EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 16, 1995

.0905

[English]

The Chairman: Order, please.

Welcome, Mr. Foster, the assistant deputy minister. I invite you to make a statement.

[Translation]

Mr. Kent Foster (Assistant Deputy Minister, Health Protection Branch, Health Canada): Thank you, Mr. Chair. First, I want to state that I have no opening statement. However, I would like to introduce the members of my team.

[English]

First, I would like to introduce Weldon Newton, from the management program services. This directorate was created as a result of branch program review. It's responsible for the preparation of strategic and operational planning frameworks, priority setting, planning systems and processes for the branch, and coordination of planning and evaluation activities. It also provides a full range of informatics and information management services, and the management of common support administrative services.

Dann Michols is head of the drugs directorate and is the executive director of the national pharmaceutical strategy. The drug directorate's major areas of responsibilities include safe and effective drugs, including biologicals and radio-pharmaceuticals. This responsibility includes the regulation of clinical trials, pre-market assessment of drug submissions, the continuous monitoring of drugs on the market, including narcotics and controlled substances, the inspection of manufacturers' facilities and product recall activities, special access to unmarketed drugs and the undertaking of research which supports the regulatory process.

Dr. Jo Losos is director general of the Laboratory Centre for Disease Control. LCDC, as it is known, carries out national disease surveillance and risk assessment and control of diseases of national importance and concern. This is achieved through monitoring, investigating and managing risk to the health of Canadians, and dealing with the health risk posed by microbial, food-borne, drug-related and environmental hazards. LCDC is Canada's only national public health and disease-control agency and its activities are fundamental to protection of the health of Canadians.

Dr. Sol Gunner is director general of the food directorate. Its function is to protect and improve the health and well-being of the Canadian public by defining and advising on and managing the risk and benefits associated with the food supply. Areas of work include food additives, agricultural chemicals, veterinary drugs, chemical and microbiological contaminants, nutrients, novel foods and food components, and food processes such as radiation. These responsibilities are carried out through coordinated programs of scientific research, evaluation and regulatory activities.

.0910

Roy Hickman is director general of the environmental health directorate. The responsibility of the environmental health directorate is to protect the public from health and safety hazards associated with chemicals, radiation, medical devices, tobacco, consumer products and hazardous materials in the workplace. To achieve this the directorate investigates, monitors and assesses the health risks arising from both natural and technological hazards and then provides Canadians with health and safety information.

That's our team. We're prepared to answer your questions.

The Chairman: We're impressed. Since nobody from the opposition wishes to speak, I'll call on Rose-Marie.

Mrs. Ur (Lambton - Middlesex): Are you gentlemen involved with the study on BST?

Mr. Foster: Yes, we are.

Mrs. Ur: I'm from mainly an agricultural riding so it's certainly one of the important issues in my riding. Who is really benefiting from this study? There appear to be several studies going on, and it appears that whenever I've reviewed these studies, whether they are Health Canada studies or other studies, there seems to be a close contact with one of the producers, Monsanto. There appears to be a lot of co-relation with Health Canada and Monsanto, whether person contact or monetary contact. Could you expand on that? I find it hard to get an unbiased opinion when there's so much interrelation.

Mr. Foster: I will start with Health Canada's role in the BST process. The regulations and process are quite straightforward. The manufacturer must provide to Health Canada the necessary data to prove the claims they're making with respect to BST. We deal directly with every company, which includes Monsanto.

The submissions by those companies are confidential and that is a law. We are required to abide by that. Any disclosure of that information can be done if the company agrees to have it made public. Health Canada's role in this is to determine the human and animal safety and efficacy of BST in the intended species, and by doing it by risk assessment.

A voluntary moratorium has been declared. The only authority able to license or not license or issue a notice of compliance to any company wishing to market a product such as BST is Health Canada.

Mrs. Ur: What stage of the game are you at?

Mr. Foster: The science is being completed as we speak and I think it's fair to say that with the interest shown in this particular subject, as you pointed out yourself, various things have been raised during the process of the science being completed. We are not prepared to make a determination public.

Mrs. Ur: When do you feel you will have adequate data to bring forth a result from your study?

Mr. Foster: I would hesitate to put a timeframe on that.

Mrs. Ur: Do you have a concern in your studies about the findings of mastitis, twinning and the research linking the hormone to elevated levels of insulin growth within small children?

Mr. Foster: These particular concerns are exactly the concerns our scientists are reviewing.

Mrs. Ur: Dr. William Drennin, who I believe is from Health Canada as well, was asked on the fifth estate about BST. You probably remember the incident; his statement. What is Health Canada's reaction to that?

Mr. Foster: A lot was said. I'm not sure to which particular part of the statement you're referring.

Mrs. Ur: One of his statements was that Monsanto, the BST Canadian manufacturer, offered a bribe in exchange for approval of the BST. That was on the fifth estate.

.0915

Mr. Foster: Yes. I guess we can talk about the words that were used. I don't have the transcript in front of me, but that particular incident was some years ago. I turned it over to the RCMP to investigate. It was concluded that nothing extraordinary was done. That was the conclusion of the RCMP.

