British Columbia could see its health-care funding from the federal government climb by more than $100-million annually if Ottawa would agree to weigh demographics and the proportion of elderly residents in its funding formula, provincial Finance Minister Mike de Jong said Thursday.
Mr. de Jong told The Globe and Mail’s editorial board he believes B.C. has a strong case for arguing federal health-care payments should include a consideration of the higher costs for older residents.
“I think it’s a legitimate conversation to have, and we’ll see to what extent the federal government agrees with us,” he said.
The Harper government announced a new health financing agreement at the beginning of 2012, telling provinces it will make payments under the Canada Health Transfer strictly on a per capita basis with no adjustments for the economic status of a province or its demographics.
B.C. has argued it will be disproportionately affected by the change because of its higher percentage of seniors, due in part to its popularity as a retirement destination. The province has said its fastest-growing demographic group are people 85 and older.
Talks on B.C.’s proposal to include demographics in the funding formula have so far been “back and forth,” Mr. de Jong said, and there has been no commitment from Ottawa. Mr. de Jong said he estimates the size of the potential benefit to B.C. would be “in excess of $100-million,” but said it would vary depending how demographics are included in a funding formula.
“Depending on the methodology you employ and how you factor it, I could make an argument for $10-million or $100-million, depending on where that conversation ends up,” he said.
Mr. de Jong said the province is continuing to budget on the health transfer amounts announced in early 2012, and is not counting on a demographic adjustment.
His Liberal government tabled an economic update last week, revealing it anticipates a $153-million surplus in the current fiscal year, down from $197-million predicted in the February budget. The decrease has been caused by softening revenues due to slower economic growth so far this year.
Mr. de Jong said the government will need “absolute vigilance and discipline” to meet its fiscal targets over the next two years given the uncertain economic conditions. But he added the budget is extremely conservative in its forecasting, especially for natural gas and other resource prices, to ensure the budget plan is achievable.
He said he was disappointed by analyst commentaries of his economic update last week that criticized the province’s over-reliance on plans to develop a liquid natural gas (LNG) industry to help meet budget forecasts.
He said none of the forecasts in the current three-year economic plan rely on LNG revenue, although he acknowledged that long-term debt reduction forecasts do predict significant gains from LNG development. Those revenues are six or seven years in the future, he added, and will only emerge if the province acts quickly to develop the sector in the face of broad global competition from other potential producers.
“This is an opportunity we don’t want to squander,” he said.
Mr. de Jong also said he has an “anecdotal” sense that B.C.’s economy is starting to grow more quickly, but said he has no statistical evidence to prove the claim. He said he has seen real estate and commercial space expansion that he believes will translate into a quickening in the province’s growth rate in the next six months.
He said he has heard from people in the business community who said they had anticipated an NDP win in the May provincial election and had put growth plans on hold while waiting to see the outcome and any potential changes that could emerge. Some have now resurrected stalled projects, he said.
“It does seem to be real – there does seem to be an entirely different mood prevailing in British Columbia,” he said.