The Canadian Press
Andy Blatchford
OTTAWA–A new report suggests the federal government’s offer on health funding to the provinces doesn’t provide enough cash to help them keep up services in the coming years.
The study, to be released today by a University of Ottawa think-tank, follows months of bitter federal-provincial talks over health funding.
On one side, the Trudeau government says it has put forward a “historic” offer with the potential to transform health care in Canada.
On the other side, five provinces–representing more than 90 percent of the country’s population–argue the federal offer is inadequate and threatens their ability to maintain health services at current levels.
The analysis today by the Institute of Fiscal Studies and Democracy, which explores health-spending numbers and projections for Ontario, agrees the federal offer falls short for all provinces.
The report estimates the federal offer amounts to average annual funding increases of about 3.7 percent over the next decade.
In comparison, it predicts Ontario’s health-care costs to rise by an average of 5.1 percent annually between 2016 and 2018, due to factors such as the aging population.
Beyond 2018, it expects the province’s health expenditures to expand between 4.5 and five percent average per year.
The report considers Ontario as a conservative case-study choice because, as the most-populous province, its per-capita health costs are among the lowest in the country.
“Regardless of the forecasts used, the health-care cost drivers are very real,” reads the report by Randall Bartlett, chief economist at the institute, which is directed by former parliamentary budget officer Kevin Page.
The annual growth in federal health funding transfers is set to drop in April to three percent per year–down from the six percent increase in place for more than a decade.
Face-to-face negotiations toward establishing a new national funding framework collapsed in late December when health and finance ministers from across the federation rejected the federal offer at a meeting in Ottawa.
At the time, the provinces declared the federal proposal–to increase transfers by 3.5 percent per year and $11.5 billion for the targeted areas of home care and mental health over 10 years–simply wasn’t enough.
Since then, however, federal Health minister Jane Philpott has reached bilateral deals with New Brunswick, Newfoundland and Labrador, Nova Scotia, Yukon, Northwest Territories, Nunavut, Saskatchewan, and P.E.I.
The remaining five provinces–Ontario, Quebec, B.C., Alberta, and Manitoba–have made repeated calls for Prime Minister Justin Trudeau to meet face-to-face with the premiers to resume negotiations.
These provinces have called for an annual increase in federal health dollars of 5.2 percent, a number they based on research by the parliamentary budget office and the Conference Board of Canada.
Philpott has said she wanted to transform the system, describing the country’s health-care outcomes as average compared to similar countries even though Canadians pay some of the highest per-capita costs in the world.
Ottawa has suggested the provinces, which are responsible for health-care delivery under the Constitution, of channelling federal transfers into their general revenues.
Data released in December by the Canadian Institute for Health Information said health spending by all the provinces combined grew by less than three percent annually between 2012-13 and 2014-15.
The organization also forecast the provinces only increased total health spending by about 2.3 percent in 2015-16 and again in 2016-17.
