Canada: Navigating Health Law In Canada - The Legal Framework June 2013

Last Updated: June 25 2013
Article by Lydia Wakulowsky and Ratika Gandhi

The Canadian health care market and regulatory environment is constantly evolving in light of changing health care priorities and policies, an aging population and creative business models, providing great opportunity for the sale of new and diverse health products and services. However, the provision and delivery of health care in Canada, as well as the import, advertising and sale of health-related products, involves various legal regimes, policies and stakeholders and, as such, makes navigating health laws complex. There is legislation that governs the advertising, import, distribution and sale of products such as drugs, medical devices, natural health products, foods and cosmetics in the Canadian market. Health law also covers the regulation of public and private hospitals, independent health facilities, long-term care facilities, pharmacies, laboratories and specimen collection centres, private clinics as well as the practice of numerous regulated health professionals. In order to navigate the health law regime, it is necessary to understand the legislative landscape and the jurisdictional differences in power between the federal and provincial governments.

Jurisdictional Divide

In Canada, no level of government has exclusive jurisdiction over health care. Instead, the Canadian Constitution Act, 1867 divides legislative powers between the federal and provincial governments. Section 91 sets out the federal government's powers and Section 92 specifies the powers vested in the provinces. While some powers are exclusive to one level of government, most powers are shared, including jurisdiction over health care. Due to the potential conflicts that result from power sharing, the governments rely on the court system to clarify jurisdictional issues. The Supreme Court of Canada has held that "health is not a matter which is subject to specific constitutional assignment but instead is an amorphous topic which can be addressed by valid federal or provincial legislation, depending on the circumstances of each case and on the nature or scope of the health problem in question".

Federal Authority And Legislation

The main constitutional powers related to the federal government's authority over health care are those relating to spending, criminal law and the general power to make laws for the "Peace, Order and Good Government of Canada".

Canada Health Act

The Canada Health Act forms the basis of the nation's universal health care system by establishing the conditions that provincial health insurance programs must meet in order to receive federal transfer payments under the Canada Health Transfer. Since no province can afford to forgo federal funding, the Canada Health Act ensures that each provincial health insurance system is:

  • publicly administered (operated by a public authority on a non-profit basis);
  • comprehensive (covers all insured health services);
  • universal (provides the insured health services to 100% of insurance persons);
  • portable (imposes no minimum period of residence in a province and permits temporary absences); and accessible (offers uniform terms and conditions that do not impede access).

By implementing these conditions, the federal government is effectively creating a heavy regulatory presence over health care delivery in the provinces. Provincial governments must comply with Parliament's standards or risk losing funding of their health care regimes. The federal spending power also enables the federal government to implement health promotion and research initiatives, and it is exercised through the income tax system, most notably through the individual medical expense deduction under the federal Income Tax Act.

Criminal Law Power

The federal government also maintains jurisdiction over some aspects of health through its criminal law power. Canadian courts have broadly endorsed Parliament's use of the power to protect the health of Canadians. Part of this mandate includes regulating the sale, import, distribution and advertisement of drugs, medical devices, natural health products, foods and cosmetics.

The federal Food and Drugs Act is the underlying legislation that establishes the approval processes and set standards for the manufacture, testing, packaging and labelling of regulated products. These rules are focused on ensuring the safety, efficacy and quality of such products as well as requiring manufacturers to provide proper disclosure to adequately inform consumers and health professionals of the nature of the products, including any potential risks as well as benefits, before their use.

Other federal statutes that operate within this regime and represent the exercise of the government's criminal law power include the Controlled Drugs and Substances Act, the Hazardous Products Act, the Tobacco Act and the Canadian Environmental Protection Act.

Peace, Order And Good Government

While not as commonly exercised as its criminal law power, the federal government has jurisdiction to create temporary legislation to prevent or control an emergency, such as in the case of a health epidemic. As well, the federal government is able to regulate matters of national concern, including those matters that go beyond a local or provincial interest or matters that inherently concern the country as a whole. An example of this jurisdictional power is the regulation of smoking and tobacco advertising.

