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American entrepreneur files free trade challenge on medicare

CMAJ

An Arizona health care entrepreneur who believes anti-American sentiment thwarted his plans to build a private surgical centre in British Columbia is seeking $155 million in redress from the Canadian government, but a North American Free Trade Agreement expert claims the case is frivolous.

"I recruited people from around the world," says Melvin J. Howard, owner of Centurion Health Corporation. "They were all eager to come to BC. I had doctors from Switzerland, Spain, Paris. It was going to be kind of like the EU [European Union] of surgical centres."

View larger version (115K): [in this window] [in a new window]   Centurion Health Corporation owner Melvin J. Howard is seeking $155 million in redress from Canada for an alleged violation of the North American Free Trade Agreement. Image by: Howard Capital Management

In the claim, Howard writes (verbatim): "Centurion and its counter parties seek to be compensated for damages for barriers to entry and expropriation. ... Municipalities or city officials have put up numerous roadblocks such as zoning and by law requirements that is politically motivated instead of merit base. Its like saying yes you can no you can't in the same sentence ie. plausible deniability as far as the government is concerned."

"It's a shame he's going to get a year of free press," says T.J. Grierson-Weiler, an adjunct professor of law at the University of Western Ontario who has worked on dozens of international treaty cases.

The first problem with Howard's notice, says Grierson-Weiler, is the use of the word "expropriation." A valid expropriation case can only be made under the trade agreement when a government takes something (land, buildings, intellectual property) from a foreign investor. Construction hadn't begun on the proposed British Columbia surgical centre so that doesn't apply, says Grierson-Weiler. "What's been taken besides his aspirations?"

Another problem is that much of Howard's argument appears to be based on the inconsistencies in health care delivery between provinces. In his notice of intent, Howard mentions recent private health care initiatives in Alberta and Quebec, which implies, says Grierson-Weiler, that he is seeking equally favourable treatment in British Columbia. But under the trade agreement, a party cannot seek better treatment in one jurisdiction because it is offered in another.

In a post on worldtradelaw.typepad.com, Grierson-Weiler expressed his concern that these types of cases attract too much attention: "Such stories don't just provide some modicum of credibility for manifestly incredulous legal claims; they reinforce commonly-held beliefs about the sacred quality of a method of socialised medicine that verge upon some sort of political existentialism."

Dr. Danielle Martin, chair of Canadian Doctors for Medicare, is not so quick to dismiss Howard's attack on Canada's health care system. With more and more private health care providers opening shop in Canada, pressure from US investors is inevitable, she says. "The threat is real. ... If it's not him, it will probably be someone else. Once the big guys come in, we'll have real problems."

Howard believes his case is strong because circumstances have changed since the trade agreement came into effect. "In 1994, the government maybe had a case that medicare was grandfathered in, but today, in 2008, the medicare program has eroded. There are private centres all around." He also claims many Canadian politicians encouraged his plans in private but distanced themselves from him in public. As well, Howard wants the issue of US investment in Canadian health care brought into the open.

"It involves much more than just making a profit. I want Canadians to have the best care, and they can't get that under the status quo. But mainly I'm doing this because I've had enough of the hypocrisy."

Even if he fails to get a penny from the Canadian government, Howard says he will continue to look for ways to invest in Canadian health care. "I'm not done with Canada. I know that I can bring a lot more in terms of health care services to Canada. I have family and friends there, and I'm not going to abandon them because the government can't decide who it wants to be."

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