The tango between Justin Trudeau and Jagmeet Singh regarding the drug insurance plan

The leader of the New Democratic Party (NDP), Jagmeet Singh, did not want to repeat the threat made by one of his MPs, who had described the launch of a national and universal insurance program as a “red line”. medications this fall by the Liberal government of Justin Trudeau. This ultimatum from the NDP health critic, Don Davies, was validated “unanimously” by party activists at their convention last weekend. But Mr. Singh refused this week to say whether his party intended to withdraw from its “support and confidence” agreement with Mr. Trudeau’s troops if the latter did not respect his commitment to pass insurance legislation. medicines before the end of 2023.

Such a withdrawal could plunge the country into early elections. Or not. Mr. Singh’s hesitation says a lot about the risks the New Democrats are exposing themselves to by trying to corner the Liberals on this issue. If they withdrew from the agreement but continued to support the Liberals in votes in the House of Commons, they could be accused of abandoning their own principles. But if they force an election, they could find themselves with fewer seats than the 25 ridings they currently hold, while the Conservatives are riding high in the polls.

There are New Democrats who think that their party could take advantage of Canadians’ disaffection with the Liberals to improve its score in the next election. That left-wing voters who made a strategic choice in 2021 by supporting the Liberals in order to avoid a Conservative victory will prefer to send more “real progressives” to Ottawa in the next vote instead of falling back on the Liberals halfway -grape. Nothing is less sure.

It is in this context that the Liberals must decide whether to launch a costly new social program that would add billions to the budget deficit in the medium term, or rather to move forward with a much more modest program, even if to promise to improve it in the years to come. Most Liberal ministers seem to favor the latter option. The majority of Canadians already have private drug insurance through their employer and are satisfied with it. All provinces already provide free medications to social assistance recipients and seniors. A more modest federal program would only aim to cover people who are not in one or other of these categories, like the public drug insurance plan in Quebec, in which the participation of these people is obligatory.

However, Mr. Singh’s troops are demanding a universal, single-payer drug insurance plan, modeled on the health insurance plans in each province. This model would have the effect of eliminating private insurance, and thus depriving insurance companies such as Manulife and Canada Life (the latter colossus being part of the Power Corporation of Canada empire) of billions of dollars in revenue. They are, naturally, opposed to this idea.

The same goes for the powerful Business Council of Canada, whose president, Goldy Hyder, has just written to the Minister of Finance, Chrystia Freeland, to warn her against announcing new spending that would further inflate the deficit. “As valuable and important as the measures envisaged are, financing them with borrowed money is not wise and will only exacerbate the precariousness of our public finances,” he wrote. Increasing deficit-financed spending at higher interest rates will eventually and inevitably lead to debt levels that will force future governments to cut spending and raise taxes. »

In a report published last week, the Parliamentary Budget Officer (PBO), Yves Giroux, predicted that a national drug insurance plan using the list of drugs currently covered by the Quebec plan would cost $11.2 billion in 2024-2025 and 13.4 billion in 2027-2028. Such a plan would generate overall savings of $1.4 billion in the first year, largely due to the ability of a single buyer to negotiate discounts from pharmaceutical companies. But a public plan would also cover the cost of fewer drugs than most current private plans. The Conservative leader, Pierre Poilievre, also raised this last caveat this week by saying he wanted to see the details of the program that the Liberals would propose before deciding on the subject, even if everything indicates that his party would oppose any proposal. liberal because of the additional expenses it would entail.

The PBO report came a day after another from his office, which forecast that the federal deficit for the current budget year will amount to $46.5 billion rather than the $40.1 billion that Mme Freeland had planned in the budget last March. In addition to the new spending announced this year, the increase in interest rates is widening the deficit. According to the PBO, interest on the federal debt will cost $46.4 billion this year, an increase of 33% compared to 2022-2023. Most economists expect interest rates to remain higher for longer, a development that alone would add as much as $10 billion a year to the deficit in future fiscal years.

Between further inflating the deficit or disappointing the NDP, Justin Trudeau has a choice before him.

Based in Montreal, Konrad Yakabuski is a columnist at Globe and Mail.

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