Canada - World Health Organization Regional Office for Europe

Health systems in transition Canada 133
As discussed in Chapter 3, OOP payments made up 15% of revenues and
PHI a further 13% of revenues for all health spending in Canada in 2009, almost
all of which stems from the benefit packages in group-based employment
plans. Such benefits are generally restricted to higher-wage and higher-salary
permanent jobs, whereas the working poor are often in low-paid, temporary or
seasonal jobs, precisely the type of employment that does not come with PHI
benefits (Hurley & Guindon, 2008). By health sector, dental care provides one
of the most extreme examples of reliance on private funding. In Canada, 95%
of all financing for dental care comes from either OOP or PHI sources, a figure
considerably higher than in almost all high-income OECD countries.
Compared with PHI and OOP funding sources, general tax revenues are
more equitable, involving some income redistribution from higher-income
households to lower-income households. The extent of this redistribution
depends on the overall degree of progressivity of the general tax system. As
reviewed in Chapter 3, a number of revenue sources make up the general
revenue funds of governments in Canada. Although the largest source is income
tax – a progressive source of taxation – other taxes, including consumption
taxes, tend to be regressive, making it difficult to assess the progressivity of the
tax system as a whole. While tax systems are often perceived to be progressive,
the reality depends on the relative mix and design of taxes that make up the
basket of the general revenue funds of an individual government – federal,
provincial or territorial.
In her analysis of the equity of health financing in British Columbia, McGrail
(2007) found that the mix and incidence of taxes actually resulted in a healthfinancing
system that was nearly proportionate across income groups. Based on
this result, she concluded that that while medicare redistributes across income
groups, this was largely the result of higher utilization of medicare services
among lower-income groups as opposed to equity in financing. It should be
borne in mind that health premiums – in effect, a regressive poll tax – still form
part of the health financing mix in British Columbia. Since health premiums do
not exist or have been integrated into existing income tax systems, this could
mean that other provinces have relatively more progressive health financing
than British Columbia. However, similar empirical analyses of health financing
have not yet been conducted on the other provinces.