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The Globe and Mail

Ontario Premier pushes for new 10-year health deal between Ottawa, provinces

Ontario Premier Dalton McGuinty leaves after speaking to the media following a meeting of the Council of the Federation in Vancouver, Thursday, July 21, 2011.


Ontario Premier Dalton McGuinty wants the federal government to begin talks leading to a new 10-year health accord with the provinces but does not directly say that would mean another decade of pre-determined annual increases in the money transferred from Ottawa.

The existing health accord is set to expire in 2014. It requires the federal government to increase the health transfer to the provinces and territories by 6 per cent every year.

Prime Minister Stephen Harper has said his government is "planning on a 6-per-cent ongoing increase for health transfers" after 2014 but it is unclear how long he intends the increases to continue.

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Mr. McGuinty, who is facing an election later this year, says Mr. Harper's promise of annual hikes in health-care funding will last just two years. He repeated a call Thursday for immediate negotiations to forge a new deal to replace the one that will end in three years' time.

"We need the federal government to help lead a national discussion on how we can prepare for the coming grey wave" of aging Canadians, Mr. McGuinty said in a lunch-hour speech to an Ottawa business crowd.

"Those discussions must lead to a new 10-year health accord negotiated among provinces and territories," he said.

It is a call he has been making since April.

But it is unclear whether he expects the federal government to commit to increasing its health transfer to the provinces by 6 per cent annually until 2024.

"We're not talking about forever, we're just looking for a long-term deal," Mr. McGuinty replied when asked if he would insist on the continuation of the 6-per-cent escalator.

The Canadian inflation rate has averaged 2 per cent over the last 10 years.

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When asked how annual health-transfer increases that outstrip inflation could be sustainable for another 10 years, Mr. McGuinty said the answer is to constantly introduce reforms.

"For example," he said, "we have cut the price of generic drugs in Ontario by half a billion dollars. I have proposed to all my fellow premiers, let's buy our drugs together."

About 20 cents of every dollar the provinces spend on health care comes from Ottawa.

Currently, health-care costs eat up roughly 40 per cent of provincial program spending and are rising at between 5 and 7 per cent every year. Left unrestrained, they are set to reach between 70 and 80 per cent of total spending by 2030, according to a study last year by economists at Toronto-Dominion Bank.

The health-care accord that was signed in 2004 by the Liberal federal government of Paul Martin provided stable funding for the provinces and territories in return for measurable improvements in the health-care system – most notably, the reduction in wait times for a list of critical medical procedures.

Mr. McGuinty said he wants a new agreement to include "accountability and clear goals" to secure the future of public health care in this country But some of the promises of 2004 accord have yet to be met including a national pharmaceuticals strategy.

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"I am confident that that's one of the things that we're going to want to revisit," Mr. McGuinty said of the failure to produce a national plan making drugs more accessible and affordable.

"Did we do everything we set out to do under the 2004 accord?" he asked. "No we did not. But did we make some genuine measurable progress? Yes we did. I think there might be some loose ends we might be able to pick up and tie into the new accord and that's one of the challenges."

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