Mrs. Ur: Could you tell me, sir, how many dollars were given by Monsanto?

Mr. Foster: No dollars were given by Monsanto.

Mrs. Ur: For research, $1.5 million?

Mr. Foster: No. May I also say for the chair and the members of the committee that parts of that investigation are still ongoing.

Mrs. Ur: So it's not final?

Mr. Foster: It is not.

Mrs. Ur: They're saying the BST is not going to cause any change within the milk because of the high pasteurization. It will decompose the hormone value. It won't show a detrimental effect to human beings. Do you really feel that's the way it's going to show up?

Mr. Foster: I guess the member would understand if I said that's exactly the science report I'm waiting for. I would not prejudge that, nor would I be able to prejudge that.

The Chairman: On the same issue, before I recognize Pauline on this issue, just let me put a couple of quick questions.

Mr. Foster, who's been asking for this, other than the manufacturer? Have you had any lobby? Do we need increased milk production?

Mr. Foster: That's not something we are directly concerned with. Perhaps I could start by explaining how our role has played in this. The minister is required to entertain any submission made for the Canadian market.

In the case of BST, various companies have made submissions of products they want to put on the market. Under the Food and Drugs Act, the minister is required to review those. If there is no health and safety concern, the minister is then obliged to issue a notice of compliance. It's not a choice. But that does not mean the product then has to be used by whomever submitted it. It is a voluntary choice by either the manufacturer or the people indeed in the dairy industry who want to use the product, who would make the choice. That's exactly how the process comes to bear on BST.

The Chairman: One other question. In timeframe, where is it now? When do you get the result of your investigation? When do you make the decision public?

Mr. Foster: I understand the frustration with that, but what I'm saying is that this kind of activity, each time there's a new fact we think needs looking into - such as some of the facts mentioned by a member of the committee - we take those and have to look at them. It's a dynamic process.

A number of companies have just recently given us additional information we feel we need to make a judgment. It would be wrong for me to tell you six weeks, five months, three months. I honestly don't have that knowledge. I would expect the scientists reviewing it are in the same boat. As soon as that report is complete, that notice of compliance will come to me for release to the public.

The Chairman: Now you may be sensing frustration, but not from me. I hope the answer is never. But at the same time there was a fairly live rumour last week that a decision was imminent. That's not the case, is it?

Mr. Foster: Could I address that for a second? The moratorium is in place and will last until July 1; a voluntary moratorium. When that moratorium ends, there is no automatic licensing or issuing of notice of compliance for that drug. That will not be done until Health Canada has completed its science review and made a judgment as to whether it's safe or unsafe. That was another rumour that was on the street, Mr. Chairman.

The Chairman: Mrs. Picard.

[Translation]

Mrs. Picard (Drummond): Health Canada is planning a restructuration of the drug licensing system. Could you explain to us how the drug licensing process is operating? What are the steps? How long, on average, does the licensing of a drug take? How much money does it cost, on average, to approve a drug?

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Mr. Foster: I'll ask Mr. Dann Michols to answer your question. He might be in a better position to explain the process in generic terms. You may want to ask for more details.

[English]

Mr. Dan Michols (Executive Director, Drugs Directorate, Health and Protection Branch, Health Canada): The drug approval process at Health Canada requires that we look into two aspects of any new drug a manufacturer wishes to put on the market: the safety and efficacy of the drug and the quality of the drug. These are two processes we coordinate.

As of April 1, 1994 we have put performance standards into place for each of our processes. As it stands now, no approval should take longer than one year before we make our first decision whether or not the drug can be released to the market, and it should not take any longer than two years to come to a final conclusion on a particular drug. We put those performance standards into place last April; we are meeting them in most cases.

About cost, there is no charge at the moment for submission review within the drugs program. We are in the process of considering cost recovery in a number of those activities.

[Translation]

Mrs. Picard: How do you explain that some laboratories or pharmaceutical companies claim that it could take up to seven years before the drugs are approved and that, often, after the whole process has cost them a fair amount, they have to start all over again since after all those years, a new product is on the market? How can you explain that it takes so much time to licence a drug?

[English]

Mr. Michols: I don't think there is any example where a drug review has taken up to seven years. There are definitely examples where it has been three to four years. That period of time is a combination of the review time we take and the time a company takes to respond to our requests for additional data or to fill in incomplete aspects of the submission. As I mentioned earlier, that has been a major concern.

We are in the process of streamlining all of our processes. We have put in place performance standards that will require a first decision on a submission within 360 days of its acceptance. We are, in most instances, meeting those performance standards. So when you do hear statistics of that nature they tend to be dated. They are three or four years old. Our current progress is considerably better.

Mr. Hill (Macleod): About the silicone breast implant, the original story, if I understand it correctly, was broken by an HPB scientist. That scientist received some degree of notoriety in the department and was fired. Subsequent events, in my view, have shown him to be quite accurate in his original perspectives; so much so that I hear that Dow Corning is now filing for bankruptcy protection.

