The Federal Spending Power: Building Forward after the Pandemic

Abstract

The phrase, ‘the federal spending power’ identifies the federal government’s ability to spend in areas beyond its constitutional authority to legislate – a power that has supported the development of a national system of universal health care coverage in Canada. Even before the COVID-19 pandemic, this power was critical to the expansion of Canada’s narrow but deep basket of universally covered services. The challenges exposed by the pandemic mean that still more federal investment will be required. Yet for traditionalists, the material basis of this power is now constrained: the federal government may possess the constitutional authority to invest, but it lacks the fiscal capacity; some form of belt tightening – even austerity – will be necessary. As debates over public spending intensify, health leaders will need to address these questions. Depending on how they do so, health leaders will either support - or detract from - a healthy recovery.

Keywords: Health policy, Health finance, Sustainability

JEL Classification: I15