Healthcare & Innovation

www.policymagazine.ca September—October 2015

Canadian Politics and Public Policy

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2 0 1 5 R E C I P I E N T S

Gail Asper

Lloyd Axworthy

Gary Doer Canadian Ambassador to the United States, Former Premier of Manitoba

Paul Moist

Justice Murray Sinclair

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4 From the Editor: Healthcare and Innovation 5 David Naylor Canadian Politics and Unleashing Innovation—Synopsis of a Recent Policy Report Public Policy 8 Andre Albinati EDITOR “Zombie” Policy Making and the Politics of Healthcare L. Ian MacDonald 12 Nik Nanos [email protected] Will Healthcare Be the Sleeper Issue of the 2015 Campaign?

CONTRIBUTING WRITERS 16 Graham Scott Thomas S. Axworthy The Next Frontier of Digital Health: Putting the Patient First Andrew Balfour 19 Belinda Vandersluis Yaroslav Baran Canada’s Leadership in Clinical Trials: An Edge Worth Protecting Brian Bohunicky Derek H. Burney 22 Chrisoula Nikidis Catherine Cano Actions Based on Values: the Innovative Pharmaceutical Sector’s Margaret Clarke Path to Integrity Celine Cooper 24 Janet Yale Fen Osler Hampson Perspective is Key to Universal Pharmacare Success Daniel Gagnier Mike Sullivan Martin Goldfarb 26 Can an Innovative Tax Credit System Patrick Gossage Brad Lavigne Sustain Drug Plan Coverage in Canada? Kevin Lynch 29 Gail Attara Jeremy Kinsman A Crack in the Canadian Jewel of Healthcare Andrew MacDougall Denise Carpenter Velma McColl 31 Healthcare Solutions Right Around the Corner David McLaughlin Geoff Norquay 33 Helen Scott Robin V. Sears Big Shots: How Canadians Are Transforming Global Health Gil Troy Through Vaccinations Anthony Wilson-Smith WEB DESIGN CANADA AND THE WORLD Nicolas Landry 36 Jeremy Kinsman [email protected] Greece and the EU: Beware of the Single Story SOCIAL MEDIA EDITOR Kevin Lynch Grace MacDonald 40 Where is China Heading?—A Letter from Ditchley Park [email protected] GRAPHIC DESIGN & PRODUCTION 44 Perrin Beatty Monica Thomas TPP: Beyond the Economics [email protected] 47 David Lindsay Policy From Laggard to Leader: The Canadian Forestry Sector’s Virtuous Cycle on Climate Change Policy is published six times annually by LPAC Ltd. The contents are 50 Joseph F. Schulman copyrighted, but may be reproduced Letting Market Forces Lead is Best for Canada’s Railways with permission and attribution in and the Economy print, and viewed free of charge at the Policy home page at 53 Verbatim/Brian Mulroney www.policymagazine.ca. Reforming the Senate: We Already Have a Road Map Printed and distributed by St. Joseph Communications, 1165 Kenaston BOOK REVIEWS Street, Ottawa, Ontario, K1A 1A4 56 Geoff Norquay Special thanks to our sponsors What’s Happened to Politics? Bob Rae and advertisers. 57 James Baxter Strength of Conviction Tom Mulcair

Policy CANADA’S RAILWAYS The right track. 30 years ago, Canada adopted a market-based approach to its transportation policy – encouraging customers and railways to work together to help the Canadian economy. What happened?

Our railway system has seen record levels of investment, 33,000 Canadians have well-paying rail sector jobs, and our customers enjoy the lowest rail rates in the world. Canada’s economy has grown more quickly than that of many other countries, our exports have expanded, and we are well positioned for more success.

As Canada reviews its national transportation policy — let’s stick with the ideas that are working, even as we improve where change is needed.

PULLING for CANADA

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From the Editor / L. Ian MacDonald Healthcare and Innovation elcome to our special is- Chrisoula Nikidis of Rx&D looks at become the mass manufacturing hub of sue on Canadian health- actions based on values and writes the world.” On geopolitical affairs, he W care and innovation, which that the pharmaceutical industry’s writes, “China intends to become a rule we are publishing in partnership with goal is to “put in place the tools that maker, not just a rule taker.” Rx&D, “Canada’s Research-Based Phar- can help us enable strong ethical re- Canadian Chamber of Commerce Presi- maceutical Companies.” While several lationships among all actors in the dent Perrin Beatty looks at the 12-na- articles in the cover package were writ- healthcare system.” tion trade talks for a Trans-Pacific Part- ten by industry stakeholders, the au- nership and writes that Canada, as a thors worked independently, and Policy urning to pharmacare, Arthri- trading nation, absolutely needs to be alone is responsible for the content. tis Society President Janet Yale part of any TPP agreement encompass- Former University of Toronto President T points out that Canada is the ing 40 per cent of the world’s GDP. David Naylor, Chair of the Advisory only developed country with universal Panel on Healthcare Innovation, shares health not to offer universal pharmacare. David Lindsay makes the case that Can- some insights from the panel’s report She weighs in with an endorsement. ada’s forestry industry has transformed Unleashing Innovation: Excellent Health- itself from laggard to leader in reducing Mike Sullivan begs to differ and suggests care for Canada. GHG emissions in climate change. As an innovative system of tax credits as a he notes, there has been a 65 per cent Andre Albinati, a prominent Ottawa better way to sustain drug coverage in reduction in the Canadian forestry sec- consultant on healthcare and health Canada. Gail Attara, Chair of the Best tor’s GHGs below 1990 levels, far sur- policy, writes that the Naylor Report Medicines Coalition, writes that cover- passing the Kyoto target of 6 per cent was essentially DOA—dead on arrival. age for medications is a patchwork and by 2012. The industry is also “on its Albinati notes that after appointing that pharmacare programs need to be way” to meeting the Copenhagen tar- the Advisory Panel in 2014, the federal reconfigured with patients in mind. get of 17 per cent below 2005 levels by government had nothing to say about its recommendations in the summer Denise Carpenter, head of the Neigh- 2020, as well as the Paris target of 30 of 2015. It released the report without bourhood Pharmacies Association, per cent below 2005 levels by 2030. writes that healthcare solutions are comment late on a Friday afternoon in Joseph Schulman, an Ottawa consul- literally right around the corner. Treat- July, when hardly anyone one pays at- tant on transportation infrastructure, ing patients in pharamacies, she writes, tention in Ottawa. looks at regulatory issues around Ca- “helps keep them out of emergency nadian railways, which “move more Pollster Nik Nanos of Nanos Research rooms and hospitals.” looks at the historic importance of than 70 per cent of all intercity surface healthcare in the rankings of issues and Finally, Helen Scott writes of Canada’s goods” and “roughly half of the coun- confirms healthcare is always “a top na- trailblazing work in vaccinations— try’s exports by volume.” from polio to experimental work on a tional issue of concern” for Canadians. In a Verbatim, former Prime Minister Looking ahead, fully 39 per cent of Ca- vaccine against ebola—in over 1,000 Brian Mulroney suggests we already nadians are concerned that healthcare locations around the world. have a roadmap for Senate reform. He in Canada will be worse for their chil- proposes the Meech Lake formula under dren, while 27 per cent of respondents eading off our Canada and the which senators were to be appointed think it will be better. Seven Canadians World section, Jeremy Kinsman by Ottawa from ranked lists furnished in 10 also think it’s important to put L looks at the Greek financial crisis by the provinces. This would meet the money into healthcare innovation. and its impact on the European Union. standard for appointments in the Su- Speaking of innovation, Infoway Can- Kinsman, a former Canadian ambas- preme Court’s decision in the Senate ada Chair Graham Scott writes that sador to the EU, writes that the Greek reference case, while avoiding the need “far from being a cost, digital health crisis has divided public opinion “into for a “7/50” constitutional amendment. represents an investment in the pro- polarized national caricatures.” Finally, we offer reviews of two timely ductivity, efficiency and sustainabil- Kevin Lynch, in a letter from a Ditch- ity” of healthcare. books for this election season. Geoff ley Park conference on China, offers Norquay provides a positive take on Bob Belinda Vandersluis notes that Canada insights into the remarkable growth of Rae’s What’s Happened to Politics, while has the highest number of clinical tri- the Chinese economy, poised to surpass James Baxter reviews Tom Mulcair’s per- als per capita of any G7 country, and the United States within a decade as the sonal journey in Strength of Conviction. argues that it’s a competitive advantage largest in the world. Already the world’s worth protecting. largest energy consumer, “China has Enjoy.

Policy 5

Unleashing Innovation— Synopsis of a Recent Policy Report David Naylor

The Advisory Panel on Healthcare Innovation reported in Several observations shaped our thinking about innovation themes July 2015, identifying five broad themes for reform. To and policy options. enable progress on these themes in partnership with stake- a) Canada’s provincial and territo- holders, provinces and territories, the panel also recom- rial healthcare systems have many mended creation of an arm’s-length national health in- strong points. However, the total- ity of evidence and opinion left us novation agency. The new agency would consolidate three with a strong sense that Medicare existing organizations, and oversee a new federal fund is aging badly (see, as an example, with a target annual outlay of $1 billion per annum to Exhibit 1 next page). support the development, evaluation, and scaling of sus- b) Healthcare everywhere is changing in response to aging populations, tainable healthcare innovations. the revolution in information technology, greater engagement by patients in their own care, and unprecedented advances in medi- n June 2014, federal Health Min- the nation. After wide consultation cal technology, most notably the ister Rona Ambrose launched an and extensive research, the panel’s emergence of data-intensive ‘preci- I advisory panel to identify the five 126-page report was released in July sion medicine’. most promising areas of healthcare 2015. This synopsis accordingly has a c) Canada has excellent healthcare innovation in Canada and interna- greater than 500 to 1 compression ra- providers. However, in the current tionally, and recommend ways that tio, but does offer readers a snapshot set of poorly integrated systems, the federal government could accel- of the panel’s framing of the issues these committed professionals erate innovation in these areas across and findings. often struggle to deliver the consis-

September/October 2015 6 Exhibit 1: National Summary Scores on Health Systems Performance

AUS CAN FRA GER NETH NZ NOR SWE SWIZ UK US OVERALL RANKING 4 10 9 5 5 7 7 3 2 1 11 Quality Care 2 9 8 7 5 4 11 10 3 1 5 Effective Care 4 7 9 6 5 2 11 10 8 1 3 Safe Care 3 10 2 6 7 9 11 5 4 1 7 Coordinated Care 4 8 9 10 5 2 7 11 3 1 6 Patient-Centered Care 5 8 10 7 3 6 11 9 2 1 4 Access 8 9 11 2 4 7 6 4 2 1 9 Cost-Related 9 5 10 4 8 6 3 1 7 1 11 Access Problems Timeliness of Care 6 11 10 4 2 7 8 9 1 3 5 Efficiency 4 10 8 9 7 3 4 2 6 1 11 Equity 5 9 7 4 8 10 6 1 2 2 11 Healthy Lives 4 8 1 7 5 9 6 2 3 10 11 Health Expenditures $3,800 $4,522 $4,118 $4,495 $5,099 $3,182 $5,669 $3,925 $5,643 $3,405 $8,508 per Capita, 2011*

Adapted from Davis K. Stremikis K, Squires D, et al. Mirror, Mirror on The Wall: How the Performance of the U.S. Health Care System Compares Internationally. New York (United States): The Commonwealth Fund; 2014. Available from: www.commonwealthfund.org/~/media/files/publications/ fund-report/2014/jun/1755_davis_mirror_mirror_2014.pdf

tently high-quality care that Cana- ed action on several fronts, Canada’s plans such as Kaiser Permanente or In- dians deserve. Several professions healthcare systems, including the fed- ter-Mountain Health. Various ‘Obam- are also constrained from using the eral government’s programs focusing acare’ reforms, such as bundled pay- full range of their skills by, variously, on First Nations and Inuit health ser- ment models and Accountable Care Medicare’s deep but narrow scope vices, were likely to lose more ground Organizations, provide models for of coverage, misaligned incentives, in the years ahead. incremental integration. Adoption of and outmoded regulations. models of integrated care and budget- These considerations also led the ing is urgently needed in Canada, not d) The Panel was informed repeatedly panel to delineate five themes for least to deal with fragmentation of about impressive innovations in promotion of innovation and policy First Nations care or to cope with the healthcare at the local or regional reform. Detailed recommendations aging of the general population. level that were not scaled up prov- for advancing each theme can be ince-wide, let alone across Canada. found in the report. 3. Technological Transformation e) As is true across the OECD, prov- 1. Patient Engagement and Digital health and data-driven care inces and territories have been Empowerment hold great potential, but Canada is making real progress in cost con- still lagging most peer OECD nations We found many promising initiatives tainment since the global financial in standardization and uptake of in- in patient engagement across Can- crisis of 2008-09. However, Cana- formation technology for healthcare. da’s spending remains well above ada, but these tended to be local or Moreover, the reliance on data-driven the OECD average. The panel was regional in scope. A clear gap accord- care is accelerating with the emer- struck by an emerging consensus ingly persists between the rhetoric of gence of ‘precision medicine’ based on that a shortage of operating funds patient-centred care and the reality detailed biological characterization of is not the primary cause of our for many patients and families—and individual patients. The panel accord- middling performance. must be closed with improvements ingly made a number of recommen- in mobile health technology, patient dations aimed at addressing these two f) Notwithstanding a number of portals for record access, and involve- promising initiatives by the Coun- important and inter-related domains ment by patients in co-designing of technological transformation. cil of the Federation, Canada’s sub- healthcare at all levels—clinical, in- national jurisdictions lack catalytic stitutional, and system-wide. 4. Better Value from funding and in some cases a criti- Procurement, Reimbursement cal mass of expertise to make sub- 2. Health Systems Integration & Regulation stantial changes in the way their Better integration of care around the The panel concluded that, in gen- healthcare systems work. needs of patients has had a transfor- eral, Canada’s healthcare systems do The panel’s overall diagnosis was mative effect on quality, continuity, not have a strong value-for-money therefore sobering: Without concert- and efficiency of care in US health orientation. At the same time, in-

Policy 7 novative companies of all sizes are frustrated by a multi-tiered system Canada’s healthcare systems do not have a strong for regulatory approval and frag- value-for-money orientation. At the same time, mented purchasing arrangements in innovative companies of all sizes are frustrated by a multi- healthcare. A comprehensive suite tiered system for regulatory approval and fragmented of recommendations accordingly addressed issues ranging from collec- purchasing arrangements in healthcare. tive purchasing and improved pricing of drugs to lay the foundations for pharmacare, to greater transparency in regulatory processes. for staged growth towards this level anada’s healthcare systems 5. Effective Partnering with of spending, with rigorous selection remain a source of national Industry criteria, performance parameters, and C pride, providing important measurement of milestones for any Many European nations, led by Den- services to millions of Canadians ev- projects. This target reflects the fact mark and the UK, have developed ery week. Nonetheless, the scope of that Canada spends about $220 bil- policies and processes to partner with public coverage is narrow, our overall lion a year on healthcare. Moreover, industry for mutual benefit in health- performance by international stan- spending on health-related research care delivery. Canada has lagged in dards is middling, and serious pres- and development in Canada is mod- this regard, but now has unrealized sures on the system can be anticipat- est, with very little indeed directed to potential to punch above its weight ed in the next fifteen to twenty years. turning R&D into value-generating in the development, commercializa- innovation. Last, in the latest federal The panel was well aware of the re- tion, adoption and export of innova- budget, after eliminating debt-servic- current inter-jurisdictional tensions tive healthcare products and services. ing costs, Ottawa spent $265 billion that have arisen around Medicare, The panel recommended federal lead- on programs and people—against and the appeal of disentanglement. ership through a single organization which the proposed maximum outlay On the other hand, the reality is that mandated to drive opportunities for of $1 billion per annum amounts to Canada’s national set of medicare partnership of mutual benefit to in- less than 0.5 per cent. programs was effectively created by dustry and Canadians. Conservative and Liberal govern- The new innovation agency would ments through three landmark pieces he panel heard repeatedly be supported from the fund, and also of legislation in the 1950s, the 1960s, oversee its external allocations. The from stakeholders who fa- and 1980s. Moreover, the proposed agency would draw on staff from the voured the creation of an model for re-engagement by Ottawa T Canadian Foundation for Healthcare arm’s-length national innovation seeks to side-step the pitfalls of con- Improvement, the Canadian Patient centre and an innovation fund as a ditional fiscal federalism in the mu- Safety Institute and, after a transi- means of breaking the current multi- tual interests of all jurisdictions. jurisdictional gridlock and enabling tion period for completion of exist- innovation. ing projects, Canada Health Infoway, The panel understands that this consolidating the mandates of these model depends on an ethos of part- An innovation fund can be seen as a agencies, and creating a centre of nership, and a shared commitment bookend to the 2011 decision by the expertise to support sustainable im- by all governments to scale existing federal government to slow the rate provements in healthcare delivery. innovations and make fundamental of growth in healthcare transfers to changes in incentives, culture, ac- provinces and territories. These funds wo other cross-cutting foci for countabilities, and information sys- could support initiatives to break federal action were identified tems. While this may seem to be a down structural barriers to change and T by the panel. The first is con- tall order, the stakes are high. Absent accelerate the scale-up of promising sensus building across jurisdictions concerted action of this nature by innovations. In contrast to past prac- on ethical and social issues, or, where the federal, provincial and territorial tices and accords, monies would not applicable, passage of relevant federal governments, there is every probabil- flow on a formulaic basis to all juris- legislation, e.g. patient protection ity that Canada’s healthcare systems dictions. Funds would instead support against potential genetic discrimina- will continue to lose ground relative initiatives leading to sustainable and tion. The other is a new refundable to international peers. scalable innovations in healthcare de- health tax credit to mitigate the ef- livery, proposed by ‘coalitions of the fect of rising out-of-pocket spending David Naylor is Professor of Medicine willing’—jurisdictions, institutions, on healthcare. These costs bear differ- and President Emeritus at the University providers, patients, industry and com- entially on the elderly and those of of Toronto. In 2014-15, he chaired the mitted innovators of all backgrounds. any age with low incomes and chron- federal Advisory Panel on Healthcare The target outlay for the fund was ic diseases. The tax revenue foregone Innovation. A full list of panel members benchmarked at $1 billion per an- would be offset by taxing employer- and biographies can be found at www. num, fiscal circumstances permitting. funded health benefits, as already oc- hc-sc.gc.ca/hcs-sss/innovation/memb- The panel also emphasized the need curs in Quebec. eng.php. [email protected]

September/October 2015 8

As the baby-boomer generation retires and lives longer, the demands on Canada’s healthcare system will only grow. A system in which the Naylor Task Force found “some extradorindary creativity and innovation,” writes Andre Albinati. iStock photo “Zombie” Policy Making and the Politics of Healthcare Andre Albinati

There are few tasks more thankless than delivering anadian policy makers have federal spending prescriptions during an election cam- missed yet another opportunity C to help shape Canadian health paign, especially when the incumbent government policy at a key moment when leader- doesn’t necessarily agree with them. But there are ways ship is required more than ever. in which the Naylor report on Canadian healthcare In June 2014, Health Minister Rona can be salvaged for parts. Ambrose handed former University of Toronto President David Naylor the daunting task of chairing a task force on increasing health-system sustainability through promoting and lever-

