Canadian Health in the New Economy

The financial crisis that began in 2007 has provided us with a unique opportunity to review how both Canadian and American individual and community health respond during and after an economic recession. Historical data on life expectancy, physician rates, total expenditure on health, and pharmaceutical expenditure are analyzed in an attempt to reveal how past recessions have influenced these proxies for health in Canada and the United States. In terms of business cycles, it seems these proxies for health are counter-cyclical, where both Canadians and Americans actually become healthier during economic downturns. In order to understand how recessions paradoxically improve the health or well being of individuals, the labour leisure trade off model and the Grossman model are used to explain these unexpected results. Looking forward, an appendix has been included which reviews the policy responses and health care implications over the next 25 years.