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Ottawa's per-capita health transfers a windfall for Alberta

Alberta Premier Alison Redford acknowledges that Ottawa's proposed health transfer is an advantage to the province, but says she will work with the other provinces to 'fully explore' its consequences.

Andy Clark/Reuters

Resource-rich Alberta stands to receive billions more in federal health transfers under the per-capita funding model proposed as the pillar of Ottawa's new Canada Health Transfer plan, a windfall that comes at the expense of every other province.

Other premiers have so far avoided going after Alberta – Prime Minister Stephen Harper's home province and the heartland of Conservative Party support – but on Tuesday struck up a panel to dig into the proposed "fiscal arrangements" of the unilateral federal proposal.

What's the current deal?

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The Canada Health Transfer sends cash to provinces – $26-billion in total this year – to cover the growing cost of health care. Wealthy Alberta currently receives a reduced rate of about $558 per person, roughly 38 per cent less than the other provinces and territories. Alberta now laments the disparity it once agreed to and argues that initiatives such as the equalization program should handle wealth redistribution, not health transfers.

The Harper government agrees and has proposed giving Alberta an equal rate – overall, an immediate boost of between $850-million and $1-billion per year, according to various government estimates. Alberta would also be poised to gain more with each year as its booming population expands and earns a bigger cut of the per-capita funding.

Under the proposal, the federal government projects every other province would get less money. Newfoundland and Labrador would see the biggest per-capita hit, while Ontario would lose the most overall.

What about B.C.'s seniors plan?

British Columbia Premier Christy Clark has championed a plan that would give a boost to provinces like hers with a high population of seniors, typically an expensive health-care group. B.C. would gain more than $100-million in annual funding as compared to the federal proposal, but Alberta – with the lowest proportional population of seniors of any province – would see its windfall decline. (Ontario's share of funding would also fall.) Not surprisingly, Alberta rejects the notion that seniors should be prioritized over other age groups. "Alberta does believe that it's important to have equal per-capita funding," Alberta Premier Alison Redford said.

It's one of many scenarios that will be considered by Manitoba Premier Greg Selinger, who will lead the panel looking into the details of the proposed plan and whether Alberta's gains will deal a heavy blow to its fellow provinces.

What's the overall difference for Alberta?

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The change to strict per-capita funding would mean billions more for the province over the term of the deal, though the province refuses to speculate on how much that will be.

Without accounting for significant factors such as GDP change, population growth or inflation, the difference is about $10-billion.

An equal per-capita deal with the federal government's proposed annual increases of about 4 per cent, tied to inflation and GDP, would deliver approximately $46-billion to Alberta over the course of a decade. By comparison, an extension of the current deal, with higher annual increases but a lower per-capita rate, would send Alberta about $35-billion.

"In Alberta, they'll certainly be seeing this as a victory because they've been complaining for a long time that their contribution to the federation has not been well recognized or valued," said John Church, a University of Alberta professor who researches Canadian health policy.

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About the Author
Parliamentary reporter

Josh is a parliamentary reporter in Ottawa. Before moving to the nation's capital in 2013, he covered provincial affairs in Edmonton and throughout Alberta. He joined the Globe in 2008 in Toronto before returning to his home province in 2010. More

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