Ottawa — An obscure line in the General Agreement on Trade in Services could prevent Canada from expanding medicare to include a national drug or home-care program, a new report on the implications of the trade pact says.

An analysis by Matthew Sanger for the Canadian Centre for Policy Alternatives says Canada's public health-insurance program is actually covered by GATS, despite Ottawa's assurances to the contrary. This means that any expansion of medicare could trigger legal challenges from foreign health-care providers under GATS.

As a result, the report says, Canada could not institute a national home-care or pharmacare program — two ideas the Liberals have occasionally considered — without violating antimonopoly rules contained in the 1994 trade agreement.

International Trade Minister Pierre Pettigrew and his predecessor, Sergio Marchi, have consistently denied that anything in GATS threatens health care.

While Mr. Pettigrew, who was returning from a trade mission to China, was unreachable over the weekend, he said in a recent interview that public services such as health care and education "are not, have not been and will not be on the table," in trade negotiations. Trade officials said Sunday they could not comment until they read the report.

However, Mr. Sanger, an independent trade consultant who specializes in health and social policy, says that because of little-understood clauses in GATS, Canada would either have to open new health-insurance programs to private-sector competition, or face massive lawsuits from foreign corporations.

"Incredibly, Canadian health insurance is already fully covered under the GATS national treatment and market-access rules," the report says. It is due for release this week, but The Globe and Mail obtained an advance copy.

In negotiating GATS, Canada took the unusual step of listing health insurance as a service to which the full force of GATS market-access rules apply. Mr. Sanger found. Canada also made the commitment binding, meaning that all future government actions in the health-insurance sector are covered by the agreement.

"It kind of belies those categorical assurances we get from the Prime Minister and the International Trade Minister," he said. "Canada certainly hasn't taken the steps it could have to protect public health insurance."

A trade tribunal handling a complaint against Canada from a private health-care provider would be more interested in what's actually written in the deal than in how Canadian politicians interpret it, Mr. Sanger said.

While there is a clause in GATS exempting Canada's health-care system, Mr. Sanger called the exemption "weak and narrow" — only enough to protect the system as it currently stands. Meanwhile, the schedule filed with the World Trade Organization listing services Canada considers covered by GATS includes the line "life, accident and health insurance services."

The latest round of GATS negotiations among the pact's 139 member countries is scheduled to commence later this spring. That, Mr. Sanger said, gives Canada the opportunity to plug the loophole that leaves health insurance exposed.

"Canada should be making this its top priority," he said, perhaps by pushing for a general exemption for health care. Canada could also unilaterally revise its own schedule of services covered by GATS, Mr. Sanger said.

GATS is one of the agreements forming the basis for the World Trade Organization. It requires that countries treat foreign service suppliers the same as domestic ones, with no distinction between whether they are operated for profit or otherwise, and whether privately owned or public.

CCPA executive director Bruce Campbell said he believes it's possible that politicians such as Mr. Pettigrew don't know about that provision, and that it may have been put into the agreement by bureaucrats. Some trade officials, he said, are more concerned with assuring Canadian companies access to foreign health-care markets than they are with protecting the medicare system here.

It may also have been a flat-out mistake by negotiators, he said, noting that Canada believed its cultural exemptions under GATS would be enough to prevent split-run magazines (so-called Canadian editions of American publications) from making their way into Canada, only to be told in court that it would have to allow them because of GATS commitments.

"I don't think most Canadians have any idea about this," Mr. Campbell said. "I think the government will have great difficulty brushing this report aside."