To my mind, HPB is suspect because it has not exonerated that scientist and given him the public recognition I think he deserves for his original work on this issue. I have trouble understanding how a scientist, even though he did not speak the current language, broke new ground. And I've never seen anything from HPB to recognize his contribution. Could you comment on that for me, please?

Mr. Foster: I'm not sure how you judge his contribution, and I'm not sure why we're looked upon as suspect. In what way are we suspect?

.0925

The Meme breast implant tragedy was addressed by the Health Protection Branch with the best science available at the time. A government of the day declared a moratorium to begin with, then these implants were banned.

Since that time these breast implants can only be acquired on a compassionate basis. The permission for those are delegated to me by the minister. From the point of view of research, we're doing everything we can to determine exactly what are the characteristics of these implants.

I am not yet aware of any conclusion whereby science says categorically that these implants cause the following things or don't cause the following things. Now we're spending considerable amounts of money in those areas to prove the case.

That's not to say that a particular scientist may not have been leading the charge. Hopefully within my organization I have many of those people. They are at the forefront. This chapter is not completed yet and the rest of the action related to implants and breast cancer have to be concluded.

As far as the Dow Corning story goes, it broke yesterday. We're aware of it. We're not aware of the details. The Government of Canada has actually intervened on behalf of Canadian women in terms of the global settlement proposed by the company.

If you wish more detail on the actual position of that scientist, I'd be happy to go into it further with you and perhaps respond in writing. I think it rather difficult to say much more than that this morning.

Mr. Hill: Leaving off the historical aspects of this controversy, we're today in a position...we have a huge product liability settlement in the U.S., so huge it may force a very large company into bankruptcy. To my mind the biggest responsibility we have is to those women who are currently looking at breast implants - shall I get one - and to those women who have breast implants - shall I have them taken out.

I've been waiting with great anticipation for the clinical practice guidelines that have been promised for a significant length of time. The guidelines I saw had no mention of the large product liability settlement in them. To my mind they're designed to offset responsibility from HPB rather than to look at the women, who are today deciding - shall I get an implant or shall I get mine out. I'm very concerned that these guidelines are so slow.

Mr. Foster: In a minute I'll ask Mr. Hickman to tell us exactly where the guidelines are in the process, but I share your view on the guidelines. The guidelines are to help physicians and medical practitioners give the information to patients who are considering this. That's what the guidelines are for. Those guidelines are to provide a standard response and a uniform response across the country in dealing with this particular issue. I would have to ask Mr. Hickman where the guidelines are in particular.

Mr. Roy Hickman (Director General, Environmental Health Directorate, Health and Protection Branch, Health Canada): The guidelines are completed in draft form. They have gone out to a number of interested groups to give them an opportunity to raise concerns which may not have been addressed in the guidelines.

That process is now completed and those concerns have gone back to the advisory committee which originally drafted the guidelines. I would anticipate they will be available before too much longer.

Mr. Foster: Mr. Chair, I will go back to those guidelines in light of your comment about it seeming to opt HPB out and see if there's something there that needs to be adjusted or edited. I'm be happy to do that.

.0930

[Translation]

Mr. Patry (Pierrefonds - Dollard): Thank you, Mr. Chair.

[English]

Mr. Foster, Health Canada is involved with the international commission on the harmonization of technical requirements for registration of pharmaceuticals for human use. Canada has also participated in joint reviews with the U.S. Food and Drug Administration and with Australia. Can you tell us the progress to date and the specific benefits we can really hope to achieve in terms of a more effective drug review process?

Mr. Foster: Okay, I'll give Mr. Michols a minute to gather some facts for you, but let me say that in terms of international harmonization, it's very difficult to be able to make a judgement on which of these initiatives is going to be the most effective. So to the extent we can, we try to be present and part of every initiative that's going, and that includes with the U.K., the European Union, the United States in terms of our work with FTA.

The potential for real wins here is enormous. If I could use an anecdotal example, the joint review that was done on AZT for age treatment, in our view, that's the kind of thing we would like to see done more often. It's that kind of sharing and discussing that's being done.

I'll let Mr. Michols tell you about ICH and what we're doing with not only Europe and the Americans but Japan as well.

Mr. Michols: The initiatives that you mentioned are really of two different types. The ICH, the International Conference on Harmonization, is an attempt to bring together Europe, Japan and the United States to come to agreement on common standards.

Canada is an observer to that. It's the only country with observer status. But we have led, in many instances, in the development of those standards. So that will aid us considerably by setting up international standards enabling us to design a process that requires companies to meet them.

The initiatives with the FDA and the Australia are joint reviews. This gives us an opportunity, if the company can put in a submission to the two administrations at the same time, to share resources on the review of the submission.

So Canada might take the quality assessment while the Americans take the safety and efficacy. We don't have to do both. We can share the data developed. So it enables us to spread limited resources over a broader field or in a shorter time span. For its size, Canada has done remarkably well in those areas.

The Chairman: Paul.

Mr. Szabo (Missisauga South): Mr. Foster, the five directorates are Drugs, Food, Environmental Health, Laboratory Centre for Disease Control, and Management Program Services. But the data we were provided with is broken down into four expenditure areas: food, drug, environment and national health surveillance. Based on your general knowledge of your area, is any one of those expenditure areas more costly to operate on a per capita basis?

