If Canadians want pharmacare, we must pay more taxes

The words “pay as you go” have little meaning in Canada these days.

Citizens maxed out on their credit cards are constantly cautioned by the Bank of Canada that their debt levels — the average Canadian owes $8,500 in consumer debt alone, not counting a mortgage — are dangerously high.

Publicly-funded spending sprees and endless deficits are far more popular with federal and provincial governments, as well as those who elect them, than tightened belts and balanced books.

So nothing changes, despite the frequent alerts that the debt freight train will someday run us over. We spend today what we borrowed yesterday for our children and grandchildren to repay some distant tomorrow.

But while the country has largely been deaf to most warnings about unsustainable debt, we should heed the latest advice from Kevin Page, the former parliamentary budget officer, regarding a national pharmacare program.

There’s a strong argument to be made for a program to cover the cost of prescription drugs for Canadians, Page agrees.

But if we want it, we must be willing to pay for it — now, not later. And that means higher taxes.

This is a timely, important if somewhat unwelcome message that should be heard by all Canadians, not just the provincial and territorial leaders who heard it from Page in New Brunswick last week.

The lack of a national pharmacare program has long been identified as a major gap in Canada’s public health-care system. What good is it, pharmacare advocates insist, if someone can see a publicly-funded physician but can’t afford the prescription drugs the physician prescribes?

What we have today is an inefficient, exorbitant, hodgepodge system of drug-care plans that leave 3.5 million Canadians unable to afford the prescriptions they need.

There is a strong moral argument for a nationwide pharmacare plan. There is also a financial justification, according to Page, who now heads a University of Ottawa think tank.

Such a program could lead to a greater consistency in health costs across Canada and save people money on their out-of-pocket drug expenses. Indeed, a 2017 study by the parliamentary budget office concluded such a program could save Canadians more than $4 billion annually on their prescription costs.

But a national pharmacare plan would also result in a new and significant cost for governments. That was pegged at about $20 billion a year by the parliamentary budget officer last fall.

So, while there are reasons for Canadians to want a national pharmacare program, there are also reasons for hiking their taxes to pay for it.

Ottawa’s fiscal situation is already fraught, Page says. The provinces, as a group, are even worse off.

Incurring higher deficits to start a pharmacare program would be an easy out for politicians but a disservice to the country. Indeed, Page says it would become an unsustainable cost for Ottawa.

And that’s why Page suggests raising taxes to pay for it. One option would hike the Goods and Services Tax by two points, to bring it to seven per cent.

We commend Page for adding a dose of reality and an infusion of common sense into the pharmacare debate.

Canada can be proud of the social safety net it has created. Perhaps that net should be bigger, not just with pharmacare but more public dental care and child care.

But the time has come to agree that if we want more government services, we should be willing to pay more to get them. It’s time, folks, to pay as we go.