The Truth About Canada (49 page)

EU15
— The member countries in the European Union prior to the EU’s expansion in May 2004. The countries of the EU15 are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

FDIIC
— foreign direct investment in Canada. Direct investment usually represents significant ownership and control of a corporation, although in some widely held corporations as little as 10 percent ownership results in effective control.

FIRA
— Foreign Investment Review Agency

FTA
— Canada-U.S. free-trade agreement, which came into effect in 1989

G7, G8
— Group of Seven, Group of Eight. The G7 is a group of seven leading industrialized countries: Canada, France, Germany, Britain, Italy, Japan, and the United States. The G8 includes Russia.

GATT
— General Agreement on Tariffs and Trade

GDP
— gross domestic product. The total output of goods and services for final use produced by both residents and non-residents in an economy. This is the standard measure of the incomes generated from productive activity in a country.

GNI
— gross national income. GNI is equal to GDP plus the net receipts of wages, salaries, and property income from abroad.

IMF
— International Monetary Fund

labour productivity
— This key economic indicator is both important and confusing. For some, a poor performance in labour productivity implies workers are not working long enough or hard enough. But for others, it means the workers aren’t being given the updated technology and equipment they need to be more competitive. This last definition can be directly tied to poor corporate investment in research and in machinery and equipment.

For Statistics Canada, labour productivity measures real gross domestic product per hour worked and is a primary determinant of improvements to the standard of living in the long run and also the main source of economic growth.

Labour productivity is defined as the real output per hours worked. Multifactor productivity measures the efficiency with which inputs are used in production.

LDC
— least developed countries. The group of 50 countries classified by the United Nations as falling below thresholds established for income, economic diversification, and social development.

LICOs
— Low-income cut-offs are Statistics Canada thresholds, which are determined by analyzing family expenditure data, below which families will likely devote a larger share of income to food, shelter, and clothing than would the average family, adjusted for family size and
community. Statistics Canada says LICOs are “a well-defined methodology that identifies those who are substantially worse off than the average” and those who are in “the most straitened circumstances.”

low income
— Low income is broadly defined by Statistics Canada as a family or individual income that is half or less of median income.

market income
— Market income is the total of earnings from employment, invested income, and retirement income. It is the same as total income less government transfers.

median
— The median is the point where one half of incomes (for example) is higher and one half is lower.

multi-factor productivity
— This is where labour, capital, technological progress, and management considerations are added together to measure growth. Canada does better in this measurement than it does when only labour productivity is considered. From 1995 to 2003 inclusive, of 19 OECD countries, Canada was about in the middle of the pack with the ninth best record. Ireland, Finland, Greece, Australia, the United States, France, Sweden, and the United Kingdom all outperformed Canada, but Canada bettered Portugal, Germany, New Zealand, Austria, Belgium, Japan, Spain, the Netherlands, Denmark, and Italy, which had by far the worst record.
¹

NAFTA
— North American free-trade agreement. The Canada-U.S.-Mexico agreement that came into effect in 1994.

National Child Benefit Supplement
— The National Child Benefit was launched in 1998 by the federal, provincial, and territorial governments to increase child benefits to low-income families with children. The National Child Benefit Supplement is the federal government’s increased contribution to the initiative.

OECD
— Organization for Economic Cooperation and Development. This is composed of 30 developed countries which work together on economic, social, globalization, and environment matters. The OECD publishes a steady stream of invaluable books, papers, articles, and studies. The OECD member countries are Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

portfolio investment
— The purchase of shares and bonds for income yields or capital gains, not with the objective of asserting ownership or control.

poverty
— There is no official measurement of poverty in Canada. Social groups use the term to refer to those with incomes below the Statistics Canada LICO lines. Internationally, poverty is usually defined as living with an income less than 50 percent of the median disposable income. In common usage, poverty means being deprived of the necessities of life, suffering, hunger, lack of proper shelter and clothing, and the inability to take part in the community in a reasonable manner. (See Appendix Two for various methods of measuring poverty.)

purchasing power parity (PPP)
— Purchasing power parities are the currency conversions used to eliminate differences in price levels between countries. They provide a system for comparing the volume of GDP in different countries. PPPs are determined using the cost of a basket of goods and services in different countries. They are calculated in national currency units per U.S. dollar.

R&D
— research and development

transfer payments
— Transfer payments generally refer to payments by Ottawa to the provinces or to individuals, or other payments made by the provinces. Transfer payments to individuals include old age security, Canada and Quebec pension plans, employment insurance, guaranteed income supplements, spouse’s allowances, child benefit payments, welfare, workers’ compensation benefits, GST credits,
etc.

United Nations Human Development Index (UNHDI)
— This is based on longevity, adult literacy, school enrolment, and real GDP per capita and is published annually.

Unicef
— United Nations Children’s Fund

APPENDIX ONE: HEALTH CARE

CATEGORY BREAKDOWN OF TOTAL HEALTH-CARE EXPENDITURES IN CANADA

The Canadian Institute for Health Information (CIHI) says that in 2006, 29.8 percent of health-care funds went to hospitals, 17.0 percent for drugs, 13.1 percent to physicians, 9.4 percent to other institutions, 5.8 percent for public health costs, 4.1 percent for capital expenditures, 3.9 percent for administration, and the balance for “other health spending.”

Of the $39.24-billion in private sector health expenditures in 2004, 48.2 percent came from personal “out-of-pocket” spending, 41.3 percent was from private health insurance, and 10.5 percent from other sources. Most private sector health spending is for prescribed drugs, dental care, vision care, hospital accommodation, over-the-counter drugs, non-hospital institutions such as nursing homes and residential care facilities, and personal health supplies. In 2006, about 61.8 percent of all prescribed drugs had to be privately financed.