Mr. Foster: Rather than commit to facts that I would then have to go away and research for you... Yes, my experience says some of these areas are more expensive than others. Some activities just don't cost as much.

Let me caveat this again with I'd like to provide you some numbers -

Mr. Szabo: Actually, it's not necessary, because it is here. It basically says national health surveillance costs twice as much for FTE than either of the other three expenditure areas. Why is that?

Mr. Foster: In terms of what we pay each person as represented by an FTE? Is that your question?

.0935

Mr. Szabo: No, I think the operating budget covers more than administration or more than salaries. I would suspect salaries are at least two-thirds or three-quarters of it. But I thought it was very interesting that National Health Surveillance has 259 FTEs, which is $160,000 per person of operating budget. The others are $74,000, $82,000, and $95,000, which is generally about one-half. Why is National Health Surveillance so expensive?

Mr. Foster: I'm sorry, I'm not avoiding your question, but I'm having difficulty in understanding a comparison.

National disease and surveillance control involves certain activities that cost certain amounts of money, as does food safety, as does safe living and working environments, and as does medical devices.

Mr. Szabo: In fairness, your mandate is to protect Canadians from risk to life and health. With food, risk is very important and very specific; with drugs, risk is very important and very specific; and, environmental risks are very important and very specific. National Health Surveillance, whatever it is, is twice as expensive to achieve, per FTE, than the others. I have a simple question. Why?

Mr. Foster: All right, I will ask Dr. Losos to tell you what National Health Surveillance is, basically, and hopefully that will help you understand the difference.

Dr. Jo Losos (Director General, Laboratory Centre for Disease Control, Health and Protection Branch, Health Canada): The Laboratory Centre for Disease Control is in fact a hub of a wheel for gathering information and doing investigations. The public health lab systems of the provinces...the actual rubber hits the road in respect of public health surveillance in provincial systems. So LCDC mobilizes those systems. Ontario, for example, spends in the neighbourhood of $300 million in its public health systems. We top that up for the purposes of national surveillance. So a lot of the money you see there is in fact contracted out to provincial systems to gather the type of information it takes.

Mr. Szabo: Thank you, Doctor. That's the right answer.

The Chairman: Harold, you have the last word.

Mr. Culbert (Carleton - Charlotte): I'll be very brief.

Mr. Foster, last year, when the RBST issue was being studied, I was a member of the Standing Committee on Agriculture and Agri-food and there were many presenters who came before that committee, in its review. As you would know, in the final analysis, because there were many questions in the minds of committee members, one of the recommendations was for a moratorium to be put on it.

One of the reasons was the conflicting views that came forward relative to safety factors, perhaps safety from the perspective of humans but also or more so for the safety of the animals on which the RBST would be used. As I recall, one of the reasons for that recommendation being made, in the wisdom of the committee, was the fact that the United States had approved that product for use - and I believe it began in January 1994 - and the committee had recommended that coordination of effort be carried out with the United States to find out about its experience, to be very honest with you, both from the human factor side as well as in respect of the animal on which the product was being used. Has that process taken place, and if so, can you tell us, quickly, what that experience has been?

Mr. Foster: Yes. I'll have Dr. Gunner relate the details of the results of our collaboration. But yes, we've had contact with the Food and Drug Administration. We've discussed this with the U.S. FDA and we have the facts and figures and are monitoring the results of this product being on the market for the past year in the United States.

I would turn to Dr. Gunner for a little more detail.

Dr. Sol Gunner (Director General, Food Directorate, Health and Protection Branch, Health Canada): As you're aware, a task force was set up just to address those concerns you have raised, in terms of the United States reaction, and this was set up so that the task force would make a presentation and a report to the Minister of Agriculture. As you're aware, that report has been tabled and it contains many of the answers to your questions.

.0940

Insofar as what we're permitted to do vis-à-vis collaboration with our United States colleagues, we're bound to hold in confidentiality information that is presented to us by manufacturers wishing to register BST unless they give us permission to use their data in consultation with other governments.

To the extent possible, we are collaborating with our colleagues in the United States, but our regulations require us to carry out our reviews taking into account those concerns you've raised, such as the concern for animal safety and health as well as human health and safety. We have to carry out primarily independent reviews.

The Chairman: Harold, you look as if you have more on your mind, but you're going to have to save it for now.

Mr. Culbert: Mr. Chairman, I would say I don't know any more now than I did before I asked a question. I guess that's why the blank look was there, to be very honest with you.

The Chairman: Either you asked the wrong question or the witness is very successful in answering from his point of view.

Mrs. Ur: Mr. Chairman, I may have not heard the answer to your question. Do you recall the answer - the question you generated was who will benefit from this? Was that question answered?

The Chairman: Not specifically, no. That's part of the accountability. The questions that don't get answered are as significant as the ones that get answered. If the witness chooses not to answer.... Maybe he wants another opportunity.

