Is it illegal under the Canada Health Act for provinces to allow private delivery of care, charge user fees or even allow private insurance? Not in the least, but readers would be forgiven for thinking so based on the rhetoric of politicians and vested interests.

In an important new paper, Michael Watts, a distinguished lawyer specializing in health care law, writes that provinces have much greater freedom to innovate in health care delivery than most people believe. It's a matter of separating myth from reality surrounding the CHA.

OTTAWA, Sept. 20, 2013 – Anyone who has correctly noted that there is room for provinces to experiment extensively with health care delivery under the Canada Health Act has been shouted down, charges Michael Watts, a partner at Osler Hoskin & Harcourt LLP. The Act "has taken on enormous proportions in the minds of Canadian citizens and their political representatives," he writes in "Debunking the Myths: A Broader Perspective of the Canada Health Act", a major paper released today by the Macdonald-Laurier Institute.

Watts clearly lays out what the Act does and does not allow, and reveals that there is little that restricts provinces from innovating, particularly given the hands-off approach of today's federal government. Watts also establishes the importance of the case of Chaoulli v. Quebec in establishing the right to accessibility in all provinces as a condition of receipt of public funding.

To begin with, provinces have sole authority over their own health care programs. The federal government's power under the CHA is limited to its ability to withhold portions of the Canada Health Transfer. Watts quotes one public policy expert as saying the Act "neither has nor requires provincial consent and is not legally binding on either party."

And not only are the federal government's powers over the provinces with regard to issues such as user fees and extra billing weaker than most believe, Watts' research demonstrates that it is becoming less and less inclined to use them. Watts finds little evidence the federal government has ever imposed discretionary penalties on the provinces over failures to uphold the Act, mandatory penalties have declined dramatically over the years, and what few cases go to dispute resolution also tend not to result in reductions in health transfers.

"The most unfortunate result of the disingenuous, poisonous and hyper-partisan commentary around Canada's health care system is that innovative thinking has been stifled and the voices of well-intentioned and thoughtful politicians and experts have been silenced", says Watts. "In the process, many myths have taken deep root".

Among other things, Watts writes, the CHA does not dictate how insured health services must be provided; is silent on who may provide the services; takes no stance on whether a physician may work both inside and outside the provincial public insurance program; and does not discuss whether fees may be charged for non-insured health services.

Not only does the law allow for major reforms to how health care is delivered, it arguably requires them. The Chaoulli case "makes the powerful statement that if a vital health service is not provided by the government, an individual has the constitutional right to pay for the service either directly or through private health insurance", notes Watts.

Change is coming. The federal government's "take-it-or-leave-it" unilateral renewal of the Canada Health Transfer in 2011 will leave the provinces with less money to spend but signals an opportunity for them to experiment with reforms. They should not be allowed to hide behind the Canada Health Act.

Michael Watts is a partner at Osler, Hoskin & Harcourt LLP in Toronto and Chair of the firm's National Health Industry Group. Contact: Kwan Tse, 416-862-4915, ktse@osler.com

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government. For more information contact:

David Watson, managing editor and communications director, david.watson@macdonaldlaurier.ca

Phone: 613-482-8327, ext. 103