Policy 9 aging innovation. How to make the system work better for Canadians The Naylor panel found that the scope of public and for patients? coverage in Canada is narrow; the overall performance is middling by international standards, while Dr. Naylor and his Advisory Panel on Healthcare Innovation travelled the spending is high relative to many OECD countries; and country and heard from hundreds of Canada appears to be losing ground in performance stakeholders prior to turning in their measures relative to its peers. report, “Unleashing Innovation: Excel- lent Healthcare for Canada”, in June 2015. Posted online by the government on a late Friday afternoon of barriers to local innovative health- forms and seeking advantage during a hot July weekend, the report, like care practices being scaled-up across an election. The panel, as have many many before it, was met with deafen- the nation. Specifically, the system is before it, overreached and in doing ing silence. Late Fridays are reserved fragmented and lacks the dedicated so, doomed its work. primarily for governments releasing funding and mechanisms to drive appointments or policies that they systemic innovation. • Rejecting the parameters of the are not keen on showcasing to the mandate you’ve been given by a media, and as a result to the elector- he panel identified a series of government is not the most effec- ate at large. barriers to innovation in Can- tive way to ensure that your recom- T ada’s healthcare system: mendations are adopted. The gov- Reporting as they did just prior to a ernment had asked for “revenue hotly contested three-way election • A lack of meaningful patient neutral” recommendations that race, the report’s authors made it eas- engagement suggested neither significant cuts ier for the government to bury their • Outmoded human resource nor major expenditures. The panel news by neglecting to align their rec- models explicitly rejected this directive as ommendations to the clear political • System fragmentation and inade- its starting point. context. quate health data and information management capacity For his part, during a roundtable fol- Recommending that lowing the report release at MaRS in • A lack of effective deployment of Toronto, Naylor acknowledged that digital technology an annual incremental expenditure of his panel in effect had released a • Barriers for entrepreneurs “zombie report” that was dead on ar- $1 billion be provided to a • A risk averse culture and rival in official Ottawa. Their remain- new amalgamated ing hope was that the report would • Inadequate focus on understand- have some life in the months following and optimizing innovation. innovation entity fails to ing an election. recognize that Ottawa does Their five identified areas for action not have a dependable also appear to make sense: There was much to commend in the surplus. report. It had, after all, provided a 1. Patient engagement and thorough assessment of the current empowerment state of healthcare innovation in 2. Health systems integration with Canada. workforce modernization The Naylor panel found that the 3. Technological transformation • Want to kill policy momentum? scope of public coverage in Canada via digital health and precision Focus on process rather than out- is narrow; the overall performance is medicine come and suggest government ma- middling by international standards, 4. Better value from procurement, chinery changes as a panacea to all while spending is high relative to reimbursement and regulation that ails. In this case, the amalga- many OECD countries; and Canada 5. Identifying the industry as an mation of a number of organiza- appears to be losing ground in perfor- economic driver and innovation mance measures relative to its peers. tions, most of which are unknown catalyst. to anyone except those deeply in- In regions and provinces across the What is less clear though is whether volved in the system. In the case of country, they found some extraor- the panel understood why the report Canada Health Infoway, amalga- dinary creativity and innovation in failed to launch and why it is unlike- mation might actually destroy its Canadian healthcare systems that is ly to resonate in any meaningful way momentum in bringing provinces worthy of emulation, but too many with policy makers busy writing plat- to the table to enable health solu-

September/October 2015 10 tions like electronic health records health management and medicines tional barriers and ended up negotiat- to be implemented. over expensive and invasive proce- ing a 10-year health accord with the dures is unfortunate. provinces that featured at its heart a • The era in which a strong and in- six per cent-a-year funding escalator your-face federal government tried ailing to work backwards from but no real commitment to funda- to lever change in provincial health what is doable in a current po- mental change. systems has long since passed. Rec- litical context is a recurrent ommendations that consolidate F Chris Ragan, a McGill economics pro- problem that has plagued many provincial initiatives into the fed- academics and former politicians. fessor and past visiting economist to eral sphere, like the pan-Canadian Failing to accept real-world politi- the federal department of Finance, Pharmaceutical Alliance initiative cal implications and barriers to im- hit the alarm bell for policy makers currently run by the Council of the plementation isn’t an effective ap- more than five years ago, by point- Federation and based out of To- proach to providing sound policy ing to four key fiscal challenges faced ronto, are not a good idea. Federal advice. We all want to believe that by Canadian governments, including government oversight does not a sound policy trumps banal and our aging population and its impact problem solve. While the Harper sometimes counter-productive po- on health system sustainability. The Conservatives have been overly litical imperatives. Much more of- future unsustainability of the system focused on the jurisdictional divi- ten than we would think possible, also was an underlying driver iden- sions of power in the British North it does not. Just look at any long- tified years before that, as Finance America Act of 1867, it is obvious term policy challenge involving sig- Canada grappled with Canada Pen- that even the opposition Liberals nificant change that runs up against sion Plan reform and federal health- and NDP, despite their preference short-term political calculation that care transfers. for more national focus and co-op- privileges the status quo. It tends to Governments are once again begin- eration, do not believe that more lead to a clear, winning one-way bet ning to wrap their heads around some federal health bureaucracy is the on inaction. of these challenges—but doing so in a way forward. worldwide economic downturn. • Recommending that an annual in- Healthcare continues The domestic impact has been severe. cremental expenditure of $1 billion to be largely ignored This summer, the Parliamentary Bud- be provided to a new amalgamated by federal party leaders. get Office looked at government fiscal innovation entity fails to recognize Discussions are incremental. sustainability and noted that “subna- that Ottawa does not have a de- tional governments cannot meet the pendable surplus. Dollars are scarce The federal government is challenges of population aging under and the political determination to noncommittal, and yet, current policy.” spend on visible consumer benefit opinion research shows that remains the government’s focus. it remains an area of high Healthcare continues to be largely The department of finance de- priority to Canadians—one ignored by federal party leaders. Dis- mands hard metrics focused on the cussions are incremental. The federal return on investment for the dollars that frightens people on a government is noncommittal, and it sends out the door and transpar- personal level. yet, opinion research shows that it re- ency in its grant and program fund- mains an area of high priority to Ca- ing—that is to say, visibility to av- nadians—one that frightens people erage Canadians. It also prefers to on a personal level. fund time-limited endeavours for specific initiatives that can then be And this isn’t the first time that an The Privy Council Office’s most removed to sunset rather than ongo- important health policy report has cent tracking of issues of importance ing efforts with no clear end date not led the way to meaningful and to Canadians in February 2015 shows and amorphous mandates. effective health policy reform. The that our “healthcare system” is the release of the Romanow Commission second most commonly mentioned • Finally, it is counter-productive to Report in 2002 was another missed area people want the federal govern- call for private sector innovation opportunity. Instead of striving to- ment to focus on, ranking behind while slapping innovative pharma- ward a more innovative culture with- only the economy and roughly tied ceutical companies creating novel in the Canadian health system, the with employment/job creation. For intellectual property through new report was seen as largely defensive the governing party, demographic precision medicine therapies and and focused on incremental cash. analysis shows that speaking about technologies. The report’s failure to Prime Minister Chrétien shrugged the economy and jobs rather than acknowledge the savings to health his shoulders. In 2004, Paul Martin healthcare aligns best with those systems through better patient found his hands still tied by jurisdic- groups most likely to vote Conserva-

Policy 11 tive in October: men, those aged 55+, 2. Does spending in this area hamper Without this integrated approach, Ontario residents, new Canadians. the ability to alleviate greater fears we’ll have growing gangs of policy (i.e., economy, employment)? zombies offering solutions that are owever, the fact remains that out of the reach of politicians and Ca- the issue’s importance lin- Finding solutions to improving Cana- nadian patients. Getting this wrong gers and while Canadians da’s healthcare system has the poten- means the continuing degradation of H tial to resonate strongly with Canadi- may be able to rationalize ignoring the system until the feared sustain- the issue in favour of other crises, the ans for our political parties—assuming ability crisis becomes all too real. Canadians recognize the solutions as vast majority harbour some signifi- Andre Albinati is a principal of ones that help alleviate their greatest cant anxiety toward health sustain- Earnscliffe Strategy Group. His practice fears and focus on improving their ability. More specifically, about their focuses on healthcare and related public personal experience within the Cana- ability to access the system when they policy issues. He is also President of dian health system. most need it. the Government Relations Institute of Canada (GRIC). [email protected] In this environment, there should be While the challenges are immense and a public appetite for solutions and an the public will should be ready, there opportunity for a champion to gather is little policy-making capacity re- together a broad constituency of sup- maining in government departments port, particularly if the following con- like Health Canada to implement so- ditions are incorporated into policy lutions. For those who are left, and for proposals: the experts to whom they reach out for proposed solutions, it is impera- 1. Is the federal government seen tive they take the time to understand as being able and likely to spend the political and the policy environ- wisely in this area? ments in which they are operating.

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September/October 2015 12

The economy may be the top of mind issue in the election, but healthcare is always a leading concern for Canadians. CPC photo, Jason Ransom Will Healthcare Be the Sleeper Issue of the 2015 Campaign? Nik Nanos

As Canadians live through an 11-week federal election leeper issues, if activated during campaign whose marquee stump issues so far have been campaigns, can make or break S the winnability of a party. Health- the economy and security, pollster Nik Nanos reminds us care fits the bill of a sleeper issue. Al- that voters tend to rate their concerns based on an issue’s though the top-of-mind issue frame immediate relevance to their daily lives. With Canadians continues to be dominated by economic issues, scratch the surface, and living longer and governments both federal and provin- healthcare is lurking in the minds of cial pressed to reconcile the need for innovation and the Canadians and they are ready for a na- imperative to cut costs, a campaign debate on healthcare tional dialogue on this critical issue. may be unavoidable. Look at the long-term Nanos trend

Policy 13 [Question 1] on the top unprompted Even with the economic focus now, the long-term national issue of concern and it’s easy to see that when economic times are trend is that on any given day healthcare is good (or perhaps we should say, not guaranteed to be either issue number one, two or three bad) healthcare dominates as the among Canadians. top national issue of concern. When healthcare is in the news, for instance, during the work of former Senator Michael Kirby or Roy Romanow un- points which saw the economy over- proximity. That is the clear dividing der the Liberals, it clearly dominated take healthcare as the top national line between what Canadians take an the attention of Canadians—who issue of concern. Even though Ca- interest in and what actually influenc- wereChart open 1 – Question:to solutions What tois yourmake most pub important- nadians NATIONAL might issue be ofconcerned concern? about es their behaviour. When Canadians lic healthcare stronger. Prior to 2008, the wait time for their mother’s hip are worried about their job security, when the performance of the Cana- replacement or not having access to you have their attention. When the dian economy was steady, there was a the latest medicines, not having a system has trouble approving and de- healthcare fixation. Even with the eco- job or being worried about whether livering the latest vaccines to fight the nomic focus now, the long-term trend one’s children would get a job once latest threat to the health of Canadi- is that on any given day healthcare is they finished school trumped concern ans, you also have their attention. Of guaranteed to be either issue number about healthcare. course, Canadians care about issues one, two or three among Canadians. like the environment and are inter- hen considering what ested in the issue—but the environ- The 2008 financial crisis and the en- drives vote behaviour and ment does not have the same political suing Great Recession were key pivot W opinion, think in terms of punch in terms of proximity—because

Question 1: What is your most important NATIONAL issue of concern? [UNPROMPTED]

55%

45% 43.8%

35%

25% 27.0%

15%

9.5% 10.0% 8.5% 6.0% 5.7% 5% 3.8% 4.2% 2.6% 2.70% 1.5%

-5% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Environment Education Jobs/economy Healthcare Debt/deficit Accountability/Scandal War/Terrorism/Security Weekly Tracking (Four week rolling average ending July 24th, 2015, n=1,000)

Source: Dual frame (land + cell) RDD telephone survey of 1,000 Canadians—four week rolling average of 250 interviews per week conducted between June 28th and July 24th, 2015. The margin of error for a survey of 1,000 Canadians is ±3.1 percentage points, plus or minus, 19 times out of 20.

September/October 2015 6.0% 5% 4.2% Chart 1 – Question: What is your most important NATIONAL2.70% issue of concern?

-5% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Environment Education Jobs/economy Healthcare Debt/deficit Accountability/Scandal War/Terrorism/Security

14 issues like climate change are high- Question 2: Do you think that the quality of level and not as directly connected to healthcare in Canada will be better, worse, or the same the immediate concerns of Canadi- for your children? ans as the economy and healthcare. However, if girls and boys living in our communities start getting asthma because of poor air quality, expect UNSURE the environment to rise as an issue THE SAME 15% as it intersects with healthcare and 20% the ensuing need for our healthcare system to respond to our children’s wellbeing. BETTER Asked about the future, only a minor- WORSE 27% ity of Canadians (27 per cent) think the quality of healthcare in the future 39% will be better for their children. Cana- dians are much more likely to think that it will be worse (39 per cent) or the same (20 percent). [Question 2] The kicker is that Canadians don’t think more money is the answer—the *Note: Charts may not add up to 100 due to rounding confidence in innovating is mixed [Question 3] with Canadians gener-

Question 3: Do you agree, somewhat agree, somewhat disagree or disagree with the following statements related to innovation in healthcare.

Putting more money into the healthcare system is more important than trying to find innovative ways to deliver healthcare.

6% 19% 38% 32% 5%

Canada is good at using innovation to make the healthcare system better.

6% 38% 32% 16% 8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Agree Somewhat agree Somewhat disagree Disagree Unsure *Note: Charts may not add up to 100 due to rounding

Sources for Questions 2 and 3: RDD dual frame (land-and cell-lines) hybrid telephone and online random survey of 1,000 Canadians between September 13th to 16th, 2014 as part of a Canadian omnibus survey. The sample included both land-and cell-lines across Canada. The margin of error for a random survey of 1,000 Canadians is ±3.1 percentage points, 19 times out of 20. The research was commissioned by McKesson Canada.

Policy 15

Question 4: What would you say is the number one challenge facing healthcare in Canada today? [OPEN-ENDED]

Frequency Challenge (n=254) Lack of access / equal access to services and medicine (across geographic regions/for all) 20.5% Sustainability/effective management of existing resources 18.9% Lack of funding/rising costs for healthcare services and drugs 16.9% Aging population 9.4% Lack of timely access/Long wait times 9.1% Lack of focus on prevention and long term care 7.1% Lack of innovation, change and aversion risk taking 4.7% Increasing demand on an inefficient system 4.3% Lack of/slow integration of new technologies/medicines 2.8% Issues related to the cooperation or lack thereof amongst provincial governments and 2.4% their relationship with the federal government Lack of leadership/ability to implement reform 2.4% Inadequate integration between private and public systems/Lack of alternatives outside public system 1.6%

Source: Compiled views of 282 healthcare stakeholders between March 30 and April 30, 2015. Readers should note that the research is representative of the participants and should not be projected to any population, elite or general. The research was commissioned by Rx&D and independently administered by Nanos Research from research design through to administration and analysis. ally being divided as to whether they or medicines (21 per cent). The next are not as convinced as healthcare thought we were good at innovation most important issue, sustainability/ thought leaders that we need more according to a survey conducted for need to manage resources better (19 funding. Perhaps the message from McKesson Canada. If we can’t agree per cent) followed by lack of funding average Canadians is—spend within on whether we are good at innovat- (17 per cent). your means on healthcare but ramp ing in healthcare that likely means up innovation—we want faster access we are weak on innovation. This is Perhaps the message and newer medicines. where the importance of developing and getting access to the newest from average Canadians is—spend within The reality is that while both fed- medicines and renewing our health- eral and provincial governments care system with innovative ways to your means on healthcare face a significant fiscal burden in deliver care are key to the sustainabil- but ramp up innovation— uncertain economic times, the most ity of the system. we want faster access and prudent short term path forward is likely to focus on “innovation within his begs the question, “What newer medicines. do Canada’s top thinkers in our means” to manage the short-to- T healthcare believe are the key medium-term situation. When the challenges?” In a recent study of Can- economy is stronger, government ada’s top healthcare influencers con- look at the views of the gen- would then shift to an “aspirational ducted for Canada’s Research-Based eral public and healthcare innovation agenda” whereby govern- Pharmaceutical Companies we asked A thought leaders suggests the ments strategically invest in health- the question [Question 4], what is the possibility of an emerging innova- care in order to improve and enhance number one challenge facing health- tion nexus where new ideas to de- a patient agenda which is focused on care in Canada today. This elite sur- liver healthcare and to access services quality and access. vey of leading patient advocates, and the latest medicines become the healthcare providers, policy makers potential solution for making our Nik Nanos is the Chairman of Nanos and the like said that the number healthcare system sustainable. There Research and the official pollster for one challenge related to lack of ac- is one potential point of division CTV News and the Globe and Mail. cess, whether it be access to services and it relates to funding. Canadians [email protected]

September/October 2015 16

A doctor and her patient look at digital medical information on an iPad. It’s part of keeping up to date in the latest medical technology. Infoway Canada photo The Next Frontier of Digital Health: Putting the Patient First Graham Scott

The domestic digital health industry contributes $1.5 hy is healthcare one of the last remaining facets of billion to the economy and electronic medical records W society to take full advan- are now used by 77 per cent of family physicians. De- tage of the power of technology, par- spite that progress, few digital health tools are actu- ticularly in patient-facing aspects of the business? Why has change been so slow ally in the hands of patients. Canadians should not and what will it take to move this $215 have to wait for a “black swan” event to take full ad- billion sector that serves 35 million Ca- vantage of technology. By working together, Canadi- nadians each and every year? ans can build on the foundation of the last decade and History tells us that wholesale change realize the full value of digital health. is often brought about by cataclysmic experiences—so-called “black swan” events that transform the very face of society and culture. The development

Policy 17 Canadian Productivity Gains 2010

Productivity Gains and $0.8 billion Cost Reduction

~$6.0 B Annual EHR Benefits

$5.2 billion Cost Avoidance and Capacity Creation ACCESS QUALITY PRODUCTIVITY

Cost Avoidance / Capacity Benefits =>reduction in medication errors and adverse drug events Productivity Benefits =>improvements in radiology productivity and reductions in tests and film / space costs

of the microprocessor led to the So where are we, really? we’re not where we want to be, so launch of personal computing and what exactly is holding us back? the iPod caused massive upheaval for With the support of the provinces and territories we’ve come a long the music industry. Does transforma- Far from being a tive change in healthcare require a way in a decade: 91,000 clinicians black swan event? now use an electronic health record; cost, digital health 77 per cent of family doctors now represents an investment in I suggest that we don’t need to wait use an electronic medical record; and the productivity, efficiency for a black swan event; we are on the according to the OECD, Canada is a cusp of change and building on the world leader in telemedicine. and sustainability in one of foundation of the last decade, a fully the most vital sectors in our At the often overlooked macroeco- digital healthcare system is within economy. nomic level, the domestic digital our reach. health industry generates approximately $3.4 billion in revenues an- We’ve come a long nually, and contributes an estimated way in a decade: $1.5 billion to Canada’s GDP. The 91,000 clinicians now use sector also employs an estimated Universal healthcare remains a core an electronic health record; 47,400 professionals, and more than value of Canadians, but funding is 32,000 new jobs are expected to be 77 per cent of family doctors simply not keeping up with the costs, created between now and 2020. Far particularly when each province, ter- from being a cost, digital health rep- now use an electronic ritory, region, hospital, clinic and resents an investment in the produc- medical record; and practice operates within their own tivity, efficiency and sustainability according to the OECD, silo, creating centres of excellence, in one of the most vital sectors in but also independent islands of Canada is a world leader in our economy. telemedicine. ‘have’ and ‘have not’ that ultimately We’ve certainly had remarkable suc- impact patient safety. Conflicting cess and we’ve achieved much, but privacy protections and policy and

September/October 2015 18 legislation that haven’t kept up also tions, and growing adoption of so- 2. Repeat, don’t recreate. haven’t helped. lutions and sharing of information 3. Information should be borderless. through collaboration. xacerbating these challenges 4. Data in, value out. But the next phase in the evolution is the chasm between clini- 5. Privacy & safety by design, not by will not be met unless all those part- cians, patients and vendors, accident. E ners resolve to finish the job. each with their own priorities and expectations. And above all else, it is y working together, we can build on what’s already been the patient who simply wants online Success will be access to their healthcare providers B accomplished to improve pa- and health information in the same achieved by focusing tient access and enrich clinical deci- way they have accessed their banking on patient needs; extracting sion making; we will improve equity information and their travel informa- the full value of data of access to healthcare across the tion for many years that is the most through analytics and by country; and in the process, generate compelling impetus for change. much needed knowledge-based jobs focusing on interoperability for Canadians. If we are to change, and change we so healthcare providers can must, we will be required to embrace securely share information Digital health advances made in the a new way of thinking about health- past decade have yielded improved care and what it means to Canadians. to protect patient safety and patient care and health system ben- inform clinical decisions. efits but the next stage will require Digital health used to be about get- funding and commitment to see this ting the technology in place: Stan- through to the end. dards, architecture, terminology and the like. And while these important Let’s not wait for another black swan aspects have not gone away, their event to see this transformation come purpose has evolved. Today, pa- to life. tients, their safety and their com- Success will be achieved by focus- Graham Scott currently serves as Chair fort are at the heart of digital health ing on patient needs; extracting the of Canada Health Infoway and is Vice transformation. full value of data through analytics and by focusing on interoperability Chair Enterprise Canada and partner emeritus at McMillan LLP. he reasons for this change are so healthcare providers can securely He has extensive experience in the those undisputable realities share information to protect patient public service, public policy, governance that have placed unprecedent- safety and inform clinical decisions. T And it’s not just about funding but and accountability, and works primarily ed pressure on the healthcare system: on healthcare policy. Our population is aging and will need revenue generation and benefits real- healthcare more often and closer to ization so we can engineer projects to [email protected] home. Today, the evolution away scale and spread across the country, from a hospital-centric system to a leading to maximized efficiency and decentralized network that facilitates productivity. prevention, monitoring and treat- But right now, it is not certain that ment is a reality. Coordinating and this is going to happen. In fact, In- linking the information between pa- foway’s project funding is now fully tients and multiple points of care is committed and we have not received impossible without digital health. funding for this next stage in either As society has evolved, so too has of the last two federal budget cycles. Canada Health Infoway. In our in- We don’t need to wait for the black- fancy, we invested federal govern- swan event to achieve our vision of ment funds alongside provinces and healthier Canadians through digital territories to build the infostructure health. In addition to funding, there to support a pan-Canadian digital are five commitments that have al- health system. Today we are complet- ways guided our work, and that we ing that work and embarking on the can all use to achieve the healthcare next phase of the journey: Building transformation in Canada we desire: on the infostructure to meet patient needs through innovative patient- 1. Plan for the patient, with the facing access and convenience solu- patient.