Mr. Foster: I am not sure it is for me to answer who wants a particular product. What we are charged with, under the act, is to entertain any submission made, to assess that submission from a health and safety point of view. The minister is obligated, if there is no health and safety concern, to issue a notice of compliance to an organization to allow a product to be marketed. That means the product can be marketed. It doesn't mean it has to be marketed. It is not mandated to be marketed. If the dairy industry does not want to use BST, they do not have to. If the agriculture industry does not want to use it, they do not have to. If the government wants to prevent it from being used and not being licensed, that would require a change to an act.

That's as clear as I can be.

The Chairman: Who is on the front line on this one? Who, at the table, is on the front line on this issue?

Mr. Foster: Companies certainly want to market products.

Mrs. Ur: Who?

The Chairman: I'll try the question again. Who, of the seven people from the health department at the table, is particularly on the front line on this issue? Who deals with the issue on a day-to-day basis?

Mr. Foster: Dr. Gunner and myself.

The Chairman: Dr. Gunner, is this the kind of thing you get lobbied on?

Dr. Gunner: Yes, sir, I have thousands of letters in my office pro and con BST. I get them from consumers, I get them from organizations, I get them from companies, I get them from doctors; there is all kinds of public interest on this issue. It is a very emotional, volatile issue, sir.

The Chairman: Have you ever had an occasion, either with this issue or another issue, where somebody tried to lobby you improperly?

Dr. Gunner: Not really. The type of lobbying I get is in terms of letters and correspondence. Another issue, which comes to mind and at the time was equally of concern, was the irradiation issue. Again, we got thousands of letters pro and con. I wouldn't say there's anything improper. People are expressing their legitimate views, sir.

Mr. Szabo: Other than Monsanto, who?

The Chairman: Rose-Marie, you had a concern.

Mrs. Ur: Other than Monsanto, what company has lobbied Health Canada on BST?

Dr. Gunner: No company has lobbied Health Canada on BST. What the regulations -

Mrs. Ur: In comparison with Monsanto, who else, in their capacity, has approached you on BST?

Dr. Gunner: Companies request -

Mrs. Ur: Sir, just name -

Dr. Gunner: It's a matter of public record: Eli Lilly.

Mrs. Ur: Just the two, then?

Dr. Gunner: At this time.

Mrs. Ur: That answers my question.

The Chairman: I want to thank Mr. Foster and his colleagues. It is not as lengthy a process as we would like or as brief as you would like, but the process has been served. It's part of the accountability process of government and we've attempted to serve that process this morning. It also serves another in that it helps us put some faces on you and vice versa. We hope this will be the beginning of a beautiful relationship.

.0945

Thank you very much for coming.

We'll make the transition to the people from the remaining branch, the Medical Services Branch.

Good morning all, again. We are going to reconvene the session and, first of all, welcome one of our colleagues, who I believe has not been at a meeting of the health committee before.

Welcome, Darryl Stinson. It's good to have you. The Reform Party is calling in the heavy artillery now, I see.

Mr. Stinson (Okanagan - Shuswap): I'm trying to lose weight.

The Chairman: You came to the right place.

Welcome to the assistant deputy minister of the Medical Services Branch, Mr. Paul Cochrane.

It's good to have you, sir. I think you were in the room for the previous exchange, so you heard all the things I said at the beginning about brevity, etc.

Mr. Paul Cochrane (Assistant Deputy Minister, Medical Services Branch, Health Canada): As a fellow Newfoundlander, I'll try to be brief, but that sometimes is difficult.

The Chairman: That's good, because I was about to open my mouth and ask Mr. Hickman where he is from, and then he opened his mouth and I didn't need to ask.

Mr. Cochrane: Mr. Chairman, hon. members, thank you for the invitation to appear today. First of all, I'd like to introduce my team, Jerome Berthelette, director general of program policy and planning; Paul Glover, director general, non-insured health benefits; Janice Hopkins, director general, Indian and Northern Health; and Phil Martin, our director of finance.

As many of you may be aware, Medical Services has three principal program elements: the provision of community health services to first nations living on reserve, provision of non-insured health benefits to all registered Indians, and the provision of services to the Occupational Environmental Health Directorate.

The 1995 budget allowed Indian health programs to grow at 6% this year and 3% in each of the next two years. Our challenge therefore will be to manage accordingly when traditionally our programs have grown in the range of 14% and as high as 21%. Our minister has invited first nations and Inuit leaders to work with us to develop a national framework. We have tabled a range of options with first nations leaderships that will achieve these targets.

In the past decade there has been significant improvement in the health of first nations peoples.

The charts in part III of the main estimates illustrate this. Nonetheless, significant disparities remain between first nations' and other Canadians' health.

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We believe, as do first nations, and studies by such organizations as the World Health Organization support us, that further improvements in the health status of first nations will only be achieved if they maintain control.

The Chairman: Excuse me just a moment. If you hadn't told us you were a Newfoundlander, we would have known by now because you're going about a mile a minute. The interpreters are going berserk. Would you speak as though your audience is a bunch of mainlanders?

Mr. Cochrane: Okay, thank you. I'm trying to keep to the time, Mr. Chairman.

