When Bad Political Choices Lead to Fiscal Liability

Did Canada Waste $440 Million out of Its COVID Vaccination Investment?

NOTE: this article was actually written back in late 2021. You can update the scale of government wastage appropriately.

In an ideal world, a world without financial, logistical, and political constraints, your imagination is free to roam the galaxy. Universal free dental care? Guaranteed minimum income? Free post-secondary tuition? Sure. Why not?

Since, sadly, we don’t live in such a world, we’re forced to carefully weigh the potential benefits of proposed government programs against their costs.

Are there real-world constraints out there that could have helped us better focus our vaccination programme? Let’s first learn a bit more about the program itself.

Statistics Canada reports that nearly $2.7 billion of “vaccines for human medicine” were imported to Canada between January and August, 2021. Of course, that figure covers all vaccines and not just those intended for COVID. And some might have been imported by private organizations or other levels of government. So we’ll need to compare 2021 with previous years to get a sense of how much of that 2021 number was spent for COVID.

Statistics Canada also tells us that the average total value of annual human vaccine imports between 2018 and 2020 was $663 million. We can therefore imagine that, without COVID, that’s more or less what we would have needed in 2021, too. Since, however, our 2021 figure only covers the first eight months of the year, we’ll assume that we’d normally have spent only around $437 million by this point in the year. Subtracting that amount from the actual total of $2.7 billion tells us that we actually spent around $2.26 billion on COVID vaccines.

But just paying for the vaccines themselves is only one part of the picture. Distributing and injecting all of those doses is the responsibility of the provinces. Ontario, for example, committed around $1.135 billion for vaccine administration between its 2020 and 2021 budgets. This, presumably, included practical infrastructure costs like reimbursing pharmacies “$13.00 for the costs associated with administering an injectable publicly funded COVID-19 vaccine” and staffing for public health facilities, along with maintenance for associated websites and mobile apps.

Extrapolating Ontario’s budgeted amount to the rest of the country by population (Ontario has 35% of the total population) would suggest that Canada’s provinces spent $3.3 billion administering COVID vaccines. Added to the federal vaccine purchases, it seems reasonable to estimate Canada’s total vaccine-related expenses up until August, 2021 at around $5.5 billion.

What did all that cash buy us? As of mid-October, 2021, an impressive 57 million doses found their way into Canadian arms. That translates to around $96.50 for each dose. By all measures that’s a lot of money. Nevertheless, most of us would agree the goal was worthy.

But could the program have been both more effective and a great deal cheaper? Or, in other words, did the vaccination campaign need to indiscriminately target the entire population, or could our primary goals have been largely met through vaccinating just a subset of the population?