Policy 19

Canada has the highest number of active clinical trials per capita of any G7 country, a comparative advantage worth keeping. Canada’s Leadership in Clinical Trials: An Edge Worth Protecting Belinda Vandersluis

Most of today’s curative treatments, vaccines and medi- ould a virus help cure cancer? Canadian researchers have re- cines owe their existence to clinical trials—studies that C cently launched the world’s test new therapies on patients to evaluate their benefits first clinical trial that combines two before bringing them to market. Clinical trials not only engineered viruses to attack cancer cells and produce an anti-cancer im- save lives, but contribute substantially to the Canadi- mune response to prevent them from an economy, and result in novel and effective tools and returning. If successful, the treatment treatments for cancer and many other illnesses. could have fewer side effects than traditional chemotherapy and radiation treatments, and provide a new tool in the fight against cancer. The study is an excellent example of the powerful way that investment in research trials can advance discovery and change lives.

September/October 2015 20 Phases in a Clinical Trial It’s no surprise that the world’s top 10 pharmaceutical companies regularly Phase conduct clinical trials in Canada. Canada is a leader in active clinical trials and has the highest number of 0 E ect on Body active clinical trials per capita among G7 nations. The country’s robust clinical trial infrastructure means an I weeks Safety in humans abundance of highly skilled and ex- tens perienced personnel and companies to do the job. Our research covers clinical trials across all major fields of II months E ectiveness at medicine such as cancer, CNS, meta- treating diseases hundreds bolic and cardiovascular disease; and our researchers are globally renowned III years Larger scale safety for their work. The quality of Cana- thousands and e ectiveness dian clinical research is outstanding, thanks to several unique assets such as our ethnically diverse population and IV ongoing Long term safety universal healthcare system, which ensures a high standard of care for patients before, during and after the clinical trial period, resulting in superior data accuracy from all trial sites.

The Canadian healthy a ected pharmaceutical industry supports 34,000 high-quality, well-paying Most of today’s curative treatments, high-quality, well-paying jobs in jobs in Canada. Our vaccines and medicines owe their exis- Canada. Our industry creates an over- industry creates an overall tence to clinical trials, studies that test all economic impact of more than $3 economic impact of more new therapies on patients to evaluate billion a year on Canada’s economy. their benefits before bringing them Close to 70 per cent goes towards than $3 billion a year on to market. Along with being a critical clinical trials. Canada’s economy. Close to step to bringing new medicines, vac- 70 per cent goes towards Canada’s Research-Based Pharma- cines and devices to improve our qual- clinical trials. ity of life, clinical trials give Canadians ceutical Companies annually invest tailored care that meets their needs by more than $1 billion into the discov- using family history and details about ery and development of new medi- individual habits and lifestyle to cre- cines and vaccines. long with driving global in- ate personalized therapies and treat- Clinical trials also attract key clini- novation for improved health- ments and therapies. They also allow cian-scientists to Canada, who pro- Canadian healthcare professionals care, clinical trials make a vide leading-edge care to patients A and hospitals to introduce innovative while conducting studies that lead to real difference to the lives of Canadi- new therapies. innovative therapies and treatments. ans who participate in these studies. Therapies and treatments tested with- Clinical trials are conducted in prac- Canada’s health science research tically every aspect of medicine, and community has over 30,000 investi- in trials have saved lives, reversed ill- can be local, national or internation- gators across the country, with nearly nesses and given healthcare profes- al in nature. Along with advancing 3850 ongoing active clinical trials in sionals new tools to diagnose, treat knowledge in healthcare, they are an Canada. We are also home to many and prevent disease. They give Ca- important economic engine in terms world-class research hospital and ed- nadians access to talented clinician- of revenue, job creation and spin-off ucational institutions, which bring in scientists and provide mentors to our companies. The Canadian pharma- high levels of government grants and next generation of highly qualified ceutical industry supports 34,000 private research dollars. personnel.

Policy 21 We are, however, facing mounting challenges from both traditional and We are, however, facing mounting challenges from emerging countries competing for both traditional and emerging countries competing these trials and the scientific and eco- for these trials and the scientific and economic benefits that nomic benefits that they bring to our they bring to our country. country. It’s estimated that a decline in Canadian trials represents a loss of $300-$500 million per year.

The Canadian Clinical Trials Coor- tors that make Canada a global leader Map (CCTAM), a pan-Canadian data- dinating Centre (CCTCC) was devel- in quality clinical trials. It also signals base designed to showcase Canada’s oped to reclaim Canada’s position as the highly collaborative partnerships clinical research capacities. This dy- a leader in the clinical research enter- between government, industry and namic, online database includes de- prise, to strengthen our clinical trials academia that support a stable, high tails on clinical trial sites, research and streamline processes for compa- quality clinical trial environment. nies and researchers, and to present a networks, research ethics boards, institutions/hospitals and individual unified national voice for clinical tri- The Centre’s coordination on a Na- clinical research experts, and will als to the international community’s tional Patient Recruitment Strat- help advance Canada’s clinical re- key opinion leaders. egy will reduce patient recruitment times through a database of registries search capabilities. The CCTAM of- A collaborative effort of the Canadian with appropriate consent and pri- fers tremendous marketing benefits Institutes of Health Research (CIHR), vacy considerations that will help to to clinical research organizations and Canada’s Research-Based Pharma- identify patients that may be eligible investigators and will allow clinical ceutical Companies (Rx&D), and a for feasibility studies and enrolment trial sponsors to place trials effective- collaborative of national healthcare in clinical trials. The registries ben- ly and efficiently reducing clinical organizations (HealthCareCAN), the efit researchers, but also Canadians trial start-up times. CCTCC is working to leverage our re- who want to become more involved search talent and facilities, and show- in these types of studies. According The CCTAM database is the only case them to the global community, to a recent survey commissioned by pan-Canadian, fully inclusive data- while increasing access to these valu- Research Canada, 70 per cent of Ca- base that is bilingual, free to use, easy able studies for Canadians. nadians feel that health research is to search, comprehensive and regu- part of the Canadian culture and 70 larly updated. The Asset Map already The CCTCC’s National Advisory per cent of Canadians also feel that has over 880 database records, and an Group is a testament to Canada’s they would like to get involved in upcoming update will allow users to united approach to advancing clini- health research. search by federal riding boundaries. cal research. Comprised of leaders from industry, academia and Clinical trials save lives, they con- healthcare institutions, the advisory According to a tribute substantially to our economy, group provides tactical guidance for recent survey and they result in novel and effective implementing strategies to attract commissioned by Research tools and treatments for cancer and more clinical trials to Canada and to many other illnesses. Canada has strengthen clinical trials to help at- Canada, 70 per cent of an important role to play in uniting tract research investment. The Centre Canadians feel that health clinical trials stakeholders to invest is also housed at the Health Charities research is part of the in research. Coalition of Canada, providing a natural and valuable connection to Canadian culture and 70 Belinda Vandersluis is the Director, patients and patient advocates. per cent of Canadians also Implementation, of the Canadian feel that they would like to Clinical Trials Coordinating Centre. Since its inception in 2013, the [email protected] CCTCC has been working with the De- get involved in health partment of Foreign Affairs, Trade and research. Development (DFATD), to commission an Investment Case to highlight Canada as a top investment location for foreign company clinical trials. The business case provides an over- he CCTCC also helped fa- view of the clinical trials landscape in cilitate the creation of the Canada, and highlights the key fac- T Canadian Clinical Trials Asset

September/October 2015 22 Actions Based on Values THE INNOVATIVE PHARMACEUTICAL SECTOR’S PATH TO INTEGRITY Chrisoula Nikidis

The pharmaceutical industry has been sending a clear sig- come leaders and push the envelope nal: we are committed to ethical practices. Our industry on ethics. has—in the past—been plagued by negative public percep- We have developed tions, particularly with regards to our business ethics. Most a joint consensus of us can agree that innovative medicines and vaccines save framework for ethical lives. But that’s not where our contribution ends. We have collaboration between worked closely with our global partners to put in place the patient organizations, tools that can help us enable strong, ethical relationships healthcare professionals and among all actors in the healthcare system. the pharmaceutical industry, in support of high quality patient care. he pharmaceutical industry, activities are a fundamental part of in Canada but also interna- safeguarding our healthcare system T tionally, is convinced of the for future generations. Our work al- ur industry has been sending adage that we are stronger when we lows our members to focus on what a clear signal: we are commit- work together with our partners. Our matters: delivering better healthcare O ted to ethical practices. Evi- goals are aligned with the broader solutions to Canadians. dently, we believe in its importance. healthcare community: we want to As an association, Rx&D works with Our industry has—in the past—been ensure patients have the best pos- other associations worldwide. plagued by negative public percep- sible health outcomes while ensuring tions, particularly with regards to our the long term sustainability of the The International Federation of Phar- business ethics. Most of us can agree healthcare system. maceutical Manufacturers and Asso- that innovative medicines and vac- ciations (IFPMA) has existed for near- These notions are important when cines save lives. But that’s not where we consider the exciting pharmaceu- ly 50 years and is a global, non-profit, our contribution ends. nongovernmental organization. Its tical research we work on with part- Recognizing the importance of trust ners across the life sciences spectrum. members are the leading international companies and associations in the and transparency, and that structure Rx&D represents Canada’s innova- pharmaceutical, biotechnology and is foundational, our industry has worked very closely with our global tive pharmaceutical industry. Our vaccine sectors from both developing partners to put in place the tools that membership consists of more than and developed countries. 50 companies, from established orga- can help us enable strong, ethical re- nizations to fledgling start-ups, all of IFPMA members have committed to lationships among all actors in the whom are revolutionizing healthcare implement its Code of Practice in all healthcare system. markets in which they operate. To through the discovery and develop- Together with the International Alli- achieve this, it brings together compli- ment of new medicines and vaccines. ance of Patients’ Organizations, the ance, regulatory and legal experts to Guided by a strict Code of Ethical International Council of Nurses, the advocate for ethical promotion, train- Practices, we work with governments, International Pharmaceutical Fed- ing, and advising and guiding compli- insurance companies, healthcare pro- eration and the World Medical As- ance officers and company staff on fessionals and other stakeholders to sociation, we have developed a joint marketing and promotional activities advance the field and enhance the consensus framework for ethical col- according to IFPMA Code and/or other wellbeing of Canadians. laboration between patient organiza- member associations’ national codes. We believe in ensuring that Cana- tions, healthcare professionals and dians have access to the innovative Rather than let old reputation dic- the pharmaceutical industry, in sup- treatments they need and that our tate our future, we’ve chosen to be- port of high quality patient care.

Policy IN THE INNOVATIVE PHARMACEUTICAL INDUSTRY HEALTH &TRUST A Quick Guide to the interactions between the pharmaceutical industry and the healthcare community

TRUST IS CRUCIAL WHY WE INTERACT WITH HEALTHCARE PROFESSIONALS

healthcare professionals, governments, and the pharmaceutical industry. Trust can only be built and New medicines that Explained by sustained when the entire healthcare community acts ethically and responsibly. 23 enhance patient science-based treatment information

The joint nine-point Framework for

Ethical Collaboration is characterized P

S HYS

T I N C

TIE IAN PA S by four overarching principles.

Trust is Crucial

1. Put patients first

An efficient healthcare system Physicians make better Patients and physicians make Healthcare community improves

2. Support ethical research and N

O decisions for patients. better decisions about courses its understanding of treatment

depends on mutual trust

A of treatment. options available to patients.

Z U

innovation I

N S

between all parties, including A E G S 3. Ensure independence and ethical R O

patients, healthcare T SCOPE OF INTERACTIONS N

E conduct and I T

A professionals, governments, CLINICAL TRIAL DATA – P PEER REVIEWED SCIENTIFIC

WHEREVER POSSIBLE 4. Promote transparency and INFORMATION

and the pharmaceutical INTEGRITY OF

INFORMATION IS MADE AVAILABLE

accountability.

industry. Trust can only be S

EXCHANGES

P A

H built andsustained when P

The framework outlines some of the

R O

the entire healthcare A

key areas that should be considered L

A PROMOTIONAL SCIENTIFIC

S I

T Advertising and branding

community acts ethically S Direct exchanges with healthcare U

by all partners to help guide ethical

E campaigns for newly available

C NON-PROMOTIONAL professionals and scientists to

and responsibly. medicines for healthcare

Scientiﬁc information and exchanges onupdate on the state of the art such

collaborations at the individual and R

H community and patients.

speciﬁc diseases and therapeutic areas as new research data presented

organizational levels based on the with no mention of speciﬁc products. at conferences or published in

peer-reviewed journals.

common elements of their existing

guidelines and codes.

N A

ORS SC

Support for the framework is growing, with the International Hospi- tal Federation and the International Source: International Federation of IFPMA Code of Practice binds its members to adopt the Pharmaceutical Manufacturers & Associations highest ethical standards of interaction with the healthcare Generic Pharmaceutical Alliance re- community and patients, wherever they operate in the world However, not all industries involved in healthcare have cently endorsing it. Available in five dedicated codes, e.g. medical devices, generic medicines. languages, the Consensus Framework can and should be referred to by IFPMA member associations and Implement Multi-Stakeholder Ethical health providers and has the poten- companies and all other enterprises Collaborations. in the region reduce compliance risk THE IFPMA CODE IS A SELF-REGULATORY tial to positively impact millions of CODE IN NUMBERS:In Canada, our association is working and equalize the competitiveThe IFPMA Codeenvi appli- es to nearly 90 members, including over 50 National Associations and nearly 30 MECHANISM WITH A MULTIPLIER EFFECT patients worldwide. global research-based Pharmwithace uthetical CCanadianompanies, whic hMedical operate in ove Associar 150 countries- . ronment. The initiative’s biopharma- tion, the Canadian Pharmacists As- DIRECT ME M B ERS: here are clear benefits of ceutical program has demonstrated IFPMA members, companies and national associations, are required to adopt the code sociation, the Best Medicines Coali- strong ethical practices in the notable success in the developmentIFPMA CODE TRAINING: COMPLIANCEtion, NET WwhichORK: is an organization that biopharmaceutical sector. and implementation of codes of eth- T represents patient groups, the Ca- For patients and healthcare provid- ics by local industry associationsCOMPLIANCE in NETWORK Association training sessions and nadian Nurses Associationonline and courses the 30 50 alignment with APEC’s Mexico City pharmaceutical ers, they can enhance access to safe experts representing http://www.ifpma.org/ethics/ifpm 50 associations operating Health Charities Coalition of Canada companies operating Principles, which utilized the IFPMA100+ member associations and a-code-of-practice/ and innovative medicines that save all around the world tocompanies develop to supervise the Canadian ifpma-online-code-training.htmlConsensus and improve the quality of lives. Code as a key reference document. Code implementation Framework for Ethical Collaboration.Companies are required to COMPANY CODES For industry, they help equalize the The Business Ethics for APEC SMEs regularly train employees We are looking at our existing in- Pharmaceutical Medical Devices Generic Domestic Producers competitive environment, reduce Initiative has supported the adop- - tion or achieving formal progress100s dividualtical company standards, compliance such as Rx&D’s reputational risks and improve access programs overseen by Chief INDIRECT MEMBERS:Any company that is a member of at least one IFPMA national association is covered by the toward 22 new biopharmaceutical Code of Ethical Practices and working IFPMA Code, wherever they operate. This includes pharmaceutical companies, and in some cases medical devices, to markets. generic and domestic producers. sector codes across six economies from our common ground. Strong ethical practices are good where they previously did not exist, The global Consensus Framework en- news for governments, too. Strength- expanding high standardTHE APEC IFPMA prin- CODE COMPLEMENTS LAWS, CODE COMPLAINT: abled Rx&D to engage a large group ened industry self-regulation and ciples to nearly 8,000 biopharmaceuREGULATION,- AND GUIDELINES WORLDWIDE of key stakeholders in discussions re- Contact the company – Contact national industry Contact IFPMA – compliance with high standards low- through confidential association or dedicated when national codes tical enterprises across the region.B U I L DING AND M AINT AINING TRU S T ers enforcement burdens, improves lated to ethics. “contact us” online system. Code authority body. cannot be applied. patients’ trust in the healthcare sys- n September 2014, at the First Ultimately, we can build trust and FILING A COMPLAINT PHARMACEUTICAL INDUSTRY APEC Business Ethics Forum, the LAWS & REGULATIONS COMPLEMENTARY tem, improves health outcomes and CODES & SELF-REGULATIONpromote transparency by starting Anyone can file a complaint; companies, nurses, patient associations…the general public. Under product quality and supports trade. Nanjing Declaration was launched the 2012 IFPMA Code, all complaints are published but the source is withheld. I IFPMA CODE what we REGIONALhave LEGISLin common—whereATION WHO ETHICAL ev CRITERIA- and subsequently endorsed byNATIONAL APEC ASSOCI ATIONS’ CODES NATIONAL LAWS WITH GLOBAL HEALTHCARE PROFESSIONALS For economies, they help support eryone isRE Acomfortable—andCH CODESdevelop- File a complaint online: SME Ministers and APEC foreignGLOBAL COMandPANY CODES http://www.ifpma.org/ethics/ifpma-code-of-practice/complaint-submission-page.html ing standards• US FOREIGN that CORRUPT allow us allPA TIENTto build ORGANIZA TION CODES economic growth, innovation and or by email: [email protected] trade ministers. The Nanjing DeclaraCODE COMPLIANCE- NETWORK PRACTICES ACT consumer confidence. relationships that are mutuallyAPEC’S benefi MEXICO CITY- tion serves as a roadmap for the APEC • UK ANTI-BRIBERY ACT PRINCIPLES cial. Only through real collaboration How to file a complaint: http://www.ifpma.org/ethics/ In 2012, the Asia-Pacific Economic initiative’s biopharmaceutical sector ifpma-code-of-practice/how-to-file-a-complaint.html can we ensure patients have the best Cooperation (APEC) forum launched program with goals that include uni- possible health outcomes. a comprehensive initiative to strength- versal code adoption by all industry en ethical standards in the biophar- associations in the region by 2020 Chrisoula Nikidis is Executive Director, maceutical sector across 21 Asia- and supporting the development of Ethics and Compliance, (Rx&D) Pacific member economies, helping codes of ethics through a Guide to [email protected]

