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by Stan Marshall
senior research officer
Canadian Union of Public Employees
Westin Hotel
Ottawa, Ontario
November 21, 2000

Good Morning. It is indeed a pleasure to be here to say a few words about health care and globalization from a Canadian perspective. There is no question that the drive for profits is driving globalization and, unfortunately, it is also driving health policy.

Key people in the media, business and government often make the connection as the following quotations show: “Canada’s health care system could be converted from an expensive overhead into a profit centre.” – Diane Francis, The Financial Post, November 16, 2000.

Commercial opportunities exist along the entire spectrum of health and social services” – Charlene Barshefsky, US Chief Trade Delegate and Chair of the Seattle round of the WTO.

“The public ownership of health care has made it difficult for U.S. private-sector – U.S. Coalition on Service Industries submission, Services 2000 – Objectives at the GATS.

Health Canada plays a significant and positive role in the promotion of Canadian exports of health care products and services and in encouraging foreign investments in Canada.” – Edward Aiston, Director General International Affairs Directorate, Health Canada, presentation to International Health Business Opportunities Conference, Calgary October 29, 1997.

The importance of strong domestic markets for capital

The ideology of free trade predominates in the Canadian corporate and government mind. Business wishes to open up new markets and the public sector is one of the last untapped frontiers.

Governments have been convinced by a decade of abuse that they should no longer be in the business of government – that they should merely steer and not row, taking advice from that infamous book, Reinventing Government, published a decade ago. And “steering” means turning the boat over to the private sector.

Governments are getting out of the business of “rowing” by opening up domestic markets to privatization. Canadian business is happy with the consequence. They are keen to strengthen the domestic market. From capital’s perspective, they will then be able to use the domestic market as a springboard to enter the international market.

But let’s keep in mind that in the free trade arena, you do not gain access to foreign markets without opening your own to foreign competition. So, once again from capital’s perspective, it is better that you have a strong domestic market.

What does strengthening the domestic market in health care mean?

You can strengthen the domestic market by issuing faster approvals for drugs and medical devices. Businesses have for some years now been putting tremendous pressure on the approvals process – get the times for granting approvals of drugs and devices down. We need to get to market faster before our competitors do. Speeding up entry to the domestic market speeds up entry to international markets.

Corporate members of the Sectoral Advisory Group on International Trade (SAGIT) for Medical and Health Care Products and Services routinely chastise the responsible Director General at Health Canada for slow approval times. Moreover, the corporate members of the SAGIT routinely denigrate the public nature of the Canadian health care system while overtly proposing private sector solutions to any problems. The mandate of the SAGIT is clearly laid out by the Department of Foreign Affairs and International Trade. The SAGIT is to provide advice on trade matters and not on health policy. Consequently, the impact of trade measures on health policy are never considered – not even by the Health Canada representatives at the SAGIT.

Strengthening the domestic market also means entering into an increasing number of Mutual Recognition Agreements (MRAs) through which we will seek the ultimate goal of harmonization with other trading blocks. These MRAs could apply to any type of health product or service. At present they are primarily focussed on pharmaceuticals, foods and medical devices. In any case, business is concerned that the MRA process is not proceeding at a pace that is swift enough to ensure complete harmonization in a very short time. Corporate members of the SAGIT are particularly vocal on this point.

A big problem in strengthening the domestic market is that at present much of the domestic market is publicly funded with services delivered by public employees. There is only one sure way to strengthen private sector involvement and that is to convert public services to private ones.

Many provincial governments in Canada are heading down this road. Alberta passed Bill 11 to allow for the creation of private hospitals. Ontario has introduced a competitive bidding process in home care to ensure private sector participation in the market. Private clinics in B.C and Quebec are operating with seeming impunity. The majority of new long-term care beds in Ontario are awarded to private corporations. Health laboratory services are privatized to some degree in almost every province. There is extensive deregulation and privatization of water testing in Ontario and many, many attempts to privatize water and waste water treatment across Canada.

