THEIR universal health-care system is what many Canadians say most distinguishes their country from their neighbour. Medicare, as it is known, is a symbol of fairness and compassion, virtues that Canadians claim to cherish. But the financing and delivery of medicare has for years been a source of friction between the federal government in Ottawa and the ten provinces. This week, at the end of a particularly fiery month, Allan Rock, the federal health minister, called a meeting in Toronto with his provincial counterparts to seek a truce.

First introduced in 1962 by a socialist government in Saskatchewan, one of the poorer but more idealistic provinces, medicare was soon spread across Canada by the Liberal government of Lester Pearson on the basis that costs were to be shared between the federal and provincial governments. What began as a 50-50 division, however, became an increasing burden for the provinces after the federal government, looking for budget cuts, began in 1994 to reduce drastically the block grant for social services. Today, Alberta's government claims that Ottawa is paying only 13% of its health-care costs, which have meanwhile soared with a growing and ageing population.

Everybody admits reform is needed. Emergency wards are overflowing—often with people with minor ailments, because family doctors work limited hours. Many specialists have headed across the border in search of more money and modern equipment. This, along with a shortage of hospital beds now that so many patients need long-term care, has lengthened waiting-lists for operations. The overload on the system has been further aggravated by the decision of several provincial governments to eliminate their budget deficits—and, in Ontario, to offer tax cuts—by squeezing health services, laying off nurses and closing hospitals.

Now that most provincial budgets are back in surplus, how should health care be reformed? The provinces want Ottawa to restore the money it cut, and have demanded an extra C$4.2 billion ($2.9 billion) a year for health. Last year, Paul Martin, the federal finance minister, did put in an extra C$3.5 billion to cover the next three years; and, in this year's budget, he allotted another C$2.5 billion for social services over four years. But this still falls short of the original losses.

Mr Rock's ideas include looking after long-term patients at home, to release hospital beds for surgical cases, and improving the primary care provided by family doctors, to relieve the burden on emergency wards. There will be enough money for all this, he promises, as soon as a reform plan is agreed on and under way. Yet the provinces want the money up front, and say they will cut services further if they do not get it.

The prickliest part of reform concerns privatisation. On March 2nd, Alberta's Conservative premier, Ralph Klein, introduced a bill to allow private clinics to do low-risk surgery which nonetheless involves an overnight stay. Twice before, he has had to withdraw similar bills after protests by pressure-groups which claimed that he was bringing in a two-tier system. Once again, he faces fierce resistance. One radio poll suggests that 58% of Albertans are against it. On March 10th, delegates representing the 6,000 doctors belonging to the Alberta Medical Association voted to oppose the bill unless big changes were made. They say that such clinics—which already exist, mostly to perform cataract operations—have no intensive-care facilities to deal with complications that might arise from more serious surgery. The doctors' solution is to secure more money and staff for public hospitals.

Mr Rock fears that the new bill would indeed undermine the country's single-tier health system. Both he and Jean Chrétien, the Liberal prime minister, have flown separately to Alberta's capital, Calgary, to urge the locals to oppose it. After meeting Mr Klein, Mr Chrétien agreed not to challenge the bill—private hospitals are outlawed in Canada—in the hope that a compromise could be reached. Others have been less coy. The main union representing the country's health-care workers claims that these “surgical clinics” are private hospitals under another name, that the bill is illegal, and that it opens the door for large American firms to set up private hospitals across the country.