Drug plan will mean tax hikes, Page says

OTTAWA — Former federal budget watchdog Kevin Page will deliver a blunt message to premiers this week about the costs of a future national pharmacare program: If Canadians want one, taxes will have to go up.

Page, who now heads a University of Ottawa think tank, will walk through the numbers Friday when he gives a presentation to the provincial and territorial leaders on what lawmakers should know about creating a cross-country, publicly funded plan for prescription drugs.

He will address the premiers in St. Andrews, N.B., where they will gather this week for Council of the Federation meetings.

The federal Liberals have set up a group of advisers, led by former Ontario health minister Eric Hoskins, to consult Canadians and explore options for a national program. The council is to report back next year, when the topic of pharmacare is sure to become a major issue during the federal election campaign.

Last fall, an analysis by the parliamentary budget officer estimated national pharmacare would carry a hefty cost in the neighbourhood of $20 billion a year. That’s about one percentage point of Canada’s gross domestic product and twice Ottawa’s annual deficit projections in each of the next few years.

Page said there’s a solid argument to be made for national pharmacare because it would help Canadians save significantly on their out-of-pocket drug expenses and create more consistency in terms of health costs across the country. The 2017 parliamentary budget office study estimated such a plan would save Canadians more than $4 billion every year on prescriptions.

But Page said Ottawa’s books are already facing a difficult fiscal situation, and warned that the federal balance sheet would become unsustainable if it assumed the full cost of such a program. The provinces, as a group, are in even rougher fiscal shape, he added.

His presentation, which is based on a study by his Institute of Fiscal Studies and Democracy to be released Monday, recommends spending cuts and tax increases as ways to afford the program.