Health, Education and Social Services in Canada: The Impact of the Gats
TRADE POLICY RESEARCH 2004, J. M. Curtis, D. Ciuriak, eds., Ottawa: International Trade Canada, pp. 287-518, 2004
203 Pages Posted: 27 Jun 2005
Since General Agreement on Trade in Services (GATS) came into force, one of the issues that has attracted considerable public attention in Canada is the extent to which the agreement applies to health, education and social services. The Canadian government has consistently assured Canadians that the delivery of these services is not threatened by Canada's GATS commitments. The government relies on a number of aspects of the agreement. A general exclusion for "services supplied in the exercise of governmental authority" carves some Canadian health, education and social services out of the GATS completely. To the extent that an aspect of health, education or social services is found to be subject to the agreement, the government's position is that the GATS obligations Canada has undertaken do not impair Canada's ability to maintain its current regime in these areas. Canada has not committed to GATS higher tier of obligations, which includes national treatment, for health, education and social services. In other services, sectors where Canada has undertaken these higher obligations, Canada negotiated some limitations that the government asserts provide additional safeguards. The government also relies on Canada's freedom to withdraw from its commitments in these sectors.
This study interprets the scope of the governmental authority exclusion to define the criteria for its application, and then applies these criteria to the existing structures of regulation and methods of services delivery in the areas of health, education and social services to ascertain the extent to which these services are subject to the GATS. For the aspects of health, education and social services to which the GATS does apply, the effect of Canada's current GATS obligations is analyzed.
The study concludes that the governmental authority exclusion does not exclude all aspects of Canadian health, education and social services, though few programs for the public provision of these services would be construed as subject to the GATS. A strong case can be made that public funding for health care, hospitals, public schools and major social programs, like Employment Insurance and social assistance, are all excluded. To the extent that the GATS has application to some health, education and social services, most of the concerns expressed regarding the threats that GATS obligations represent to the effective provision by Canadian governments of these services and to the regulatory structures governing them appear unfounded. However, GATS obligations will have to be taken into account in relation to some kinds of policy initiatives. For example, expanding public funding to cover additional health services that are insured by private firms is one important area where Canada's GATS obligations may have an impact. Also, where foreign suppliers are permitted to enter the market, the GATS will impose some constraints on the ability of Canadian governments to treat suppliers from one WTO Member less favorably than those from another country.
Keywords: Trade, health, education, social services, GATS
JEL Classification: F13, H4, I18, I28, I39, K33
Suggested Citation: Suggested Citation