Healthcare monopolizes spending

For the 2010-11 fiscal year, the government of Ontario will spend $40.1 billion of its program expenditures in the health sector: a figure reflecting the needs of an aging population. This compares to a mere $21.4 billion for the education sector.

A study in November by the Certified General Accountants Association of Canada found that “certain provinces could be spending in excess of 50 per cent of their budgets on health care as early as 2020.”

“Unless they get that [healthcare spending] percentage down, then education could take a significant hit,” said David Docherty, senior advisor: multi-campus initiatives for Wilfrid Laurier University, noting that if cuts to education occurred it would happen in the longer term.

“It will depend on the political party as well,” he added. “I think the Conservatives would be more likely to trim education because that’s not necessarily their constituency.”

A way to reduce government spending in healthcare would be to increase the degree of private services. Docherty believes that any provincial government attempting to implement such a reform would have to be very careful to avoid a public backlash. “From a policy perspective, I would say that a lot of politicians would be afraid to tackle that because it’s a loaded [issue],” he said. “Any move towards increased privatization or not, it has to be clear that how sick you are determines your level of care.”

A recent poll conducted by Ipsos Reid for the Canadian Medical Association found that 59 per cent of Canadians agreed that healthcare spending would eclipse other public spending priorities, while only 32 per cent agreed that government should raise taxes to cover the cost of healthcare. This indicates cuts in areas like education as the best option politically.

“If there are cuts to education, there will be fewer people participating in post-secondary education as students and that’s detrimental to a knowledge economy,” explained Docherty. “And so we start to shift into a knowledge-based economy and that takes time, and not everybody’s going to be a winner.”

In addition, Docherty predicts that a government attempting to cut costs by reducing education funding will not be desirable, as the result of cuts to post-secondary education “will be a net drain on the economy because it takes longer for individuals to have higher paying jobs, so the overall economy will start to suffer.”

Regardless, with healthcare spending consuming such a large part of provincial government budgets, other areas of spending will inevitably see a relative decline.