Governments must act quickly if they want to expand medicare into new programs such as pharmacare or home care before foreign investors get deeply into the field, says a major study done for the Romanow Commission.
Under NAFTA rules Ottawa would likely have to compensate foreign investors squeezed out of business in Canada by health reforms, says the study by the Canadian Centre for Policy Alternatives.
The costs of such compensation would not be high now, but could rise quickly if the foreign presence in health care increases, says the study.
"Right now, in an area like home care, there's a window of opportunity, that we could move ahead without facing serious trade problems," lead author Scott Sinclair said in an interview.
"But if we dither and foreign investment grows in that area, then the price tag could increase."
Roy Romanow, the former Saskatchewan premier looking at the future of health care, said last week medicare should be expanded but didn't specify in what areas.
Senior federal officials say they're open to expansion if a good case is made.
This study is the most detailed and authoritative to date of many warnings that international trade agreements could threaten new medicare programs.
It rejects government claims that medicare is protected under NAFTA and other free-trade agreements, saying that even existing services are vulnerable.
"Indeed there is no protection (for medicare) against certain important NAFTA provisions."
The study says for example, that the Canadian system favours locally based service providers and it could be argued that such a policy discriminates against foreign investors.
Even a policy that favours non-profit providers could be discriminatory because most are Canadian, it says.
It raises strong concerns about the trend to increasing commercialization of health care, for example the growing number of private, for-profit MRI (magnetic resonance imaging) clinics.
Most firms entering the health-services field now are Canadian, but one or more of them could be purchased by foreign investors, said Sinclair.
"It would just be a simple takeover by a U.S. or European company and we would be into a NAFTA problem, and a potential WTO (World Trade Organization) problem."
Private MRI clinics exist or are planned in Quebec, British Columbia, Alberta, Nova Scotia and Ontario.
Health Minister Anne McLellan has said she will uphold the principles of the Canada Health Act, but has not openly criticized provinces that allow clinics.
There is evidence patients use such clinics for queue-jumping: people who can afford the fees get service faster, and are therefore in a better position to get necessary care.
Sinclair said the MRI clinics represent the thin edge of the wedge for a two-tier health system.
The study says Ottawa should be more aggressive in international negotiations, to assert its right to set health policy according to its national priorities.
Canada's trade policies should be brought into sync with its health policies, the authors say.
"The creation of medicare required governments to take decisive, principled action often despite strong opposition from commercial interests," said co-author Matthew Sanger.
"Today the same decisive, principled action is needed to protect medicare and protect it from the powerful commercializing bent of trade treaties."
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