sions of the act would result in dollar-for-dollar de-
ductions from a province’s federal funding. The act
also stipulated discretionary penalties for failure to
adhere to the five criteria and two conditions, al-
though no such penalty has ever been applied.
Impact Under the act, provinces and territories
have jurisdiction over most services offered to their
populations and take responsibility for approving
hospital budgets, negotiating fee scales, and deter-
mining classification of staff. Health care services
vary somewhat among the provinces and territories,
as some jurisdictions may offer additional services,
such as optometric and dental care, to certain target
populations. Children and disadvantaged groups,
for example, may be given benefits beyond those
given the general population. The act does not cover
non-essentials like cosmetic surgery, hospital ame-
nities, and private nursing services. The federal
government assumes direct responsibility for some
populations, including prisoners and military per-
sonnel. Reductions in federal transfers, brain drain,
privatization, and waiting times for services are press-
ing concerns for Canadians and have led to heated
debates over reforming the act.
Further Reading
Downie, Jocelyn, Timothy Caulfield, and Colleen M.
Flood, eds.Canadian Health Law and Policy.2ded.
Markham, Ont.: Butterworths, 2002.
Fulton, Jane.Canada’s Health Care System: Bordering
on the Possible.New York: Faulkner and Gray, 1993.
National Council of Welfare.Health, Health Care, and
Medicare.Ottawa: Author, 1990.
Ann M. Legreid
See also Health care in Canada; Health care in the
organizations (HMOs) Health maintenance
(HMOs); Medicine; Trudeau, Pierre.
Canada-United States Free
Trade Agreement
Identification Agreement between the U.S. and
Canadian governments to create open trade
markets and fair competition
Date Went into effect on January 1, 1989
The Canada-United States Free Trade Agreement opened
up possibilities for more liberalized business and trading be-
tween the two nations. In Canada, the agreement was ex-
tremely controversial, as some Canadian special interest
groups feared that the new agreement would eliminate a cer-
tain degree of the countr y’s newly acquired sovereignty. In
the United States, however, the agreement barely attracted
any public attention.
At the tail end of the 1980’s, the governments of
Canada and the United States began to examine the
benefits that could result from removing barriers to
trade between the two nations. The policy makers of
the time believed that it was important to strengthen182 Canada-United States Free Trade Agreement The Eighties in America
The Government of Canada and the Govern-
ment of the United States of America, re-
solved:To Strengthenthe unique and enduring
friendship between their two nations;
To Promoteproductivity, full employment,
and a steady improvement of living standards
in their respective countries;
To Createan expanded and secure market
for the goods and services produced in their
territories;
To Adoptclear and mutually advantageous
rules governing their trade;
To Ensurea predictable commercial envi-
ronment for business planning and invest-
ment;
To Strengthenthe competitiveness of Ca-
nadian and United States firms in global mar-
kets;
To Reducegovernment-created trade dis-
tortions while preserving the Parties’ flexibil-
ity to safeguard the public welfare;
To Buildon their mutual rights and obliga-
tions under the General Agreement on Tariffs
and Trade and other multilateral and bilateral
instruments of cooperation; and
To Contributeto the harmonious devel-
opment and expansion of world trade and to
provide a catalyst to broader international co-
operation.Preamble to the Canada-United States
Free Trade Agreement