Provincial Authority And Legislation

The main constitutional powers related to the provincial governments' authority over health care are found in their jurisdiction over hospitals, property and civil rights, and matters of a private/local nature. Thus, provincial governments are responsible for the regulation of health care delivery and health insurance, although the federal government's provision of funding through the Canada Health Act ensures that the federal government has influence over such matters.

The Power Over Hospitals

The provinces' jurisdiction over hospitals is far-reaching and permits them to enact legislation on a wide variety of matters. In Ontario, hospitals must be established with approvals from the Minister of Health and Long-Term Care, in compliance with the Public Hospitals Act. Ontario hospitals are funded in accordance with the Local Health System Integration Act. There is also provincial legislation that deals with the governance of hospitals, including the Corporations Act, the Public Hospitals Act, the Commitment to the Future of Medicare Act and the Local Health System Integration Act. On a date to be named by proclamation of the Lieutenant Governor, but which will be no earlier than January 2014, the Not-for-Profit Corporations Act will come into effect and will apply to hospitals, removing them from the mandate of the Corporations Act.

In addition to the regulation of the establishment, funding and governance of hospitals, there is an extensive matrix of provincial legislation that applies to staff, health professionals and patients. For example, provincial legislation sets out informed consent laws, which prevent a practitioner from treating a patient unless he or she has obtained the patient's informed consent. As well, there is legislation that deals with patient privacy and the confidentiality of personal health information. There is also a growing emphasis on transparency and accountability within the health care regime. For instance, as of January 1, 2012, Ontario's Freedom of Information and Protection of Privacy Act applies to Ontario hospitals. This change now provides the public with a right to access a variety of information under a hospital's custody or control, including information relating to administrative and operational functions, policy and financial considerations, as well as contracts with suppliers.

Power Of Property And Civil Rights

The most sweeping power in the Constitution is often said to be that of property and civil rights, which essentially authorizes the provinces to regulate most legal relationships between individuals in their jurisdiction. Within the health care regime, this includes the regulation of matters pertaining to capacity and consent, guardianship of the incapacitated, investigations conducted by medical examiners/coroners and the creation of public health legislation concerning the prevention, treatment and control of communicable diseases.

In addition, the property and civil rights power gives provincial governments the authority to define what is and what is not a medical practice worthy of regulation. In Ontario, there are 29 health professions regulated by 24 health regulatory colleges. Health professionals are thus subject to the requirements surrounding their licensing, credentialing, ethical obligations, education as well as disciplinary measures set out in the specific legislation that is applicable to their practice.

Furthermore, some courts have held that some aspects of the manufacture and sale of drugs may be regulated by the provinces under their property and civil rights power. Examples of provincial action in this area include the Drug and Pharmacies Regulation Act, which regulates the dispensing and sale of drugs in Ontario, and the Ontario Drug Benefit Act and the Drug Interchangeability and Dispensing Fee Act, which regulate the publicly funded drug program in Ontario.

Power Over Matters Of Private/Local Nature

This provincial power includes the ability to create and administer health insurance regimes while the federal government contributes significant funding to these programs through its spending power. In addition, provincial governments have responsibility for their municipalities, and they can delegate responsibility to municipalities. For example, provinces give the municipalities the ability to enact by-laws, which can regulate public health matters relating to swimming pools, transportation, pesticides and smoking. Another illustration of direct involvement by a province into the affairs of municipalities is Ontario's Health Protection and Promotion Act. This Act mandates the provision of health programs and services in community sanitation, immunization and the control of communicable diseases, family health and planning, nutrition programs, preventative dentistry (such as oral hygiene and fluoride programs in school), lifestyle disease prevention and the inspection of restaurants and cafeterias.

Conclusion

The legal framework of Canadian health care is marked by a jurisdictional divide of power between the federal and provincial governments and interrelated legislation. This is partly due to the amorphous and expansive nature of health care and the need to balance between public health priorities and health matters of a private and local nature. Health law is constantly evolving and thus when doing business in Canada, at the outset, it is important to understand these intricacies.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2013 McMillan LLP

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Lydia Wakulowsky
Ratika Gandhi
 
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