So for significant improvements to occur in first nations' health, it is well recognized that the next major step will be if they maintain control. At present 60% of the 573 first nations communities in Canada are involved in the transfer process, and 126 first nations have taken control of programs totalling some $54 million. Our second challenge therefore will be to continue this momentum and develop further models for transfer of our zone and regional programs. In addition, we have received cabinet authority to transfer non-insured health benefits to first nations leadership.

Over the past several years our most significant efficiency gains have been made in the non-insured health benefits program, which represents 54% of all our expenditures. Through the introduction of financial and administrative measures and better definition of benefits and beneficiaries, this program grew last year by less than 6%, down from levels of 14% and as high as 21% over the past five years. This has been achieved while ensuring that first nations receive a full range of health services and products at a time when provincial health reform is increasing the demands on this program.

I turn now to occupational and environmental health services, where this will be a transition year. We are actively working with Treasury Board to obtain authority to become a special operation agency, and as a result of decisions in the budget, our quarantine and regulatory program and parts of the civil aviation medicine licensing program will become part of the departmental cost-recovery initiatives.

These are our program highlights and priorities for Medical Services Branch. My colleagues and I would be happy to answer any questions you have.

The Chairman: Mr. Cochrane, I welcome you and your team. You neglected to introduce a person we consider a star member of your team, Judith Ross. We had the pleasure of travelling with her recently to the west and north on the aboriginal health study issue. She gave an extremely good account of herself, and she also tells the best jokes of anybody I know in the department.

Mr. Cochrane: That doesn't say much for the rest of us, but we won't tell those jokes.

The Chairman: Now then, let me see how we're doing. Pauline?

[Translation]

Mrs. Picard: My questions relate to the non-insured health benefits.

You said earlier that this represented 54% of all the expenditures. The present budget shows an increase of $40 million and, a little further, on page 2-22, it shows an estimated increase of $64 million.

In 1993, the Auditor general pointed out that an analysis sufficiently detailed to determine and quantify the factors reponsible, each year, for a cost increase was lacking.

Can you give the Committee some explanations or more details on the factors which are responsible, each year, for an increase in the non-insured health benefits?

[English]

Mr. Cochrane: Thank you. First of all, the figures in the main estimates, the $40 million and the $64 million, are allocations for potential growth in the program.

As a result of the Auditor General's report in 1993, the department has implemented a management framework for this program now, which establishes clear lines of responsibility and accountability.

.0955

We have completed the implementation of our automated claims processing system, which allows for the verification of benefits and beneficiaries. Hence, only eligible benefits which are on our formularies can be provided with certain frequency limitations, and as well, only status Indians who are registered in our systems verification can be provided the benefits.

We have also introduced systems edits and administrative processes which ensure a better coordination between benefits provided by provincial and third parties, and we exercise the option of provider of last resort. These initiatives in fact have decreased, as I have said, the rate of growth in this program area to 6% from traditional levels of 14% to 15%.

In addition, the cabinet decision of September 1994 introduced program authorities in the areas of solvent abuse, adult care and mental health, which were traditional programs that had been charged to non-insured health benefits. Hence these programs now have a fixed program base, and program resources are utilized to provide these services and not non-insured health benefits.

Lastly, we have been working with the Assembly of First Nations over the last year and a half, working with first nations leaders across the country, to look at various management options for first nations to become more involved in the program.

To summarize, whilst this program has grown at rates in the past of 14% to 15%, these measures have now brought that rate of growth down to 6%.

One of the key drivers of the program still is drug cost, and as many of you are aware in our overall health care system, drug costs are increasing at a significant rate, far in excess of 6% on an annualized basis. So in fact a more prudent management and administration has reduced expenditures or reduced the growth of expenditures in non-insured.

The Chairman: Mr. Jackson.

Mr. Jackson (Bruce - Grey): Mr. Cochrane, on page 2-91 of the estimates there is an increase of $6,300,000 for the construction of the Whitehorse General Hospital.

On page 2-92 it is noted that phase one of the transfer of this hospital to the Yukon territorial government has been completed and the second phase begun. Could you provide the committee with some details as to the reasons for this expenditure at a time when the hospital is being transferred to another jurisdiction?

Mr. Cochrane: Yes, I can. When negotiations were undertaken between Health Canada and the Government of the Yukon Territories, it was recognized that that particular facility was in need of a major refit and upgrading. The facility hadn't had a major refit and upgrading in approximately 25 years. As part of the transfer to the territorial government, the federal government agreed to include a one-time cost for capital construction and upgrading of that facility in phase one. That hospital is now managed by a local board, who have taken on the responsibility, as is the case in most provinces, for local management of that facility.

Phase two of the transfer will see the remainder of what is called universal programs, which are available to all residents of the Yukon, transferred as well to the Yukon territorial government. At this time it's envisioned that transfer will in fact accrue to the same board, who will now become, instead of a hospital board, a health care board for the overall population of the Yukon territories.

Mr. Jackson: One supplementary question to that.

One of the new ideas of things we are doing with hospitals is we're not using them any more as warehouses. We're trying to get people out. They're very expensive places to put a person in.

