04/14/2017

Does Canada Have More Economic Freedom Than The United States?

Pierre-Guy Veer, Foundation for Economic Education

When speaking of Canada, conservatives laugh at our “socialist neighbor to the north” with its lavish social programs. The main point of contention is, of course, Canada's infamous “socialized healthcare," which has been viewed as the epitome of a system NOT to imitate because of its high costs and long waiting times.

While, yes, Canada is dangerously close to Bernie Sanders’ dream of a single-payer system, the very structure of its system explains why Canada constantly ranks higher on the Heritage Foundation’s Index of Economic Freedom – #7, compared to the U.S. #17 ranking. And that structure is federalism.

Indeed, Canada’s 1867 constitution explicitly stipulates that hospitals – with a few exceptions – are under the exclusive care of the provinces.

Despite many of Ottawa’s incursions in the domain, one of the only major pieces of legislation from the federal government is the Canada Health Act. It has only 18 pages – nine if it were written in only one language but all laws in Canada are written both in French and English. Including this legislation, there are eight federal laws regarding health care, totaling about 137 pages.

To put this in perspective, in the United States, the Affordable Care Act (a.k.a Obamacare) has 906 pages, Title XVIII of the Social Security Act (which established Medicare, the government health program for the elderly) has 1,149 pages and Title XIX of the Social Security Act (which establishes Medicaid and CHIP, respectively government health program for the poor and children) has 414 pages.

Education works in a similar way. Section 93 of Canada’s Constitutional Act gives exclusive powers to the provinces – minus confessional protections for Catholics, Protestants, and Natives – to rule over education.

However, only two federal acts exist, totaling 33 pages: one creates a savings account for higher education while the other gives special grants to children of deceased veterans. There has been (and still is) controversy around the Millennium Scholarship Foundation, which grants federal money to students, but it’s the only major intervention still effective.

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