September/October 2015 24

Meds: Prescription drugs cost $30 billion a year in Canada, the only country with universal healthcare that does not also offer universal pharmacare. Fotolia photo Perspective is Key to Universal Pharmacare Success Janet Yale

Canada remains the world’s only developed country to over is 22 per cent—$6 billion worth of prescriptions—shouldered by pa- offer universal healthcare but not universal pharmacare, tients themselves. despite the savings such a system would offer. An even Canada remains the world’s only de- more important consideration is that all Canadians en- veloped country to offer universal joy equitable access to necessary medications. The reason healthcare but not universal pharmacare. While the cost of drugs used in why becomes clear when you look at the changing nature hospital are fully covered, and provin- of medical therapies and innovative drug treatments. Ar- cial programs assist elderly and low- income residents, millions without a thritis Society President Janet Yale weighs in with an en- private plan are left with little or no dorsement of universal pharmacare. help at all. This is not going unnoticed: a recent poll by the Angus Reid Institute found very year, a different report comes a staggering 91 per cent of Canadi- out decrying Canada’s lack of ans favour the creation of universal E universal pharmacare and the pharmacare. The same poll revealed resulting burden on the public purse. that about half of respondents worry The price paid by patients and, in par- they won’t be able to afford the cost of ticular, those living with chronic dis- drugs in the future. ease is even more worrisome. For years, advocates have called on the The Canadian Institute for Health In- federal government and the provinces formation pegged the cost of prescrip- to come to an agreement on univer- tion drugs at roughly $29 billion in sal pharmacare, anchoring their argu- 2014. Public drug plans pick up about ments on principles of access, equity 42 per cent of those costs and private and the billions in cost savings that plans another 36 per cent. What’s left could come with a single payer, bulk

Policy 25 purchasing and a national formulary. Estimated annual savings range be- Canada remains the world’s only developed country tween $4 billion and $11 billion. to offer universal healthcare but not universal The Arthritis Society would like to add pharmacare. While the cost of drugs used in hospital are its voice in support. We believe there fully covered, and provincial programs assist elderly and should be universal access to medically necessary prescription drugs. For the low-income residents, millions without a private plan are 4.6 million Canadians currently living left with little or no help at all. with arthritis, the lack of universal pharmacare can result in thousands of dollars out-of-pocket for drugs that are needed to control the disease and alleviate pain, stiffness and many other ings of the joints, causing the inflam- The bottom line is that the particular debilitating symptoms. It can also re- mation and swelling that can lead to design of any universal pharmacare sult in unintended consequences such debilitating pain; and osteoarthritis, program must be sufficiently flexible as geographic inequity based on dif- when cartilage around the joints is to ensure that innovative, medically- ferences in provincial formularies and irreparably damaged or worn away necessary therapies find their way to even nationwide shortages of needed completely. For Canadians living with patients. medications. these conditions, prescription medi- One recent example directly impact- cations are often their best defense he solution is to ensure that ed many families grappling with the against high levels of pain and the loss the well-being of patients is realities of childhood arthritis. To- of mobility. New but often expensive T our primary motivation. Sig- nificant savings will still be achieved ward the end of 2013, Hoffmann-La pharmaceutical therapies have been through bulk purchasing power and Roche Ltd. announced it was pulling developed and more are emerging. Naprosyn (naproxen) suspension, the the move to a single payer system— most common non-steroidal anti-in- The best of example of this is a rela- but if savings comes into conflict flammatory drug used to treat symp- tively new category of biologics. This with quality of care, we believe care toms of juvenile arthritis. The drug’s breakthrough class of drugs is made must triumph. from living organisms that block the liquid form makes it easy for a child Designing a program that is focused proteins, cells and pathways that trig- to take, with dosage easily custom- on serving patients will still lead to ized according to his or her weight. ger symptoms, alleviating them en- what everyone can agree is a key tirely as well as preventing the joint The Arthritis Society and other advo- objective: a reduction in cost. But a deformities that can eventually ma- cates had to find a way to maintain patient-focused pharmacare plan will terialize in the hands and feet. For access to this drug for Canadian chil- also ensure all patients, whether they millions of Canadians with arthritis, dren. Eventually, the Quebec firm live in St. John’s or St. Albert, will be Pediapharm purchased the Canadian biologics are life-transforming. able to access the drugs they need, manufacturing rights. It wasn’t un- The challenge is that an annual course when they need them. til March of this year, however, that of a biologic can cost about $20,000 The need for change is clear. Cana- this medication was once again fully and patients are left paying this out- dians shouldn’t fear one day finding available to Canadian children. of-pocket if they don’t have private themselves unable to pay the cost of This incident provides a stark illustra- insurance. Universal pharmacare a drug that could alleviate immense tion of problems that universal phar- would remove this barrier, ensuring pain and suffering for themselves or macare would help address. It also that patients have access to medically a child, or face losing a medication underscores the importance of ac- necessary treatments irrespective of that has allowed them to live a full cess. Indeed, The Arthritis Society be- their financial situation. What makes and happy life despite having been lieves that equitable access to neces- the situation more complex is that diagnosed with a debilitating illness. there are often a number of biologic sary medications must be a defining A patient-focused plan is the key drugs, meaning there can be multiple consideration—one that is as central not only to change, but to the best to any future pharmacare program as treatments for the same condition. It possible sort of change. The kind of cost-savings. might be tempting to design a phar- change that helps people live lives macare plan that provides access to The reason why becomes clear when free from pain. you look at the changing nature of only one biologic drug. We would argue that such an approach would Janet Yale is President and CEO of The medical therapies and innovative Arthritis Society. She previously served drug treatments. Particularly from harm patients by limiting access. Be- cause biologic drugs are made from as executive vice president at TELUS, the perspective of those living with and president and CEO of the Canadian chronic diseases like arthritis. living organisms, each one reacts dif- ferently with an individual patient Cable Television Association. She here are two types of arthritis: so multiple treatment options are chairs the Arthritis Alliance of Canada. inflammatory, when the body’s medically necessary. Limiting access [email protected] T own antibodies attack the lin- means limiting care.

September/October 2015 26

A crowded crossing on Ste. Catherine Street in Montreal. Non-government payers cover more than $15 billion in prescription drug costs. But is universal pharmacare the answer? Tax credits might be another one. Montreal Gazette photo Can an Innovative Tax Credit System Sustain Drug Plan Coverage in Canada? Mike Sullivan

The fight for sustainable prescription drug plan ben- n an election year, and with a flurry of headlines in recent efits for all Canadians has to move far beyond a na- I months around the introduction tional pharmacare conversation. Until government of expensive blockbuster innovations and non-government payers find common ground with in prescription medications, it is not a surprise to see discussions of a “na- respect to how to leverage their current spending on tional pharmacare” strategy gaining prescription drugs and build meaningful partnerships momentum. There is no question that focused on efficient investment and improved health the current system for drug coverage in Canada is broken and unsustain- outcomes, meaningful long-term solutions will not be able, but the idea that a government- achieved. Well-designed policy is a critical initial step led national pharmacare strategy will in the process. solve the challenges the system faces is unrealistic.

Policy 27 There is no question The savings seen were essentially combine their resources and informa- the by-product of public policy and tion more effectively. that the current legislative changes that transformed system for drug coverage in generic drug prices at precisely the ne Ontario-based plan sponsor has seen its drug plan ex- Canada is broken and time more blockbuster generics were penditure increase by 12.7 unsustainable, but the idea entering the market. O per cent in 2015. The plan now that a government-led The Golden Era has come to a sud- spends $8.5 million annually to sup- national pharmacare den end in 2015, and the years ahead port drug plan spending for just un- strategy will solve the will prove to be a significant chal- der 13,000 plan members. The plan’s lenge for both government and non- increase in spending is being driven challenges the system faces by expensive specialty drugs for seri- is unrealistic. government payers. Generic drug utilization rates have begun to plateau ous conditions. Spending on the one per cent of all claims made in the past under the ineffectiveness of current year that are categorized as specialty plan designs, generic prices won’t drugs cost the plan 36 per cent of its materially decline in the years ahead, plan spending. Non-government payers in Canada and the number of new and emerg- spend in excess of $15 billion per year ing blockbuster therapies is remark- In other words, one per cent of all in prescription drug costs in Canada. able. While innovative and game- claims made represented over one- Non-government payers hold the key changing Hepatitis C medications third of the total plan spending. This to sustainable solutions in this area, have stolen most of the headlines in is what is driving the sustainability and the first step in that direction is 2015, there is great innovation hap- question. This is why we need to re- looking at appropriate tax credits and pening in other key disease areas like think government and non-govern- other financial incentives to keep em- diabetes, hypercholesterolemia, can- ment payer collaboration. ployers and other non-government cer, multiple sclerosis, Alzheimer’s payers in the business of underwrit- This employer saw a $1 million dol- disease, and the list goes on. That will ing prescription drug costs in years lar increase in plan spending year- continue to impact plan spending in and decades ahead. over-year on specialty drugs alone for the years ahead. conditions that included: hepatitis C, The challenge in looking at sustain- Crohn’s disease, rheumatoid arthritis, able solutions to funding prescrip- Generic drug multiple sclerosis, HIV, cancer and tion medications is that the imme- psoriasis. This plan is an Administra- diate past is misleading. The period utilization rates have begun to plateau under the tive Services Only (ASO) plan. This between 2010 to 2014 is affectionate- means that the insurance company ly known to those in the drug plan ineffectiveness of current processes the claims and administers management space as the “Golden plan designs, generic prices the plan on behalf of the employer, Era.” Thanks to generic drug prices won’t materially decline in but the company is self-insured— that are now one-third what they the years ahead, and the meaning they take on the vast ma- were five years ago and the number jority of the financial risk (which is of blockbuster drug products that number of new and the case with most medium- and lost their exclusive patent in recent emerging blockbuster large-size employers). The result is years, both government and non- therapies is remarkable. that cost increases directly impact government payers (often referred to the plan sponsor and their members, as third-party payers) saw significant with whom they share costs. savings in recent years that kept overall drug plan spending at bay and hid The latest challenge to ASO plans is the growing impact of expensive spe- that many will insure against high- The provincial and territorial govern- cialty drugs on plan sustainability. cost claims (often called catastrophic ments need to find innovative ways claims) by buying protection that hese savings seen in recent to partner with employers, health- says above a certain level—such as years were all passive—they care trusts, and other third-party pay- $25,000 per member per year (or T were not the result of better ers to develop a long-term strategy $50,000)—the insurance company member health or better plan design/ for ensuring access to drug therapies will pick up the balance of the cost. management in a majority of cases, for Canadians. It’s remarkable that This results in insurance carriers sell- it was simply a perfect storm of sub- two parties that collectively spend ing stop-loss insurance to protect stantially lower costs, a greater selec- in the range of $30 billion annually plans from high-cost claims. What tion of lower-cost generic equivalents on medications have not sought each insurance carriers are finding is that and a relatively quiet drug pipeline. other out sooner to look for ways to they had no idea how much expo-

September/October 2015 28 sure they faced from the growth of these specialty claims, so the cost of It’s remarkable that two parties that collectively stop-loss is increasing dramatically. spend in the range of $30 billion annually on This means that plans are having to medications have not sought each other out sooner to move their limits from levels such as look for ways to combine their resources and information $10,000 or $15,000 or $25,000 per more effectively. member per year to levels of $50,000 or more, and/or are facing substantial premium increases to offset the risk of high-cost drug claims. cisions around prices they can ne- bers with diseases like diabetes. Most of the long-term complications of One employer plan we recently ana- gotiate (that non-government plans poorly controlled diabetes manifest lyzed is facing a 117 per cent increase cannot access to date) and economic themselves later in life when indi- in stop-loss premiums. So, not only modeling that looks at the offset to viduals become the concern of the are plans taking on more risk, they the healthcare system such as fewer healthcare system, not the employer. are paying more to ensure the por- surgeries, hospitalizations, physician visits, and so on, by paying for a giv- tion of their experience covered by Governments should be working catastrophic insurance. Let’s look at en drug for a given member today. with non-government payers to our plan sponsor example above: if he challenge for third-party look at appropriately designed tax specialty spending increased by over credits or related financial incen- payers like employers is that $1 million in one year, what are the tives that keep these plans involved these cost offsets have no rel- odds that the premium paid to insure T in the provision and funding of evance to a non-government payer. high-cost claims will stay anywhere drug plan benefits and optimizing An employer offers a drug benefit to near the same in 2016? the health of plan members. It is its employees in order to keep them not enough that these benefits are healthy, productive and on the job, What happens if either of the em- afforded tax efficient status, it needs while at the same time offering a ployers highlighted above signifi- to go further. Non-government form of tax efficient compensation. cantly reduces or limits their spend- plans do not have access to the same The only offsets that matter to an ing on prescription drugs in response cost-containment tools that govern- to rising plan costs? What happens to employer for an investment in a drug ments have, such as pricing agree- the Canadians impacted and to their therapy are: does the investment keep ments and risk-sharing agreements health? Who picks up the slack? We an employee healthy and productive, with pharmaceutical manufacturers. need to find ways to protect all pay- and does the investment reduce dis- Some of those resources need to be ers to ensure the long-term ability of ability and short-term absences. reallocated to other payers by pro- plans in Canada to provide access to Employers will not necessarily see viding appropriate incentives, such needed drug therapy. the benefits of investing $75,000 in as tax credits or wellness innovation funds that keep non-government The numbers above look bleak. It a hepatitis C cure that may offset the payers in the game. will be tough for any payer—govern- need for surgery or transplant or liver ment or non-government—to handle disease decades down the road when Mike Sullivan is a Co-Founder and double-digit drug cost inflation an- the member is no longer an employ- President of Cubic Health, a healthcare nually (or anywhere near that level) ee. It doesn’t matter to an employer analytics and drug plan management moving forward. These two groups that a large upfront investment will company based in Toronto. He began need to find some common ground. benefit the healthcare system years his career as a pharmacist in Saskatoon. The major disconnect that needs to later. The same thing goes for well- Cubic is focused on ensuring the be addressed is around cost offsets. ness programs that aim to ensure the sustainability of investments made in Public plans base drug coverage de- optimal care and treatment of mem- health benefits. [email protected]

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Policy 29

Canada doesn’t have one system of funding medications. It’s a patchwork, a missing jewel of Canadian healthcare. Shutterstock photo A Crack in the Canadian Jewel of Healthcare Gail Attara

Coverage for medications in Canada is a patchwork. take medications as prescribed. If you have to decide between food and Sometimes eligibility for coverage is based on postal code, medication, food wins. age, and income. These inconsistencies are tough on vul- Tommy Douglas, the former Pre- nerable patients. Each stakeholder has a perspective on mier of Saskatchewan, who is warm- how to fix this, and it’s long past time for pharmacare ly called the father of Medicare in Canada, once said to his daughter, programs to be reconstructed with the patient—the end “My dream is for people around the user—at the centre. world to look up and to see Canada like a little jewel sitting at the top of the continent.” Douglas’s most notable achievement in health was the n 1976, the parents of a woman ter coverage of medications for every introduction of universal healthcare in her early 20s who died of person in Canada, so we can all live legislation in 1961, building on Prime I Crohn’s disease founded the or- life abundantly. Minister Diefenbaker’s decree in 1958 that any province seeking to intro- ganization where I have worked as Today in Canada, about 20 million duce a hospital plan would receive 50 CEO for almost 20 years, serving in- (out of more than 35 million) people cents on the dollar from the federal dividuals who have gastrointestinal have their prescription medication government. Further milestones of in- and liver conditions. Today, there covered by a private plan, but mil- terest are the Medical Care Act (1966) are medications that almost certainly lions still rely on restricted public and the Canada Health Act (1984). would have kept her alive and with a plans, and some have no coverage good quality of life. I’m encouraging at all. One in 10 individuals living Right now, there is a crack in the Ca- our government leaders to create bet- in Canada simply cannot afford to nadian jewel. The crux of our chal-

September/October 2015 30 lenge is that we don’t actually have policy reform, the current situation program would have on our society. one system; it’s a fractured, complex, will only get worse. I am encouraged In most cases, when a person receives cat’s cradle of funding transfers and that the health ministers want a good the right medication at the right time, responsibility. pharmacare plan that focuses on pro- at the right dose, and for the right du- viding coverage to the entire popula- ration, that person will become well e have a publicly funded tion while improving the quality of again and not use further resources system that covers phy- prescribing, producing better health in other parts of our social systems. W sician and hospital vis- results, and offering good experiences They will return to work sooner and its no matter where you live, but for patients—all while saving money. healthier, and will be less likely to use we don’t have a similar program for our employment insurance or welfare The heads of the various public drug many other health-related matters, plans. They will even use the medical plans say they have to manage de- such as medications. Of course, there system less, as they will need fewer creasing budgets and that the newer are some exceptions, as the Canada visits to physicians and hospitals. Health Act covers only those medi- medications, some of which work cines prescribed for use in hospital, miraculously and transform lives, I’m the current chair of the Best and the many provincial, territorial, are too costly for them to cover. If I Medicines Coalition, a national alli- and federal public plans cover medi- were working in a provincial finance ance of patient organizations with a cines for certain individuals under department, I would be looking over shared goal of equitable and consis- a complex set of varied criteria. The the shoulders of those managing the tent access for all Canadians to safe coverage does not transfer with you public drug plans to make sure they and effective medicines that improve if you move out of jurisdiction, so are spending enough, since cutbacks patient outcomes. Our hope is that many people fall through the cracks there could cause an undesirable we can create a system for providing when it comes to getting the medica- consequence in other parts of health pharmaceutical care that is nation- tions they need. and beyond. al, broadly inclusive, and allows for the uniqueness of the individuals it Throughout the past century, we While not entirely would serve by including a wide ar- have come a long way from the avail- ray of therapeutic options and timely ability of a few simple medications, attributed to access. It would include both public primarily dispensed in hospital, to medications, our Canadian and private coverage. Most impor- having a host of complex, highly ef- tantly, we must ensure that patients, fective medications administered in life expectancy has risen the end users of this program, be in- hospital and at home that keep us from 71.4 years in 1961 to cluded in its design. alive and living well. So many con- 81.2 years in 2012. Clearly, There are many stakeholders in- ditions are still untreated, so there is achieving 10 additional room for more innovation and new volved in this discussion, most with medications to help those waiting for years of life means we conflicting perspectives. What we treatments and cures. We have also invested wisely. really need is acceptance that we all learned an incredible amount about have differing, valuable, and valid the remarkable genetic variances views. I would like to see a unique- among us, leading to more treat- ly Canadian concept evolve quickly ments that are targeted and increas- from open discussions and hard work ingly effective. n simple terms, we buy and use including all stakeholders. I hope we can work in harmony to construct I’ve read many articles lately suggest- hand soap to ward off sickness; a system—with give and take—that ing that we’re spending too much on likewise with many pharmaceu- I meets the needs of us all. medicines and that the pressures on ticals, they are good investments government budgets to provide phar- as they keep us from getting sicker. In a perfect world, without sickness, maceutical care are increasing. While Medications have a tremendous role injury, or genetic anomalies, we would not entirely attributed to medica- to play in our society; we should treat not need medical and pharmaceutical tions, our Canadian life expectancy them with respect, and use them ap- help, but patients need medications. has risen from 71.4 years in 1961 to propriately, not treat them as if they Our pharmacare coverage needs to 81.2 years in 2012. Clearly, achieving (and their cost) are the enemy. Since change with the times. I want Can- 10 additional years of life means we government is not the primary driver ada’s pharmaceutical care to be that invested wisely. of medication research and develop- jewel on the top of the continent, of ment, the private sector has risen to which Douglas spoke. In June 2015, at a roundtable on the challenge, offering us many op- pharmacare that included eight pro- Gail Attara is the president and CEO tions, but they come with a cost. vincial health ministers, all agreed of the Gastrointestinal Society, the that there are too many of us who There is too much focus on the up- president of the Canadian Society of have either no or insufficient cov- front, silo costs to the various phar- Intestinal Research, the chair of the Best erage for prescription drugs. They macare budgets and not enough on Medicines Coalition, and co-founder of contend that without substantial the effect that a generous pharmacare Advocacy Boot Camp. [email protected]

Policy 31 Healthcare Solutions Right Around the Corner Denise Carpenter

Too many Canadians are struggling with access to care our healthcare system in the decades and the high costs of medications. Current discussions on ahead. This isn’t sustainable. national pharmacare, however, focus on reducing costs, Our healthcare system was built to deliver excellent, hospital-focused acute rather than on patients and health outcomes. By putting care, but now needs to deliver excel- patients at the centre of our thinking and doing the “easy lent, cost-efficient in-home chronic stuff” first, the head of Canada’s retail pharmacy busi- care for aging adults, while also improving chronic disease prevention. ness association writes, we can help Canadians lead lon- Further, an Angus Reid study re- ger, healthier lives and ensure the sustainability of acces- leased in July found nearly one- sible, affordable quality healthcare. quarter of Canadians say they, or someone in their home, can’t afford prescription medicines. More than one third say friends or family members have difficulty paying for their prescriptions. As a result, Canadians are splitting pills and skipping doses to try to make their medicines go further. Some don’t even fill their prescriptions. That’s a prescription for poor health outcomes and spiralling costs. As former US Surgeon General Everett Koop noted, “Drugs don’t work in patients who don’t take them.” Prescription non-compliance already costs Cana- dians $4 billion annually (on chronic care medications alone) and the An- gus Reid study suggests that Canadi- ans’ struggles with prescription af- fordability will increase. When it comes to healthcare ac- anadians are used to thinking campaign has re-energized calls for a cess, the disparities extend beyond of their healthcare system national pharmacare program, most income to geography. According to C as “great.” It’s almost an arti- of which focus on reducing costs. the principles of the Canada Health cle of citizenship that reflects passion Act, it shouldn’t matter where you Part of our challenge is that the popu- and pride, and a key perceptual dif- live, but it does. We have 10 stand- lation is aging quickly. Only 14 per ferentiator between Canadians and alone provincial health systems and the citizens of other countries. cent of Canadians are now over age multiple federal drug and access 65, but they account for 45 per cent There are troubling signs, however, plans. Canadians living in different of health spending. By 2036, seniors that faith in our healthcare system provinces and territories don’t nec- may not be fully warranted. Almost are expected to be 25 per cent of the essarily have access to the same care, every week we’re confronted with population, and an even larger share services or medications under public another warning about the unsus- of healthcare spending. This cost programs, so we sometimes have to tainability of Canada’s healthcare pressure will be amplified by a de- move from one province to another system and how it needs urgent, radi- crease in the proportion of working- and re-establish eligibility to access cal change. And the federal election age Canadians, whose taxes will fund needed medications.

