On Monday, the Minister of Finance announced a new investment in health care from now until 2024. He also announced the formula for funding equalization and other social programs. According to press reports, he made it clear to his provincial counterparts that this is not the beginning of a negotiation process. This is what the government of Canada is going to do.
Is this a surprise? Provincial governments, organizations with an interest in health care and many observers had been assuming – and hoping – that much of 2012 and 2013 would be devoted to discussions and negotiations on health-care reform and the federal role in health care.
After all, that is how it has been done in the past, more or less. But have we been paying attention? If you put together the stated intentions to stay out of provincial jurisdiction and to eliminate the federal deficit rapidly, and consider recent federal initiatives in the justice area, this development is perhaps not so surprising.
In any event, some will argue that this is a good financial deal for the provinces: a 6-per-cent growth rate for the federal health transfer for three years after the current health accord expires in March, 2014, followed by a growth rate tied to the growth of the economy. Given that most of the players, including provincial governments, think that health costs are growing too quickly and have to be contained, this seems like a reasonable approach. Perhaps. There is a claim that the measures announced by Jim Flaherty fulfill the commitment to Alberta that its health transfer will be the same per capita as the transfer to other provinces. This would fix a long-standing grievance and there is no space here to explain how it was generated. But we don’t know what the impact on other provinces will be. It may not do much for interprovincial harmony.
It has also been announced that the equalization program will grow with the economy. But there is a suggestion that the program will be capped. Given that Ontario is eligible for larger and larger amounts, what will be the impact on other receiving provinces?
Mr. Flaherty’s announcement should or should not be a surprise. It may or may not be a good financial “deal” for the provinces.
It is difficult, regardless, to believe that this is how a federation should work. There have been unilateral federal decisions in the past, of course. It’s hoped we can do better. It could also be argued, and it often is, that federal-provincial negotiations have not always produced good outcomes. That is also true. But again, could we not do better?
The offer the federal Health Minister made Tuesday to her provincial and territorial counterparts is a positive step. It may not be taken as seriously as it would have been if her colleague, the Finance Minister, had not acted unilaterally.
Process matters in federal-provincial relations. A federation is about rules and process. In this case, why does it matter? Because federal involvement in health care is necessary and can be achieved only with co-operation. Even if one rejects the use of the federal spending power to influence health-care delivery, the federal government holds many levers that affect health-care costs directly.
It also exercises many responsibilities that affect health outcomes. Here are important examples. The federal government regulates the marketing of drugs. What could it do to contribute to cost control in that area? Are there ways the federal government could use its considerable health research dollars to support health-care reforms? As the Canadian population ages, the use of health technology will cost more. Here again, the federal government has some jurisdiction. What about health costs and health outcomes for first nations?
Co-operation in these areas might be more fruitful than in areas where the federal comparative advantage is not strong.
Another important reason to pay attention to federal-provincial relations and process is that if the Canadian economy is hurt further by U.S. and European problems, our governments will have to revive the co-operation that prevailed when the crisis first hit.
In short, without an atmosphere of trust and co-operation, without a willingness to discuss these and other matters, an opportunity will be missed. It is not too late – there is still time before March, 2014.
André Juneau, director of the Institute of Intergovernmental Relations at Queen’s University, is a former federal deputy minister who also served in assistant deputy minister positions in intergovernmental affairs and health policy.