I know that perhaps in the northern outreaches there are complications with families, distances and stuff like that. Is there any method to use a facility that wouldn't cost money once they get past the areas where they need intense treatment?

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Mr. Cochrane: First, you have to recognize that this is the only acute care treatment facility in all of the Yukon. There are some cottage, hospital-type facilities which are in outlying communities, but this is the only acute care facility in the Yukon and the only one available to Yukoners. It doesn't provide a range of tertiary care services. It provides acute care and specialty services, but expensive tertiary care services are referred to hospitals in both Vancouver and Edmonton. This is the only acute care facility for Yukoners in the Yukon.

Mr. Patry (Pierrefonds - Dollard): There are now 44 health transfer agreements, involving 98 first nations. As well, there are 80 pre-transfer research and planning projects, involving 240 first nations and six Inuit communities. A short-term evaluation of this health transfer process was completed in 1992, and it recommended methods for improving the process. A long-term evaluation was initiated in 1994.

I have two questions, a short one first.

When will the results of the long-term evaluation be available to this community? The second is, what is your up-to-date evaluation of these health transfers and what are the effects on the health itself of these communities with the transfer of these services?

Mr. Cochrane: I'll ask Jerome to answer when the long-term evaluation is to be completed.

Mr. Jerome Berthelette (Program Policy and Planning, Medical Services Branch (Health Canada)): We expect long-term evaluation to be completed by September of this year.

Mr. Patry: Can you provide the committee with the results?

Mr. Berthelette: Yes. That won't be a problem.

Mr. Patry: Thank you.

Mr. Cochrane: To your second question, in terms of effects on health status, does your term evaluation - because transfers had only been in train for several years - focus on the community's perception or the community's feelings about what transfer did for them. In that evaluation the community stated that there were two major gains. First, it allowed them to have access to resources to develop a community health plan. For the first time they could talk to all the residents in the community and develop a plan which set out their priorities for the program. That was considered to be a benefit.

Second, the major benefit seen by the community was the fact that they could priorize the health care resources in their communities to meet that plan or to meet emerging issues. In terms of health status there was no attempt in the short-term evaluation to look at health status, although there are certainly some short-term indicators that would lead us to believe that programs under first nations control do lead to a better awareness of health in the community and a better priorization of health resources.

For example, if I could go back to Mr. Jackson's question, first nations now priorize resources into prevention and promotion activities more than they do into treatment activities within the community, because now they have the opportunity to reuse their resources to bring about lifestyle changes rather than just dealing with preventing disease.

I believe there may have been a third part to your question.

Mr. Patry: That's fine.

The Chairman: That exhausts our list. Let me ask a quick one.

Last September the minister announced this health care strategy for first nations and Inuit. The initiative was identified in the budget, yet there was not a word about it in the estimates. The overall strategy was not described in the estimates. Are we missing something?

Mr. Cochrane: The strategy you refer to was announced in October or November...it was September, sorry. It was called Building Healthy Communities. The strategy had a multi-pronged approach in dealing with issues. The major program issues which were addressed were mental health, solvent abuse and adult care.

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In the main estimates these show up, for the most part, under our community health programming activity and are not separated in that kind of detail in the main estimates. As well, the strategy enhanced the resources available by about $87 million over a five-year period, to continue on the development with first nations of models for transfer and the implementation of transfer in communities. That strategy dealt with three program areas and an enhanced resource to work with communities to transfer programs to their control.

The fifth piece of the puzzle, in terms of that particular cabinet approval, was that for the first time the branch received authority to transfer the non-insured health benefits program to first nations' control. What we had prior to that was first nations only had access, if you work backwards, to about 45% of the total branch budget. By allowing transfer of the non-insured program first nations can now have access to 100% of the budget which provides services for their communities.

The Chairman: The question was a little more specific. I'm sure you believe in the program. That wasn't the issue. The issue was much more specific. In September you made the announcement, and in February you indicated you were going to spend $243 million over a five-year period. Yet come estimates time, it doesn't merit a sentence directly in terms of what the overall strategy was. The question was simply and specifically, why did it happen that way? Was it oversight? Was it deliberate?

Mr. Cochrane: No. I don't think you could characterize it as either oversight or deliberate. The format in which we work within part III of the main estimates would see those programs come under our community health program. That's not to say that in future years we could change the profile to put that in as a separate initiative. What happens then is you get into a matrix, and things end up in two places in the main estimates. In the past we've taken a program such as non-insured health benefits, and because it represents in excess of 50% of our resources, we now profile that as a separate item in the main estimates for visibility. In terms of reporting against the expenditure, it would really mean we would have to change the structure of our main estimates to do that.

The Chairman: We are out of time, but since I complained we had no interveners we now have three.

Let's go in this order: first, Paul, then Harold, then Pauline; and we will have to make it very brief.

Mr. Szabo: One of the first things I heard about our health approach in Canada was the discussion about the future and the role of prevention versus curative or remedial work.

Can you give us an idea on aboriginal health issues, where we are today in terms of the balance between preventative and curative, and what direction it's moving in?