September/October 2015 32 s public discussion turns to When Canadians confront big issues—and ward a national pharmacare healthcare is huge—they often trap themselves in A program, the narrative too often turns to cost, when the real heart gridlock: The problems appear too complicated and require of healthcare is patients and their ac- too many stakeholders to work together, agree on a cess to care. solution and settle who’s going to pay the bill. Yes, costs have to be managed, but as shown by the poorer outcomes and increasing costs flowing from prescription non-compliance, system improvements must focus first on pacts of chronic conditions, like dia- to cover childhood diseases (which better patient care and better patient betes and hypertension, which are spiked again this year), HPV, shin- outcomes. Better healthcare costs are increasingly common among Cana- gles, meningitis and travel vaccines? a benefit of providing the right care at dians. Pharmacy healthcare teams Pharmacies also play an important the right time in the right place. also provide lifestyle management role in ensuring patients get the most Our vision is to ensure that patients advice on nutrition, obesity, smoking from their medications—ensuring are at the centre of all discussions cessation and more, all of which help people take the most effective medi- about improving our healthcare sys- Canadians live longer, healthier lives. cations for their conditions, monitor- tem. One way neighbourhood phar- Treating patients in neighbourhood ing compliance with their medica- macies could help provide a single pharmacies helps keep them out of tion regimes, preventing adverse drug high standard of care for all Canadi- emergency rooms and hospitals, interactions, or counselling a patient ans would be to coordinate patient- which are the most costly way to de- taking a new medication. focused services provided by pharma- liver healthcare. The human benefits cists. So, for example, patients across are obvious; the healthcare system We can do better than continuing Canada could expect to receive a sin- benefit: $2 billion or more annu- to allow our once-envied healthcare gle high standard of care for common ally, according to our ground-break- system to decline into costly medioc- ailments at neighbourhood pharma- ing policy paper published in 2013, rity. When Canadians confront big cies, regardless of their location. “9000 Points of Care: Improving Ac- issues—and healthcare is huge—they cess to Affordable Healthcare,” (See often trap themselves in gridlock: here are about 9,000 neigh- http://9000pointsofcare.ca/) The problems appear too complicat- bourhood pharmacies across ed and require too many stakeholders T Canada. They’re embedded he patient-focused service Ca- to work together, agree on a solution in almost every community and nadians may know best is the and settle who’s going to pay the bill. provide a growing range of primary T pharmacy influenza vaccine Faced with such complexity, we often care services, closer to where Ca- program, which, from its start in do nothing and hope the problem nadians live, work and play. Since 2010-2011, now delivers more than will go away. many neighbourhood pharmacies are 1.9 million vaccinations annually. open to midnight—and some even According to a recent study l ooking There are no easy answers to the ‘big’ 24 hours—they enable patients and at the 2014–2015 flu season, 29 per issues, but there are some ‘small’ their families to access care when and cent of those getting their protec- easy-to-implement solutions that how it’s convenient for them, often tion at a neighbourhood pharmacy can improve Canadians’ lives. If we without an appointment. This flex- have switched from other provid- fail to deliver these improvements, ibility enables patients to deal with ers—such as doctors’ offices and too many Canadians will continue minor health concerns and prevent public health clinics, due to great- to skip their medications or split them from becoming more distress- er convenience—and 20 per cent their pills. ing, more complex and more costly weren’t vaccinated in the 2013- Neighbourhood pharmacies have to treat. Pilot programs in Scotland 2014 season—which demonstrates and Saskatchewan show that provid- neighbourhood pharmacies’ ability the expertise and experience to pro- ing pharmacy care for common ail- to deliver important public health vide critical input into the develop- ments frees physicians to treat more benefits to the whole population. ment of a system that supports bet- complex cases, and diverts simple ter care and better health outcomes Neighbourhood pharmacies have for all Canadians. cases from emergency rooms, and been investing in innovations to that creates substantial savings for bring down the costs of care. So, Denise Carpenter is President and CEO the healthcare system. could this influenza vaccine example of the Neighbourhood Pharmacies Research also shows that pharmacy be leveraged for more gains? Why Association of Canada. assistance can help reduce the im- not expand pharmacy vaccinations [email protected]

Policy 33

A polio vaccination at the UN-House Protection of Civilians (PoC) 3 site in South Sudan. The Sudanese government conducted the 2014 campaign with the support of the UN Children’s Fund (UNICEF) and the World Health Organization (WHO) and working with local non-governmental organization Magna. Some 2.4 million Sudanese children were immunized. UN photo Big Shots HOW CANADIANS ARE TRANSFORMING GLOBAL HEALTH THROUGH VACCINATIONS

Helen Scott

Canadians are now recognized globally as leaders in the s Canadians, we are proud of fight to end the preventable deaths of women, newborns universal healthcare. Our sys and children. As part of this broad, concerted effort, Ca- A tem is not perfect, but for the most part, health services are deliv- nadians are working in the most marginalized communi- ered to all people across the country. ties around the world to ensure access to vaccinations, a Children receive routine check-ups proven cost-effective measure for improving health. Indi- and have access to emergency care from the day they are born. Families viduals and organizations are applying a uniquely whole- choose life-saving vaccinations for of-Canada approach to vaccination programming through their children so that many prevent- investment, innovation, expertise and collaboration. able diseases are a thing of the past. Ensuring the health of the youngest members of our society is born out of

September/October 2015 34 the recognition that they are our future: taking care of their health is tak- The longstanding national belief in the value of ing care of the health of our country, good healthcare does not stop at our country’s generation after generation. borders. Doing our part to end preventable deaths of The longstanding national belief in women and children is a key focus of our international the value of good healthcare does not development work as well. stop at our country’s borders. Doing our part to end preventable deaths of women and children is a key focus of our international development work costs and indirect economic benefits wide effort has been that polio is now as well. including improved cognitive devel- confined to only two countries: Paki- We are bringing a uniquely Cana- opment, educational success, labour stan and Afghanistan. dian approach to tackling this glob- productivity and income generation. Canadians can be proud that we are al health challenge: collaboration. Canadian organizations are leaders in one of the top donors to the GPEI. At Across the country, we are uniting this global effort to ensure access for the Global Vaccine Summit in 2013, Canadian expertise, medical knowl- all to vaccinations through expertise, we reaffirmed our commitment to edge and technologies under the um- investment and partnership. eradicate polio and pledged funds brella of the Canadian Network for over six years to support the End- Maternal, Newborn and Child Health A powerful example game Strategic Plan, which is slated (CAN-MNCH). This powerful and to eradicate the disease by 2018. Can- united network of over 80 non-gov- of the potential of ada’s contributions to eradicate polio ernmental organizations, researchers, vaccinations to change are part of its broader commitment nurses and doctors is working in over lives is the fight against to promote maternal, newborn and a thousand regions around the world polio, a disease that mainly child health, with its funding com- to improve the health of women, ing from the 2010-2015 Muskoka Ini- newborns and children. affects children under the age of five. tiative and Canada’s forward strategy As a result of this whole-of-Canada Saving Every Woman Every Child, approach, Canada is now recognized consisting of $3.5 billion in renewed globally as a leader in improving ma- funding from 2015-2020. Vaccina- ternal, newborn and child health. tions have been identified as one of A powerful example of the poten- “Continued commitment from Can- three priority areas of this new fund- tial of vaccinations to change lives is ada is critical to ensure the prioritiza- ing, along with strengthening health the fight against polio, a disease that tion of improving health for children systems and improving nutrition. mainly affects children under the age around the world,” says Anita Zaidi, of five. This fight to eradicate polio director of the Enteric and Diarrheal The result of this has been a flagship of Canada’s inter- Diseases program at the Bill & Melin- worldwide effort national efforts to improve health. da Gates Foundation. “We are espe- has been that polio is now cially focused on increasing access to Globally, the polio picture is prom- confined to only two proven interventions that save chil- ising. Twenty-five years ago, a thou- dren’s lives—a lot of lives. Affordable countries: Pakistan and sand children contracted polio every and effective interventions like vac- day. To confront polio head on, a Afghanistan. cines, in addition to oral rehydration public-private partnership called the solution, zinc, hand-washing and Global Polio Eradication Initiative breastfeeding, have proven track re- (GPEI) was spearheaded by the World cords and yield immediate impacts.” Health Organization (WHO), Rotary International, the US Centers for Dis- o ensure that these funds othing proves the effective ease Control and Prevention (CDC) translate into impact for the ness and necessity of col- and the United Nations Children’s T most vulnerable women and N laborative approaches to ma- Fund (UNICEF). In less than 30 years, children globally, traditional lines ternal, newborn and child health like some two billion children globally among government, civil society, the vaccinations. Vaccines are one of the have been immunized against polio medical community and the private most cost-effective ways to save lives, through an international investment sector are blurring. These lines need improve health and ensure prosper- of US$3 billion and the concerted ac- to blur. As a network, we empha- ity. They strengthen development tion of 200 countries and 20 million size the need for close collaboration through direct savings in medical volunteers. The result of this world- among all players to achieve signifi-

Policy 35 on the ground. For example, UNICEF Canada and the Kiwanis Founda- tion of Canada are pivotal partners in the Eliminate Maternal and Neo- natal Tetanus Initiative. This initiative will provide approximately 3.4 million women of reproductive age with three doses of tetanus toxoid vaccine in Chad, Kenya, Pakistan, South Sudan and Sudan. Canadian non-governmental organizations are delivering vaccines to children through their health programming in hundreds of communities around the world. Canadians are also making a global impact through research. An experimental Ebola vaccine designed by Canadian scientists in Winnipeg has shown promising effectiveness according to interim results of a trial in Guinea reported in late July. The Checking for polio vaccination marks in Pakistan. Thanks to a global vaccination effort, polio is now confined to only two countries in the world, Pakistan and Afghanistan. Flickr photo real-time, life-saving accomplishments of Canadian individuals and organizations are powerful steps for- cant advances in global health and rotavirus vaccine into Senegal’s na- ward in the battle to end prevent- development. tional immunization program. This able deaths of women and children is slated to save hundreds of lives an- Likewise, traditional attitudes around around the globe. nually. “Canada’s continuous strong funding are expanding to include commitment to Gavi will save mil- Canadians are partnering across our innovative financing mechanisms. lions of lives in developing coun- country and the world to improve Both Canadian and global public-pri- tries,” adds Dr. Seth Berkley, CEO of the health of women and children. vate partnerships are laying the foun- These innovative partnerships have dation for reducing child mortality Gavi. “We share Canada’s determina- through immunization. Canada has tion to see a world free from prevent- improved the ability to develop, af- been a key supporter of Gavi, the Vac- able deaths, and we are playing our ford and deliver vaccinations to ev- cine Alliance, founded in 2000 by the part by working to ensure that chil- ery corner of the globe, with a con- Bill & Melinda Gates Foundation, the dren have access to lifesaving vac- tinuing push to reach further by World Bank, the World Health Orga- cines no matter where they live.” targeting the most marginalized peo- nization, UNICEF and vaccine manu- ple. This investment in vaccinations facturers, including Canada’s Sanofi An experimental leads to improved health, increased Pasteur. This public-private partner- Ebola vaccine productivity and economic stability. ship has brought together public and The Canadian Network for Maternal, private sectors with a shared goal designed by Canadian Newborn and Child Health is con- of creating equal access to new and scientists in Winnipeg vening talented groups of Canadi- underused vaccines for children liv- has shown promising ans to change the world, one shot at ing in the world’s poorest countries. effectiveness according a time. Gavi has already averted 7 million Dr. Helen Scott has a doctorate deaths and immunized over 500 to interim results of a trial in epidemiology with a focus on million children. “Canada led the in Guinea reported in maternal and child health. She is the charge when it announced its pledge late July. Executive Director of the Canadian to Gavi, the vaccine alliance last year, Network for Maternal, Newborn and and galvanized other donors to stand Child Health, a collaborative network up and follow suit,” states Zaidi of the Gates Foundation. of 80 Canadian organizations working to end the preventable deaths of Just a few months ago, a partnership anadian leadership goes far mothers, newborns and children between Gavi, Canada and Senegal beyond financing. Our orga- around the world. brought about the integration of the C nizations are putting boots [email protected]

September/October 2015 36

Greek Prime Minister Alexis Tsipras called a “flash referendum” in which Greeks rejected a debt deal that was no longer on the table, only to be forced to accept even more stringent terms for financial support from the EU. Flickr photo Greece and the EU: Beware of the Single Story Jeremy Kinsman

As the exalted post-war vision of a united Europe suc- fter months of media frenzy, cumbs to the short-term challenges of economic incom- the drama surrounding the A struggle by Greece to avoid petence and social disruption, an international order bankruptcy, expulsion from the euro- in flux demands EU leadership that thinks in decades zone, and the economic descent that and centuries, not weeks and months. As long-time would likely follow a return to the drachma subsided with a Greece/EU diplomat and foreign policy strategist Jeremy Kinsman deal nobody likes but that should give writes, the noble project of Monnet, Schumann, Spi- Greece a few years to adjust by kicking nelli and Spaak can either implode under the weight the can down the road. of its own tactically exploited divisions, or higher and Financial reporting on the Greek cri- wider aspirations will prevail. sis was dire, conflated with the sort of moral allusions that inhabit Dickens’ descriptions of debtors’ prisons. North- ern European media excoriated Greeks

Policy 37 for the tax cheating and fudging of national accounts that had been a EU public opinion fractured into polarized national cultural and political pattern for de- caricatures, rule-of-law good Germans laying into cades. But the Greeks’ partners in bad scofflaw Greeks deserving their plight, while humiliated fraud were northern EU banks, ever- and victimized Greeks blew back against rigid domineering ready to make irresponsible loans that went belly-up with the financial German throwbacks. crisis of 2008.

EU public opinion fractured into polarized national caricatures, rule- of-law good Germans laying into dinary citizens suffered the upending ken condition in an apparent belief bad scofflaw Greeks deserving their of their lives. they had a mandate to challenge the plight, while humiliated and victim- whole system. ized Greeks blew back against rigid According to German economics pro- domineering German throwbacks. fessor Hans-Werner Sinn in the New Basking in rock star status conferred York Times, the reality is that only a by breathless European media, they For Romano Prodi, former president third of the roughly US$250 billion overplayed their weak hand. Exasper- of the European Commission and for- went to the banks; another third to ated European partners, who took a mer prime minister of Italy, the “poor the Greek treasury to finance the flash referendum as blackmail, over- handling” of these emotions ensured need of Greece to import almost ev- whelmingly lined up behind Germa- that “a small problem became a big erything; and a third filled in behind ny’s tough line. Facing a withdrawal one” by depleting the fund of mutual the flight of Greek private capital. of financial support and even expul- confidence that underpins the Euro- sion from the Euro, Tsipras had to ac- pean Union’s delicate balance. cept an austerity package as humiliat- What does the EU ing as it was hard. He bounced radical Commentary has veered into existen- stand for today? ministers and moved toward the prag- tial questioning about the future of matic centre, leaving most Greeks re- the Euro and indeed of the EU itself. Will it survive evidence of lieved and hopeful the country can What does the EU stand for today? structural design flaws? Do now muddle through for a few years Will it survive evidence of structural the increasingly disgruntled even with cuts to pensions and new design flaws? Do the increasingly citizens of the 28 member disgruntled citizens of the 28 mem- taxes required by the EU. ber states, each of which has its own states, each of which has its own national political But as the IMF has underscored to its national political narrative, really be- partners in the creditor “troika,” the lieve there is “too much Europe” in narrative, really believe European Central Bank, and the eu- their lives? there is “too much Europe” rozone authorities themselves, Greek EU-worriers counter that growing in their lives? debt is unsustainable, and auster- public defection from the European ity makes it worse. After Greece con- project, encouraged by populist na- sented to impose spending and other tionalist politicians, could produce cuts as a condition for the last round “too little Europe” to maintain the of bailout credits in 2009, debt went solidarity needed to prop up Europe’s from 125 per cent of GDP to today’s economic and social model, and cope ngry and desperate Greeks be- 175 per cent. with trans-national challenges lieved their drastically dete- Tsipras hopes that Parliament’s ap- riorated economic circum- proval of the reform package signals Populist anti-EU resentment has been A stances represented payment enough fueled by the massive financial bail- to paymasters a sufficiently con- for their wayward self-governance. out for Greece thus far, about $US trite commitment to severe cuts in 33,000 per Greek citizen. The anti-es- Rejecting the discredited political spending, however unenthusiastic, tablishment left, especially in France, class, they hoisted into power a left- to enable a new round of negotia- Italy, and Spain, objected to Ger- wing populist protest party, Syriza. tions for essential debt relief through many’s insistence on severe auster- The new Prime Minister Alexis Tsip- debt rescheduling and restructuring ity as the condition for further Greek ras, and especially his Finance Minis- (not actual reduction). Greece would credit. There was popular sympathy ter, Yanis Varoufakis, self-proclaimed thereby remain, for now, part of the with the Greek contention that the Marxist and agent provocateur, surfed battered but intact euro family of 19 principal beneficiaries of the public public resentment, blaming global nations, despite the misgivings of credits were private banks, while or- capitalism for their country’s bro- many in Northern Europe.