And Health Canada looks on, complicit through its inaction.

What has the federal government role been?

There are several organizational forces that have facilitated globalization in health care. Canadian business, transnational corporations, and governments have all played a role.

The players at the government level in Canada are:

  • The Department of Foreign Affairs and International Trade (DFAIT)
  • Industry Canada (IC)
  • national Affairs Directorate of Health Canada (IAD)

To a lesser extent the Canadian International Development Agency (CIDA) and Investment Partnerships Canada (IPC) are also complicit.

“Health” has taken a back seat to the forces of international trade within the Canadian government. This multi-departmental approach noted above has hoisted trade to new heights while at the same time it has diminished the role of government in matters of ’health’. The social and economic determinants of health do not stack up against profits. Health prevention and promotion are not considered vital unless they too can generate a profit. Pharmaceutical companies “partnering” with disease advocacy groups are part of the new health economy but government policy isn’t.

What? Why the fuss?

The dangers for public health care are significant. Private health care companies make a profit by poaching the lowest-risk patients – young and healthy – for themselves, leaving the public system to deal with those who can not afford private care – the poor, the elderly, women, single parents, and people with disabilities.

The Free Trade Agreement and the North American Free Trade Agreement (NAFTA) have already set the stage and the GATS and the WTO are the present day venues for globalization, after the Multilateral Agreement on Investment (MAI) failed.

To date, the health focus has been primarily on pharmaceuticals and medical devices. However, the terrain has rapidly shifted to services over the last three to five years. Health services are now squarely on the global trading agenda at the GATS talks and the WTO.

The social and economic determinants of health show that poverty and health are correlated. As the gap between the rich and the poor widens in both Canada and the US as a result of free trade agreements, health outcomes are likely to worsen.

For workers in health care (80% are women) the effects of globalization are just now coming fully to the fore. After close to a decade of downsizing and restructuring – a period when workers were afraid for their jobs – most health care workers are waking to the fact that their working conditions are now much worse than previously. Their pay and benefits have been cut and they are expected to carry heavy workloads. Within CUPE, workload and workplace stress issues are very high on the agenda. There are several workload conferences planned over the next year and workload will be on bargaining agendas as never before.

We are only now just beginning to realize the health costs of free trade. Workers are now working in environments where both their physical and mental health is at risk.

Low wages and stressful work in health care are particularly women’s issues. In health care a woman may work all day caring for the frail elderly or an acute care patient. At the end of the day, she may go home to care for an elderly parent or a disabled child. The workday is doubled even before she considers the other expectations her family has of her. How long can people sustain their health under such circumstances? The lack of public health programming and services has failed these women. And no amount of privatization will alleviate their condition.

Free trade has the effect of lowering food and safety standards to the lowest common denominator. Hence, the MRAs referred to earlier and any deregulation of testing is extremely dangerous, especially if combined with privatization. Trade rules may mean that higher environmental and health and safety standards are a barrier to trade.

Free trade has the effect of lowering food and safety standards to the lowest common denominator. Hence, the MRAs referred to earlier and any deregulation of testing is extremely dangerous, especially if combined with privatization. Trade rules may mean that higher environmental and health and safety standards are a barrier to trade.

Public policy will be sacrificed for profits. Public home care, a universal national drug plan (pharmacare) or even the enforcement of the now vastly diminished principles of the Canada Health Act can be challenged as constraints against free trade and abandoned. International trade lawyer, Stephen Shyrbman, says “this public policy self-censorship is arguably free trade’s most pernicious legacy.” (CCPA Monitor, Vol. 6, No. 5, p.1.) Violations of trade rules are often very harshly punished. In this sense trade undermines democracy by shrinking the choices available to democratically controlled governments.

n short, health care has become a new market and health has become a new commodity. By abdicating their role as health policy makers and by accentuating their role as sales representatives for domestic and foreign corporations, the Canadian government has set itself firmly on course to threaten public health and to destroy publicly funded and delivered health care.

Thank You