Has Pierre Pettigrew Read the Romanow Report?

November 15, 2004

By Rick Arnold*
Common Frontiers

Judging by the “offer” Canada tabled in February in hemispheric trade talks, Federal Trade Minister
Pierre Pettigrew has not read the report of the Royal Commission on the Future of Health Care in
Canada – otherwise known as the Romanow Commission. Or at least Minister Pettigrew has not taken
the report seriously enough to instruct his trade negotiators to comply with the recommendations
found in Chapter 11 on Health Care and Globalization.

In that chapter, Romanow strongly recommends that the “federal government should … ensure that
future international trade agreements … make explicit allowance for both maintaining and expanding
publicly insured, financed and delivered health care.”

Yet Canada has tabled proposals in the negotiations for a Free Trade Area of the Americas (FTAA) that
fail to protect Medicare from challenges by US corporations. Canada has tabled what is known as a
‘reservation’ for health and other social services. It uses exactly the same flawed language that
appears in the wording of the decade-old NAFTA (the North American Free Trade Agreement).

This reservation applies to health services “to the extent that they are social services established or
maintained for a public purpose.” Studies done for the Romanow Commission demonstrate that this
wording is flawed because it does not protect the not-for-profit delivery and financing of health
services. In our system many health services are publicly insured, but delivered privately both on a
for-profit and on a non-profit basis. As more publicly insured health services are privately delivered,
fewer services are covered by the reservation. Thus more and more services are subject to NAFTA
rules requiring that foreign, for-profit service providers be treated as favourably as Canadian providers
when it comes to accessing public health care dollars.

What’s worse is that the proposed reservation does not even apply to the biggest threat to public
health care, the expropriation-compensation rules found in NAFTA’s Chapter 11. Whereas Mr.
Pettigrew once said he wanted changes made to NAFTA’s Chapter 11, he now says he wants its
essential rules replicated in the draft FTAA. Under this mechanism a US corporation could launch a suit
against Canada demanding compensation because expansion of a publicly funded service like
homecare or pharmacare threatens its present or future profits. On this score Canada’s trade
negotiators have again ignored Romanow’s explicit advice to reinforce Canada’s “right to regulate
health care policy [without being] subject to claims for compensation from foreign-based companies.”

Canada’s negotiators have failed to table a tightly worded exemption that would protect all present
and future health care policies (as the US does for its “national security” interests). The reason for this
failure is that both the Department of Industry and the Department of Foreign Affairs and
International Trade have targeted health services as an engine of future economic growth. These two
departments, not Health Canada, drive health care policy. Canadian trade offices in the US and
elsewhere provide advice to the corporate health care sector regarding business opportunities in

Canada’s negotiators have not tabled stronger language that would amend NAFTA’s notorious Chapter
11 provisions because they want these measures kept in the FTAA in order to defend Canadian
corporate interests abroad. Protecting Canadian firms’ sales and investments abroad is no excuse for
sacrificing Medicare at home. Nor should these corporate interests be allowed to undermine public
services for the poorest peoples of the Americas who cannot afford private health care.

That is why several Canadian organizations are jointly promoting the FTAA: It’s Hazardous to Your
Health campaign and are calling on our government to stop negotiating the FTAA and all other trade
agreements that put profits before public well-being. We are also insisting on the removal of Chapter
11 from NAFTA.

The Canadian government needs to listen to the many people who demand that universal Medicare be
preserved and not sacrificed on the altar of economic liberalization.

In particular, Minister Pettigrew should move to implement Chapter 11 of the Romanow report and
stop defending Chapter 11 of NAFTA.