Is downsizing the latest jargon word applied to rationalization, a new concept or a different manifestation of a long term trend in health services management? At present, Canada is struggling to implement feasible reductions of expansionary pressures in the health care system. While provincial governments tend to see the issue as one of controlling chronic excess demand, federal government is still concerned to ensure free access to care on an equitable basis. Thus the problems of downsizing can be expressed by the provinces in terms of an ideological struggle with an unfeeling central government which does not understand their problems; although all know they are really about the feasibility of continuing to provide a service to meet demand. The present economic recession enables provincial governments to appeal to their voters for supporting a new way. Earlier, the appeal was to consumers to become involved in health service organization management and this policy succeeded, to a degree, where there were fluorishing grass roots communities; albeit that the service continued to be driven by professionals. Now the appeal is to taxpayers for their strong support in cost cutting. This has been more successful. Provincial governments are now permitted to 'touch the untouchables', that is to downsize the medical profession and previously sacrosanct health care institutions. They also are exploring the feasibility of introducing a two-tier system which would provide basic care for everyone and extra care for those able to pay, thus side-stepping federal conditions. By reorganizing support in this way, provincial governments have extended the range of policy choices, and two types of planning, the rational and the political, have now become combined into strategic management activity.