It should be noted that in the mid-1980s, spending for physician services was up to 15.7 percent of total health spending, but in 2006 it was down to 13.1 percent. Mind you, there were additional expenses for physicians employed directly by hospitals, boards of health,
etc.

“Other professional” expenses amounted to over $15-billion in 2006. These include the costs of dentists, denturists, optometrists, opticians, chiropractors, physiotherapists, and private duty nurses.

PROVINCIAL AND TERRITORIAL HEALTH-CARE SPENDING

The CIHI has forecast that provincial and territorial health spending in 2006/2007 would be $96-billion, up over $5-billion from the previous year and up almost $11-billion from 2004/2005. (After inflation, the 2006/2007 amount reflects real growth of 3.4 percent over 2005/2006.) Total provincial and territorial government health spending in 2006/2007 was expected to represent some 39 percent of all provincial and territorial government spending.

In 2007, per-capita spending in Alberta was $5,390, about $1,000 more than in Quebec.

In 1975, provincial and territorial spending amounted to 71.4 percent of total health-care expenditures. But by 2004 this had fallen to 64 percent.

PUBLIC AND PRIVATE HEALTH-CARE COSTS

The October 2006 edition of the
OECD Health Data
report says that in 2004 private per-capita health expenditures in the United States were $3,375, followed by Switzerland at $1,695, the Netherlands at $1,144, Australia at $1,014, and Canada in fifth place at $955 (all figures in U.S. dollars).

In 2004, private health-care expenditures in the United States were 8.5 percent of GDP, compared to about 3.0 percent in Canada.

Many Canadians think that the public share of total health expenditures in Canada is higher than in most countries. Not so. In 2004, Canada, at 70 percent public, was actually slightly below the 73 percent OECD average. All the following countries were above 80 percent in their publicly funded share of their total health spending: the Czech Republic and Luxembourg, both at 90 percent; the Slovak Republic at 88 percent; Sweden at 85 percent; Norway and Ireland at 84 percent; the United Kingdom and Denmark at 83 percent; and Japan at 82 percent. Only Switzerland at 59 percent, Greece at 51 percent, Korea at 49 percent, Mexico at 46 percent, and the United States were below 60 percent in their public share of health expenditures.

In an OECD list of 21 countries, in 2004 France led the way in public health expenditures as a percentage of GDP at 8.3 percent, followed by Germany and Norway at 8.1 percent. Canada was in eighth place at 6.9 percent.

If we measure public per-capita health expenditures in U.S. dollars for 2004, Luxembourg came in at $4,603, followed by Norway at $3,311. Canada was down in seventh place at $2,210.

HEALTH CARE IN THE UNITED STATES

Speaking in Scranton, Pennsylvania, in January 2002, George W. Bush said, “I’m proud of our health-care system.” Yet in 2007, a Kaiser Family Foundation poll said that Americans worried about their health care more than losing their job or being attacked by terrorists.

According to the World Health Organization, the United States ranked 37th in overall health performance and 54th in the fairness of the health-care system. International estimates are that in 2006 the United States was, on average, in 12th place out of the top 13 industrialized nations in a list of 16 key health indicators. And in a list of 17 countries, 14 had a higher percentage of patient satisfaction than in the United States.

American women are 70 percent more likely to die in childbirth than women in Europe.

The infant mortality rate in the home of the U.S. capital, the District of Columbia, is twice as high as in Beijing. In 2002, the number of babies who died in D.C. before their first birthday was 11.5 per 1,000 compared with 4.6 in Beijing. In the number of deaths among children under the age of five per 1,000 live births, the United States is down in 26th place, with a rate 75 percent higher than the rates for the Czech Republic, Finland, Italy, Japan, Norway, Slovenia, and Sweden.

From a featured article in the
Boston Globe
:

MY FELLOW AMERICANS: WANT A HEALTH TIP? MOVE TO CANADA

An impressive array of comparative data show that Canadians live longer and healthier lives than we do. What’s
more, they pay roughly half as much per capita as we do for the privilege.
¹

A study of health disparities in the United States and Canada was published in the July 2006 edition of the
American Journal of Public Health
. Among its findings were that Canadians had lower rates of diabetes, asthma, hypertension, arthritis, heart disease, and depression. Canadians reported that they were unable to afford their needed medicines at half the rate of Americans.

In 2005, the U.S.
Archives of Internal Medicine
reported that heart bypass surgery in Canada costs an average of $10,373, compared to $20,673 in the United States (both in U.S. dollars). The same report shows drug costs, lab tests, hospital costs, and other medical costs were much higher in the United States than in Canada.
²
Nine percent of Canadians reported that they sometimes did not fill prescriptions because of costs, compared to 21 percent of Americans.

In May 2006, a Harvard Medical School study found that

Americans, who spend twice as much per capita on health care than Canadians, had higher rates of nearly every serious chronic disease examined in the survey including heart disease, diabetes, arthritis and asthma.

Canada, despite spending so much less, is actually getting better outcomes in terms of both health and access to care.

Dr. Steffie Woolhandler and her peers concluded that Canada’s public health system was one of the key reasons why Canadians fared better.

Economist Paul Krugman says that if the United States had the same type of single-payer health-care system as Canada, the savings would be more than $200-billion a year, much more than the cost of providing insurance for every one of the many millions of Americans with no insurance. By the spring of 2006, administration of health-care costs in the
United States came to about 25 cents of each dollar, compared to two cents of every dollar in Canada.