Skip to main content

Manitoba Premier Brian Pallister, centre, speaks during the closing news conference at the First Ministers’ meeting in Ottawa on Dec. 9, 2016. Also pictured are Prime Minister Justin Trudeau, left, Nova Scotia Premier Stephen McNeil, Prince Edward Island Premier Wade MacLauchlan and Alberta Premier Rachel Notley.Chris Wattie/Reuters

The controversial shift to smaller hikes in federal health transfers will move closer to reality this week when Ottawa reveals the exact amounts provinces can count on for 2017.

Finance Minister Bill Morneau intends to send letters to his provincial counterparts that will lay out exactly what each province and territory can expect in terms of federal transfers for 2017, including the health transfer.

That means the amounts will be delivered before Canada's finance and health ministers are scheduled to discuss the issue in Ottawa early next week.

For subscribers: On health, Trudeau must pick a path between the premiers and Harper

Konrad Yakabuski: Ottawa's gloves come off over health-care funding

Prime Minister Justin Trudeau hinted Monday that further federal spending decisions could flow from that meeting.

"I'm looking forward to seeing what will come from this discussion next Monday," he told Parliament Hill reporters at an end-of-year news conference.

That language suggests the amounts from Mr. Morneau may not be the final word from Ottawa. Provinces have warned, however, that they need clear answers soon in order to be able to set their 2017 budgets.

It is common for Ottawa to provide transfer figures at or just ahead of the annual December meeting of finance ministers, but normally provinces already have a good idea of what to expect. Since 2005, federal health transfers have increased by 6 per cent a year. However, it was at the December, 2011, meeting of finance ministers that the then-Conservative federal government made the surprise announcement that health transfers would change in 2017-18 to a formula tied to economic growth, with a guaranteed minimum increase of 3 per cent.

The provinces and territories have long opposed the impending change. Mr. Trudeau discussed health care over dinner last Friday after Ottawa, eight of the 10 provinces and all three territories reached a national framework agreement on climate change. Premiers who attended the dinner left with different interpretations of Mr. Trudeau's receptiveness to the requests for increased transfers.

"What I'm expecting, unfortunately – and I hope I'm wrong – is 3 per cent is still on the table," Manitoba Premier Brian Pallister said in an interview.

Manitoba and Saskatchewan were the two provinces that did not sign last week's climate-change agreement. While Saskatchewan was strongly opposed to the deal, Mr. Pallister was more supportive. He said he would withhold Manitoba's endorsement until Ottawa also agrees to increase health transfers.

But Prince Edward Island Premier Wade MacLauchlan had a different interpretation of the way the talks progressed. "There was nothing said that would represent any real dickering, but there was a very good discussion on the level of principle," he said.

The Prime Minister did not indicate how flexible he would be in terms of the escalator to the annual health transfer, but Mr. MacLauchlan said he believes Mr. Trudeau has been prepared for some time to give more than 3 per cent.

Although the federal Liberals have said they will follow through next year with a cut to the annual escalator that would see increases drop from 6 per cent to 3 per cent, federal sources said last week that the Trudeau government might be willing to give more – perhaps as much as 4.5 per cent.

The Liberals have promised to spend an additional $3-billion over four years if the money is targeted toward home care and mental health. Quebec has called this a "poison pill" because the federal money would ultimately expire.

Granger Avery, president of the Canadian Medical Association (CMA), said doctors are "a bit concerned," as politicians debate a new health accord, that the focus is being placed on money rather that patient outcomes.

The CMA agrees with several provincial health ministers who argue that extra funds should be distributed among the provinces and territories according to the number of seniors in their jurisdiction. "We don't think it's right that there are different opportunities and different outcomes for seniors in different provinces and territories," Dr. Avery said.

The CMA also agrees with the federal government that there are specific holes in Canadian health care that need to be filled, he said.

Too many seniors are occupying space in acute care as they wait for a long-term bed, Dr. Avery said. Palliative care is spotty across Canada and, without pharmacare, he said, some people on fixed incomes don't get their prescriptions filled or take their pills every second day to make them last for a longer period of time.

Those are all issues that need to be addressed, Dr. Avery said. But "by simply focusing on a percentage increase, we don't really take account of what the Canadian people need."

The Parliamentary Budget Officer has released several reports warning that, while Ottawa's finances are sustainable over the long term, provinces and territories face escalating health-care costs and debt trouble that will inevitably force governments to adopt billions in tax hikes, spending cuts or both.

Report an error

Editorial code of conduct