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Economic freedom, the ability of individuals to make their own economic decisions, is key to economic and social progress. Hundreds of academic studies have shown that economic freedom leads to higher rates of economic growth, higher levels of income, increased trust and honesty in government, protection of civil liberties, reductions in poverty, and improvements in health and educational outcomes1. Unfortunately, in many countries not all members of society have equal access to economic institutions that protect economic freedom. For example, formal legal restrictions in many countries prevent women from owning property, engaging in voluntary trade, and operating businesses.

In 2016, the Fraser Institute published an important study in its annual Economic Freedom of the World report, Gender Disparity in Legal Rights and Its Effects on Economic Freedom (Fike, 2016). The study included the construction of the Gender Disparity Index, which used several measures to capture gender disparities in legal rights around the world in five broad areas: Freedom of Movement, Property Rights, Financial Rights, Freedom to Work and Legal Status. Economic Freedom of the World: 2017 Annual Report uses a slightly revised Gender Disparity Index to adjust its economic freedom index to account for the differential legal treatment of women. This paper explores how the Gender Disparity Index affects the economic freedom ratings of countries around the world and examines whether societies with greater levels of economic freedom (adjusted for gender legal disparities) have superior economic and social outcomes for women.

The Gender Disparity Index (GDI) captures the degree to which women around the world have the same legal rights as men and adjusts the economic freedom score accordingly. The Gender Disparity Index employs the World Bank’s Women, Business, and the Law Report (World Bank, 2009, 2011, 2013, 2015), which tracks legal and regulatory barriers imposed on women that limit their ability to participate freely in formal economic activity. These data were released for the first time in 2009, and are updated every two years to incorporate legal and regulatory reforms that take place. For 2015, the most recent year shown in the Gender Disparity Index, the index uses 41 variables from Women, Business, and the Law Report. All of the variables included directly relate to a woman’s ability to freely participate in the formal economy and can be broadly classified under the following categories.

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The Community Capitalism of the Fort McKay First Nation: A Case Study

“Community capitalism” is the term used here to describe a politico-economic system in which a First Nation uses its assets (land, location, natural resources, and money) to generate income and provide social services for its members. The Fort McKay First Nation (FMFN) furnishes an important case study of community capitalism. As a result of its remarkable success, its characteristic features stand out in sharp relief. Its wholly owned and joint-venture business enterprises generated an annual average of $506 million gross revenue in the five-year period from 2012 to 2016. But FMFN does not just have an impressive business portfolio; it has also succeeded in raising the standard of living of its members, as measured by the Community Well-Being Index.

FMFN has achieved prosperity by participating in the economy of the Alberta oil sands, which is important because the best hope for prosperity of many First Nations in remote locations is involvement in nearby resource plays. Yet FMFN has never produced a drop of oil or earned a dollar in royalties; its success has come from providing services such as janitorial care, earth moving, logistics, and workforce lodging to corporations developing the oil sands.

For the last five years, government transfers have averaged only about 5% of FMFN’s total revenues. Own-source revenue (OSR) has accounted for the other 95%. Revenues consist of business profits, interest from investments, property taxes, rent on land and housing, and payments from corporations that have had an impact on FMFN’s traditional territory. There was one bad fiscal year ending March 31, 2016, when OSR plunged because oil prices plunged from US$109.89 per barrel (West Texas Intermediate) in June 2014 to US$29.67 in January 2016. But FMFN reduced its expenditures, liquidated non-performing enterprises, modified its investment strategy towards greater income stability, and quickly returned to the black. Its performance in dealing with this challenge was better than that of many senior governments faced with similar losses of revenue.

FMFN uses its revenues to provide an enhanced standard of living for members. Benefits include comfortable housing, better education and medical care, new community facilities, and annual cash distributions to members calculated by a formula based on business profits. Chief and council are considered to be business executives and remunerated accordingly. The relatively small population of the local community (560 in the 2016 census) fosters such generosity, but FMFN also provides benefits to off-reserve members, many of whom live in Fort McMurray.