Mr. Cochrane: One has to realize that the resources Health Canada applies to first nations health - and that represents approximately $1 billion this year...that resource is in addition to the first nations access to resource within their province. As a resident of Ontario or as a resident of the province of Quebec, the first nations have access to physician services and hospital services as does any other person. About utilization of services through the provincial health care system, certainly first nation citizens, aboriginal people, are disproportionate users of the health care system in provincial statistics. Their mortality rates are higher and morbidity is certainly higher.

About the programs we directly deliver, approximately 50%, or a little less than 50%, of our programs would be aimed at community health prevention and promotion. It would be more like 45% prevention and promotion, and 55% in the treatment area. So there's about a 50-50 balance.

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The challenge for us in working with first nations is to find a way to change that balance. That was one of the reasons non-insured health benefits were approved for transfer to first nations.

Many of you will have participated in the dialogue about how to change the emphasis on health care expenditure in the broader system. There are many people who hold to the premise that you have to decrease institutional cost to increase the health promotion-prevention sector.

The same is true in Indian health services, where expenditures on non-insured health benefits are given to the management of first nations communities and they priorize usage for prevention and promotion activities more than just the procurement of benefits such as dental care - not that they don't procure essential dental care - vision, transportation, etc. So for us the challenge is to work with first nations so that they can re-priorize the expenditure.

Mr. Culbert: I just have a couple of quick questions along the same line. I'm just wondering first of all whether you keep a per capita breakdown or expenditure between those dollars in health care that are spent relative to aboriginal or first nations communities in comparison with those for the rest of Canada or the rest of Canadians.

Secondly, just to give you a little background, we have been working on a project we like to refer to as the ``wellness'' of our aboriginal or our first nations citizens. I'm just wondering what, from your perspective, is being done, as a proposal, or as any new initiative, to assist in the areas of alcohol or substance abuse for aboriginal or first nation communities.

Mr. Cochrane: I don't have the answer to your first question with me. We do per capita costs, although they are not as scientifically accurate as we would like, because we try to capture the costs from the provincial expenditures, from third-party plans, and from the federal government. But I certainly can provide you those subsequently to our meeting.

About the wellness model for first nations, in the area of alcohol abuse, we provide about$54 million worth of programs annually. The key programs are aimed at prevention in the communities. If you've visited some first nations communities, which I know you have, you would generally find a NNADAP prevention worker, or workers, in those communities. We also provide funding for about 679 NNADAP treatment beds across the country, because often people need to be treated before they can move on to healthy lifestyles.

In the area of solvent abuse, that's certainly a timely question. Last week the minister announced six new permanent solvent-abuse facilities in the country which will be owned and operated by first nations and run out of first nations communities. In addition to those solvent-abuse centres, we provide a range of intervention programs in communities and we are also looking at enhancing training of community members in the area of solvent abuse. But I'd be the first to say, and certainly our minister would as well, that the issues of solvent abuse and alcohol in first nations communities are very debilitating issues.

Certainly the department is providing resources; but from time to time they aren't sufficient. But the key to turning the corner on these issues is certainly allowing first nations to develop their own solutions; and we do that on a regular basis. But from time to time the need outstrips the resources available.

[Translation]

Mrs. Picard: The budget indicates an increase of 30,740,000 dollars for the tobacco reduction strategy, which is implemented jointly with the Indian and Northern Health Services. Can you tell the Committee what part of those funds is allocated to the health promotion project, and what kind of projects are foreseen or under way?

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[English]

Mr. Cochrane: I'd like Janice to take that question, please.

Ms Janice Hopkins (Indian and Northern Health Services, Medical Services Branch (Health Canada)): Over the next two years, including 1994-95, which was the year the tobacco reduction strategy began, $3.5 million will be spent specifically for first nations and Inuit communities to address what they call the non-traditional use of tobacco. The use of tobacco is a more difficult issue within first nations communities because of its place in first nations culture. The groups have chosen to characterize the level of use of tobacco in their communities as non-traditional use.

Secondly, there will be some $4 million spent over the next three years in carrying out some investigation and survey research to provide data on attitudes, reasons first nations people use tobacco, and the extent of tobacco use among school children.

The Chairman: All right, we're out of time.

We want to thank you, Mr. Cochrane. Where is it you're from - St. Mary's Bay or St. John's, or where?

Mr. Cochrane: St. John's Centre.

The Chairman: I was listening for the lilt there and you had me fooled. It was almostSt. Mary's Bay for a minute, but not quite St. John's West.

Mr. Cochrane: That's right.

The Chairman: Now Orvel, we're worried about you. You started out sitting over by the government and you were right over with the Reform crowd this morning.

Mr. Orvel Marquardt (Director General, Departmental Planning and Financial Administration Directorate, Medical Services Branch (Health Canada)): I'll move over there on Thursday.

The Chairman: Thank you, Mr. Cochrane and your colleagues, for coming. As I said to the other group, it gives us an opportunity to meet you and we look forward to dealing with you some more. Thank you very much.

Mr. Cochrane: Thank you, Mr. Chairman.

The Chairman: We'll take just a minute and then we'll go in camera, once we clear the room of all the undesirables.