September/October 2015 38 Many skeptics in the economic press believe this only delays Greek bankruptcy, since austerity throttles at- tempts to revitalize the economy. Re- covery needs a currency devaluation, impossible within the Euro, where many outsiders believe loosely-governed Greece never belonged.

After Greece consented to impose spending and other cuts as a condition for the last round of bailout credits in 2009, debt went from 125 per cent of GDP to today’s 175 per cent.

French President François Hollande and German Chancellor Angela Merkel. France and Germany are the pivotal leaders of the European project, which as Jeremy Kinsman writes, “remains a work in progress”. Flickr photo his underestimates the resil- to functional economic cooperation But the EU would never become the ience of belief in the wider his- and didn’t interfere with issues of na- equivalent of a state. From the proj- T toric European project, even tional identity and political custom. ect’s start, there were critical no-go among leaders warning about moral zones in Charles De Gaulle’s “Europe hazard if Greece was let off the hook. The project’s founding ideal- des patries,” fenced-off areas crucial Few Europeans in decision-making ists—Monnet, Schumann, Spinelli, to national political sovereignty. capacities would actually revel over Spaak—understood the need to soft- Most notable is the politically potent the failure of this deal. Only die-hard pedal political goals of unification power to tax citizens, vested in sov- by channeling them underneath anti-EU nativist politicians would ereign national parliaments that elect functional purposes. Starting with want the EU itself to crash. national leaders who constitute the co-management of the coal and steel EU’s Council of Ministers, now 28, Indeed, that the crisis has rattled con- industries at the fault line of German- each channeling a distinct national fidence in the sustainability of the French rivalries, they aimed to lock in political narrative. European project itself may therefore the habit of common endeavour, first The first priority of elected politicians be what saves it. within a common market of the six founding members, with a common is to be re-elected. The 19 eurozone Pushback against the notion of po- agricultural policy and external tariff, members steer different economies litical unification is nothing new, then as a progressively enlarging and with different budgets so as to be able to spend or tax according to elec- though it has gained traction as liv- deepening economic community, toral opportunity. But this rules out ing memory faded of the violent with common policies covering the a common agreed fiscal policy, with- calamities caused by European na- gamut of economic and social life, out which a common currency would tionalisms in two world wars that an extending massive infrastructure in- not work. “ever-closer union” aimed to make vestment to poorer regions. impossible forever. This economic truth was an inconve- he reality is that the EU is an nient contradiction to the essentially Euro-skepticism thrives in the “An- emphatically political project, political rationale behind at least the glosphere.” North American opinion T whose voluntary pooling of na- timing of the euro’s creation. The undervalued the political aspirations tional sovereignties has no historical overall European political project and behind the European unification precedent. As such, it remains a work its public support began to falter in the movement born in the rubble of the in progress, seeking traction from 1980s. Used to post-war decades of in- Second World War. British opinion crisis to crisis in a continuing com- creasing prosperity and social welfare, grasped them but recoiled, preferring petition between optimists and pes- deepening policy cooperation, and a European Union that limited itself simists, federalists and nationalists. widening EU membership, many Eu-

Policy 39 ropeans took for granted the highest “Immigrants” are instead refugees in the hundreds real standard of living in human history—until economic growth slowed of thousands a year, mostly seeking refuge from the to a point where generous social and wars of Syria, Iraq, and Afghanistan or from dead ends in employment guarantees and benefits Africa, with whom there is no prior contract. Ironically, one became unaffordable, deepened by of the EU countries bearing the brunt or arrivals is Greece, the costs of publicly funded pensions the least able to afford it. for increasingly early retirees.

Used to post-war decades of increasing years. They don’t seek and recruit set- states. The EU is not a state but sought tlement-immigrants the way Canada, the attributes of one with the euro in prosperity and social welfare, the US, and Australia do. We extend order to acquire identity value nor- deepening policy to candidates for settlement a virtual mally conferred by “nations.” cooperation, and widening contract of mutual acceptance. EU EU membership, many “immigrants” are instead refugees in National leaders need to articulate the hundreds of thousands a year, Europe-wide objectives in ways that Europeans took for granted mostly seeking refuge from the wars can compete in appeal with nation- the highest real standard of of Syria, Iraq, and Afghanistan or alist impulses, especially from Ber- living in human history. from dead ends in Africa, with whom lin, now clearly the EU capital that there is no prior contract. Ironically, counts the most after years of reluc- one of the EU countries bearing the tance. The Greek crisis confirmed brunt or arrivals is Greece, the least German leadership. But the jury is able to afford it. out on whether it was out of defer- National politicians were increas- ence to German opinion and narrow ingly blaming “Brussels” for bad EU solidarity over the best way to national interest, or in support of the economic news and the necessity manage pluralism is taking a beating. common currency as a flagship of the of cuts to benefits and expectations. Public opinion in most of the EU is European project. Commission bureaucracies were eas- cold to a refugee-sharing plan, believ- ily caricatured as over-staffed, over- ing many refugee/immigrants import Just saying the EU must be saved paid, and intrusively interfering in practices that undermine hard-won doesn’t make it happen. The found- everyday lives. Efforts to endow the values such as gender equality and ers were right: only doing it will European project with tools of direct the separation of religion from law work, over time, crisis by crisis. The democracy created a European Par- and civic governance. Jihadist vio- substantive crises on the EU’s table liament that seemed to radiate waste lence against freedom of speech has are daunting, especially for transac- and inflated entitlement. further hardened attitudes. tional politicians trying to hold on The effect is a gathering storm over the to office who are consumed with he efficiency and effectiveness European landscape. Nativist parties smaller moments of local interest, of those institutions is now that are anti-EU and anti-immigrant content with less Europe. But with- T being tested not only by that have increased their sway in al- out higher and wider aspirations, threats to the sustainability of the most every member state have been sadly, both they and Europe stand to economic model, but by questions of handed more weapons by the swarms lose. So will North America, as the identity, security and human rights of migr ants this summer and by the non-EU partner among the trans- spawned by the immigration crisis. Euro crisis, including in Britain, soon Atlantic liberal democracies whose facing a “Brexit” referendum. The Eu- values have held sway in the world Immigration is a surrogate for a vari- ropean project based on the belief that for the past seven decades. ety of issues. National identities are disparate national identities could be being pressured by a popular feeling subsumed for the greater good of all Jeremy Kinsman was a long-time there has been too much change, too is struggling to reconcile in a convinc- Canadian ambassador under fast, including from the last wave of ing way the need for more union at Liberal and Progressive Conservative EU enlargement that has added eco- the EU level and more pluralism with- Governments and now holds positions nomic migrants from inside the EU in member states. at the University of California, to waves of immigrants from outside Berkeley, and Ryerson University. He Europe. Jack Citrin of the University of Cali- participates in a non-partisan group fornia, Berkeley, has written about the that periodically meets to discuss global EU countries have generally tech- way in which the sense of being a “na- issues with Justin Trudeau. nically been zero-immigration for tion” gives legitimacy to the actions of [email protected]

September/October 2015 40

Skyline watching in Shanghai. In only 35 years, “an impoverished totalitarian Communist state” has grown to the second largest economy in the world, poised to overtake the United States within a decade. Flickr photo Where is China Heading? —A Letter from Ditchley Park

Kevin Lynch

While China’s growth has long been a quarterly fixa- iven the importance of China tion of markets and analysts—both political and eco- to the global economy today, G it is useful to pause and pon- nomic—we rarely focus on its long-term prospects be- der where China will be a decade from yond betting on when it will surpass the United States now, rather than just focusing on its as the world’s largest economy. How will China main- next-quarter GDP numbers. tain strong growth and social stability while meeting To set an historical context, consider the evolving demands of an expanding middle class? the following thought experiment: it BMO Financial Group Vice-Chair and former Privy is 1980 and a distinguished group of Western economists and policy advis- Council Clerk Kevin Lynch shares his thoughts on Chi- ers are asked to rate the chances that na’s future, fresh from Ditchley Park. China, an impoverished, totalitarian Communist state just emerging from

Policy 41 the cultural revolution, will go on a 35- year growth binge that would China’s rapid economic growth has been one of the make it the second-largest economy key features of the “new global normal.” It will in the world, a global economic pow- surpass the US within a decade as the world’s largest er eclipsing all but the United States. economy and it is already the world’s largest energy Their answer would have been unani- consumer. China has become the mass manufacturing hub mous, and utterly incorrect. This is a useful reminder as the world consid- of the world. ers the path China might follow over the next decade or so, at a time when it is facing an exceedingly complex array of policy problems and “China will surpass the US within a decade cessive reliance on export-led growth skeptics” again abound in Western as the world’s largest economy and imbalances the economy, and imma- policy circles. it is already the world’s largest en- ture systems for pensions, healthcare, ergy consumer. China has become and unemployment insurance, make At a recent high-level Ditchley Con- the mass manufacturing hub of the excessive personal savings logical but ference in the UK where leading eco- world. This incredible pace of eco- economically inefficient. nomic and political experts attempt- nomic growth has lifted over half a ed to peer into China’s future, there billion Chinese out of abject poverty Private enterprise is was a fair consensus—but certainly and created a new middle class that expanding robustly, not unanimity—that: numbers hundreds of millions and and an entrepreneurial spirit continues to grow rapidly. Private en- • continuation of strong economic is taking hold among young growth without significant policy terprise is expanding robustly, and an reforms is unlikely; entrepreneurial spirit is taking hold educated Chinese, as they among young educated Chinese, as look to Jack Ma and • political reforms are probably they look to Jack Ma and Alibaba, Alibaba, rather than not a prerequisite for the needed rather than government, for career policy reforms, given China’s inspiration. China has built world government, for career track record and the policy skills class infrastructure in many areas inspiration. of today’s leadership cadre, but (compare La Guardia to the Beijing being able to affect the required airport for example), is developing reforms is an open question; and a globally credible university system Labor, land and capital markets have • pressures for a more responsive with internationally competitive re- lagged goods markets in China’s political model—possibly search, and is producing a bilingual policy liberalization, and have led “responsive authoritarianism” but crop of future business and govern- to property asset bubbles, excessive not a Western-style democracy, ment leaders. And it has done this local government debt and decreas- would likely grow, but major while maintaining a relatively low ing competitiveness. Demographics changes are unlikely before the ratio of federal government debt to will soon become a drag rather than next generation of Communist GDP, building a relatively high level a motor of growth, and productivity Party leadership. of foreign reserves, reining in inflation, and integrating hundreds of growth and innovation will have to eflecting on this political- millions of people from the country- be dramatically increased if China is versus-policy reform debate side into the cities in the largest mi- to sustain its high rates of econom- R recently, Francis Fukuyama has gration in human history. ic growth and raise living standards argued: “An effective political system further. Finally, income inequality has to balance state capacity against This success, astonishing for its scale is both high and rising, and may be- rule of law and democracy. I think in and timeframe, is not without its chal- come a front burner issue if China is the United States and certain other lenges. Environmental degradation to avoid “the middle-income devel- democratic countries, the emphasis has been enormous, led by air pol- opment trap.” has been so much on the constraint of lution (visit Beijing in winter), water utside China, the need for state power that we end up not being shortages (11 ‘dry provinces’) and political reform within Chi- able to make difficult decisions. But I widespread water quality problems. na is widely discussed, with think China is the opposite, and that’s Corruption is problematic (witness the O extraordinary anti-corruptive drive of the typical argument being that some not a good situation either.” President Xi Jinping), and a legal sys- kind of political change seems inevi- Clearly, China’s rapid economic tem geared to the rule by law, not the table as a prosperous middle class de- growth has been one of the key fea- rule of law does not give the certainty velops and wants more say over how tures of the “new global normal.” It that private sector investors seek. Ex- they are governed and more protec-

September/October 2015 42

Chinese President Xi Jinping meets with Gen. Martin Dempsey, chief of the US Joint Chiefs of Staff, in Beijing. As Kevin Lynch writes: “China intends to be more a rule maker, not just a rule taker, in the shifting geopolitical order.” DOD photo, Flickr

tions—the rule of law not rule by law. it is the reality that bureaucracy was has marked China’s growth down to Inside China, not surprisingly, the a Chinese invention to bind together 6¾ per cent in 2015, and somewhat debate is more muted as the Commu- a far-flung empire by more than arbi- weaker next year, with risks still to nist Party’s main focus is maintain- trary behaviours. But, with respect to the downside. The recent gyrations in ing its legitimacy, preserving “social representative bodies, there is no Chi- Chinese stock markets, the frenzied harmony”, and guarding its domi- nese historical reference point, unlike measures to prop up equity prices and nant position. Indeed, the current the West with its Roman and Greek the decision to devalue the currency anti-corruption campaign is publicly antecedents. A key question, given the only underscore the growth challeng- popular, enhancing the party’s legiti- need for substantial policy change to es facing Chinese policy makers. macy, and clearly consolidates the sustain robust growth, is whether cur- Supporting the structural view of party leadership’s power. rent Chinese governance structures are an impediment to policy change slowing growth is President Xi him- Demographics will or capable of leading such change? self. In recent speeches he refers to And, the jury is still out on whether “the new normal” for China, calls for soon become a drag rebalancing Chinese growth towards rather than a motor of reforms will be deep and fast enough given the shifting dynamics in the consumption and services and away growth, and productivity Chinese economy. from exports, advocates an innova- growth and innovation will tion agenda to raise Chinese produc- The most immediate challenge is that tivity and improve competitiveness have to be dramatically of growth, which is giving every indi- and is moving ahead with financial increased if China is to cation of slowing below the govern- sector reform, albeit with Chinese sustain its high rates of ment’s new target of seven per cent, characteristics. In this regard, the economic growth and raise despite Chinese government assur- government has approved a growing living standards further. ances to the contrary. The pertinent number of offshore renminbi clearing questions are not whether but why centres (15 and counting), including there will be a growth shortfall and Canada, to support the increasing how much it will be. On the “why”, international role of the Chinese cur- I believe the slowdown is more struc- rency. Reform of State Owned En- The Chinese people tend to evaluate tural than cyclical—reflecting aging terprises (SOEs) was a core feature of their present by reference to their past, demographics and low productiv- the 3rd Plenum, although details are not surprising for a nation with 5,000 ity (excess capacity, little innovation, scarce and outright privatizations of years of history. With respect to the capital market rigidities)—and these major SOEs unlikely. However, there West, it is the “hundred years of hu- structural factors combine with the is a growing appreciation that a too- miliation” narrative; with respect to consumption impacts of the anti-cor- dominant SOE position in the econo- strong leadership, it is never forgetting ruption campaign and local property my is an impediment to innovation past periods of instability and chaos; bubbles to magnify the growth weak- and productivity. As someone noted, with respect to rules and authority, ness. On the “how much”, the IMF the rise of Alibaba required both the

Policy 43 extraordinary entrepreneurship of Jack Ma and the absence of an SOE in China intends to be more of a rule-maker, not just the e-commerce space. a rule-taker, in the shifting geopolitical order. The central question is: what vision of the world will China useful caution to Westerners, who too often see China as espouse, how well will its vision mesh with that of the West, A a homogeneous monolith, is and will it see its future working predominantly within or that it is more diverse than we under- outside the existing global order? stand and increasingly so. The middle class, which did not exist 35 years ago, is large, growing, traveling and demanding. The “Great Firewall of frustrated with the existing interna- that of the West, and will it see its fu- China”, we are assured, is no match tional order and its place in it. We ture working predominantly within for tech savvy, innovative young pro- should not underestimate the impact or outside the existing global order? fessionals who view social media as on Chinese strategic thinking of the their new extended family. Graduates China has both bold ambitions and global financial crisis and its percep- from the elite universities are for the big challenges. Leadership, both in tion in Asia of “Western model fail- first time seeking jobs in the private China and in the West will matter ure.” The failure of the U.S. to ap- sector, not government or the SOEs. greatly to how China evolves. Do- And even the SOEs are more differ- prove reform of the IMF, and to cede mestically, China needs to reorient its entiated in culture and practice than a major role in the Asia Development economic growth model towards do- they were, depending on the extent to Bank to China, were prominent fac- mestic demand, build its private sec- which they operate in global markets. tors in China’s establishment of tor, reform its SOEs, give the “invis- the Asian Infrastructure Investment ible hand of the market” a freer rein Two of the many policy challenges Bank. The “One Belt, One Road” in- that lie ahead for China particularly to spur innovation and entrepreneur- ternational investment initiative is ship, and renew the “social contract” stood out at this Ditchley Confer- an attempt to align countries in the ence. They were the enormity of with its citizens—a huge task for any region through Chinese-financed society at any stage of development. China’s environmental problems, economic ties, not unlike Western particularly expanding droughts, strategies in the postwar period, and Despite the Western commentary widespread degradation of the water to create a new export market for Chi- about the dominance of President Xi, table and unhealthy levels of air pol- na’s manufacturers. The energy deal some China watchers worried that lution in many cities. These rising en- with Russia was both strategic and he may not yet have enough power vironmental costs and the slowing of opportunistic—with Russia reeling to effect the enormous structural re- growth should provide the occasion from sanctions, it agreed to “Euro- forms China requires, while others for a massive government infrastruc- pean gas pricing” rather than “Asian felt he had the power but questioned ture program geared to cleaning up gas pricing.” Interestingly, as China’s whether he had the intent to use it the skies and water in China’s cities. global role rises, its association with for the needed policy reforms. The other policy problem, which de- the developing countries and the serves more analysis and discussion, BRICS, appears to be diminishing. hat everyone at Ditchley is soaring income inequality and its agreed is that the West But the most important international impact on a society with a sizable lacks strategic coherence relationship is that with the United W middle class and a significant super- in its engagement with a fast-evolv- States and this is now being defined wealthy elite for the first time in its ing China. One possible approach, by strategic rivalry in most areas. history, combined with a shrinking advocated by former Australian Prime While some degree of geopolitical but potentially restive population of Minister Kevin Rudd in a recent Har- and economic competition between rural poor vard report, is that a new “construc- these two superpowers is inevitable, tive realism” is needed in the rela- What about political dynamics, Chi- the inadequacy of “correcting mech- tionship, with a common strategic nese style? The Communist Party of anisms” today—regular summits be- narrative for US-China relations to China has every intention of remain- tween leaders; dialogue mechanisms anchor it, and new regional mecha- ing totally in control, while imple- among militaries, officials and busi- nisms to support it. menting centrally managed reforms, ness leaders; common perceptions permitting directed experimenta- of each other’s objectives—is worri- Contributing Writer Kevin Lynch, tions and encouraging local innova- some. Clearly, China intends to be Vice-Chair of BMO Financial Group, tion—a sort of “responsive authori- more of a rule-maker, not just a rule- is a former Clerk of the Privy Council. tarianism”. Whatever the West might taker, in the shifting geopolitical or- He is also a former Chair of the Board think, there is no real challenge at der. The central question is: what vi- of Governors of the University of present to the Party’s primacy. sion of the world will China espouse, Waterloo, and Chancellor of University On the global stage, China is clearly how well will its vision mesh with King’s College in Halifax.

September/October 2015 44

Intermodal cargo at a ship to rail siding at the Port of Prince Rupert, B.C. Canadian shippers are among those who would benefit from increased trade under a TPP deal. TPP: Beyond the Economics

Perrin Beatty

The economic impact of the Trans-Pacific Partnership opes were high when Minister could be considerable for Canada. But the numbers of International Trade Ed Fast H and his team of negotiators alone ignore that something much bigger is at play. headed to Maui at the end of July for Is the TPP the first of a new breed of multilateral a high-level effort to reach agreement trade agreements? on the Trans-Pacific Partnership. Delib- erations hit severe snags on key issues and the negotiators began planning another meeting—sometime, somewhere.