FMFN’s economic and social success is underpinned by its practice of “consensus government,” which includes adherence to the rule of law, separation of business and politics, and extensive consultation with members. Political leadership is crucial, and Chief Jim Boucher has provided stable leadership and vision since 1986. But the model of consensus government is also an important part of its success. It means not only obtaining agreement of all members of council for important initiatives, but also holding frequent consultative meetings with members (both on and off reserve) while fully disclosing information such as annual audited financial statements and the compensation of Chief and Councillors. It also means separating business from politics by appointing independent boards of directors.

Community capitalism, based on consensus government and ongoing political support from members, is a promising model for promoting the independence and improving the standard of living of Canada’s First Nations. FMFN’s dramatic results are to some extent dependent on its relatively small population and the opportunities afforded by its location in the heart of the oil sands, but opportunities have to be seized in order to become beneficial. FMFN has developed friendly business relations with nearby corporations, reinvested revenues generated from impact-benefit agreements, and also used the Indian Act exemption from taxation to turn its reserve into a no-tax growth zone. Other First Nations, no matter their size and location, may benefit from studying the principles of FMFN’s community capitalism and adapting them to their own unique situation.

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Back on Track: How the Federal Liberals Can Deliver Their Promised Balanced Budget by 2019/20

Main Conclusions

  • During the 2015 federal election, Justin Trudeau’s Liberals presented a fiscal plan to Canadians that proposed three years of deficit spending of no more than $10 billion annually with a return to a balanced budget by 2019/20. After forming government, they abandoned this fiscal plan—breaking a pledge to Canadians.
  • Despite a growing economy, the Trudeau government has recorded annual budget deficits nearly double the promised amount. There is no plan to balance the federal budget and projections by the Department of Finance point to budget deficits well past 2040.
  • A key driver of the larger and persistent federal deficits over the course of the government’s current fiscal plan is rapid growth in program spending. Since coming into office, the Trudeau government increased program spending from $253.9 billion (2014/15) to $304.9 billion (projected for 2017/18). This $51-billion increase in spending equals growth of 20.1% in just three years.
  • On an annual basis, program spending has increased by 6.3% each year over the same period—much faster than federal revenue (3.3%), inflation plus population growth (2.7%), and nominal GDP (2.6%). In fact, the recent increase in spending is greater than the 2.2% average growth over the previous decade from 2005/06 to 2014/15 (excluding the 17.1% growth in 2009/10 during the recession).
  • Still, the Trudeau government could make good on its pledge of a balanced budget by the end of its first mandate in 2019/20 through relatively modest spending adjustments: reducing program spending from its 2017/18 level of $304.9 billion to $301.7 billion in 2019/20—a reduction of $3.2 billion or 1.0% over two years.
  • This is a modest spending adjustment compared to the 9.7% reduction over two years that was delivered by Jean Chretien’s Liberals in the 1990s.
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Annual Survey of Mining Companies: 2017

This report presents the results of the Fraser Institute’s 2017 annual survey of mining and exploration companies. The survey is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment. The survey was circulated electronically to approximately 2,700 individuals between August 22nd and November 10th, 2017. Survey responses have been tallied to rank provinces, states, and countries according to the extent that public policy factors encourage or discourage mining investment.

We received a total of 360 responses for the survey, providing sufficient data to evaluate 91 jurisdictions. By way of comparison, 104 jurisdictions were evaluated in 2016, 109 in 2015, 122 in 2014, and 112 in 2013. The number of jurisdictions that can be included in the study tends to wax and wane as the mining sector grows or shrinks due to commodity prices and sectoral factors.

The Investment Attractiveness Index takes both mineral and policy perception into consideration

An overall Investment Attractiveness Index is constructed by combining the Best Practices Mineral Potential index, which rates regions based on their geologic attractiveness, and the Policy Perception Index, a composite index that measures the effects of government policy on attitudes toward exploration investment. While it is useful to measure the attractiveness of a jurisdiction based on policy factors such as onerous regulations, taxation levels, the quality of infrastructure, and the other policy related questions that respondents answered, the Policy Perception Index alone does not recognize the fact that investment decisions are often sizably based on the pure mineral potential of a jurisdiction. Indeed, as discussed below, respondents consistently indicate that approximately 40 percent of their investment decision is determined by policy factors.

The top

The top jurisdiction in the world for investment based on the Investment Attractiveness Index is Finland, which moved up from 5th place in 2016. Saskatchewan experienced a slight drop in its score in 2017 so dropped into second place after ranking first in the previous year. Nevada moved up from 4th in 2016 to 3rd in 2017. The Republic of Ireland ranked 4th this year, and Western Australia dropped from 3rd in 2016 to 5th in 2017. Rounding out the top 10 are Quebec, Ontario, Chile, Arizona, and Alaska.

The bottom

When considering both policy and mineral potential in the Investment Attractiveness Index, Guatemala ranks as the least attractive jurisdiction in the world for investment. This year, Guatemala replaced the Argentinian province of Jujuy as the least attractive jurisdiction in the world. Also in the bottom 10 (beginning with the worst) are Kenya, Mendoza, Chubut, Mozambique, Bolivia, Venezuela, Romania, China, and Nicaragua.

Policy Perception Index: A “report card” to governments on the attractiveness of their mining policies

While geologic and economic considerations are important factors in mineral exploration, a region’s policy climate is also an important investment consideration. The Policy Perception Index (PPI), is a composite index that measures the overall policy attractiveness of the 91 jurisdictions in the survey. The index is composed of survey responses to policy factors that affect investment decisions. Policy factors examined include uncertainty concerning the administration of current regulations, environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, socioeconomic and community development conditions, trade barriers, political stability, labor regulations, quality of the geological database, security, and labor and skills availability.

The top

For the fifth year in a row, the Republic of Ireland had the highest PPI score of 100. Ireland was followed by Finland in second, which moved up from 4th in the previous year. Along with Ireland and Finland the top 10 ranked jurisdictions are Saskatchewan, Sweden, Nevada, Northern Ireland, Michigan, Wyoming, Quebec, and Newfoundland and Labrador.

The bottom

The 10 least attractive jurisdictions for investment based on the PPI rankings are (starting with the worst) Venezuela, Chubut, Zimbabwe, Guatemala, Democratic Republic of Congo (DRC), China, Philippines, Indonesia, Bolivia, and Ecuador. Venezuela, Chubut, Zimbabwe, Philippines, Indonesia, and Ecuador were all in the bottom 10 jurisdictions last year.

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Report Card on Ontario's Secondary Schools 2018

The Report Card on Ontario’s Secondary Schools 2018 collects a variety of relevant, objective indicators of school performance into one, easily accessible public document so that anyone can analyze and compare the performance of individual schools. By doing so, the Report Card assists parents when they choose a school for their children and encourages and assists all those seeking to improve their schools.

The Report Card helps parents choose
Where parents can choose among several schools for their children, the Report Card provides a valuable tool for making a decision. Because it makes comparisons easy, it alerts parents to those nearby schools that appear to have more effective academic programs. Parents can also determine whether schools of interest are improving over time. By first studying the Report Card, parents will be better prepared to ask relevant questions when they visit schools under consideration and speak with the staff.

Of course, the choice of a school should not be made solely on the basis of a single source of information. Web sites maintained by Ontario’s Education Quality and Accountability Office (EQAO), the provincial ministry of education, and local school boards may also provide useful information. Parents who already have a child enrolled at the school provide another point of view. Naturally, a sound academic program should be complemented by effective programs in areas of school activity not measured by the Report Card. Nevertheless, the Report Card provides a detailed picture of each school that is not easily available elsewhere.

The Report Card facilitates school improvement
The act of publicly rating and ranking schools attracts attention and this can provide motivation. Schools that perform well or show consistent improvement are applauded. Poorly performing schools generate concern, as do those whose performance is deteriorating. This inevitable attention provides an incentive for all those connected with a school to focus on student results.

However, the Report Card offers more than just incentive. It includes a variety of indicators, each of which reports results for an aspect of school performance that may be improved. School administrators who are dedicated to their students’ academic success accept the Report Card as another source of opportunities for improvement.

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Will British Columbia’s New NDP Government Abandon Past Spending Discipline?


  • In many respects, British Columbia can currently boast of having the soundest fiscal position of any Canadian province. While other provinces, including Ontario and Alberta, have struggled in recent years with comparatively large budget deficits and significant debt accumulation, BC recorded a $2.7 billion operating surplus last year (2016/17)—its fourth consecutive operating surplus and the largest positive fiscal balance among the provinces.
  • A key reason for BC’s favourable fiscal standing today is its relative spending discipline since 2001. After accounting for inflation and population, BC’s program spending increased at an average annual rate of 0.9 percent from 2002/03 to 2016/17—the lowest rate of any province. In Alberta and Ontario, program spending grew at faster annual rates—1.3 percent and 1.8 percent, respectively.
  • If BC had increased program spending at the same rate as Alberta, the province would today be spending approximately $54.5 billion instead of what it actually spent ($46.1 billion). If BC’s program spending had increased at the same rate as Ontario’s, its spending level would have been $55.0 billion—almost $9 billion higher than was in fact the case. If spending increases in BC had grown at the average rate of the Canadian provinces (excluding BC), program spending in 2016/17 would have been $56.4 billion, approximately $10 billion more than the actual figure.
  • From 2001/02 to 2016/17, BC ran nine operating budget surpluses and seven budget deficits, totaling an aggregate surplus of $10 billion over the period. Under each of the alternative spending scenarios, BC’s fiscal outcomes since 2001 would have been dramatically worse.
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Pharmaceutical Counterfeiting: Endangering Public Health, Society, and the Economy

The presence of counterfeit medicines in international commerce was initially identified as a problem in 1985 at the World Health Organization Conference of Experts on Rational Drug Use. Prior to this event, the dangers and challenges of pharmaceutical counterfeiting were primarily limited to developing countries. The global picture, however, has starkly changed. Pharmaceutical counterfeiting now spans every continent and no medicine is immune.

Masquerading as curative medicines, counterfeit pharmaceuticals are increasingly prevalent and profitable. Moreover, there is anecdotal evidence that the trade is being used to fund criminal organizations and terrorism. In addressing the threat of counterfeit drugs, there is obvious scope for benefiting consumers, government health programs, and international pharmaceutical firms.

Pharmaceutical counterfeiters have no shame, no boundaries, and no limits. Accordingly, counterfeiters produce spurious versions of all types of medicines: branded drugs, generic drugs, over-the-counter drugs, and herbal remedies. These drugs may contain no active ingredient, harmful ingredients, the wrong drug, the wrong concentration, the wrong dose, or drugs past their expiry dates. All of these put patients at risk for treatment failure, harmful side effects, and dangerous drug interactions.

The most obvious and significant appeal of pharmaceutical counterfeitingis the profitability of the trade. A 2017 article notes that counterfeiting prescription drugs can be ten times as profitable as trafficking heroin. While anecdotal evidence of the link between counterfeiting targets and profit is quite plentiful, the clandestine nature of the business as well as the secrecy maintained by law enforcement make it virtually impossible to completely understand or measure the extent of the trade.

The OECD estimates that counterfeit goods accounted for 2.5% of the global pharmaceutical trade in 2013. According to a 2015 report, worldwide pharmaceutical sales reached US$1.1 trillion in 2015. Moreover, if the counterfeit pharmaceutical industry is worth as much as $200 billion annually, this is only slightly less than the $246 billion illicit drug trade.

While Canada maintains a safe drug supply chain, recent incidents point to the presence of counterfeit pharmaceuticals in Canada in both the legitimate supply chain as well as in the illicit drug trade and in illegal internet pharmacies. The challenges surrounding counterfeit pharmaceuticals are largely, though not exclusively, based in online or internet pharmacies. Nevertheless, there are documented cases in which counterfeit medicines made their way into licensed brick-and-mortar pharmacies.

Pharmaceutical counterfeiting in Canada is facilitated by factors that are universal and others that are unique to the Canadian market. The forces at play include demand-side factors, supply-side factors, inadequate regulation, enforcement, and sanctions, as well as quality sourcing issues and loopholes within the regulatory architecture. These factors are compounded by the insufficient criminal penalties currently in place.

This study makes several recommendations to limit the growth of pharmaceutical counterfeiting and protect patients, providers, and manufacturers: Raise public awareness, improve regulatory oversight, regulate pharmaceutical transshipments, increase criminal sanctions, implement global harmonization, and pursue an international treaty.

Pharmaceutical counterfeiting is a growing priority internationally and has consequently attracted the attention of international policymakers. Considering the more public and more aggressive campaign against counterfeiting, it is important to examine the extent of the problem, what is known about counterfeit production and distribution, links to organized crime, and appropriate policy responses. This paper reviews each of these in turn in the Canadian context, as well as providing a set of recommendations for safeguarding the Canadian drug supply and the health of Canadian patients.

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Repeating Past Mistakes? Spending Restraint Critical for Ontario’s Fiscal Health


  • In 2016/17, Ontario’s net debt reached $302 billion, or approximately $21, 500 per Ontarian. The province’s debt-to-GDP level stands at 38 percent, just below its all-time historic high.
  • Ontario’s net debt has increased dramatically since 2003/04, with the province running budget deficits in 11 of the past 14 years. These annual deficits have ranged from $991 million to $19.3 billion and have averaged $8.6 billion over the whole period.
  • The provincial government’s spending choices are a primary cause of Ontario’s persistent deficits. Between 2003/04 and 2016/17, provincial program spending increased at an average annual rate of 4.9 percent. This rate of growth greatly surpassed the province’s overall rate of economic growth (3.5 percent) and the rate that would have been required to offset the combined effects of inflation and population growth (2.8 percent).
  • If the government had restrained program spending growth to the rate of nominal GDP growth since 2003/04, the province would have run budget surpluses every year since 2004/05; the large run-up in provincial debt since 2003/04 would not have occurred.
  • Between 2003/04 and 2010/11, spending increased quickly, followed by a period of significantly slower spending growth between 2011/12 and 2016/17. This slowdown in spending growth, coupled with strong growth in revenues, contributed to deficit reduction in recent years.
  • However, the government’s 2017/18 budget announced a substantial spending increase for the current fiscal year, suggesting that the short-lived era of comparative restraint may be ending. The Ontario government appears to be repeating the mistakes of the past and may once again be exposing the province to substantial risks including the re-emergence of large budget deficits should another fiscal shock occur.
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Federal Deficits and Recession: What Could Happen

There are serious financial risks associated with running deficits during times of positive economic growth. One of the principal risks is that the budget cannot be balanced regardless of economic conditions because a permanent imbalance between how much the government spends and the amount it raises from taxes and other revenues develops. The Trudeau government took office in late 2015 and immediately increased budgeted federal program spending by $8.1 billion over the period from 2015/16 to 2019/20. Less than six months later, in its first full budget (2016), the federal government markedly increased budgeted program spending by an additional $65.9 billion over the same five-year period. The increases in program spending meant the government purposefully moved from expected small surpluses to large deficits. The original 2015 plan presented by the Harper government was for a cumulative budgeted surplus for the 2015/16–2019/20 period of $13.1 billion.

The Liberal government’s first budget, introduced in early 2016, called for deficits between 2015/16 and 2019/20 totaling $104.3 billion, more than four times higher than originally proposed in their campaign platform. Again, these deficits were planned without an expectation of a recession or economic slowdown during the planning period. This paper estimates the potential annual and four-year cumulative deficits for the federal government if an economic slowdown or recession occurred. It does so by applying the experiences of three previous recessions (1982/83, 1991/92, 2008/09) and an economic slowdown (2000/01) to the current financial plans of the federal government.

Recessions automatically—without any policy changes—cause government revenues to decline and program spending to increase. For instance, the best known of these types of programs is Employment Insurance. During times of recession the revenues collected for EI will decline as people’s income declines or they are laid off. In addition, spending by the EI program automatically increases as more people collect EI benefits. In the most recent 2008/09 recession, spending on employment insurance increased from $14.1 billion in 2006/07 to $21.6 billion in 2009/10, an increase of 53.3%.

Often governments will also enact discretionary measures that further reduce revenues and/or increase program spending in response to recessions. The Harper government, for instance, introduced a large package of stimulus spending in the 2009 budget in response to the 2008/09 recession. The result of both the automatic revenue declines and spending increases coupled with possible discretionary policy changes is larger deficits.

If the 1991/92 recession, which had mild fiscal effects, was to repeat, the 2019/20 deficit is forecast to increase from its current budgeted level of $14.4 billion to $42.7 billion. The four-year accumulated deficit for the period from 2019/20 to 2022/23 would increase from $48.5 billion to $124.2 billion.

The economic slowdown of 2000/01 had more serious fiscal effects than the 1991/92 recession. If such an experience were repeated, the deficit for 2019/20 is estimated to reach $48.7 billion and the cumulative four-year deficit increases to $287.4 billion (current estimate is $48.5 billion).

Finally, if the conditions of the most recent and fairly serious recession of 2008/09 were repeated, the annual deficit for 2020/21 is expected to reach $120.5 billion. The four-year cumulative deficit is estimated to increase from $48.5 billion to $335.1 billion.

As many commentators, including the authors of this essay have noted, running deficits in times of economic growth, even periods of slow economic growth, risks much larger deficits when the inevitable recession occurs. This essay applies the experiences of three past recessions and an economic slowdown to the federal government’s current finances in order to estimate the possible fiscal effects of the next recession. The resulting decline in revenues and increase in program spending from recessions means much larger deficits and thus an accumulation of debt. The risks to federal finances from even a mild recession, let alone a more severe recession, given the current level of deficits are substantial and should be taken into consideration in future budgets.

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The Supply of Physicians in Canada: Projections and Assessment

While the provision of health care involves the use of a considerable number of inputs, including medical equipment and pharmaceuticals, health-care services still draw largely on the expertise of health-care professionals. Physicians, in particular, play a prominent role. In this regard, while Canada has one of the most expensive universal health-care systems among developed countries, the number of physicians relative to the Canadian population ranks well below the average for developed countries. Indeed, Canada ranks 29th out of 33 high-income countries for number of practicing physicians per thousand population. Unless physicians in Canada are much more productive than physicians in other OECD countries, or patients in other OECD countries consume fewer services per visit to a physician than do Canadian patients, it would seem that Canada suffers from a relative scarcity of physician services.

Some additional evidence supporting the claim that Canadians would be better off, on balance, if the supply of physicians’ services relative to the population increased is provided by the relatively long wait times Canadians endure for access to the services of specialist physicians, as well as media reports of Canadians who are actively—and unsuccessfully—looking for a regular physician. Also relevant is a Commonwealth Fund survey of adults in 11 countries that found that only 43% of Canadian respondents re-ported that they were able to get a same day or next-day appointment with a doctor or nurse when they needed medical attention—the lowest rank among all countries surveyed.

To be sure, some experts argue that a recent growth in domestically and foreign-trained physicians in Canada will reduce or even reverse Canada’s seeming relative scarcity of physicians. This study provides a forecast of the number of physicians (including residents) per 1,000 population for Canada out to the year 2030 to assess whether, given a continuation of recent trends in the main factors that determine the supply of physicians, as well as estimates of population growth, the ratio of physicians to population will increase for Canada. Our main finding is that given current trends in medical school enrollments, the projected supply of Canadian-trained physicians will only result in a small increase in the physician-to-population ratio—rising from 2.74 physicians per thousand population in 2015 to 2.84 in 2030. Furthermore, even if the supply of foreign-trained physicians continues to follow the trend of the last five years, the ratio will only improve from 2.74 physicians per thousand population in 2015 to 2.97 in 2030.

To put these projections into perspective, the present-day ratio of physicians per thousand population for OECD countries equals 3.4, an average that might well increase in the future. Expected demographic changes, particularly the changing gender and age profiles of the physician workforce, may also result in fewer hours worked by physicians. While this might also be the case for other OECD countries, it will worsen access to physicians’ services in Canada. An aging population is likely to further exacerbate access problems.

The broad policy implication of this study is that reforms and innovations in the delivery of medical services should be a public-policy priority, as a continuation of the status quo will leave Canadians with less access to physicians’ services than is arguably desirable. The study suggests a number of policy initiatives for consideration, primarily affecting supply conditions for health-care services, that might help address what our forecast identifies as a continuing shortfall of physicians’ services.

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