Prescription drugs on shelves at a pharmacy in Montreal.Ryan Remiorz/The Canadian Press
On April 28, Finance Minister François-Philippe Champagne will offer an update on the state of the country’s finances. This would be the perfect time for this Liberal government to put an end to pharmacare.
A program introduced late in the life of Justin Trudeau’s third term exists on life support, involving only a limited range of drugs and with agreements involving only three provinces and one territory. Expanding the program would be hugely expensive at a time when Ottawa is pursuing far different priorities.
The Trudeau government’s half-baked pharmacare experiment would have been a bad idea at the best of times, and these are not those times.
A truly comprehensive, national pharmacare program would cost governments more than $13-billion annually, the Parliamentary Budget Officer estimates. It would displace existing programs offered by private insurers and interfere in a field of provincial jurisdiction, which is why provincial governments are so reluctant to embrace it.
As we have previously observed, there might have been a window to incorporate pharmacare into Canada’s universal public health care system when it was first established in the 1960s. Since then, however, employers extended private prescription drug plans to about 40 per cent of the population. A plethora of federal, provincial and municipal drug plans looked after the needs of another 40 per cent, most of them seniors or people in need. About 20 per cent of prescription costs are paid out of pocket.
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Nonetheless, Liberal governments have repeatedly dangled the possibility of extending a universal public prescription plan, especially when seeking to get elected. Both Jean Chrétien and Paul Martin promised to consider a national pharmacare program, but both preferred instead to focus on eliminating the federal deficit and then on bolstering funding to existing programs.
Justin Trudeau commissioned studies and promised to take the “critical next step,” in moving toward pharmacare, after receiving a report that recommended national, universal pharmacare. But it wasn’t until after the 2021 election that the Liberals committed to establishing a program, as part of their supply-and-confidence agreement with Jagmeet Singh’s New Democrats.
That program covers only two types of medication, for diabetes and contraception, and Ottawa signed agreements with only three provinces and one territory: British Columbia, Manitoba, Prince Edward Island and Yukon.
(The Trudeau government also introduced a national dental care program, with a far better design. That plan covers only those without an existing public or private plan, and with a family net income below certain thresholds. And there are co-pays for those with incomes above $70,000.)
In theory, the pharmacare program could gradually expand coverage and sign agreements with more provinces. But Mark Carney’s government has given no indication that it has any interest in seeing it expand.
The fall budget contained no additional funding for pharmacare, and Health Minister Marjorie Michel affirmed there were no new agreements pending with provinces.
So the current program inhabits the worst of all possible worlds: a $1.5-billion, five-year commitment, passed in Budget 2024, that sustains a limited program. Mr. Carney made only fleeting reference to pharmacare and other social programs from the Justin Trudeau era in his speech at the Liberal policy conference in Montreal earlier this month and in a recent video.
Furthermore, Mr. Champagne’s update is certain to confirm that this federal government continues to run persistent budget deficits.
This doesn’t mean there is no role for government in meeting prescription drug needs. Polling data report that one Canadian in four struggles to pay the cost of prescriptions, or leaves them unfilled altogether. It is right and proper for governments to take steps to provide for those who need medication but cannot afford it. But Ottawa should be helping provincial governments to extend their own programs, rather than foisting its own program upon them.
A federal universal program to pay for prescription drugs would be wildly expensive, crowd out the private sector and rile provincial governments. Pharmacare is an idea whose time should never come.