Certainly, the economic impact of this agreement would be substantial for

Policy 45 Canada. Economic studies put the benefits at somewhere between $5 The TPP is a turning point; an opportunity to put billion and $10 billion per year. But the global trading system on track for the future. In the numbers alone ignore that some- Canada, nearly two out of every three jobs directly or thing much bigger is at play. The TPP indirectly depend on exports, so our prosperity is intimately is a turning point; an opportunity tied to this project. to put the global trading system on track for the future. In Canada, nearly two out of every three jobs directly or indirectly depend on exports, so our prosperity is intimately tied to this project. ment are good, they alone do not cap- powers in their own right. With more ture the full importance of the TPP. people around the table, finding con- The economic case for TPP is clear. sensus has become much harder. Covering 12 countries, including our The global trade regime is in trouble. NAFTA partners the United States Every year since the 2008 financial For a mid-sized trade-dependent and Mexico, it supports Canada’s crisis, G20 countries have pledged economy like Canada’s, this shift is trade ambitions and its objective to to halt what has become a steady concerning on many levels. Going attract more foreign investment. The growth of trade barriers. However, toe-to-toe with giants like China, In- TPP will also give Canadian business- countries keep finding new ways to dia and Japan is a terrible alternative es improved access to 800 million shelter their markets, including local to our traditional (and leading) role consumers across eleven countries, content requirements, state aid and in multilateral negotiations. We gen- representing nearly forty percent of regulatory barriers. This trend may erally fare best when working with global economic activity. even accelerate. others, especially if we can maintain a leadership position in affecting how The advantages are even clearer when he institutional architecture these new trends play out. you look at specifics. A commanding and rules that support global 65 per cent of Canadian agri-food How can we put global trade back on trade need a major overhaul. exports are intended for TPP coun- T track? The Trans-Pacific Partnership The world no longer seems able to tries. These same partnership coun- is the first element of the answer. craft multilateral agreements. The tries also account for half of Canada’s World Trade Organization has done Countries that have an active trade inward and outward foreign invest- a good job of settling disputes since agenda need to band together and ment. The measures in the agreement set the rules themselves, instead of will contribute to job growth, protect its founding in 1994, but it has failed pushing for individual and less ef- innovations and give Canadians a to bring new liberalization in recent fective agreements. Canada in par- greater choice of consumer goods. years. The Doha Round once again finds itself in political deadlock. ticular cannot afford to go it alone. Japan is the biggest prize of all. The We’re much more effective when we collaborate with our G7 counter- Canadian exports of meat, grain, oil Canada in particular seed, seafood and wood will grow parts and other countries that share once producers no longer face the cannot afford to go our trade ambitions. These partner- quotas and import tariffs that shield it alone. We’re much more ships allow us to create agreements the world’s third-largest economy. effective when we that are adapted to specific situa- tions and objectives where we have Beef exports to Japan are projected to collaborate with our G7 double or even triple. There will be a role of influence. similar relief from trade barriers in counterparts and other Vietnam and Malaysia, fast-growing countries that share our ake the example of CETA, markets representing nearly 120 mil- trade ambitions. where Canada is putting in lion people. T place a positive and comprehensive agreement, adapted to its The economic benefits will also be priorities, with all of the European felt within the country. Goods and Union in a single, fluid motion. By products will need to move across doing so, Canada is setting itself up as So where lies the problem? The global Canada through essential transport one of the only countries en route to balance of power has shifted dramati- infrastructure such as the CP and CN having trade agreements with North cally over the past decade. The G7 railroads, to be delivered to our ports America, the East and the West. and border crossings. countries were hit hard by the financial crisis while countries like China, Achieving something together is a Although the economics of the agree- India and Brazil have become trade way to blaze the path for other coun-

September/October 2015 46 tries in the future. Already, the Phil- ippines, Indonesia, Taiwan and South

CETA was a good start for Canada, but the Trans-Pacific Partnership is the big show. We need to be fully engaged in the discussion. We cannot let others determine the outcomes for us and hope they remember to include us at the signing.

Korea have been attracted by the benefits of joining the TPP. Even China is considering ways to formalize relations with the new trade bloc.

CETA was a good start for Canada, but the Trans-Pacific Partnership is the big show. We need to be fully engaged in the discussion. We cannot let others determine the outcomes for us and hope they remember to in- Canadian Chamber of Commerce President Perrin Beatty writes that a TPP deal would open the clude us at the signing. door for future agreements. Photo courtesy of Ian Wagreich, U.S. Chamber of Commerce.

The real promise of TPP is in the rules. There’s a real opportunity to Trade in services is increasingly im- TPP will deliver at face value and give update the trade agreement template portant for Canada. Our exports of Canada access to new and emerg- to make it more relevant to the busi- banking and insurance, for instance, ing markets. More importantly, nesses using them. TPP will strength- have tripled over the past decade. TPP though, it will position us as a key en and extend standard rules around will progressively open up service in- trade stakeholder, one of the few things like non-tariff barriers, invest- dustries to foreign investment and countries actively establishing the ment and intellectual property. But provide a more predictable policy rules, not merely playing by them. there are several key innovations to framework to help them compete. And therein lies the real strength of this agreement. watch for. Finally, TPP will make sure every- body is competing on a level play- Technology has dramatically changed There are no free passes to access this ing field. New rules on state-owned the nature of international trade. The table. If we want to play a hand and enterprises and better enforcement spread of global supply chains has influence the outcome of the round, of labour and environmental regula- sliced up activities into ‘bite-sized’ we have to put our chips down. Cana- tions will deter countries from un- portions. Digital goods and services da cannot win by letting its competi- dercutting each other in a detrimen- need to be taken into account. Small tors decide our future without us. tal race to the bottom. businesses are getting involved like Perrin Beatty is the President and CEO never before, but have a hard time The Trans-Pacific Partnership is the of the 200,000-member Canadian dealing with the red tape and un- first true modern trade agreement. It Chamber of Commerce, Canada’s derstanding local regulatory require- is the basis for new global trade archi- largest and most representative national ments. TPP is the first major trade tecture that provides universal, yet business association. agreement to have a chapter focused flexible rules, to foster the growth of on their needs. trade and investment.

Policy 47

The Canadian forestry sector has reduced GHG emissions by 65 per cent, way beyond the Kyoto target of 6 per cent reduction below 1990 levels by 2012. From Laggard to Leader THE CANADIAN FORESTRY SECTOR’S VIRTUOUS CYCLE ON CLIMATE CHANGE

David Lindsay

As the world’s attention turns to the United Nations roughts from California to Brit- Climate Change Conference in Paris in December, it ish Columbia. Record-breaking D temperatures in Central Cana- is worth knowing which industries are doing the most da. Fires in Saskatchewan—all blamed to reduce their carbon footprints. The Canadian forest on climate change. Yet as angst grows about the impact of climate change, so products industry has made significant GHG emissions do fears that curbing greenhouse gases reductions and has aimed to be carbon neutral along (GHGs) could curtail economic activ- its supply chain. At the same time, with 10 per cent of ity. So wouldn’t it be wonderful if there were something that pulled greenhouse the world’s forests, Canadian trees absorb tremendous gasses out of the air while fostering jobs amounts of carbon dioxide to the tremendous benefit of and growth? our entire planet. Instead of being part of the problem, the forest products industry can be seen as part of the solution to climate change—which scientists agree stems from the increasing emissions of greenhouse gases, especially carbon dioxide

September/October 2015 48 (CO2), from burning fossil fuels. Canada’s forest sector is helping to Accounting for 10 per cent of the world’s forests, mitigate this global challenge by ab- Canadian trees absorb tremendous amounts of sorbing CO2 from the atmosphere carbon dioxide to the benefit of the entire planet. and storing it in trees and soils, as The Canadian Forest Service estimates that the areas well as in traditional and innovative of Canada’s managed forest store about 50 billion tonnes new forest products from car parts to new construction materials. This of carbon. contribution to a low-carbon economy is recognized by the Intergov- ernmental Panel on Climate Change (IPCC), but is probably less under- alize that Canada is a global leader in does emit carbon but the next gener- stood by many Canadians. sustainable forest management. Our ation of trees stores it again— similar country has 161 million hectares of to a round-trip ticket—while burning Forests themselves are not immune forests certified by independent third fossil fuels for energy gives carbon a from the stress of climate change. parties to follow progressive social one-way ticket to the atmosphere. With global warming, large and ex- and environmental practices. That’s treme forest fires, such as the ones 43 per cent of the total certified for- Forest facilities are in Western Canada this summer, are ests in the world, or more than four approaching energy on the upswing. So are infestations. times more than any other country. From 1998-2012, the mountain pine Part of this leadership is developing self-sufficiency with about beetle killed about 18.3 million hect- active forest management practices to 30 facilities generating ares of pine forests in British Colum- help forests adapt to climate change green electricity on site using bia, mainly because winters were —for example, salvage harvesting to residual materials from their not cold enough to kill off the for- reduce fire risk, jump-starting growth est pest. However, at the same time, in forests ravaged by the mountain operations—enough to the forest sector is well positioned to pine beetle, or planting resilient power all the houses in influence and perhaps even lead the species. By following best practices, Calgary. way on how we collectively address properly managed forests can be a climate change and transition to a positive contributor to a Canadian low-carbon economy. It’s all part of carbon management system. a virtuous cycle. he next step in the cycle is A growing forest is a carbon “sink” Then there are the various products at the mill. The story here is that sequesters carbon dioxide from made from wood that continue to impressive: across the board, the atmosphere and stores it in trees T capture and store carbon. This in- companies are aggressively reducing and soil. Accounting for 10 per cent cludes traditional wood products their environmental footprint and of the world’s forests, Canadian trees such as timber framing, furniture or running more efficient facilities. Can- absorb tremendous amounts of car- books as well as new innovative bio- ada’s pulp and paper mills rank in the bon dioxide to the benefit of the products. Take for example car parts, top quartile in the world in GHG in- entire planet. The Canadian Forest the console of a Ford Lincoln is made tensity emissions compared to their Service estimates that the areas of with a wood fibre composite. This peers. Annual GHG emissions have Canada’s managed forest store about helps the low-carbon economy in been cut by about 65 per cent since 50 billion tonnes of carbon. two ways—by replacing plastics made 1990. At the same time, Environment from non-renewable fossil fuels and And as a renewable resource, our Canada reported that Canada’s total by being lighter in weight, reducing trees will continue to play this role. GHG emissions in 2013 were 18 per the car’s fuel consumption. Wood fi- The deforestation rate in Canada is cent above 1990 levels. bre is now found in everything from virtually zero, just 0.02 per cent a clothing to cosmetics to green chemi- year. Any trees that are harvested are The pulp and paper sector has also cals as well as 3D-printing, pharma- regrown, ensuring the maintenance eliminated the use of coal and re- ceuticals and electronics. of our forest carbon stocks. A study duced the use of oil by more than 90 by Werner Kurz of the Canadian For- per cent. Instead, forest facilities are est Service confirmed that Canada’s approaching energy self-sufficiency hese new products do not managed forests have been a carbon with about 30 facilities generating just have an environmental sink from 1990-2008. green electricity on site using resid- T advantage but they also rep- ual materials from their operations— resent an important business oppor- Canadians, especially the majority enough to power all the houses in tunity. The shift in consumer pref- who live in urban areas, may not re- Calgary. Burning wood for energy erence for green products can help

Policy 49 open new markets and opportuni- mill, in products or recycling, the for- industry in GHG emissions ties for the Canadian forest prod- est products industry is continuing its below 1990 levels, which has far ucts industry. journey of environmental improve- surpassed the 6 per cent Kyoto ment. Under Vision2020, our ten- target by 2012. This may be especially true when it year sustainability plan, forest com- comes to the potential of environ- • To date, there has been an 11 panies are pledging to reduce their mentally-friendly wood-frame build- per cent reduction in GHG environmental footprint by another ings, which are heading higher be- emissions below 2005 levels, and 35 per cent based on a dozen param- cause demonstrated improvements the industry is well on its way to eters including greenhouse gas emis- in fire safety and new construction meeting the Copenhagen target of sions, energy use, waste to landfill techniques and materials have led 17 per cent by 2020. and recycling. The Canadian forest to building code changes that per- products industry has also pledged to • As for the Paris target of 30 per mit mid-rise (up to six-storey) wood be carbon neutral by 2015 and will cent below 2005 levels by 2030, frame buildings. Even taller wood find out whether it has reached this the forestry sector is on its way buildings are envisaged using ultra- ambitious target when final metrics to meeting that goal, as well. strong laminated timber beams that come in next year. Interestingly, so much progress are glued together under pressure— has been made in emissions for example there are plans for a 16 reduction by the industry, that to 18-storey residence at the Univer- Canada’s pulp and there may not be a great deal of sity of British Columbia and a 13-sto- paper sector room for further improvement. rey timber tower in Quebec City. By represents less than one per storing carbon in the wood and recent of all Canadian GHG Climate change is a challenge that quiring less energy to produce, these emissions. This is in stark needs to be embraced by everyone in- structures will have a lower carbon terested in both the environment and footprint than similar construction contrast to the transportation our economic future. materials made of energy-consuming sector, which is responsible concrete and steel. for 28 per cent of the There is also the issue of putting a price on carbon. The forest industry This isn’t just a green dream. A study greenhouse gas emissions generally agrees with the principle by the ATHENA Sustainable Materials in Canada. that there should be higher costs Institute used a life-cycle analysis to on the pollution we want to reduce look at the environmental impact of and lower costs on what we want to constructing three different houses in increase such as income and invest- Toronto—framed with either wood, ment. Regarding the carbon pricing sheet metal or concrete. The study Doesn’t the forest industry emit a lot scheme, the sector also feels that any concluded that from the perspec- of carbon as well? After all, it’s a man- revenue generated should be allocat- tive of “embodied energy” the wood ufacturing sector. Carbon is released ed to a carbon reduction fund, should house did 53 per cent better than when harvesting trees, using power at be national in scope to avoid duplica- sheet metal and 120 per cent better mills, transporting products or during tions, and that early adopters such as than concrete. From a global warm- the decomposition of forest products the forest products industry should ing perspective, wood came out 23 in landfills. However, a 2007 special be recognized. per cent better than sheet metal and report completed for NCASI, an envi- 50 per cent better than concrete. A ronmental research body, concluded Canadians will be hearing a lot more typical 2500 square-foot wood frame that GHG emissions along the for- about climate change as we head to- home is estimated to have 30 metric est product industry value chain are ward the United Nations Climate tonness of carbon stored in it, the largely offset by the sequestration Conference taking place in Paris in equivalent of driving your car for in forest products. The latest figures late November and December to set seven years. show that Canada’s pulp and paper new international carbon emission sector represents less than one per Finally, as part of the forest indus- targets beyond 2020. There is increas- cent of all Canadian GHG emissions. try’s virtuous cycle, climate change ing global understanding that a low- This is in stark contrast to the trans- is being addressed through the recov- carbon economy is the way to avoid portation sector, which is responsible ery and recycling of paper and card- damaging impacts on ecosystems, so- for 28 per cent of the greenhouse gas board. The recycling rate in Canada is cieties and economies while securing emissions in Canada. around 70 per cent—higher than the sustainable economic growth. US rate and among the highest rates Specifically: David Lindsay is President and CEO in the world. • There has been a 65 per cent of the Forest Products Association of And whether it is in the forest, in the reduction in the Canadian forestry Canada. [email protected]

September/October 2015 50

Letting Market Forces Lead is Best for Canada’s Railways and the Economy Joseph F. Schulman

Regulatory interventions since 2008, including the Fair anada has one of the most ef- Rail for Grain Farmers Act of 2014 passed in the wake ficient freight rail systems C anywhere. Its railways move of a grain transportation crisis, mark a departure from de- more than 70 per cent of all intercity cades of incremental deregulation of Canada’s railways, surface goods—worth $250 billion— in Canada each year at low rates, and beginning with the National Transportation Act of transport roughly half of the coun- 1967. History has shown how economic regulation that try’s exports, by volume. is too restrictive can produce seriously negative results, Enabling the success of Canada’s not only for railways but for the customers and economy railways is a regulatory regime that they serve. prioritizes commercial freedom and reliance on market forces over government intervention—a reality that can be traced back to the National Transportation Act (NTA) of 1967.

Policy 51 Before that, railway economic regu- In 1961, the MacPherson Royal Com- the beginning of a dramatic shift in lation in Canada involved increas- mission issued a seminal report pro- the regulatory environment for Can- ingly restrictive regulation focused posing a complete dismantling of the ada’s railways. Rigid constraints on on freight rate control and unifor- then-existing regulatory framework. pricing were removed, allowing rail- mity, beginning with the first Rail- Recognizing that railways no longer ways to compete more effectively. A series of subsequent reforms placed way Act in 1851. As regulation grew operated as virtual monopolies, the an increasing emphasis on market more controlling over the decades, report recommended replacing the and commercial forces, while main- it became disconnected from the existing regulatory restraints with taining a number of protections to evolving business realities faced by competition. The commission saw this as the best way to achieve the ensure balance between railways and the railways, including competition most efficient rail system. shippers. from an emerging trucking industry. As a result, railways became ineffi- It took until 1967 for legislation re- Revisions to the NTA in 1987 further promoted competition, reduced regu- cient and had difficulty undertaking flecting the MacPherson recommen- latory burdens, and introduced new much-needed capital investments to dations to be enacted. The National levers for shippers in their relation- maintain and grow their networks. Transportation Act (NTA) represented ship with railways. Railways were permitted to enter into confidential Figure 1: Canadian Railways—Revenue Tonne-Kilometres contracts, while mediation and final vs. Revenue per RTK offer arbitration became available to NTA (1987) CTA (1996) all shippers. Distances for regulated 450 4.00 interswitching—the switching of 400 NTA (1987) CTA (1996) 450 3.504.00 traffic at regulated rates between a 350400 3.003.50 local railway’s line and a connecting 300 350 2.503.00 line-haul carrier’s line—were extend- 250300 ed to 30 km from four miles. “Com- 2.002.50 Photo CP Rail 200250 petitive Line Rates” designed to fur- 1.502.00 ther enhance competition, were also 150200 1.001.50 introduced. 100150 10050 0.501.00 The passage of the Canada Transpor- Billion Revenue Tonne-Kilometres 500 0.000.50 Real Revenue (in cents) per Tonne-Kilometre tation Act (CTA) in 1996 introduced 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 additional changes that reduced mar- Billion Revenue Tonne-Kilometres 0 0.00 Real Revenue (in cents) per Tonne-Kilometre 1988 Revenue1990 1992 Tonne-Kilometres 1994 1996 1998 2000 2002Revenue 2004 2006(2002 2008 Dollars) 2010 2012per RTK ket exit barriers, allowing railways to discontinue or transfer portions Revenue Tonne-Kilometres Revenue (2002 Dollars) per RTK of their networks to other carriers to become more efficient. This gave Figure 2: Canadian Railways—Productivity Indices Canadian railways greater freedom to divest Operations of the uneconomic portions of their networks, control costs and generate NTA (1987) CTA (1996) 450 greater efficiencies. It also fostered NTA (1987) CTA (1996) sharp growth in Canada’s “shortline” 400450 rail industry, which delivers traffic 350400 to and from mainline railways, and 300350 today originates more than 20 per cent of the Class 1 traffic. Around the 250300 same time, CN was privatized, creat- 200250 ing competition between two pri-

1988 = 100 vately held, publicly traded national 150200

1988 = 100 systems (the other being CP). 100150 During this period, railways evolved 10050 into highly productive enterprises 500 capable of providing low-cost ser- 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 vice while generating the revenues 0 needed to reinvest into their respec- 1988Labour 1990 1992(1,000 1994 RTK 1996 per Employee)1998 2000 2002 2004 2006 2008 2010 2012 tive networks. Shippers, meanwhile, Fuel (GTKs per Litre of Fuel Consumed) Labour (1,000 RTK per Employee) gained access to a world-class railway Source: RailwayFuel Association (GTKs ofper Canada Litre of Fuel Consumed) system and lower freight rates.

