instead kicked the problem down the road by increasing federal transfer payments and other sources of cash for a system that now consumes 13 per cent of Canada’s gross domestic product, second only to the U.S. among Organization for Economic Co-operation and Development nations.

Going forward, the former cabinet minister writes, federal transfers should be conditional on commitments from the provinces to achieve “measurable progress” on health care reforms, overseen by an agency with representatives from both levels of government.

In November, Canada’s premiers rejected a proposed increase in federal health care funding, in part because the federal government was insisting that the bump would be conditional on the creation of national health human resources and data collection programs.

“The federal government should not introduce new programs requiring joint funding without agreeing with the provinces and territories on the policy rationale and program development,” Mr. Morneau writes.

In the book, which is scheduled for release on Jan. 17, he recounts how in 2017 he and former health minister Jane Philpott championed one of the government’s signature achievements: reforms that increased support for home care and mental health. In Ontario, the programs translated into an additional $4.2-billion of federal funding.

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Looking back, Mr. Morneau writes, “We continued the pattern where the federal government gives the money while accepting a fiction: that the provinces will apply the funds to the system for which they are responsible, which is something that often fails to happen.”

Prior to entering politics, Mr. Morneau was the chief executive officer of employee benefits firm LifeWorks, formerly known as Morneau Shepell. The 60-year-old was also chair of the board at downtown Toronto’s St. Michael’s Hospital, and he led a successful reform of Ontario pension plans commissioned by the provincial government.

Mr. Morneau said in an interview that he wrote the book to address what he sees as critical national issues, including improving productivity, renewing infrastructure and transitioning from fossil fuels to renewable energy. But improving health care tops his list of suggested priorities.

“The work to solve the unfinished business of health care can’t be done unilaterally by the federal government, and it can’t be a second or third priority,” he writes. “It sits at the top of the list of Canadians’ concerns, it is fundamental to the fiscal health of the provinces and it demands the combined focused attention of the provinces and the federal government. There is no shortcut.”

In the book, Mr. Morneau points out that Alberta pleads poverty on social programs while remaining the only jurisdiction without a provincial sales tax – a contradiction about which he would not have been free to opine while he was still in politics. “The provinces won’t look good to their electorates by seeking more money from sales taxes or other taxes, but they can appear near-heroic by demanding that the federal government provide more funding for health care,” he writes.

Since Mr. Morneau resigned, the government has boosted health care spending, including by launching a national child dental care program, at an annual cost of about $1-billion, as part of a pact to win support from the federal New Democrats. But the country’s hospitals are now buckling under staffing shortages and wave after wave of COVID-19 and other respiratory illnesses.

To find solutions to seemingly intractable health care challenges, Mr. Morneau suggests leaders look outside Canada for both ideas and political approaches. In the book, he points out that former U.S. president Bill Clinton and his wife Hillary tried to introduce sweeping health care reforms in the 1990s, only to see their ambitious plan fail in the face of industry opposition and partisan politics. Two decades later, president Barack Obama made revolutionary changes by rolling out reforms in stages, rather than trying for a “total makeover.”

“I share the pride in the attention and investment we pay to caring for every Canadian, regardless of their financial or social status. I also believe there is substantial room for improvement in our hands to find and apply the steps needed to make the system even better,” Mr. Morneau writes.

“Unfortunately, for too long our approach to solving our health care crisis has consisted of shutting our eyes, pointing our fingers, applying Band-Aids and generally assuming that things will work somehow,” he continues. “All of it reminiscent of the joke about the doctor telling a patient, ‘Take two Aspirin and call me in the morning.’

“At some point, without leadership that places all the issues on the table and obtains agreement from the provinces on steps to be taken, no one will be there to answer the call in the morning.”