Think tank calls on Ottawa to abandon single-payer pharmacare model

OTTAWA – A think tank is urging the federal government to abandon plans for a single-payer pharmacare program in the face of tariff-related fiscal uncertainty.

Rosalie Wyonch, associate director of research at the C.D. Howe Institute, says in a new report released Thursday that the government should instead look to fill existing gaps in coverage.

Ottawa should “aim at universal coverage for the entire population that is fiscally sustainable and leans into the advantages of our already mixed public-private system,” said Wyonch, the report’s author.

She cited Quebec’s system, which has been operating for decades, as a model. That province has a public prescription drug insurance program that is mandatory for residents who do not have private insurance.

The report also calls on the federal government to provide clarity about its pharmacare policy and its plans for the future.

The Liberals pledged during the spring federal election campaign to “protect” pharmacare.

When he was asked about that commitment last week, Prime Minister Mark Carney Carney said his government will sign agreements with the remaining provinces and territories to implement the program’s first phase “as quickly and as equitably as possible.” 

He was noncommittal when asked whether a universal program would follow.

A 2019 report by an advisory council, chaired by Dr. Eric Hoskins, recommended that Canada create a universal single-payer pharmacare program.

In the report, Hoskins noted that the council “found a strongly held, shared belief that everyone in Canada should have access to prescription drugs based on their need and not their ability to pay, and delivered in a manner that is fair and sustainable.” 

The Pharmacare Act came about as a result of political pressure during the last Parliament.

The minority Liberals, led by Justin Trudeau, committed to passing pharmacare legislation as part of a confidence-and-supply agreement with the New Democrats.

The NDP insisted that it wanted to see the creation of a single-payer, first-dollar, universal program to cover the cost of prescription drugs. Such a program would cover all Canadians, regardless of whether they currently have private insurance, and would be publicly funded.

The Pharmacare Act, which became law last October, commits the government to working “toward the implementation of national universal pharmacare.”

Steven Staples, the national director of policy and advocacy at the Canadian Health Coalition, called on the government to continue on the path to a full pharmacare system.

“The issue of single-payer, universal pharmacare has been thoroughly debated in both the House of Commons and in the Senate,” he said.

The first phase of the pharmacare program, launched last year, provides what the government calls “universal, single-payer, first-dollar coverage” of contraceptives and some diabetes medications at little or no cost to patients.

The law requires the federal government to negotiate funding deals with provinces and territories to cover those two categories of medications. 

In a statement, a spokesperson for Health Minister Marjorie Michel said the government is “tracking those agreements” to see how they’re working, “and we are working with our provincial and territorial partners to see how we can best support them to strengthen our public health care system.”

The law also calls for a study exploring the best way to create a universal pharmacare program to cover all medications.

The committee of experts tasked with exploring possible models for a universal pharmacare program is set to report to the health minister by Oct. 10. The minister is expected to table their report in Parliament.

On Oct. 17, Michel is set to meet with provincial and territorial health ministers in Calgary.

Wyonch said the Carney government is not as focused on health care as the previous Trudeau government.

“Obviously now we are dealing with tariffs, economic uncertainty and a big shift in government priorities towards infrastructure, defence and just different priorities,” she said.

Universal pharmacare would be costly. A 2023 report from the Office of the Parliamentary Budget Officer estimated the cost of drugs under universal pharmacare at $38.9 billion in 2027-28, an increase of $13.4 billion over the estimated cost that same year of drug payments and other federal costs under the current system.

Even the first phase of the program is not fully funded.

Manitoba, B.C., P.E.I. and Yukon are the only jurisdictions to sign deals with the federal government so far to cover contraceptives and diabetes medications.

Those four agreements account for more than 60 per cent of the $1.5 billion set aside for pharmacare in the last budget, even though they cover just 18 per cent of the population.

Critics have pointed out the government’s limited formulary also means some patients are not able to access the diabetes medications they need.

The C.D. Howe Institute report is the result of a policy workshop held in August, which Wyonch said included people representing the pharmaceutical industry, the insurance industry and government, along with academics and former public servants.

She said there was broad consensus at the workshop on what should happen next.

“This is quite literally the first time in my experience that … the whole pharma industry has agreed with the insurance industry,” she said. 

Nik Barry-Shaw, trade and privatization campaigner with the Council of Canadians, said he’s not surprised to see the two industries lobby for this change.

“That’s a very good solution for protecting their profits, but it’s a bad solution for ensuring that Canadians have access to the medicines they need,” he said.

He argued that job losses as a result of tariffs and economic uncertainty make access to programs like pharmacare all the more important.

“For a government that came in promising to spend less and invest more, pharmacare seems like a perfect investment, one that’s going to allow us to spend less on drugs, we’re going to spend less on people needlessly getting sick because they can’t afford their medication,” said Barry-Shaw.

This report by The Canadian Press was first published Sept. 18, 2025.