September/October 2015 52 Regulatory changes since 2008, intro- costs for railways and transit times Canada’s freight rail system. Railways duced in the form of Bill C-8 (2008), for shippers, and may siphon busi- are among the most capital-intensive Bill C-52 (2013) and Bill C-30 (2014), ness away from Canadian railways industries. Companies must have suf- have amounted to the federal govern- and ports to the United States. ficient earnings to re-invest in infra- ment stepping back from the direc- structure, replenish assets, serve traf- tion initiated with the NTA in 1967. Experience in both fic growth and promote innovation. Bill C-8 expanded the reach of exist- Canada and the Canada’s railways have rapidly in- ing shipper remedies by eliminating United States shows how creased capital expenditures on their the test to determine whether a ship- damaging intensive Canadian operations since the early per has suffered substantial commer- 2000s, investing roughly 15 per cent cial harm. In addition, the Canadian regulation can be, and how of revenues annually, including $2 Transportation Agency’s authorities the commercial freedoms billion in both 2011 and 2012. were expanded to include the power adopted in the latter to investigate and order changes to decades of the 20th century ancillary charges. The Canadian have resulted in a revitalized railway industry New measures under Bill C-52 made rail industry. operating ratio—a key it obligatory for a railway to offer a confidential service agreement to any measure of efficiency, where shipper that requests one—to stipu- a lower number is better— late specific performance standards Experience in both Canada and the has been generally under 80 for receiving, loading, carrying, un- United States shows how damaging per cent, well below the loading and delivering traffic. intensive regulation can be, and how average prior to 1996 which Under Bill C-30, the Fair Rail for Grain the commercial freedoms adopted in exceeded 90 per cent. Farmers Act, passed in May, 2014, the latter decades of the 20th centu- the agency now has the authority to ry have resulted in a revitalized rail specify operational terms in arbitrat- industry. For its part, Canadian rail- ed service agreements, and must also way performance—in terms of rates advise the federal minister of trans- charged, productivity and capital investment—has greatly improved port on minimum amounts of grain There is a demonstrable link between under the regulatory freedoms intro- to be moved by the Class 1 railways how economic regulation of rail- in a crop year. The legislation also duced in 1967, 1987 and 1996. ways is carried out and the industry’s extended the interswitching distance With pricing freedom, real freight performance. Regulatory reform in limit to 160 km from 30 km in the rates have on average declined sig- favour of commercial and market- Prairies. (Bill C-30’s measures are sub- nificantly, dropping by 33 per cent based freedoms has proven to be the ject to a sunset clause, which can be between 1988 and 2013 (Figure 1). most effective approach, serving as postponed by Parliament.) Over the same period, labour pro- the catalyst for a resurgent and suc- ductivity grew rapidly, reflecting the cessful rail industry. verall, the effect of the railways’ ability to utilize assets more changes since 2008 has been effectively under a modernized regu- Several measures in recent years have O to modify the balance in the latory environment. The industry introduced new regulatory restric- railway-shipper relationship to give also improved its fuel efficiency by tions. While it is too early to judge shippers more powers. Regulation 2.5 per cent annually between 1996 their effect, history has proven how that restricts commercial freedom and 2013 by investing in fleet up- regulation can produce seriously neg- and intervenes in railway operations grades and introducing innovative ative results not only for railways but unnecessarily can do more harm than management practices (Figure 2). The for the customers and economy they good. Regarding Bill C-30, the man- Canadian railway industry operating serve. In contrast, when regulation dated quotas for grain volumes to be ratio—a key measure of efficiency, moved by Canada’s Class 1 railways has relied primarily on commercial where a lower number is better—has and market forces to direct the indus- favour grain shippers possibly at the been generally under 80 per cent, try, Canada’s railways and their abil- expense of other customers, but with well below the average prior to 1996 ity to serve have thrived. no discernable benefit. Meanwhile, which exceeded 90 per cent. the extended interswitching limits Joseph F. Schulman is a Principal significantly increase the rail traffic he railways’ improved finan- Consultant with CPCS in Ottawa. base subject to fixed regulated rates. cial viability since the late [email protected] Depending on how extensively these T 1990s has enabled and en- are used, they can mean increased couraged high levels of investment in

Policy 53 Verbatim/Brian Mulroney Reforming the Senate: We Already Have a Road Map

In a major address to the Canadian Bar Association in Montreal, former Prime Minister Brian Mulroney proposed a way to make Senate appointments that would meet the test of the Supreme Court’s 2014 landmark decision on the reference on Senate reform, term limits, elections and even abolition. His suggestion, the Meech Lake formula of the prime minister appointing senators from ranked lists furnished by the provinces, would fall within the framers’ intent in the British North America Act while avoiding the need for a constitutional amendment under the 7/50 or unanimous amending requirements of the 1982 Constitution Act.

he separation of powers be- minded us that, while the amending They were building a principled but tween the legislative and judi- rules are part of the Constitution Act pragmatic constitutional model, one T cial branches is, of course, fun- of 1982, Canada’s constitutional ex- derived from the Westminster tradi- damental to our democratic way of perience dates from the Constitution tion, but adapted to the realities of the life. The independence of the judi- Act of 1867: In other words, the Brit- emerging Canadian federation. ciary is as sacrosanct in one branch of ish North America Act, the constitu- government as the accountability of tional framework that has served this The Court reminded Parliament is in the other. country so well for nearly 150 years. us that, while the amending rules are part of We were reminded of all those attri- Canadians value both the BNA Act butes last year in the Supreme Court’s and the Constitution Act of 1982, the Constitution Act of ruling in the reference from the gov- at the heart of which is the Canadi- 1982, Canada’s ernment on Senate reform. The ex- an Charter of Rights and Freedoms, constitutional experience ecutive wing of the legislative branch along with the amending formula. dates from the Constitution was asking the judicial branch wheth- The two constitutional streams are er an appointed Senate could be re- perfectly complementary. Both de- Act of 1867: In other words, placed by an elected one, whether fine Canadian values of a tolerant the British North America there could be consultative elections and diverse society. Act, the constitutional in the provinces, whether term limits framework that has served were possible, even whether the Sen- Sir John A. Macdonald and the Fathers of Confederation knew what they this country so well for ate could be abolished by the executive and legislature alone. were doing at the Quebec and Char- nearly 150 years. lottetown Conferences of 1864, and In its landmark decision, the Court re- at the London Conference of 1866-67.

September/October 2015 54 The division of powers and the pragmatic federalism of the BNA Act are The Supreme Court justices have confirmed a high at the very heart of the Canadian constitutional threshold in the Senate reference. compromise invented by Sir John Equally important, they have reminded us that our A. and the founding fathers. The Canadian constitutional experience did not begin in 1982, founding fathers created a bicameral legislature—an elected House with but in 1867. We all know that the Senate is badly in need of representation by population, and reform. It has become a dysfunctional chamber, and has an appointed Senate in which the re- fallen into disrepute, notwithstanding the good work it gions had equal representation. often does, especially in its committees. “The Senate is one of Canada’s foundational political institutions,” the Court declared. “It lies at the heart of the agreements that gave birth to the minister would refrain from mak- ment provisions in the interests of Canadian federation.” ing new appointments until the new constitutional innovation and har- And so any change in the appoint- code is in effect. mony, pending final approval by all ment of senators touching on the provinces. Among the framers’ intent of 1867 amounts to Looking back at it now, I’m struck a constitutional amendment under provisions adopted by the outstanding quality of sena- the amending procedures of 1982, in the Meech Lake Accord, tors our government appointed requiring either the consent of Ot- the prime minister would from Quebec, on the recommenda- tawa and seven provinces comprising name senators from ranked tion of the government of Premier 50 per cent of the population under Robert Bourassa and from other the 7/50 formula, or the unanimous lists provided by the provinces that chose to avail them- consent of Ottawa and the provinces. provinces. This had a selves of the opportunity. number of purposes—to he Supreme Court justices There was Claude Castonguay, minis- have confirmed a high consti- diminish the centralization ter of health and the father of health- T tutional threshold in the Sen- of power in the PMO, end care in Quebec; Gérald Beaudoin, a ate reference. Equally important, the process of packing the professor of law known around the they have reminded us that our Ca- Senate by the party in country; Thérèse Lavoie-Roux, the former president of the Montreal nadian constitutional experience did power, as well as affirming not begin in 1982, but in 1867. We Catholic School Board; Jean-Marie all know that the Senate is badly in the Senate’s role as the Poitras, the chairman and CEO of need of reform. It has become a dys- House of the provinces. l’Alliance Insurance; Roch Bolduc, functional chamber, and has fallen the head of the Quebec public service; into disrepute, notwithstanding the there was Solange Chaput-Rolland, good work it often does, especially in the broadcaster and journalist; and its committees. There is also one way of reforming Jean-Claude Rivest, Mr. Bourassa’s the executive appointment process closest political adviser, who is still in This is not to say nothing can be the Senate sitting as an Independent. done under the present rules. I have without a constitutional amend- two suggestions. ment, and that is the formula adopt- In 1990, I also appointed Stanley Wa- ed at Meech Lake in 1987. Among ters from Alberta at the recommen- First, whoever is prime minister fol- the provisions adopted in the Meech dation of Premier Don Getty. Mr. lowing the next election could name Lake Accord, the prime minister Waters was Alberta’s first “elected” a commission of two prominent Ca- would name senators from ranked Senator, as the winner of a consulta- nadians—perhaps a former auditor- lists provided by the provinces. This tive election. From Newfoundland, general and a former member of the had a number of purposes—to di- on the recommendation of Premier Supreme Court—and give them six minish the centralization of power Brian Peckford, I appointed Gerald months to produce a code of conduct in the PMO, end the process of pack- Ottenheimer, a Rhodes Scholar, who for the Senate that addresses malfea- ing the Senate by the party in power, had been president of the Newfound- sances and the absence of regulations as well as affirming the Senate’s role land House of Assembly. governing expenses, residences and as the House of the provinces. the like. There should be clear, strict ll of these appointees proved rules, and they should be enforced. Although Meech was not yet in to be excellent senators, and To ensure compliance, the prime force, I offered to apply the appoint- A not one of them was a Pro-

Policy 55 gressive Conservative party loyalist, tinct society within Canada,” tied to practical matter, therefore, en- or organizer—with the exception a duality clause that would entrench trenching formal recognition of Senator Ottenheimer. In other English-language minorities in Que- of Quebec’s distinctive charac- words, I wasn’t sending my friends bec and French-speaking Canadians ter in the Constitution would to their political reward, I was send- elsewhere in the country as a “funda- not involve a significant depar- ing highly qualified people to do mental characteristic of Canada.” In ture from the existing practice good work. other words, affirmation of Quebec’s in our court.” distinctive identity within Canada, The provision on the Senate was without any grant of special status. You will not find anywhere a more typical of the pragmatic character reasoned, persuasive and lethal repu- of Meech. It would also have consti- It is interesting to note that, some diation of the main argument of the tutionalized Quebec’s three seats on years after the acrimonious debate anti-Meech forces at the time. the Supreme Court and seen Ottawa about the “Distinct Society” provi- choose candidates from lists submit- sion of Meech, former Chief Justice Excerpted from a speech to the ted by the provinces; entrenched Brian Dickson of the Supreme Court Canadian Bar Association in Montreal, the Cullen-Couture agreement on of Canada said: June 3, 2015. immigration between Ottawa and Quebec; limited the federal spend- “Let me say quite directly that I ing power in shared-cost programs; have no difficulty with the con- extended unanimity in the amend- cept. In fact, the courts are al- ing formula to several other areas, ready interpreting the Charter including any change in the role of of Rights and the Constitution the Queen. in a manner that takes into account Quebec’s distinctive role The first of six items provided for in protecting and promoting the recognition of Quebec as a “dis- its Francophone character. As a

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COR-5453-A-POLICY.indd 14 2015-08-06 13:52 Document: COR-5453-A-POLICY Format (Po): 8.5 po X 5.5 po Coordo: Véronique Format (col x ag): -- ÉPREUVE Publication: Policy Safety: 0.75 po Bleed: 0,125 LEFT + RIGHT Parution: DEPOT 10 Aout FOND 01 par : Fernando Tremblay-Bouchard Jrnl Enr 56 Book Reviews

accompanied by an ability to digest, coloured. He treats us to the usual absorb, learn and grow. bromides:“A sustainable national energy policy can also be a source of well-

The chapter on paying jobs across the full breadth of leadership is excellent, the economy. From infrastructure and construction to advanced manufactur- starting with his view of its ing, the job potential is huge.” three critical components— Well, not so much in Ontario, where vision, persuasion and the Fraser Institute told us in 2013 that implementation. provincial subsidies add $6 billion to household energy costs and $12 billion to business and industrial costs or, as Gywn Morgan wrote in the Globe and Mail in 2013, “transforming Ontario’s The structure of the book flows nicely. previous low cost electricity economic A wide-ranging analysis of politics and advantage into a crushing millstone.” leadership is followed by several pre- And then there’s the 2014 study by scriptive chapters that address, among Tom Adams suggesting that wind and other issues, energy sustainability, solar projects be halted in Ontario be- healthcare, mental health, aboriginal cause they together provide less than issues, the current state of democracy four per cent of the province’s power, An Optimistic and foreign policy. but account for 20 per cent of what Ontarians pay for electricity. It’s hard The chapter on leadership is excellent, to see the advantages of such sustain- Realist starting with his view of its three criti- able energy policies here. cal components—vision, persuasion and implementation—all of which Bob Rae ae’s chapter on aboriginal issues must be present and in balance for is equally mixed. He provides an What’s Happened to Politics? leadership success to be achieved. In R impassioned and exhaustive descrip- Toronto: Simon and Schuster the Canadian context, he looks at the tion of the long, sad history of white- Canada, 2015 leadership accomplishments of Sir aboriginal relations and treaty making, John A Macdonald, Pierre Trudeau, as well as the jurisprudence created by Review by Geoff Norquay Jean Chrétien and Brian Mulroney. Of the court system over several decades. Mulroney’s unsuccessful attempt to But when he looks to possible solu- hen I first picked up this book, bring Quebec into the Constitution, tions, there is little acknowledgement I had some initial apprehen- he concludes, “…sometimes, the issues W of the thousands of First Nations Ca- sions. Given its title, I was afraid it with leadership have nothing to do nadians who have long since given up would be yet another polemic against with the leader themselves….the truth on the reserve system and moved on modern Canadian politics, filled with is that any leader can only control her with their lives. There is little acknowl- laments against the manipulation own actions, and not the actions of edgement of the difficult choices fac- of big data, the slicing and dicing of others, let alone the host of external ing aboriginal leaders, pulled one way electorates, the permanent campaign, factors in which she must operate.” by those communities who seek to bol- the undue influence of lobbyists and As for the prescriptive chapters of the ster dependency through the colonial megaphone uber-partisanship. book, not everyone will agree with ev- provisions of the Indian Act and those My fears where soon allayed, because ery solution Rae advances. others who are already well down the while all of that is there, Bob Rae road to social and economic self-suf- has written a literate and thoughtful n the positive side, there is a ficiency. And one searches in vain for analysis, not only of the current politi- O forthright attack on the Harper any sense that the splits in national cal scene, but also the last 40 years of government’s decision to end the long- aboriginal leadership have become a governing, policy and politics in this form census, a cure for which there huge barrier to progress on First Na- country. was no known disease, and which has tions issues. equally disadvantaged government, Of course, Rae’s credentials are impec- In his concluding chapter, Rae writes, the private sector, and the academic cable. His life in politics has scaled “This book has not been written as community. heights and plumbed depths, seen sig- an exercise in partisan propaganda. nificant accomplishments and notable On the negative side, Rae’s analysis My intention has been to show the defeats, and spanned two different of the energy and environmental sus- resonance and resilience of a way of political parties, but has always been tainability issue is particularly rose- looking at politics that is based on as-

Policy 57 sessments of values, idea, programs, understanding what dwells unseen by Mulcair describes his passion for the law character, and leaders, not on spin, most gives us a better indication of the as a quest for fairness in the world. His money, image, impressions, branding, kind of prime minister he could be. time working with the minority Eng- lish-rights group Alliance Quebec and and appeals to fear or even hate.” Mulcair struggles with a public persona at the helm of the Office des professions My personal quibbles and policy prefer- that is seen as pious and uncompromis- du Québec is well written, but doesn’t ences aside, this is an entertaining and ing, an image he hopes to change—or provide a lot of insight into Mulcair’s eminently readable book. Despite the at least explain—in his pre-election au- leadership style or his vision for Canada. tobiography Strength of Conviction. The many twists and turns in his 40-year What is clear is that he revels in results, picture on the cover is a chapter unto political journey, Bob Rae remains both championing nuance and reaching ac- itself—the greying beard and wrinkles a realist and an optimist. ceptable compromises. around the eyes suggest experience and Geoff Norquay, a principal of Earnscliffe wisdom, while the twinkle in those eyes Strategy Group, was senior adviser on ot surprisingly, the book moves show vigor and focus. social policy to Prime Minister Brian N from character foundation to Mulroney. [email protected] From the foreword, Mulcair acknowl- historical thriller as the disenchanted edges that the book—and much of his Mulcair, having served as Quebec envi- Geoff Norquay, a principal of Earnscliffe political life—has been a team effort. It ronment minister under Jean Charest, Strategy Group, was senior adviser on took a phalanx of friends, family and prepares to exit Quebec politics in 2006 social policy to Prime Minister Brian a dogged publisher to extract and or- and is wooed to run by Jack Layton’s Mulroney. [email protected] ganize the many memories and deeply NDP in the 2007 Outremont byelec- held values that have brought him to tion. Mulcair’s admiration for Layton the point of aspiring to lead the country. is clear and inspiring, but also complicated. Layton’s world was one of large Unlike many of today’s politicians, who personalities and reaching across aisles, have never imagined any other career whereas Mulcair’s was much quieter and path for themselves, Mulcair paints a transactional. Together, however, it’s picture of a happy childhood, though clear they made a strong team. one that was far from luxurious. He came from tough Irish stock, watched But where Layton could be publicly en- his father, a man with 10 children, suf- gaging of his rivals, in the book, Mulcair fer through a career setback when the makes no effort to hide his disdain for company he worked for was bought out the political antics of Stephen Harper by a US-based rival. He lost his job and and his staff. He also offers a particularly seniority, but with dignity and humour, merciless assessment of Michael Ignati- built himself back up. It was one of the eff and the hapless Liberals. His words many lessons Mulcair has carried with are short, sharp and leave little doubt him since. that he believes Ignatieff was his own (and his party’s) worst enemy. hat is made clear through the With all that background in place, the W first third of the 184-page book final chapter, a treatise of sorts titledA is how strongly Mulcair values family. In Country of Shared Values, offers a listing many political biographies, families are of his beliefs and desires for the country. mostly used as props, but the depth of Among them: “It’s time to remember characters Mulcair reveals to the readers how strong we are when we work to- Personal offers tremendous insights into his most gether; I believe that every young fam- basic beliefs. ily just starting out should have every Touchstones Beyond his immediate family—and opportunity to succeed; I believe access Rocket Richard, of course—among his to affordable child care is an economic On a Political greatest childhood influences is Father as well as a social priority; I believe ev- Alan Cox, a Montreal priest who ran ery Canadian should be able to retire in Journey afoul of the Montreal archdiocese for his dignity with financial security; I believe avant-garde approach and was sent to that a family with two children working minister in suburban Chomedey, where full-time at minimum wage should not Tom Mulcair Mulcair was a high school student. be living in poverty.…” Strength of Conviction. What made Cox cool was that he sought One need only read these last eight pag- Toronto: Dundurn, 2015 social justice and taught Mulcair and his es to learn what Tom Mulcair might do classmates to seek more from each other as prime minister. But by looking back Review by James Baxter and to strive for a better, fairer world. at the road he has travelled, one sees He also takes us through his love affair that Mulcair’s convictions are built on a nderstanding the potential of an with Catherine Pinhas. The two have solid foundation of people who showed U old house under renovation, one been together since 1974, when Mulcair him how one person can do make all needs to look at the strength of its foun- was a 19-year-old law student. It’s clear the difference in the lives of many. dation, the quality of the materials and that theirs is a unique and powerful James Baxter is Editor and the loving upkeep it has received from bond, one that is a key theme through- Executive Chairman of iPolitics. its owners. In evaluating Tom Mulcair, out the book. [email protected]

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