Here are three sources claiming that Canada not only spends pennies to lower the cost of drugs but all of them call the government drug cost reducing program a subsidy.
"Prescription Drug Coverage in Canada
Canada's 10 provincial governments subsidize prescription drugs for certain populations - primarily the poor, elderly and those in long-term residential care. The remainder of the population in six provinces must pay for their drugs out of pocket, but four provinces have some coverage of pharmaceuticals. For example, in British Columbia an individual must pay for the first $800 in drug purchases each year, and the government pays 70 percent of costs between $800 and $2,000 and 100 percent of costs above $2,000. Government subsidies cover only the provincial "formulary," the list of drugs approved for the provincial health plan."
http://www.ncpa.org/pub/ba323
"Between 1970 and 1986 all Canadian provinces introduced some version of a prescription drug subsidy for those age 65 or over and since 1986, all the provinces have increased copayments or deductibles to some degree. Employing a first-order approximation to the welfare gains from a subsidy, we find evidence that these subsidies have been less redistributive than an absolute per household cash transfer but slightly more redistributive than a transfer that would increase each household's income by the same percentage. Such evidence may have relevance for predicting the redistributive effects of a potential national prescription drug plan for seniors in the United States."
http://ideas.repec.org/p/mcm/qseprr/350.html
"
ABSTRACT:
Canada’s provincial governments have, until relatively recently, provided virtu
-
ally all seniors with generous prescription drug coverage. Managers of these programs have
implemented a variety of policies to contain spending while ensuring access to necessary
medicines. Some of these policies have been successful in temporarily slowing cost
growth. However, the lack of comprehensive utilization management tools has resulted in
ongoing spending increases that now constitute a threat to the sustainability of a public
drug subsidy for Canadian seniors. Sustainable and equitable pharmacare programs re-
quire the political willingness to confront opposition to policies that will, if successful, con-
tain program costs without obstructing access."
http://content.healthaffairs.org/content/22/3/49.full.pdf
Did they all use the word "subsidy" wrongly?
Here is a definition:
"Definition of 'Subsidy'
A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public.
Politics play an important part in subsidization. In general, the left is more in favor of having subsidized industries, while the right feels that industry should stand on its own without public funds.
Investopedia explains 'Subsidy'
There are many forms of subsidies given out by the government, including welfare payments, housing loans, student loans and farm subsidies. For example, if a domestic industry, like farming, is struggling to survive in a highly competitive international industry with low prices, a government may give cash subsidies to farms so that they can sell at the low market price but still achieve financial gain.
If a subsidy is given out, the government is said to subsidize that group/industry."
http://www.investopedia.com/terms/s/subsidy.asp
We should all notice that welfare payments are included as a subsidy.