Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

A patient undergoes arthroscopic surgery at a Vancouver hospital in 2010.


One of the global challenges of public policy is the rising relative cost of health care.

Total government spending on health in Canada rose to $191-billion in 2010 from $140-billion in 2005. Much of this growth is fueled by the $24.8-billion (and rapidly growing) transferred to the provinces by the federal government specifically for health.

Regardless of party or partisan stripe, health-care costs across Canada – and much of the Western world – have grown at rates far exceeding other social programs. The result is budgets where health care threatens to take over so much of tax revenue that other programs, from welfare to roads to the military, are reduced below quality measures anyone would want.

Story continues below advertisement

The phenomenon is obvious to anyone in public policy, but the question of why it happens is more complex. A recent paper in the British Journal of Political Science provides a new angle. Danish political scientist Carsten Jensen argues that "health care is inherently different from the politics of social policy related to the labour market."

Most elements of the welfare state – social assistance, unemployment insurance, injured worker's insurance, sick pay, etc – are programs where the benefits fall more heavily on those with lower incomes, and thus there is a major income skew along the labour market. Those with lower-income tend to be more supportive of social programs than those with higher income.

Jensen argues effectively that health care is different. "Failing health is a life course risk, meaning that it is largely uncorrelated with income distribution. High-income and low-income individuals are almost equally exposed to the risk of failing health." Only the most well-to-do have the resources to self-insure against catastrophic health risks.

The result is that health care remains popular among the middle class, far more so than other elements of government transfers to individuals or programs. In the parlance of political science, there is an electoral exposure between the median voter and the income at which a voter can self-insure which splits the natural conservative coalition. Some can afford to self-insure and some can't.

As a result, conservative governments do two things.

First, they are as likely as left-wing ones to increase spending in health care, even while cutting spending in other parts of the welfare state. They do this to mollify concerns among lower-income conservative voters in a world where "amount you spend" is used to equate with "how much you care." Second, they tend to offer opt-outs or Private Health Insurance (PHI) as a way to mollify high-income conservatives who want access to higher quality care.

The data Jensen tests shows that since 1980, conservative governments tend to result in lower unemployment income replacements, but have no significant impact on total health spending. As a result, we can see why across the world health care continues to grow while the rest of the budget shrinks. The left tends to ramp up spending across the board. For conservatives, it is good electoral strategy to match the financial spending bids of parties to their left, while promising to cut programs that are more income-dependent.

Story continues below advertisement

The result is health just keeps growing. Jensen tests his hypothesis with two case studies, Denmark and Australia, as well as data from across the developed world.

We see the same phenomenon in Canada. This year, the looming renegotiation of the federal-provincial Health Accord – renewing Paul Martin's "fix for a generation" – was a key issue in the federal election.

Before 2006, Stephen Harper's position was simple. Asked about the accord in 2005, Harper answered: "I would rather have the federal government focus on the things it can do and let the other governments get on with the issues they are supposed to deal with."

As the election opened, the Liberals tried to make the accord a key issue, pledging billions in new money for a post-2014 Health Accord with the provinces. Within minutes, the NDP matched the Liberal pledge. And within hours, the Conservatives had matched them both.

Stephen Harper was determined not to repeat the mistake of the 2004 campaign, where he let Paul Martin define him as supporting Ralph Klein's musings on private health care – and wound up taking a surprising defeat as a result. In a single day, all three major parties promised to extend transfers to the provinces at 6 per cent annually, guaranteeing a multi-billion dollar increase in funding.

The quick match of the Liberal position makes perfect sense for the Conservatives politically. The issue was certainly salient. After the election, Nik Nanos found health care negotiations with the provinces were the No. 1 issue Canadians wanted Stephen Harper to address.

Story continues below advertisement

The issue was also one that the Conservatives did not want to spend any time on. Private coverage and lower funding split the Conservative Party coalition, so they wanted to fight the election elsewhere. By matching the spending commitments of the opposition, they were able to do that.

The Canadian case study reinforces Jensen's basic finding: If you want a way to explain accelerating health care spending, don't just point to the left. Parties on right are just as responsible for the extraordinary increases.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies