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Presented to the Legislature February 11th
Printed by Charles F. Banfield, Printer to the King's Most Excellent Majesty.
1930.  The Honourable S. L. Ilotce, M.L.A.,
Provincial Secretary, Victoria, B.C.
Sir,—I have the honour to transmit herewith a Progress Report of the Royal Commission
on State Health Insurance and Maternity Benefits, for the information of the Government and
the Legislature in harmony with the Resolution of the House in this regard adopted February
1st, 1929.
I have the honour to be,
Yours faithfully,
(Sgd.)     C. H. GIBBONS,
Victoria, B.C., February 5th, 1930.  Royal Commission on State Health Insurance and
Maternity Benefits.
(Votes and Proceedings of the Legislative Assembly of British Columbia, Friday,
February 1st, 1929.)
" The House resumed the adjourned debate on the motion moved by Mr. Wrinch on January
29th, as follows :—
" ' Whereas by Resolution under date of March 14th, 1928, it was resolved by the then
Legislative Assembly, " That a Committee of the Legislative Assembly, consisting of five members, be appointed, whose duties shall be: (1) To inquire into the workings of any systems of
health insurance and of maternity benefits wherever such systems can be found in effective
operation;   (2) to report its findings to the Legislature":
" ' Therefore be it Resolved, That this Legislative Assembly reaffirms the terms of the
Resolution hereinbefore cited.
" ' And be it further Resolved, That a Committee of this Legislative Assembly be appointed,
whose duties shall be: (1) To inquire into the workings of any systems of health insurance and
of maternity benefits wherever such systems can be found in effective operation; (2) to report
its findings to the Legislature.' "
" Mr. Rutledge moved in amendment, seconded by Mr. Cornett,—
" ' That all the words after the first word " Whereas" be deleted, and the following be
inserted in lieu thereof:—
" ' it is advisable, in the interests of the people of this Province, that this Legislature
should be in possession of authentic, full, and up-to-date information regarding the subjects of
maternity benefits and health insurance:
" ' Therefore be it Resolved, That a humble petition be presented to His Honour the
Lieutenant-Governor, praying that a Commission composed of members of this Legislature, who
shall serve without salary, be appointed under the " Public Inquiries Act" to inquire as to what
laws relating to the subjects of maternity benefits and health insurance are in force in other
Provinces of Canada or any other countries; to collect facts as to the actual operation of such
laws and as to how far they have been found satisfactory; to inquire as to whether and to
what extent the public interest requires the introduction of similar laws into the Province of
British Columbia; to estimate what would be the total annual cost to the people of the Province
in regard to each of these subjects, and what portion of the annual cost would fall upon (a) employers of labour, (6) prospective beneficiaries, and (c) the general taxpayers; to suggest
methods by which the annual cost might be collected from the employers, prospective beneficiaries, and general taxpayers respectively; and generally to inquire into any and all matters
affecting the said subjects respectively; and to report its findings and recommendations to this
Legislature at its next Session.'
" Amendment agreed to.
" Main motion as amended agreed to."
On April 16th, 1929, a Royal Commission under the Great Seal of the Province and the
signature of His Honour Robert Randolph Bruce, Lieutenant-Governor, issued under the
" Public Inquiries Act," addressed to Cyril Francis Davie, Barrister, of Duncan, Chairman;
William Farris Kennedy, of Vernon; Lorris E. Borden, M.D., CM., of Nelson; George Sharratt
Pearson, of Nanaimo; and John Joseph Gillis, M.D., CM., of Merritt, members of the Legislative
Assembly of the Province of British Columbia, in terms as follows :—
" Whereas the following Resolution was passed in the Legislative Assembly on Friday, the
1st day of February, 1929 :
" ' Whereas it is advisable, in the interests of the people of this Province, that this Legislature should be in possession of authentic, full, and up-to-date information regarding the
subjects of maternity benefits and health insurance: Z 6 BRITISH COLUMBIA.
" ' Therefore be it Resolved, That a humble petition be presented to His Honour the
Lieutenant-Governor, praying that a Commission composed of members of the Legislature, who
shall serve without salary, be appointed under the " Public Inquiries Act" to inquire as to what
laws relating to the subjects of maternity benefits and health insurance are in force in other
Provinces of Canada or any other countries; to collect facts as to the actual operation of such
laws and as to how far they have been found satisfactory; to inquire as to whether and to what
extent the public interest requires the introduction of similar laws into the Province of British
Columbia ; to estimate what would be the total annual cost to the people of the Province in
regard to each of these subjects, and what portion of the annual cost would fall upon (a) employers of labour, (b) prospective beneficiaries, and (c) the general taxpayers; to suggest
methods by which the annual cost might be collected from the employers, prospective beneficiaries, and general taxpayers respectively; and generally to inquire into any and all matters
affecting the said subjects respectively; and to report its findings and recommendations to this
Legislature at its next Session ':
" And whereas by an Order of the Lieutenant-Governor in Council dated the sixteenth
day of April, a.b. 1929, it is directed that a Commission under the provisions of the ' Public
Inquiries Act' be issued to you, Cyril Francis Davie, Barrister, of Duncan, Chairman ; William
Farris Kennedy, of Vernon; Lorhis E. Borden, M.D., CM., of Nelson; George Sharratt
Pearson, of Nanaimo; and John Joseph Gillis, M.D., CM., of Merritt, appointing you to
inquire into and report upon to His Honour the Lieutenant-Governor in Council the matters
set forth in the aforementioned Resolution:
" Now know ye that, under and by virtue of the powers contained in and conferred by the
said recited Act, and of all and every power and powers vested in TJs in that behalf, and by and
with the advice of Our Executive Council, We, reposing trust and confidence in your loyalty,
integrity, and ability, do hereby confer upon you, the said Commissioners, the powers of making
inquiry into all and every the matters set forth in the aforementioned Resolution.
" And We direct you, the said Commissioners, to report in writing the facts found by you
to Our Lieutenant-Governor of Our said Province immediately or as soon as conveniently may
be after you shall have concluded such inquiry, and the opinions you may have formed in
relation to the matters aforesaid as the result of such inquiry, with such recommendations as
you may think proper." Royal Commission on State Health Insurance and
Maternity Benefits.
To His Honour the Lieutenant-Governor in Council:
May it please Your Honour :
In pursuance of a Commission under the Great Seal, bearing date April 16th, 1929, directed
to and empowering us to :—
" Inquire as to what laws relating to the subjects of maternity benefits and health insurance
are in force in other Provinces of Canada or any other countries; to collect facts as to the
actual operation of such laws and as to how far they have been found satisfactory; to inquire
as to whether and to what extent the public interest requires the introduction of similar laws
into the Province of British Columbia; to estimate what would be the total annual cost to the
people of the Province in regard to each of these subjects, and what portion of the annual cost
would fall upon (a) employers of labour, (6) prospective beneficiaries, and (c) the general
taxpayers; to suggest methods by which the annual cost might be collected from the employers,
prospective beneficiaries, and general taxpayers respectively; and generally to inquire into
any or all matters affecting the said subjects respectively "; and to report our findings and
We, your Commissioners, beg to report that:—
We have communicated with and assembled from all countries of the world legislative
enactments, reports, and other material touching the several matters that are subjects of inquiry,
bringing such informative material up to date; and have summarized and assembled the salient
features of the health-insurance legislation and practice of all lands in a comprehensive digest
in 720 pages.
We have initiated the compilation of statistics essential to intelligent consideration of the
position of British Columbia in respect of the necessity therein for some scheme of State health
insurance, what form such scheme should take, entailed costs, and how such costs should be
distributed, etc.; and the collection of such statistics is being advanced with all possible
We have held numerous sittings for discussion of the matters assigned to us for investigation
and the bearing thereupon of information elicited during the earlier stages of the Commission's
functioning; and we have also held public meetings at Trail, Vancouver, Cumberland, and
Nanaimo for the purpose of securing first-hand information as to methods now obtaining, having
their inception in private enterprise, for protecting the health of workers and securing them
against especially trying money loss during incapacitation by illness or accident.
We addressed a questionnaire in this connection also to representative Provincial interests
in transportation, industrials, merchandising, and municipal services with annual pay-rolls of
$75,000 and upwards, and have tabulated replies thereto representative of approximately 64,989
wage-earners of an estimated Provincial total of 100,000.
By request of the Secretary of the British Columbia Division of, the Canadian Manufacturers' Association, 500 questionnaire forms also were supplied to and sent out by that organization to member-manufacturers in the Province who had not been heard from in response to the
Commission questionnaire.
Information adduced by these questionnaires is hereinafter referred to.
Owing to time necessarily required for the compilation of basic informative material as to
prevailing health-insurance practice elsewhere—such legislation having materially changed
during recent years and it having been necessary in consequence to revise in accordance with
substitutional or amending enactments (in seventeen instances available only in the languages of origin) digests hereto regarded as authoritative—it has not been possible as yet to consult
concerned Provincial interests otherwise than as hereinbefore indicated, or meet various requests
of representative public bodies, industrial interests, fraternal associations, trade-unions, and
concerned individual citizens for opportunity to present their views on matters pertinent to the
inquiry; nor is it possible until our inquiries and investigations are completed for us to present
a Final Report with data, statistics, conclusions, recommendations, etc., in accordance with the
instructions contained in the Commission.
We would therefore request that further time be granted for the completion of the work
entrusted to us, in which connection it may be mentioned that the researches and activities of
a similar Commission in Great Britain, upon whose report and recommendations subsequent
legislation was based, functioned during several years, although that Commission had had the
invaluable assistance of an expert actuarial staff and complete statistics such as in British
Columbia or in Canada are not available. In France a like Commission required four years to
perform its duties. In Australia a Royal Commission was so employed during four years; in
South Africa a similar Commission has now been three years so engaged.
It may be added that the situation with respect to health-insurance practice generally has
so radically changed since 1925 that not only do former reports and compilations of material no
longer accurately present it, but legislation .of the past few years appreciably increases the
volume of material which this Commission must consider.
Essential features of such legislation are briefly referred to hereafter; also the Provincial
position in so far as it may be interpreted at the present stage of our inquiries; the question of
Provincial jurisdiction in the premises; and the legal and moral relationships of the Dominion
to any scheme of State health insurance which may commend itself to the Government and the
Legislature of this Province, and the obligation of the Dominion as a contributor toward costs
(if any) an acceptable scheme may impose upon the State.
Our investigations thus far convince us that there is justification and a general demand for
the introduction in British Columbia of an economically sound and equitable public-health
insurance plan, in the interests of the majority of Provincial workers, of Provincial industries,
and of the State—in the more effectual safeguarding and preservation of communal health, the
more rational distribution of sickness costs, and the scientific reduction of such charges to the
Government, to employers, and to individual citizens.
Since the organization of the Commission, May 9th last, the volume of correspondence, outward and inward, is represented by 1,524 items, much of such correspondence and many of the
enactments and reports of the past four years therein represented being in foreign languages
and careful translations thereof having been necessitated.
Transcripts of the evidence taken at preliminary public meetings held by the Commission at
Trail, Vancouver, Cumberland, and Nanaimo constitute three typed volumes of 374 pages ; while
abstracts of the proceedings of the Select Standing Committee of the Dominion Parliament on
Industrial and International Relations, which considered certain phases of the health-insurance
problem during 1928 and 1929, together with other compilations essential to the work of the
Commission, are contained in two other manuscript volumes of 285 pages.
The cost of our operations to January 1st instant is $5,740.77, made up as follows:—
Salary of Secretary and Technical Officer, Mr. C. H. Gibbons  $2,490.00
Translators' fees       207.75
Office and sundry expenses,  including  reporting  of evidence,   transcripts, advertising, etc     1,824.42
Travel expenses     1,218.60
(Members   of   the   Commission   serve   without   remuneration,   receiving   only
travel expenses.)
All of which is respectfully submitted.
(Sgd.)    C.  F.  DAVIE,  Chairman.
(   „   )    W. F. KENNEDY.
(   „   )    L. E. BORDEN.
(   „   )    J. J. GILLIS.
(   „   )    GEO. S. PEARSON.
Victoria, B.C., January 15th, 1930. JURISDICTION.
Whether it is constitutionally within the competency of a Provincial Parliament to enact
and apply legislation in the matter of State health insurance primarily challenged consideration by your Commission. Research discloses no precedent. Although all European
countries have adopted State health-insurance principles—the only exceptions being the inconsequential independent States of Albania, Andora, Lichtenstein, Monaco, and San Marino—no
example offers in which the exemplifying legislation is otherwise than national.
In South and Central America the only country that has followed the European practice and
adopted policies for insurance of the health of its workers and other citizens of limited means
(Chile) has done so nationally. Argentina, Bolivia, Brazil, and Mexico are moving nationally
in the same direction.
Asian countries, with their widely different living standards and political administrative
structures, naturally are far behind the countries of Europe in social legislation, yet China,
Japan, and Palestine have national laws and plans for the protection of the public health and
the insurance of workers against losses through sickness.
Africa, like Asia in backwardness according to the standards of Western civilization, except
in its territories under the British flag and British governmental institutions, has not yet
reached that phase of progressive evolution in which health-insurance proposals claim consideration.
The United States of America, while it has neither adopted nor considered health insurance
as a factor of Government policy and concern, some time ago moved federally for the improvement of health conditions for the young in adopting the Shepherd-Towner Act. Explanation of
such displayed indifference in the United States to health insurance as a factor of public policy,
as offered by students of economies, is that prevailing high wage standards enable the American
working-classes, without undue self-denial and without lowering of prevailing high living-
standards, to themselves insure against losses consequent upon sickness and provide for
themselves adequate medical care, medicines, nursing, etc., generally included under the designation " benefits in kind " in the comprehensive schemes of national health insurance operating in
European countries. Consequently in the United States efforts of both Federal and St.ate
authorities and leaders in public thought have rather been concentrated upon measures for the
betterment of health conditions generally, instruction and care of expectant mothers, and reduction of the mortality risk of infants and children up to age 10.
Further, in British dominions, Canada excepted, health insurance and associated progressive
legislation invariably have been considered and promulgated as national measures. Great
Britain's operative Act covers comprehensively and inclusively insurance against sickness,
maternity, old age, disablement, and unemployment. So also does legislation of North Ireland
and of the Irish Free State.
A Royal Commission is now investigating the advisability of a compulsory State health-
insurance scheme for the affiliated countries in the Union of South Africa.
In Australia it has at no time been suggested that legislation against sickness and its concomitant losses might be considered as other than a Commonwealth enactment. There has been
at no time any proposal of health insurance in or for any of the individual Australian States,
which in their relationship to the Commonwealth are in almost the identical position of the
Provinces of Canada to the Dominion. Throughout Australia it is held that the provision of
sickness insurance—with which there are associated invalidity and unemployment insurances,
maternity benefits and old-age pensions—is a matter of Federal policy and concern, and such
responsibility is accepted by the Commonwealth authority.
Under public pressure extending over a period of years, the Commonwealth Government
therefore appointed in 1923 a Royal Commission to investigate the need for such insurance in
Australia aud, if convinced thereof, to devise a scheme to meet the particular requirements of
the country. This Commission functioned until 1926-27, when a Final Report was presented
recommending Commonwealth legislation providing compulsory insurance.
It will be apparent that all precedents suggest recognition of State health-insurance proposals in Canada as matter for Federal consideration and Federal action. Why these precedents
cannot be accepted and the obligation to consider and deal with any and all proposals for State
health insurance and kindred matters of advanced social legislation be passed, with responsi- Z 10 BRITISH  COLUMBIA.
bility thereanent, to the Government of Canada, are made evident by the proceedings of the
Canadian Parliament's Select Committee on Industrial and International Relations during the
sessions of 1928 and 1929, that Committee having been instructed by the Federal House to make
inquiries into the related questions of unemployment, sickness, and invalidity insurance. While
this Federal Committee devoted itself principally to the unemployment-insurance element,
sickness-insurance matters presented themselves during the progress of its inquiry, generally
in association with and incidental to the unemployment phase of the reference. Considerable
attention was also given to suggestions as to family allowances in Canada, these proposals
having indirect relationship to maternity benefits.
With regard to sickness insurance, it was specifically noted that the problem was obtaining
special attention in two Provinces, British Columbia and Alberta. In British Columbia one
Royal Commission headed by Mr. Winn, of the Workmen's Compensation Board, had recommended the establishment of a sickness-insurance system. In Alberta in 1928 a resolution had
been adopted on the initiative of Mr. Fred White, leader of the Labour group, in the following
" Resolved, That the Government should make an inquiry for the purpose of ascertaining
what legislation is in force in other countries for insurance against sickness and proposals
having for their objects the provision of any medical or surgical services to the people as a
public service, the nature and extent of such service and its efficiency, the cost thereby entailed
on the public funds, and the financial feasibility of adopting, with or without modification, any
such legislation or proposal in the Province of Alberta, having regard to prevalent conditions
and circumstances and the probable cost."
It will be noted that no legislation as yet exists in Canada establishing compulsory sickness
insurance except with respect to certain occupational diseases for which compensation is granted
under workmen's compensation laws of the several Provinces. Voluntary sickness-insurance
schemes have been developed throughout Canada to a considerable extent, however—by insurance
companies, fraternal societies, trade-unions, and industrial and commercial organizations, life
insurances in effect in Canada carrying included disability benefits exceeding one and one-half
billion dollars. A considerable number of general and accident insurance companies make
provision for sickness benefits in their policies, such sickness-insurance premiums in 1926
aggregating $1,660,407, with losses paid of $902,247. To go back a little farther, at December
31st, 1925, six Canadian and six foreign companies doing business in Canada gave sickness
benefits, the average contribution by the insured being $5.97, and the total contribution for
sickness insurance $561,913. The sickness benefit usually granted was in the amount of $5—
and exceptionally $10—weekly, the first week's illness excluded and twenty-six weeks being set
as the maximum period for allowed benefits.
Sickness costs and economic loss in Canada are placed by Dr. McGibbon, M.P. (Bracebridge),
at from two-thirds to three-fourths of the total expenditures of the Dominion of Canada: while
a survey (1927) by Dr. J. W. S. McCullough, Chief Officer of Health for the Province of Ontario,
shows that sickness throughout Canada costs the individuals $276,000,000 a year; that 11 per
cent, of losses, or $34,000,000, is distributed to communities; and that the total cost of sickness
in Canada reaches $311,000,000 annually.
To this being added the loss of prospective earning-power through premature deaths, a total
of $1,311,060,448 is arrived at as the annual loss due to sickness in Canada, this being necessarily an estimate arrived at in the same way Mr. Homer Folk produced his estimates in dealing
with the situation in the State of New York. At the same time the estimated aggregate Federal,
Provincial, and municipal public-health expenditure in Canada is placed at $5,454,529 annually,
of which Provinces and municipalities bear by far the greater part—$3,563,068.
The disposition of parliamentary investigators to associate sickness and unemployment
insurance has persisted, no doubt largely through this having been British and German practice.
The Trades and Labour Congress of Canada and the Canadian Manufacturers' Association have
suggested that legislation as to unemployment and sickness insurance should be Dominion-wide
in scope and character, holding that otherwise the industrials of adopting Provinces might be
penalized in competition with their rivals in business not so providing for their wage-earners.
In a memorandum presented to the Select Standing Committee on Industrial and International Relations on April 19th, 1928, President Tom Moore, of the Trades and Labour Congress STATE HEALTH INSURANCE AND MATERNITY BENEFITS COMMISSION.     Z 11
of Canada, also sets forth that: " The Trades and Labour Congress of Canada holds the view
that all social legislation of the nature now being dealt with should be of Federal character, as
otherwise many workers are denied the benefits of same because of the difficulty of establishing
the requisite Provincial residence qualifications, etc., owing to the transitory nature of their
At the same time the Government of Canada, on the advice of its Department of Justice,
rigidly insists that jurisdiction exists exclusively with and in the Provinces, although the
Dominion admittedly has power to make money grants to the Provinces or any of them, and thus
become a sharer of costs in the event of the State being made a contributor to sickness or
invalidity insurance costs, in addition to employers and employee-beneficiaries.
In the Report, presented June 1st, 1928, of the Canadian Parliament's Select Standing Committee on Industrial and International Relations (pages 486-514, Journals, 1928) the third
recommendation, later concurred in by the Government and adopted by the House, reads :—
" That the evidence of the Justice Department makes it clear that the responsibility for
such legislation (the reference being, among others, to sickness insurance) rests on the Provincial authorities, it being within their jurisdiction under the provisions of the ' British North
America Act'; but that it would be within the power of Parliament to contribute by grant to
such Provinces as adopted such legislation, following the precedents set in the matters of
technical education, highway-construction, and, more recently, the ' Old-age Pension Act.' "
This is supported by the record of the Committee proceedings. During the examination,
May 10th, 1928, of Mr. William Stuart Edwards, Deputy Minister of Justice, that witness was
asked by Mr. Woodsworth, M.P., if in his opinion there was not some section of the " British
North America Act" that could be extended in its interpretation so as to confer jurisdiction
upon the Dominion.
"Mr. Edwards:    With regard to insurance?
" Mr. Woodsworth :    Yes.
" The witness : No, I'm afraid not. AVe endeavoured to do that with insurance generally
and the Privy Council held against us. They held that the subject of insurance is Provincial
and that the Dominion can control it only in so far as a particular aspect of insurance can be
brought within one of the enumerated subjects in section 91."
And again:—
" Mr. AVoodsworth: Supposing, as in this case, the Provincial Government instituted a
scheme, or fell in with a scheme, as in the old-age pensions, by which the employer and the
employee contributed in certain proportions, is there anything to prevent the Dominion Government making a contribution to that scheme'.'
" The witness : I would contend not. I do not wish to be misunderstood about this ; I am
only giving my own opinion.    I think that we can make that contribution.
" The Chairman:    It is simply a question of Government policy.
" Witness : I am speaking now about the strict question of law. Of course a big question
of policy is involved, and I would express no opinion about what Parliament ought to do in a
matter of policy. That is within its own decision, but Mr. AAroodsworth is asking me whether
we have legal power to appropriate part of the Consolidated Revenue Fund of Canada for the
purpose suggested. The subject of unemployment insurance, and for that matter insurance
generally, is not mentioned in any of the enumerated subjects of jurisdiction conferred upon the
Dominion by section 91 of the ' British North America Act,' but it does fall precisely within the
enumerated subject of ' Property and Civil Rights ' in section 92, which is the section conferring
jurisdiction upon the Provincial Legislatures."   .
The Deputy Minister at the time expressed himself as convinced that no section of the
" British North America Act," which is Canada's charter, can be interpreted or extended so as to
permit of Dominion action in insurance matters or substantiate Dominion jurisdiction.
The entire attitude of the Dominion to the subject of health insurance, as exemplified during
the proceedings of the Select Committee, is that while, practically and morally, health-insurance
legislation should be national, action thereto is estopped by the mandatory terms of the " British
North America Act," placing jurisdiction with the Provinces in all matters of health and kindred
subjects. Z 12 BRITISH COLUMBIA.
The adoption of the Report of this Federal Committee and the attitude of the Dominion
Government during its sessions may be fairly condensed in the conclusion that while a system
of State health insurance should properly be national, the provisions of constitutional law are
such that action bringing such insurance laws into effect must be Provincial; but the Dominion,
accepting its moral obligation, will consider assistance by grants ratified by Parliament, as in
the case of through highway-construction, technical education, and old-age pensions contributions.
It is therefore apparent that it is quite within the constitutional power of British Columbia,
or any other of the Provinces of Canada, to proceed in the establishment of a State health-
insurance plan, as British Columbia led the way in the creation of old-age pensions ; and that
the Dominion is morally committed, by its concurrence in the Report of the Select Standing
Committee on Industrial and International Relations, to sympathetically consider the granting
of financial assistance in the operation of such State health-insurance system.
Furthermore, as indicating the attitude of the Dominion authority, Hon. Mr. Heenan,
Minister of Labour, informed the Committee that " The Dominion should wait for the Provinces
to take the initiative "—as British Columbia is now doing.
The Dominion Committee found its inquiries considerably handicapped by inability to secure
authoritative data on the extent and costs of sickness in Canada, the non-presentation of any
concrete plan upon which actuaries could be instructed to prepare statistical information, and
the inf'requency of census compilations as a means of securing comprehensive information.
And although Parliament on May 1st, 1929, adopted the Report of its Select Standing Committee, recommending, " That, with regard to sickness insurance, the Department of Pensions
and National Health be requested to initiate a comprehensive survey of the field of public
health, with special reference to a national health programme," this recommendation being
accepted by the Government, provision for such a survey has not yet been made and the
assumption is permissible that action awaits the course adopted by this and other Provinces in
interrelated policies.
Analysis of world legislation on State health insurance and related matters gives evidence
of revolutionary changes of opinion in recent years. AVhen a previous British Columbia Royal
Commission inquired into this subject, European countries were by no means of one mind as to
wiiether health insurance should be compulsory or optional. Since then it has become almost
everywhere accepted that, to be effective, such insurance must be compulsory, the improvident,
careless citizen, against whose necessities it is most essential to provide, habitually neglecting
opportunity to protect himself against possible sickness losses and remaining, as before voluntary
insurance laws existed, a prospective recipient of public aid if overtaken by misfortune.
In other words, the voluntary sickness-insurance plan has now become generally accepted
throughout Europe as impotent to achieve desired results, and those countries which previously
had expressed antagonism to the compulsion principle, one by one have come or are coming to
adopt it.
Conspicuous among such countries is France, which originally had set its face against
compulsion, in a measure influenced possibly by national sentiment antagonistic to theory and
legislation of German origin. The successful working of the German system observed in the
recovered Provinces of Alsace and Lorraine, as contrasted with the admitted ineffectiveness of
the previously obtaining French voluntary plan, explains in part the national change of front.
The new French Act, drafted by a commission of economic experts whose researches and
consideration of the matter extended over a period of four years, and debated in Senate and
Chamber during seven years thereafter, eventually was adopted by the Chamber of Deputies,
March 14th, 1928, by almost unanimous vote, 477 to 1, with 50 abstentions, the Senate having
passed it the previous year.
It. applies to all wage-earners of both sexes whose yearly remuneration does not exceed
15,000 francs, this amount being increased to 18,000 francs if there be a dependent child, and by
2,000 francs additional for each other dependent child in the family. It is designed to benefit
more than 8,500,000 workers, and covers more than 13,000,000 beneficiaries as for sickness,
invalidity, old age, unemployment, maternity, and funeral costs, the funds required for its
operation approximating 5,000,000,000 francs ($200,000,000) yearly. This Act is being put into
effect gradually, and will function fully when the reserve fund provided for by it reaches
In Belgium the voluntary-insurance plan was so seriously threatened with complete collapse
in 1927 that its preservation was secured only by substantial increases of allowed State
subsidies; and a definite educational campaign has since been inaugurated with the object of
preparing the Belgian people for substitutional compulsory-insurance proposals.
In Finland also insurance against sickness is made compulsory by many of the approved
AVorks (Trades) Funds, and a compulsory-insurance bill was introduced in 1927, which has not
as yet, however, replaced the existent voluntary-insurance law. Answering a questionnaire of
the International Labour Bureau toward the end of 1920, the then Government of Finland
explained that " in a country where the population is as scattered as in Finland it is clearly
very difficult to arrive at satisfactory results from a social point of view if the sickness-insurance
system is based on the voluntary principle; consequently all the projects which have been
worked out during the last twenty years in Finland for the organization of sickness insurance
have been based on the compulsory principle. . . . Undoubtedly the compulsory system of
sickness insurance has considerable advantages over the voluntary system, more particularly in
that it effectually ensures the protection of the persons covered."
Denmark has recently made sickness insurance compulsory for certain classes of its workers,
although hitherto an outstanding proponent of the voluntary system. And Denmark has advised
the International Labour Conference of its conclusion that " compulsory sickness insurance is
at present applied in most civilized States and it would seem indisputable that this system on
the whole has considerable advantages over the voluntary system."
Denmark, it may be noted, by the comprehensive organization of its health-defence
machinery, has remained one of the few countries wherein the voluntary plan has functioned
without development of serious defects.
Hungary has widened and materially varied the scope of its compulsory law in the light
of operative experience.
Italy has now made insurance compulsory as against tuberculosis and various occupational
diseases, and in the Italian Labour Charter the Facist Government refers to these new compulsory measures as " in preparation toward general insurance against all sickness." At the same
time the Italian Federation of Mutual Aid Societies is actively agitating for compulsory insurance in its fullest interpretation.
The Netherlands, by legislation of 1929, this year becoming operative, also has departed
from its voluntary-insurance scheme and made insurance compulsory for various types of risk,
radical changes, all trending toward compulsion, being embodied in last year's amending Act.
Spain has made insurance of the health of school-children obligatory; and the superior
advantages of compulsion are being urged in Sweden by a growing number of converts thereto.
In Switzerland the highly curious situation developed that while a party definitely committed to compulsory health-insurance policy was confirmed in power, such legislation, adopted
in the National Council by 113 to 1, and in the Council of the States unanimously, was rejected
by the people on its presentation to them for ratification by referendum, the embarrassed
Federal Government finding its way out of the consequent impasse by delegating power to the
cantons and the communes to make such insurance obligatory, and itself contributing the
subsidies which Swiss Federal legislation grants.
In this connection Switzerland alone of world countries is, with its cantons, in a position
somewhat paralleling that of Canada and the Canadian Provinces, save that the explicit terms
of the " British North America Act," not the will of the people as disclosed by referendum, are
interpreted as debarring the Dominion from enacting and applying health-insurance legislation,
although its right to contribute tow7ard costs under such legislation, if and when adopted by
the Provinces or any of them, is affirmed by the Justice Department.
It was during consideration of the proposed substitution of an insurance system for the
" civil responsibility of manufacturers " that it became evident to the Swiss Government that
it was necessary to introduce sickness insurance simultaneously with accident insurance, both
being recognized as on the same plane. The constitutional basis of this important social reform
was unanimously accepted by the two Chambers and ratified by referendum in 1890, the adopted
text reading:—
" The Confederation shall introduce by legislation sickness and accident insurance, taking
into account existing relief funds; it may declare these forms of insurance compulsory, either
generally or for certain classes of persons only." Z 14 BRITISH COLUMBIA.
Preparation of a Bill on the indicated constitutional basis was entrusted to Dr. Forrer, and
in 1896 a measure respecting sickness and accident insurance on the compulsory principle was
submitted to the Chambers.. After long discussion its text was adopted in the National Council
in 1899 by 113 to 1, and in the Council of the States without dissent. Although the Federal
Chambers thus put themselves on record as almost unanimously favouring compulsory insurance,
they could not deny the constitutional right of the people to decide the issue. A referendum
was accordingly taken on May 20th, 1900, and by an overwhelming majority—341,914 to 148,035,
and in all cantons with the exception of Glaris—the Swiss people repudiated the considered
judgment of its representatives.
After this referendum, which reduced to naught ten years' expert studies, parliamentary
deliberation and individual efforts, the Government found itself faced by a peculiar task. How
was it possible to explain that a nation that had accepted the principle of insurance previously
by more than 200,000 majority should reject the Bill based on that principle? It was regarded
as first necessary to ascertain whether this was attributable to a change in public opinion or
to discontent with the proposed method of applying the principle. An informed student of
affairs comments that:—
" AVithout doubt both these factors were partly to blame, but the main reason for this check
would appear to lie in the fact that the Swiss people saw in the new measure an attempt to
restrict their freedom. In criticizing the result of the referendum, it is essential to remember
that at the period in question social insurance was in a very incomplete stage, and the population were more easily attracted by simple measures for the protection of human life. The
prevalent desire at that time was for a system of State subsidies that in one form or another
would assure a considerable reduction in the cost of medical and pharmaceutical treatment for
the classes concerned. Be this as it may, Government circles gradually became convinced that
it was necessary to abandon the idea of entrusting the Confederation with the organization of
sickness insurance. This conviction led to the idea of public-sickness insurance carried out by
the mutual-aid societies, the part played by the State to be confined to providing subsidies and
technical advice for the private institutions. Doubtless the Federal Chambers would have
preferred a more rational plan of sickness insurance to this somewhat liberal conception, but
the necessity of safeguarding the principle of compulsion in accident insurance obliged them
to act with great prudence and to make concessions. In 1906 the Department of Industry
presented the Federal Chambers with a second draft, which was a sort of compromise between
the Government proposals and the popular conception of social insurance. According to this
draft the Confederation was entrusted with the organization of compulsory accident insurance,
while the application of sickness insurance was maintained on a basis of mutuality, Government
action being limited to subsidizing and supervising sickness-insurance institutions set up by
private initiative." *
Parliamentary discussion of the subject extended over the next five years, and in 1911 the
Bill was adopted by the National Council and submitted in 1912 to another popular referendum.
This time the measure was accepted by a small majority, 287,565 to 241.416, the country thus
being endowed with a sickness-insurance scheme that came into operation on January 1st, 1914.
Both in spirit and in the results of its application, the Swiss Federal " Sickness Insurance
Act " is an exact embodiment of the political regime of the country. Switzerland is a federative
State. According to the Federal Constitution, legislative rights are divided between the federation and the several cantons, as in Canada they are between the Dominion and the Provinces.
In so far as the Confederation has not been declared exclusively competent to legislate in a
given domain, this right belongs to the cantons, and of their rights they are exceedingly jealous.
But immediately the Confederation intervenes by a Federal law in a given domain, the matter
in question is governed by Federal legislation unless the cantons have been definitely empowered
to intervene within certain limits.
Although the enforcement of the Federal " Sickness Insurance Act" is legally in the hands
of the Federal authorities, in practice the powers of jurisdiction left to the cantons in this
respect are wide, as the Act empowers them to legislate on the same subject also. In fact,
although section 1 of the Federal Act states that the Confederation encourages voluntary
insurance against sickness by granting subsidies to the sickness-insurance funds which satisfy
' Voluntary Sickness Insurance," Geneva, 1927, pages 396-7. STATE HEALTH INSURANCE AND MATERNITY BENEFITS COMMISSION.     Z 15
the necessary conditions, section 2 stipulates that the cantons may (a) declare sickness insurance compulsory, either generally or for certain classes of the population; and (o) establish
public funds or delegate such powers to their communes. The two essential reservations made
by the Federal legislation in connection with the powers of the cantonal authorities are that
the cantons must take into consideration the relief funds existing in their territories and may
not compel employers to pay contributions.
In order to lessen for the working-classes any allegedly detrimental effects of the system
of voluntary insurance, the Swiss legislators have made every endeavour to safeguard the
principle of compulsory insurance, which they have been as yet unable to introduce on a Federal
scale. After being long hostile to the very suggestion of compulsion in connection with social
insurance, Swiss public opinion appears to have changed in late years to a very considerable
extent. A survey shows that the legislative action of the cantons in favour of compulsory
insurance, at first timid and tentative, has with time gained strength, and this is confirmed by
the comparatively recent adoption of important new legislation on compulsory sickness insurance
in the cantons of Schaffhouse and Thurgau. It is predicted by Swiss students of affairs that
the present decade will see the compulsory principle confirmed in all sections of the confederacy.
Compulsory insurance against sickness now has been adopted in all countries of Europe
with the exception of those specifically referred to above, and excepting also the diminutive
independent States of Albania, Andora, Lichtenstein, Monaco, and San Marino, with aggregate
populations of considerably less than 200,000. These have at no time considered sickness-
insurance policy of any sort, although Monaco has a maternity-benefits plan, for the operation
of which calls are made upon State funds.
Throughout the British dominions, health-insurance policy as yet has been crystallized in
effective legislation only in Great Britain, Northern Ireland, and the Irish Free State, where
each year witnesses detail changes in the statute law, grave defects in which were at the outset
apparent, arising presumably through political demands for expeditious enactments and consequent curtailment of studies to secure a well-balanced economic plan advantageous to the
country and equitable in its application to all classes thereby affected.
Australia has before its Commonwealth Parliament the Report of a Royal Commission
which, after investigations extending from 1923 to 1927, recommended a plan of compulsory
sickness insurance, evolved with particular recognition of the conditions of the country. Legislation based upon this Report will, it is understood, be enacted by the present Government at its
first opportunity.
In the Report of this Commission it is noted that " where voluntary schemes have been
established in other countries they have generally failed to satisfactorily achieve their purpose,
as is indicated by the universal tendency to change from voluntary to compulsory principles.
There are no grounds for the assumption that if a voluntary scheme were instituted (in
Australia) it would not have the inherent defects of all such schemes, which, as has been
conclusively proven, fail to provide for those who most need assistance, cannot be effectively
and generally applied, and only attract the more thrifty."
The Union of South Africa, which heretofore has left insurance against sickness and
disability to private action, as in Canada and New Zealand, now has a Royal Commission
studying the desirability of compulsory insurance.
In Canada, the neighbour Province of Alberta is concerned with British Columbia in the
establishment of a State health-insurance plan, and is moving in that direction with preliminary
surveys of the existing situation. The national attitude on the subject is indicated in the
proceedings of the Select Standing Committee of the Federal Parliament on Industrial and
International Relations, 1928 and 1929.
In the Americas, the seeds of health-insurance policy have been sown. Argentina compels
such insurance for certain classes of the population and since 1926 has had a Commission
surveying the national situation preliminary to the formulation of a scheme for the application
of compulsory insurance against illness. In Bolivia insurance of all sorts is voluntary, except
as to occupational diseases, insurance against which is obligatory.
Brazil as yet recognizes sickness insurance as a voluntary precaution, but a Labour Code
which includes compulsory insurance against sickness for certain classes of workers was
approved in July last and sent to the Senate, which had not yet acted upon it at last advices, Z 16 BRITISH COLUMBIA.
Chile for some time has had a complete compulsory sickness-insurance plan modelled on
approved European practice; and Colombia makes insurance compulsory generally, but as to
life rather than loss and distress through sickness.
In Mexico, Article 123 of the Federal Constitution of 1917 was recently amended to provide
for the enactment of a law on health insurance and other forms of social insurance. This will
be embodied in the new Labour Code under consideration by the Mexican Congress at the close
of 1929, which in all probability has now been accepted by that body.
Among Asian countries Japan alone has a definite health-insurance law under which such
insurance is made compulsory, and which is being constantly broadened in its application, by
amendments evolved in the light of experience.
Further significant evidence of the changing attitude of European countries theretofore
antagonistic to the compulsory principle in health insurance is furnished in the replies of such
countries to. a questionnaire submitted to member States of the League of Nations by the
International Labour Conference prior to the arrangement of the agenda for its 1927 session at
Geneva, when it was considered that the time was possibly ripe for action toward internationally
harmonizing social insurance laws by way of a draft convention or recommendations under
Article 405 of the Treaty of Peace. The suggestion in thus consulting the member Governments
on essential aspects of the health-insurance problem was twofold: To give the Conference
opportunity not only of framing proposals on such insurance questions which could be made the
subject of mutual undertakings between as large a number of member States as possible, and
of comparing experiences in the various countries, the effective operation of their laws, results
attained, and the indicated most appropriate methods for adoption in the future development of
health-insurance policies.    The first and basic interrogation in this questionnaire was:—
" Should the fundamental obligation to be imposed upon countries which ratify the Convention be the principle that sickness insurance is to be made compulsory for workers, or some
other, but less far-reaching, principle?"
Of the twenty-four Governments to which the questionnaire was addressed, seventeen
directly affirmed the necessity of making sickness insurance compulsory for the effective accomplishment of its objects, these seventeen including such administrations hitherto committed to
the subsidized voluntary plan as Belgium, France, Italy, the Netherlands, and Spain. France
and Italy took advantage of the opportunity to announce that they were already preparing to
abandon their voluntary insurance systems for the compulsory, Italy noting its more successful
functioning in her new Provinces retaining the Austrian law.    Of the minority seven countries :—
Denmark's reply was that " compulsory sickness insurance is at present applied in most
civilized States and it would seem indisputable that this system on the whole has considerable
advantages over the voluntary system ; at the same time it has been found in Denmark that it is
possible to produce the same results with voluntary insurance."
Finland's opinion also was decidedly half-hearted if accepted as endorsation of the voluntary
plan in preference to the compulsory. Its Government said: " Although the Finnish Government is of opinion that sickness insurance in Finland should be compulsory for the classes of
the population to be covered, subject to local exceptions, it would nevertheless seem more practical to leave this question open in dealing with it internationally. Undoubtedly the compulsory
system of sickness insurance has considerable advantages over the voluntary system, more
particularly in that it effectually ensures the protection of the persons covered, but it has been
shown, especially in one of the Scandinavian countries, that, where the conditions are favourable,
voluntary insurance can on the whole produce the same results as compulsory insurance."
Sweden's reply likewise was anything but a commitment in favour of voluntary as against
compulsory insurance: " Sweden has had for a long time a voluntary system of sickness insurance which is subsidized by the State and which has been considerably developed. Proposals
have, however, been made from time to time for the institution of compulsory insurance, and
these proposals have led to a number of investigations and the formulation of different projects.
None the less, the existing system has remained in operation so far for various reasons, chiefly
because of the economic consequences which any change on the lines proposed would undoubtedly
involve. ... As compulsory sickness insurance exists at the present day in most civilized
countries, there seems to be good reason for holding that this form of sickness insurance must
on the whole have considerable advantages over voluntary insurance, especially that it is much
Switzerland's experience, as hereinbefore referred to, is briefly recounted in the Swiss
Government's reply, with explanation of the system at that time operating throughout, the
Confederation, and it is added : " On account of this historical evolution, the Federal ' Sickness
and Accident Act' of June 13th, 1911, has not made sickness insurance compulsory, but authorizes
the cantons to make it compulsory ' in general or for certain classes of persons.' "
There remain but two countries to which the questionnaire was addressed—Canada and
" In view of the absence of compulsory sickness insurance in this country and of any
experience gained thereunder, it is not possible to answer ' yes ' or ' no ' to the different features
of the plan of sickness insurance which was in contemplation in the preparation of this questionnaire," was the answer of the Dominion Minister of Labour.
" The Government of India considers," reads the reply from Delhi, " that the adoption of
any comprehensive scheme of sickness insurance must be regarded, for some time at all events,
as impractical in and for India, and thinks it unnecessary that the reply to the questionnaire
on behalf of the Government of India should discuss in detail the provision of a scheme which
will be formulated with almost exclusive regard to conditions prevailing in the more advanced
European countries."
It is thus made plain that nowhere is a claim advanced that the voluntary system in
workability or principle is superior to the compulsory; in fact, the contrary opinion is indicated
in the replies of the voluntary-insurance countries, several of which were at the time preparing
to abandon it in favour of the alternative plan, while the compulsory-insurance countries
unanimously declared their satisfaction with the working of the obligatory-insurance plan, in
the light of their experience of its operation.
Apart from the pronounced trend toward unanimous acceptance of compulsion for the effective operation of health-insurance law, examination of recent changes in such European enactments and policy shows also marked tendencies to concentrate in increasing degree upon
associated health-preservation policies and to increase benefits-in-kind to insured persons—
hospitalization, medical care, nursing, medicines, appliances, etc.—rather than to augment cash
benefits or extend the payment period, which in former years had been the recognized practice
as increasing reserve funds balances made possible.
Thus during the first period of the operation of the insurance law in Great Britain, 71 per
cent, of the benefit payments were in cash and 29 per cent, in kind; whereas in the second period
such payments were respectively 52 and 48 per cent., and present expenditure upon benefits-in-
kind exceeds the disbursement in cash benefits.
Health standards of the wage-earners' body thereby are improved. Industries are assured
less interruption in the continuity of service of experienced employees. The average duration
of such employees' efficient working capacity is extended; and material reductions are achieved
in hospital and medical costs, etc., credit balances in the sickness insurance reserve funds
thereby being automatically increased, to be diverted more and more to health protection and
preservation education and propaganda, to the establishment and operation of hospitals, sanatoria, convalescents' homes, and to the provision of scientific apparatus and laboratory equipment, general and special clinics, etc., these in their turn functioning toward ultimate further
reduction of sickness and its costs and the advantage of workers, industrialists, and the communities generally.
As to the use of reserve fund balances in excess of amounts assuring ability to meet all
normal obligations, it is becoming standard practice to divert available moneys to health-
extension works except in those countries which proportionately reduce the levies for sickness
insurance as reserves are accumulated for its specific purposes. Australia stipulates that such
accumulated funds may be used " in the extension of social services available to insured
persons." Austria designates their employment " to improve health conditions of the insured
population," even in the provision of seaside and mountain outings for children of the wage-
earning classes. Germany authorizes their use " for general purposes of disease-prevention,"
this being a salient feature of the German system, scientifically evolved as are most German
institutions. Greece follows a similar course. Hungary directs their use in " establishing and
maintaining institutions for the relief of the sick ";   while Denmark prescribes:—
" AVhen, at the bidecennial survey of insurance affairs, it is found that the reserve funds are
in excess of requirements, with due allowance of a safe margin for emergent demands should
they arise, appropriations may be made therefrom for the establishment of sanatoria or con-
valescents' homes, or for the furtherance of other measures, educational or otherwise, for the
scientific prevention of disease or the reduction of sickness and the general improvement of the
health standards of the country."
As to the efficacy of health insurance, as operating in Great Britain, in the prevention of
sickness, Dr. A. Grant Fleming, Professor of Public Health and Preventive Medicine at McGill
University and Secretary of the Health Survey Committee, has expressed himself after careful
consideration of this phase of the problem. Attending as a witness before the Select Standing
Committee of the House of Commons on Industrial and International Relations, at Ottawa,
March 12th, 1929, he said :—
" In England they have a large mass of Unemployment, lowT rates of wages, but at the same
time it is safer to be born in England, from the standpoint of the baby, than to be born in
Canada. You have an infant mortality rate of 70 in England and AVales; in Montreal it is
113; and I think for Canada the last figure was 101. In England, out of every 1,000 babies
born alive 70 die the first year; in Canada, out of every 1,000 babies born alive 101 die the
first year."
Asked by Mr. Heaps, M.P., as to whether a scheme along the general lines of British health
insurance would be a good thing for Canada, Dr. Fleming said :—
" There is a great need, and public-health workers have a general feeling that health insurance offers a possible solution of that need. At present I know of nothing which seems to offer
as much as health insurance in some form. ... I do not see how you can work it unless
it is compulsory, because the indifferent individual otherwise would not insure himself and when
he became ill would be a burden on the community without having contributed. Another thing,
it would relieve our hospitals of a big burden."
John Gerald Fitzgerald, M.D., Professor of Hygiene and Preventive Medicine and Director
of the School of Hygiene and the Connaught Laboratories of the University of Toronto, is
another witness for health insurance. He, too, was called as a recognized expert in his field
by the Federal Committee.
" I presume," it was suggested by Mr. AVoodsworth, M.P., " that under a thoroughly organized
national system of State insurance there would be a great many economies; there would be a
great deal of preventive work which would probably lessen the bill, and yet on the other hand
there would be a much more extensive service than now provided ? "
" In general the view held in countries where there are systems of national health insurance
is that both the State and the individuals in those countries are better off financially, which
probably means that they spend considerably less money on preventable sickness than they did
before," Dr. Fitzgerald replied.
" Do you consider that it ought to be a compulsory system? " Mr. AA'oodsworth inquired.
" The views of those men who have had the most experience with the question and who
have given to it the greatest amount of thought and consideration is that the compulsory system
is superior to the voluntary system," was the answer.
In this Dr. A. Grant Fleming fully concurs.
At the same sitting of the Federal Committee Mr. Woodsworth, M.P., asked:—
"What is your opinion, Doctor, with regard to compulsory insurance?"
" It seems to me," was the reply, " that if the health-insurance measure is to be successful
it must be compulsory, or else the individual who is careless and indifferent will fail to insure
himself and when he becomes old the problem is there as far as he himself and his family are
concerned, and he becomes a charge on people who have to make provision for themselves. I
would think it must be compulsory."
" The amount of money we are losing by preventable accidents, preventable sickness, and
preventable deaths is simply staggering," commented Dr. McGibbon, M.P. (Bracebridge). " It is
equal, probably, to two-thirds or three-fourths of the expenditure of the whole Dominion of
Canada. It would seem to me the thing we have to do is to arouse the national conscience, first
as to the necessity and second as to the great national waste, because it is terrific."
As to expert opinion formed on the practical operation of a sickness-insurance system, the
Chief Medical Officer of the Ministry of Health for England and Wales says in his 1927 Report
(page 253) :—
" The value of health-insurance practice is likewise beyond question. It is an intelligent
method of organizing private medical practice for the bulk of the population. Its sxiccess
depends upon reasonable co-operation between the doctor and his patient.    It pays them both STATE HEALTH INSURANCE AND MATERNITY BENEFITS COMMISSION.     Z 19
for the patient to be kept well, and it is meant that it should also be an educational system in
which the practitioner is the true doctor and teacher of his client. Much sickness may be and
is dealt with in insurance practice; and, where it cannot be dealt with, the system should act
as a clearing-house by which the patient is otherwise treated. This method rightly used should
be an effective instrument of preventive medicine."
Another example of pertinent comment on the practical results of health insurance is
afforded by Dr. Alfred Cox, Medical Secretary of the British Medical Association, in a survey
of the " Results of the British System of Health Insurance in its Operation." These results
he summarizes as :—
(1.)  A greater sense of security in time of sickness on the part of the whole insured
(2.) A service which, in spite of its incompleteness, gives a large number of the population ready access to medical treatment of a kind superior to what they had in
pre-insurance days, and a guarantee as to the quality of service greater than
private patients possess.
(3.)  A greater interest in the question of medical service on the part of the community
in general.
(4.) A realization that the present service is incomplete and a desire to make it complete of all those at present insured, with an extension to their dependents in the
near future.
There are a number of significant conclusions to be drawn from study of the State health-
insurance schemes of Europe—Russia excepted, inasmuch as it is admitted that the Soviet plan
has remained theoretical and inoperative—one being that industrial employers, instead of
finding their operation charges increased through fixed contribution to insurance of their
employees against sickness, will find in the final analysis apparently that they will pay less
than they are now paying of their own volition if participants in financing employees' benefit
institutions, with extinction of the monetary advantage now enjoyed by competitors who do
not contribute to such health-protection organizations. The State also, even when made a
contributor toward sickness-insurance costs, is found to derive general monetary advantage
through the en masse application of insurance principles, being relieved of many necessarily
onerous contributions to the maintenance of hospitals on account of indigent patients; of out-
payments in aid of resident physicians; of a considerable proportion of usual grants for the
establishment and conduct of hospitals, sanatoria, etc., which under fully matured public insurance systems are frequently financed by diversion of excess balances in the insurance reserve
funds, and in improved and maintained efficiency of the industrial workers, with consequent
increased production values. British Columbia's estimated expenditure's for 1929-30 in such
connections were:—
Provincial Board of Health      $127,294.00
Statutory grants to hospitals      530,000.00
In aid of resident physicians        17,000.00
Hospitals, institutions, etc      325,000.00
Balance available under " Liquor Act "       251,000.00
Total $1,250,294.00
It will be interesting and enlightening for experts in Government finance to approximate the
extent of reductions in such charges with a scientifically devised health-insurance scheme fully
functioning; it will be equally interesting and instructive for industrialists and their bankers
similarly to work out approximations of what their position would be under such system, taking
due account of the elimination of costs of present welfare plans, enhanced continuous efficiency
of the working-force by lessening of time-loss through illness, ultimate lowering of taxation
with diminishment of direct Treasury contributions that would become charges against health-
insurance funds, and reduced cost of wage-earners' insurance by its spread over all prospective
beneficiaries through the application of recognized actuarial principles—calculators, from both
State and employers' ground, necessarily talcing into account the various matters covered in
each European insurance law and estimating the fractional part thereof to be considered as
representing the cost of standardized health insurance apart from the associated coverages;
i.e., old-age and disability pensions, maternity benefits, funeral allowances, unemployment insur- Z 20
ance, etc.    Present divisions of established contribution charges under the several European
State insurance systems are :—
One-third  -	
Subsidies     graduated     to
Sometimes contribute 	
With  employees up  to  10
per cent, of wages
All, less voluntary employers' aid.
With employers up to 10
per cent, of wages.
Nil .   ..
lien   4%d.   week,   women
4d. week
Men   4%d.   week,   women
4%d. week.
Nil     ...
Men 4d. week, women 4d.
Nil ...
As required, and with communes
As employees	
As employers.
All.   with   group   contributions.
Nil ...
Nil    .
All, less subsidy.
i/i   of   6   per   cent,   basic
14   of   6   per   cent,   basic
As hereinbefore indicated, there is to be noted throughout the civilized world a marked
change of late in the attitude of leaders of public thought (both within and outside the medical
profession) as to the necessity of revising health services and devoting primary attention to
keeping the people well rather than curing those ills to which flesh is heir. Sir Arbuthnot Lane,
the eminent London physician, urges that the medical profession must revolutionize and reorganize its principles and its policy with recognition of this objective. Economists and industrialists are becoming seized of the necessity of checking the enormous wastage in costs of
sickness preventable by such system as will assure closer and more continuous observation of
the units of the industrial population, through which incipient disaffections may be detected
and successfully treated at the outset, with prolongation of the working span of life and increase
of comfort and effectiveness. This is peculiarly a function of public-health insurance machinery,
and claims are advanced in Europe that the operation of compulsory health insurance, with
associated health-preservation education and propaganda, already have lengthened the normal
life of industrial activity by years.
Almost ten years ago Frederick L. Hoffman, an American insurance critic recognized by the
commercial insurance interests of the continent as an authority in all such matters, wrote:—
" There is no dissenting opinion, even on the part of life-insurance managers, that Government insurance has resulted in far-reaching reforms; that it has been of vast benefit to the
people;  and that it has come to stay." STATE HEALTH INSURANCE AND MATERNITY BENEFITS COMMISSION.     Z 21
Dr. Zacher—" reputed to be the most eminent health-insurance authority in the world," to
quote Mr. E. S. H. AATinn—states that twelve years were added to the life-span of the worker
during the first thirty years of compulsory health insurance in Germany, which conclusion is
supported by investigations conducted by the National Conservation Commission on this phase,
its findings being summarized in this table compiled on statistics up to 1913:—
Rate of Lengthened Life under State Health Insurance, in Yeabs per Century.
Great Britain 	
1871-1881 to 1891-1900, or 20 years	
1817-1831 to 1898-1803, or 76 years	
1867-1877 to 1891-1900, or 23 years	
1835-1844 to 1891-1900, or 57 years	
1816-1840 to 1891-1900, or 67 years
And Dr. Louis I. Dublin, statistician of the Metropolitan Life, writing in the " Economic
AVorld " in 1917 on " The Social Bearings of Working-men's Insurance " in Germany, said that
" side by side with the development of the sickness-insurance law there has been a considerable
and significant reduction in the mortality of the Empire."
AA'hile neither federally nor by any State in the Union has any scheme of health insurance
been adopted as yet in the United States of America—although expert investigations in a number
of States have resulted in reports strongly recommending such legislation, and Bills based on these
reports have been introduced repeatedly in New York, California, New Jersey, and elsewhere,
failing nevertheless to obtain endorsement by the concerned legislative bodies—agitation and
pressure for such legislation continues, and several national bodies are now engaged in propaganda and educational work directed toward that end.
" Ten billion dollars a year, or one-ninth of our annual income, goes in the United States to
pay for illness or repair damages inflicted by it," writes Dr. AV. S. Rankin, Director of the
Hospital and Orphans Section of the Duke Endowment, Charlotte, N.C., in an article on the
"Economics of Medical Service" contributed to the "Journal of Public Health" (Boston).
" That this bill may be cut by further organizing and co-ordinating medical services and introducing illness insurance," he declares with positiveness, instancing concrete cases where this
plan already has been carried out in selected groups. Dr. Rankin notes that in considering
the economic factors of any problem we are necessarily concerned with two fundamental conditions—the cost of production and the purchasing-power of the people.    He proceeds :—
" The average individual between the cradle and the grave spends one-fortieth of his time
in bed because of incapacitating illness. The average worker loses 2 per cent, of his time, a
fraction more than seven days a year, because of incapacitating illness. One-fortieth of the
population is constantly ill to the extent of being bedridden. For every thousand people there
are fifty who suffer from prevalent and chronic diseases that completely incapacitate for but a
small part of their duration, such as tuberculosis, cancers, heart-disease, vascular diseases,
chronic indigestions, gallstones and kidney-stones, hernias, unrepaired injuries following childbirth, etc.
" The people of the United States are paying for the treatment of diseases not less than
$2,500,000,000 a year, or approximately $100 per family. In addition there is an estimated
annual loss of $2,000,000,000 as a result of decreased wage-earning capacity. And there is a
still further loss of permanently interrupted wage-earning capacity through postponable deaths
estimated to be $6,000,000,000, making the total annual cost of disease to the people of this
country $10,000,000,000.    The total annual income of the United States'is about $90,000,000,000.
" Any service which costs as much as medical care and which is so absolutely essential to
both individual and national prosperity and happiness, at once raises the question of the ability
of the people to pay for it.
" According to the United States census, 49.7 per cent, of patients in general hospitals in
1923 were able to pay in full; 19.3 per cent, of patients paid in part; and 31 per cent, of
patients paid nothing.   We have no such reliable data as to people who pay for the services Z 22 BRITISH COLUMBIA.
of physicians. It is reasonable to suppose that, if we had such data, we would find the
pecuniary relation of patient to physician very similar to that of patient to hospital. It is
therefore reasonable to assume that approximately 50 per cent, of the patients pay their
physicians in full, 20 per cent, only in part, and 30 per cent, not at all.
" Unquestionably a large percentage of American people are not receiving the medical care
they should have, both as individuals and as units of society. The expenses of being sick are
unanticipated, appearing at unforeseen and irregular times, and are not like the expenses of
food, shelter, clothing, etc. AVhen a family runs along for one, two, or three years, and then
has a serious illness, with a hospital bill and professional charges for surgeons and nurses,
its economic stability is seriously jarred and often shattered. For that 50 per cent, of American
families whose annual income is below $1,200, when unexpected sickness comes there is one
of these alternatives—medical charity or financial tragedy. It is not the amount so much as
the condition of payment that rips the family purse. AAThat treatment will improve or relieve
this social abnormality?
" An organized medical service can be offered for financial returns considerably smaller than
the cost would be if the patient obtained the same service from unrelated practitioners and
specialists. An organized service makes possible economics impossible in an unorganized service.
A few examples will illustrate and substantiate the above statements:—
" Through an organized medical service some of our large universities, notably the University of Michigan, the University of Minnesota, and the University of California, are able to
render a thoroughly modern medical service, including hospital care, to their students for from
$9 to $12 per student per year.
" The Endicott-Johnson Corporation with its 16,000 employees and their families represent
a total population of probably not less than 60,000 people. The Corporation gives to this group
of employees and their families a medical service which includes the full-time services of twenty-
seven physicians, three dentists, one X-ray technician, fifty-one nurses, and two pharmacists
for an annual cost of $6 to $7 per capita for the entire industrial population.
" Roanoke Rapids, N.C., an industrial settlement composed of the workers of five cotton-
mills and one paper-mill, gives a very modern, efficient medical service, including hospital care,
home visits, and public-health nursing, for $23.60 per family, or approximately $9 per capita.
" The insurance principle appears to be the only remedy, but a most effective one, for
providing adequate medical care for a very large percentage of the people."
Dr. Michael M. Davis, an authority on health problems whose, service as consultant to the
Associated Out-Patient Clinics Committee of New York City has brought him in close touch
with the many individual tragedies resulting from sickness, also has been analysing and
emphasizing not only the high cost of being sick, but the " uneven incidence of sickness costs."
"In this fact, that sickness is distributed unevenly, lies the need for the insurance method
of protecting wage-earners," he maintains, being fully supported in this view by Dr. John A.
Lapp, late Director of Investigations for the Ohio Health and Old-age Insurance Commission,
who urges that " illness and old age are peculiarly of the type of risks that needs insurance
because of the unevenness of the incidence of these calamities." AArriting of " the Advantages
of Insurance in Distributing the Cost of Illness," he observes that the title of his article " would
better conform to my temper and understanding if it were to read ' There is No Substitute for
Social Insurance in Distributing the Cost of Illness.' "
And here in Canada a no less informed and competent student of business economics than
the President of the Canadian National Railways system has taken pains to put upon record
his conclusions as to the dollars-and-cents advantage of doing everything humanly possible to
maintain industrial workers in full health and fitness—not as humanitarianism, but as essentially sound business policy.
Sir Henry Thornton had been writing of the reorganization of Canadian National services
after he assumed charge of them.
" So much for the physical rehabilitation of the railroad," he continues. " It all would not
have been worth a hoot without man-power. I do not mean mere numbers of men; I mean
man-power in its highest form—something which employers within recent years have truly
come to recognize.   The public expects a railroad to be in good shape.   It pays its money for the best of engines, the best of cars, and the latest comforts or advantages. That's merely the
stock-in-trade. It cannot function without the enthusiasm, the vision, and the team-work that
will step out, buck obstacles, and bring home the bacon. Nobody wants to feed oats to a lazy
horse, or a crippled one, for that matter. In the last analysis the real thing I have done to
make the Canadian National Railways a success is to pound, pound, pound, until it is now
second nature with the employees to understand that a messenger-boy is as important in his
sphere as I am in mine, and that the minute a single man slacks on the job a bolt begins to
" Man-power—that's the secret of industrial success. Electricity in its elemental qualities
is an absolutely standard thing, but companies succeed or go broke in the way they serve it to
the public. My greatest concern and my greatest asset in my job has been my men. Yet that
angle has been neglected by industry more than any other element. For instance, in the railroad business we creosote ties and paint bridges and oil engines. They are materials. We
conserve them ; the successful business is the one that does the same thing for its men. It is
an unlimited field because it is so fallow.
" Nine months ago, for instance, the Canadian National started a clinic, operating among
10,000 employees. The actual saving in dollars for that time was $15,400, which was saved in
fees. We cannot estimate what the saving will be in arrested diseases, time that might otherwise have been lost, increased efficiency and happiness. Nobody knows, for instance, how much
headaches cost a big company, until he finds the work stepping up in a certain department
because a few persons procured glasses. Nobody likes to be ill, but many persons draw sick
benefits when they would be happier and more prosperous at work. I admit to an obsession
in that regard—to apply the same rules to human materials as to inanimate ones; if a tie can
be given longer life .by creosote, then a human piece of material can be enhanced the same way
by diagnosis, by justice, by a feeling of equality, and by industrial and personal happiness."
It is a curious commentary upon objections to State health insurance (and more particularly
compulsory insurance) of workers, sometimes raised by employers, that such insurance had its
inception in Germany, at the instance of the great Bismarck, with the objective primarily of
offsetting the spread of socialism and checking the development of trade-unionism. The scope
of compulsory sickness-insurance laws is principally determined on the basis of the contract of
employment; i.e., such laws are intended to apply particularly to wage-earners as a class and
not to other population groups. Nine European countries—France, Germany, Latvia, Norway,
Portugal, Roumania, Russia, Switzerland (in part), and A^ugoslavia—have extended the insurance coverage beyond manual workers and made it compulsory for persons of limited means
working on their own account. As voluntary insurance for the latter class, a supplementary
provision in other compulsory schemes, has had very little success, it seems probable that
compulsory sickness insurance will long retain its essential character of working-class legislation.
The number covered by compulsory sickness insurance varies in different countries by which
that plan has been adopted to date, the proportion of insured persons ranging (1928) from 5 to
47 per cent, of the total population and from 21 to 92 per cent, of the employed population.
These differences are accounted for by the difference in importance of the wage-earning classes
in the several countries and by the insurance being limited to particular groups in certain of
those countries. There is to be noted a growing tendency toward the removal of restrictions,
and in almost all compulsory-insurance countries the insurance now applies to all wage-earners
in industry and commerce, restrictions based on the size of undertakings and the degree of
risk having virtually disappeared, except in Japan and Esthonia.
The inclusion of agricultural workers in these insurance schemes has been naturally slow,
but experience has demonstrated that difficulties in the administration of benefits can be overcome ; and as these workers are organizing and demanding social legislation, the situation with
respect to them is rapidly changing; and, as a result, compulsory insurance has been extended
to agricultural workers in seven European countries, in five during the past few years. The
movement is also being extended to include occupational groups such as domestic servants and
home workers, definition of whose status is more difficult.
The system of deducting workers' contributions from wages, especially with the use of
stamps as in Great Britain, has solved the difficulty initially presented in the case of persons
working for several employers, and makes it possible also to extend protection to temporary Z 24 BRITISH COLUMBIA.
and seasonal workers. On the other hand, there is a decided tendency to restrict the application
of insurance so that non-manual workers whose earnings exceed a certain amount may not be
included, and in a number of important schemes recently adopted such an income limit is
imposed even upon manual workers. Acceptance of the principle thus observed would, under
present wage conditions in the United States, exclude virtually the entire body of industrial
workers from participation in any sickness-insurance benefits conditioned upon European lines
and wage bases.
The usefulness of compulsory insurance depends not alone upon its scope, but also upon the
nature of the benefits granted. During the evolution of the system tendencies have developed
toward broadening the benefits, so that not only the immediate needs of the person unable to
work owing to sickness will be covered, but the volume of preventable sickness be appreciably
reduced. Two general and antagonistic ideas prevail with regard to the amount of sickness
benefits—one that such benefit should provide for a strict minimum of existence costs during
the period of forced inactivity, and the other that the incapacitated worker should be maintained
at his usual living standard, and should, therefore, receive a benefit proportionate to such
standard. This variable benefit based on the living standard of an insured person was universally adopted in continental Europe prior to the war, and has been made a feature of all
compulsory-insurance laws since enacted. In a number of countries, too, the benefit rate is
increased in cases of prolonged sickness, where the resources of the patient have been exhausted;
while in a growing number of countries family responsibilities are taken into account in the
determination of the benefit rate.
The thought that restoration of the patient to health is desirable rather than the mere
payment of compensation for time-loss has resulted in the provision of medical aid, medicines,
etc., and in all the more recent laws, treatment by specialists and convalescent care. In the
majority of the compulsory-insurance countries the costs of these benefits-in-kind is now quite
as high as the sum of cash allowances, in some cases even greater. Sickness insurance also is
being extended to cover workers' families, such service being provided in the majority of the
compulsory-insurance systems. As a result, tens of millions of workers' households in European
countries are now entitled to free medical treatment in all or in its principal phases, and compulsory sickness insurance has thus become a major means of carrying forward a consistent
health-protection programme for the masses of the population.
In apportioning contributions to the cost of sickness insurance, it is more difficult to arrive
at an equitable division than in the case of workmen's compensation for accidents, where the
employers' responsibility is more clearly definable. In view of the fact that the worker, the
employer, and the State are each in a degree concerned in the preservation of the health of
the industrial class, and all thus have interest in the success of insurance, costs are met in
six continental European countries by these three groups in varying proportion. Soviet Russia
only has not accepted the principle of the workers' contribution ; and Roumania, certain of the
Swiss Cantons, Italy, and Sweden do not require contributions from employers. Participation
by the State in insurance costs is still a subject of much controversy and in but eight of the
nineteen compulsory sickness-insurance schemes of Europe (counting Northern Ireland with
Great Britain) is the State found a contributor. In all the various systems the contribution
of the insured person is almost always equal to, or greater than, one-half the total contribution;
while the employers' contribution varies from one-third to one-half the total, and that of the
State is widely differentiated in character, in amount, and in manner of payment. It may
take the form of a minor fraction of approved expenditure, a specific allowance for each insured
person, a share in the total cost of all benefits or covering special benefits only. AArith the
extension of the activities of insurance funds into the field of public health and its protection
and preservation, it is, however, probable that the justification for financial aid from public
treasuries will obtain increased recognition.
In summing up the tendencies revealed by a study of the operation of compulsory-insurance systems in Europe, the International Labour Bureau says:—
" Sickness insurance is endeavouring to fulfil ever more completely its task of protecting
the health of the working-class family and maintaining the workers' capacity to produce by
widening the circle of insured persons; perfecting the system of benefits which perform the
threefold function of relief, cure, and prevention; concentrating the means of action, and
systematically organizing autonomous institutions under the control of the parties concerned. 	
Thus compulsory sickness insurance, as a creator of security, health, well-being, and stimulative
productive capacity, and also as an instrument of education, is an element both important and
necessary in the proper economic and social organization of modern communities."
In the few European countries which have not as yet adopted compulsory sickness-insurance
plans, the establishment of insurance institutions by private initiative has been encouraged by
Government, the applicable laws giving the mutual-aid movement a more favourable position as
insurance carriers than commercial companies and financially assisting them with public funds.
In countries where the societies benefit by special advantages in return for the obligations and
supervision imposed upon them, the conditions under which they are approved by the State
relate usually to the obligation to undertake insurance on the mutual principle, the admission
of members, financial balancing and auditing, and compliance wdth prescribed rules for the
investment of capital. The special advantages they enjoy are in the extension of legal capacity;
exemption from payment of certain rates and taxes;   and, in many countries, public subsidies.
A major objection to the provision of workers' health insurance by the voluntary plan and
the co-operation of such societies is that admission to the societies and qualification for the
enjoyment of benefits is usually limited to those workers between ages 16 and 45 and of
established good health. Workers most in need of assistance thereby are deprived thereof,
to become a charge upon charity or otherwise provided for. The cost of necessary supervision
under the voluntary system also is prohibitive when members leave the area in which their fund
operates; and as a result, in nearly all cases, there is a residential clause under which insured
persons lose their membership and benefit rights on leaving the area of their fund. This is
accepted as one of the great disadvantages of the voluntary-funds system, as the person who
has passed the age-limit and cannot satisfy the conditions of the fund in his new place of
residence is thus unable to make provision for the future or against sickness, at the very special
time when his need therefor is greatest.
The desirability of testing British Columbia opinion as to the present necessity of instituting
State health insurance in and for the Province—if organization of such a system of Dominion-
wide application and under Federal control be constitutionally impossible—was recognized at
the initiation of the Commission's operations. Although statistics are unfortunately incomplete
and far from up-to-date, sufficient data are nevertheless available to establish the fact that
private insurance with commercial companies against sickness losses is carried by only a minor
fraction of the wage-earning and low-income community. Membership in fraternal societies
including relief during iimess among their benefits also is confined to a small minority; and
such societies, while carrying on important and useful services, reach, after all, comparatively
few of the poptdation and prescribe such conditions of membership that an even smaller part
are eligible therefor. At the same time the financial ability of a number of such societies to
provide their guaranteed benefits under present scale assessments is questionable, should
abnormal demands be made upon their funds through epidemic or other exceptional pressure.
Moreover, the costs of insurance with commercial companies against loss by illness are
necessarily higher than they would be under a generally applied system, since such companies
look naturally for a business profit, not operation on a mere cost basis, and their comparative
spread of insurance is distinctly limited.
As to the societies, it is found that years ago the Fraternal Societies' AVelfare Association—
including the Canadian Order of Foresters, Loyal Orange Order, Loyal Order of Moose, Chosen
Friends, Independent Order of Odd Fellows, Order of the Rechabites, Sons of England, and
Benevolent and Protective Order of Elks—endorsed the objects of a compulsory health-insurance
plan properly administered, under which plan it is quite possible that they might continue to
function as insurer agents of the State, with Government supervision and guarantee of their
solvency, as in certain European countries, such security for members being missing in this
Province under present loose conditions.
There remain for attention the facilities of protection afforded by a considerable and growing number of privately conceived and established welfare and benefit associations for employees
of major industrial, transportation, commercial, and public-service institutions, which associations are accomplishing much good, but with costs of their protective services necessarily higher
than if such services were standardized and of universal application. Z 26 BRITISH COLUMBIA.
At the same time the gross inequity intrudes that where an employing interest has become
a voluntary sharer in welfare association costs, it is penalized to the extent thereof in competition tvith others in its line of activity ivhose employees are not so organized and protected, or
by their own contributions exclusively provide monetary compensation for time-loss through
illness or, alternatively, furnish medical care, medicines, hospitalization, etc.
The favourable attitude of the general public of British Columbia toward State health-
insurance proposals has been time and again attested in representations by public-service and
social-welfare organizations, by Provincial labour bodies, and by students of health-protection
science. During late years the demand, for a public-health insurance plan, on the part of the
prospective beneficiary class, has manifestly crystallized; and the Union of British Columbia
Municipalities has within the year gone on record as strongly favouring careful study of the
situation with such innovation in view. And of municipal corporations of the Province answering a Commission questionnaire in this connection, 77 per cent, desired the introduction of
compulsory insurance; two confessed to lack of information upon which to base a considered
opinion;   and one offered no comment.    None replied negatively.
Such opposition as may be anticipated promises to develop in employing interests which
have not as yet fully acquainted themselves as to how a public-insurance system would in
reality affect themselves and their businesses. A disposition is indicated to accept it as
axiomatic that if employers are to contribute to the costs of health-insurance protection for
their workers, overhead expenses inevitably must be increased. In this attitude account would
seem riot to be taken of the facts :—
That a wider spread of insurance by its general application on actuarial principles will
presumably reduce the averaged cost to below that now possible under existing voluntary employees' benefit association schemes :
That administrative costs of such services will be eliminated:
That equities now missing in the operations of competing interests will be assured, to the
marked advantage of employer bodies taking active interest in the welfare of their workers:
That all employers will gain by decreased interruption of the sustained capacity effort of
their working-forces, through betterment of health standards, anticipating and preventing the
development of illness, enhanced general efficiency, relief from workers' worry, and extension
of the span of active life for experienced employees:
That reduction of abnormal charges now carried by the Province and by municipalities in
connection with health-protection and care of the sick, aid for hospitals, and physicians'
retainers, through a considerable proportion of such charges being assumed by established insurance funds, will in turn be reflected in reduced taxation in such behalf now borne by industrials,
etc.;   and
That a major part of the sickness-costs burden now placed upon Province and municipalities
through non-payment of hospital charges will be extinguished with such charges being made
collectable from all by the health-insurance machinery.
Objections to the institution of a State health-insurance scheme that tentatively and preliminarily have been voiced by corporations having smoothly functioning employees' welfare
organizations which they and their employers desire to continue to operate and control, as well
as objections that may reasonably be looked for from fraternal and kindred societies fearing
possible extinction through alienation of their benefits features, would seem possibly to be
easily met by acceptance, with adaptation to Provincial conditions, of the policies of certain of
the older countries in this regard, making the societies recognized insurance carriers; or of a
principle already successfully applied under AA?orkmen's Compensation practice—employees'
associations functioning as approved societies upon satisfying reasonable conditions as to
Provincial supervision in the interest of the insured, assured financial stability, and the provision of benefits equal to those guaranteed under State system.
Still further it should be borne in mind that in any plan that may be devised for the
preservation of the family health as well as that of its breadwinners, the ratio of cost in this
Province will naturally be somewhat lowrer than in European countries, where the family
average (exclusive of parents) is 3.34, whereas in British Columbia it is established by the
last census figures at 1.43—the smallest in Canada.
Analysis of the detailed information up to date elicited, as to policies voluntarily initiated  in   major  British   Columbia  undertakings—industrial,   commercial,   transportation,   etc. —for safeguarding the health of employees and otherwise promoting their welfare, will be
found peculiarly instructive. The questionnaire was addressed to approximately 350 firms and
corporations, etc., comprehensively representing all principal employers of labour in British
Columbia. Two hundred and ten replies were received by the Commission; and later, through
the Canadian Manufacturers' Association, summary reports were made by others, bringing the
complete response up to virtually 100 per cent, of the original address-list.
In the 210 enterprises reporting to the Commission direct in first instance, approximately
64,989 workers are employed; and in 82 of these 210 undertakings protection services are in
operation, widely various in their coverages and with costs ranging from one-third of 1 per cent,
to 3.5 per cent, of pay-roll—some of such services being paid for entirely by the employers; in
others exclusively by contributions of the employees; generally by graduated co-operation
between masters and men. In twenty-eight instances medical services are furnished for the
families of employees as well as for the employees themselves, the cost of such services to the
workers ranging variously from $1 to $4.30 per man per month, married men as a rule paying
from 50 to 75 per cent, more than bachelor employees, for the coverage extended to their
No system of cost adjustments functions, with resultant inequities: Thus one large establishment is found, with 1,547 employees, which appropriates approximately $18,000 per annum
for the maintenance of an emergency hospital, salaries of resident and visiting nurses, and
proportioned contribution to costs (roughly, 35 per cent.) of the services provided by its
Employees' AArelfare Association. At the same time an active competitor, with 1,376 employees,
does not participate in the costs of protection services furnished by its Employees' Sick Benefits
Club; and a third business rival, with 1,104 on its pay-roll, restricts its co-operation to paying
for first medical calls and guaranteeing its Employees' AATelfare Association against a deficit in
the event of undue demands upon its resources occasioned by epidemic or like abnormal emergency.
In the timber industry, inclusive of pulp and paper making, thirty-four of seventy-one
undertakings report more or less complete provision for medical care, etc., for their employees,
such care extending in ten cases to the families of employees, and these thirty-four undertakings
representing 10,986 workers as against a total of 14,916 for the seventy-one. Complete first-aid
services are in thirty-three cases maintained at employers' expense. In one instance the operating company pays all costs of a half-rate contract for medical services for its employees and
their families; in three instances the protection takes the form of group insurance, with
employers contributing to its cost; in the majority of cases there is a proportioned division of
health-protection charges between employers and employees;   in a few, employees pay all.
Of the timber interests represented, forty-one concerns favour the introduction of State
health Insurance, twenty-six specifying that such insurance should be compulsory. Twenty-four
express no opinion. Fifteen favour a voluntary protection scheme; and six are opposed to any.
" AAre want nothing that will further increase the costs of doing business," is the comment of
one of the latter. " Present conditions are satisfactory," remarks another. Of the advocates of
compulsory insurance, one says: " It will be a wonderful benefit to the working-classes,"
Another observes : " If left voluntary few would avail themselves of it " ; and a third observes :
" Compulsory insurance, to be sold by the Province and covered by reinsurance."
Of fourteen transportation and public utilities corporations, with 17,642 workers on their
combined pay-rolls, nine already have well-organized welfare services functioning for the protection of 16,632 employees, or 89 per cent, of all in this classification. Two of these corporations—the Canadian Pacific Railway Company and the Canadian National—with 9,191 British
Columbia employees, operate scientifically organized Employees' Medical Aid Associations
approved by the AVorkmen's Compensation Board and functioning for accidents as well as
sickness of employees or members of their families. The cost to Canadian Pacific workers is
$1.75 per month per man, with proportional rebates for accidents falling under the " AA'orkmen's.
Compensation Act." Canadian National men pay $1.30 per month if single and $1.55 if married,
benefits under the C.N.R. plan being somewhat less extensive than those provided for Canadian
Pacific workers and their dependents.
The British Columbia Telephone Company, with 2.360 employees, pays all costs of benefits
participated in by employees with two years' service and upward, and 50 per cent, of an emergency fund operated by the employees and caring for those of their number as yet lacking the SasMstfSV
requisite service period qualification. The British Columbia Electric Railway Company also,
with 4,099 employees in A'ancouver and 459 in A'ictoria, provides pensions and life insurance and
pays full wages to inside employees during sickness—entirely at company cost; while its
Motormen's and Conductors' Union furnishes sickness and funeral benefits for members of the
outside forces at distributed minimum cost.
Blue Band Navigation Company, Limited, and Pacific (Coyle) Navigation Company, Limited,
insure their men in the Sick Mariners' Fund and declare themselves " in favour of compulsory
State health insurance," as also does the British Columbia Electric Railway Company through
its Arictoria management, A'ancouver heads of the company preferring to express no opinions.
British Columbia Motor Transportation, Limited, insures its 184 servants against both accident
and sickness with the Travelers Life, collecting for the sickness coverage $1.50 per month
per man.
British Columbia's established mining industries leave no room for doubt as to their
attitude on the economic necessity of protecting the worker and his family against loss by sickness as well as by accident. Twenty of such companies reporting, with working-forces varying
from 15,600 to 17,970 men (the five others giving no information as to their employees' strength),
show comprehensive relief plans voluntarily introduced and functioning smoothly for the care
of employees, and in 50 per cent, of the total extending benefits to the families also. Four
major companies among these, employing from 12,447 to 13,247 wage-earners, have Employees'
Medical Aid and General AA'elfare Associations approved by the Workmen's Compensation
Board; and the largest of all, the Consolidated Mining & Smelting Company, Limited, pays in
30 cents per month per man to its workers' organization, in which the aggregate costs of
benefits is the maximum for the Province, $4.30 per month per man.
Britannia leads in its attitude of deep concern and displayed generosity to employees, insuring all in gradually increased amounts, wholly at company cost, and in addition providing all
modern hospital services. The British Columbia Cement Company, Limited, also pays life-
insurance premiums for its men, and goes further, assuming a proportion of their sickness-
benefits charges, paying salary and expenses of the community nurse, and defraying all costs
of maternity cases in the families of employees.
This company and also the Canadian Gypsum & Alabastine Company, Limited, express
themselves unqualifiedly as " for compulsory State health insurance "; no negative opinion is
registered by any of the mining interests. In the case of twenty-three out of the twenty-five
represented concerns, no opinion or comment is offered; but as twenty of these twenty-five
already have developed benefit services for their men, it may be remembered that actions are
even more eloquent than the spoken or the written word.
Fishery and food products industries, employing 3,474 workers, with two exceptions show
no organized provision for compensation or care of wage-earners overtaken by illness. Of
eighteen concerns reporting, seven favour the introduction of compulsory State health insurance;
two would prefer continuance of voluntary insurance; one (the Fraser Valley Milk Producers'
Association) suggests the adoption of a voluntary insurance scheme "at the commencement";
eight offer no opinions.
The exceptions referred to as having given consideration to the necessities of sickness are
P. Burns & Co., Limited, and the Swift Canadian Company. Employees of the former have an
organized welfare association furnishing benefits-in-kind, to which the company extends practical co-operation. The Swift Canadian Company throughout Canada adopts the elaborate
welfare system of the parent company in the United States and provides generous pensions for
veteran employees. Costs to the Swift workers of protection furnished through their association
vary from 15 cents to $1 weekly and in the aggregate represent 2 per cent, of the pay-roll. Both
the Canadian Fishing Company, Limited, and the B.C. Sugar Refineries, Limited, also insure
the lives of permanent employees, paying all premiums.
Merchandising interests, eight in number, with 4,592 employees, show six establishments,
with working forces of 4.422, enjoying varying degrees of security as against sickness under
widely differing plans. The largest of these concerns is an important contributor to the financial
resources of its employees' welfare association, members of which receive medical care, etc.,
during illness up to three months' continued incapacity. Another establishment in the same
field has a like workers' organization operated by the members' assessments exclusively; while
in a third the employers co-operate to the extent of providing a credit guarantee against possible extraordinary charges through epidemic or other exceptional drains upon resources. In a
fourth concern 325 employees are covered by group insurance, for which the employer pays; and
a fifth interest in this class operates an elaborate employees' pension and benefits plan, with
medical examinations, costs of which scheme approximate 2 per cent, of the pay-roll. In this
classification those expressing opinions .as to State health-insurance proposals are two to one for
compulsion rather than for the voluntary plan.
In a miscellaneous group are represented fifty manufacturers, contractors, oil refiners and
distributors, elevators, motor-dealers, etc., employing 4,567 people, twenty-seven of which undertakings expressed definite opinions—fourteen in favour of compulsory insurance, ten for the
voluntary plan, and three negative. Of the latter, one is " opposed to all forms of paternalist
legislation " ; another holds that wage-earners are now " sufficiently well paid to carry their own
insurance." The Dominion Construction Company, Limited, urges careful consideration of the
cost factor. Hodgson, King &. Marble express themselves as objecting to " handing over so-
called health insurance to the allopathic medical profession," holding that " any system should
include natural methods of healing."
On the other hand, supporters of compulsory insurance also elaborate their registration of
opinion, as:—
Star Steam Laundry Company, Vancouver: " Favour compulsory insurance, which should
be Federal ":
Gregory Tire and Rubber Company, Limited, New AArestminster: " Favour compulsory State
insurance with contributions to cost by employers and employees on a 50-50 basis ":
Royal City Laundry Company, Limited, New AA'estminster: " Regard compulsory sickness
insurance as quite as necessary as the minimum wage, as it would relieve much misery if
properly applied ":
James & McClughlan, Limited, New AA'estminster: "Favour the compulsory-insurance plan,
with special care for mothers and children, the medical profession and all hospitals to be
brought under State control " ;   and
Campbell & Grill, Vancouver: " State health insurance is a good thing, for the reason that
the period of sickness and disability is the time generally when wages stop and the expenses are
greater. Free hospitalization would be a great benefit. Glasgow has some such system, where
every employee pays a portion of his wages weekly. On becoming a recognized thing it would
never be missed. By making it voluntary the system would be too haphazard, since there always
are those who will spend as fast as they earn and who generally have to be cared for in sickness.
AA'e therefore favour compulsory insurance, although there is always the danger of red-tape and
political job-hunting operating to the detriment of the workers."
Of these fifty undertakings, 20 per cent, provide in various ways for their workers, but none
for employees' families. The Union Oil Company insures its 260 men under the provident-fund
plan at costs of $1.44 per month per man to the company and $1 to each man, sickness benefits
being secured. The Ross & Howard Iron AArorks' 100 employees are insured for sickness benefits
of $10 weekly and $500 in the event of death, each employee contributing $1 a month and the
company bearing the remainder of costs. Six hundred and forty-three Imperial Oil employees
are assured both sickness benefits and annuities, all costs being borne by the company and these
representing 2 per cent, of the pay-roll. Tupper & Steel's twenty workers are insured as against
accident and sickness, costs being equally divided between company and man. Fordyce Motors,
Limited, forty men, covers its employees by group insurance, the costs of which the company
bears. Employees of Pacific Engineers, Limited, engaged on the Bridge River operations of the
British Columbia Electric Railway Company, are insured against sickness at their employers'
charge. The Dominion Bridge Company's 200 men have group insurance, accident and sickness,
costs being equally divided. A like number employed by the General Construction Company,
Limited, secure sickness benefits by contributing $1 per month per man. Restmore Manufacturing Company's employees (150) are protected by life insurance, for which their company
pays, and enjoy sickness benefits, to the costs of which they contribute 25 or 50 cents each
monthly. And 55 per cent, of the Gregory Tire & Rubber Company's New AVestminster force of
seventy are covered by group life policies, for which their employers pay 35 cents per month
per man, an Employees' Association providing sickness benefit of $12.50 weekly from the third
day of incapacity, for a monthly contribution of $1 per man. Z 30 BRITISH COLUMBIA.
In addition to questionnaires mailed direct to employing interests with yearly pay-rolls
exceeding $75,000, 500 questionnaire forms were, by request, provided the Canadian Manufacturers' Association (British Columbia Division) in order that that organization might test the
feeling of its members, representing almost completely the manufacturing interests of the
Province. Responses show ten additional industrials in which arrangements operate for the
provision of medical care for employees, costs of which are shared by employers and employed,
to seventy-five in which there is no such provision as against sickness and losses occasioned
thereby to the wage-earners.
To the question, " Would you regard the institution of a system of State health insurance
as desirable for British Columbia (a) in natural tendency to improve the general health
standard, and (b) as likely to reduce costs ? " replies were overwhelmingly affirmative, those
expressing a negative opinion being in the ratio of 10 per cent.
The majority of the manufacturers also expressed the conclusion that a compulsory system
of health insurance is preferable and desirable for this Province.
Printed by Charles F. Banfield, Printer to the King's Most Excellent Majesty.


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