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Federal Health Minister Jane Philpott meets with stakeholders while in Toronto for a health ministers’ meeting on Monday.

Fred Lum/The Globe and Mail

The federal Health Minister says Ottawa has been giving large sums of money to the provinces and territories for health care without assurances that it is being used for that purpose and the result is a mediocre system must be transformed to better meet Canadians' needs.

The strong words from Jane Philpott came Monday on the eve of a meeting with her provincial and territorial counterparts who were discussing ways to force the federal government to abandon its plan to cut the increase in the annual Canada Health Transfer to 3 per cent.

Although the transfer has grown by 6 per cent a year since 2004 – it topped $34-billion in 2015-16 – the growth in health-care spending at the provincial level has been much slower than 6 per cent in recent years.

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Opinion: Cutting through the numbers on health-care funding

Related: Philpott hints budget funding tied to provincial agreement on health accord

Read more: Federal health transfers carry political baggage

"We pay some of the highest costs in the world for health care and we've got a middle-of-the-road health-care system," Dr. Philpott said. "We can do better for the money that we're spending and we have a responsibility to do so."

Unless the provinces and territories come up with other innovative ideas for improving health care, Ottawa is not prepared to give more, Dr. Philpott said.

She also said she will not ask for additional money from the federal Finance Minister if the provinces cannot prove it will be used for health care. At the moment, Dr. Philpott said, "I don't know where that money is going."

The federal government has said it is willing to invest an additional $3-billion over four years in home care and palliative care. But provincial ministers said Monday that they would be reticent to discuss Dr. Philpott's plans to improve home care if the increase in the Canada Health Transfer is held to 3 per cent.

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"With their current position to decrease the escalator down to 3 per cent, provinces and territories stand to lose an additional $1-billion next year alone – $400-million in Ontario," said Eric Hoskins, the Ontario Health Minister who chairs the conference of provincial and territorial ministers of health.

Provincial and territorial premiers wrote to Prime Minister Justin Trudeau earlier this year asking him to commit to meet with them about health before a planned First Ministers' meeting in December that will be primarily about climate change. Mr. Trudeau replied that he would await the outcome of this week's meeting of health ministers before agreeing to do so.

The tension between the two levels of government suggests Tuesday's meeting could be confrontational despite attempts by the Liberals in Ottawa to take a more co-operative approach to federal-provincial relations than the former Conservative government.

Dr. Philpott pointed to an oft-quoted report from the New York-based Commonwealth Fund which ranked Canada 10th out of 11 developed countries on health-care performance – only the U.S. placed lower. The report gave Canada especially poor marks for its efficiency and timeliness of care.

The Canadian Institute for Health Information's most recent comprehensive spending report, released last October, projected that health-care spending would increase by an average of just 1.5 per cent across the country in 2015, a rate the CIHI said reflected slower economic growth and provincial efforts to rein in their budgets. Provincial health budgets have been growing at about 3 per cent a year, on average.

Dr. Hoskins said it is more important to look at the diminishing share of the health-spending pie that comes from Ottawa. "In Ontario's case, just under 25 per cent of the dollars that are spent [on health] are provided by the federal government. So a 6-per-cent increase in that would amount to an increase in our health-care budget of about 1.5 per cent. Our health-care budget has never been at that low level of growth."

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He and other provincial health ministers instead pointed to reports from the Parliamentary Budget Officer and the Conference Board of Canada that predicted health-care spending would rise at a much higher rate in the future, especially as Canada's population ages.

The provincial and territorial health ministers disagreed with Dr. Philpott's assessment that Canadians are not getting good value for their health-care dollar. "I think Canadians in general are quite proud of the health-care system that they have from coast to coast to coast and we are committed to find ways to improve that," Sarah Hoffman, the Alberta Health Minister, told reporters.

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