That was anti-climactic, wasn’t it?
Canada has a new health accord – or, more precisely, health accords with 12 of the 13 provinces and territories (at this writing, Manitoba is the only holdout).
No blood was spilled and, refreshingly, there were very few overwrought claims from either side, such as the “fix for a generation” or “the end of medicare as we know it.” In fact, one would be hard-pressed to identify any losers – or any actual change for that matter. But reaching that conclusion requires a bit of parsing of the numbers and the politics. So, let’s start with some background.
The federal government shifts tax dollars to the provinces and territories via the Canada Health Transfer. In 2016-17, the CHT was $36.068-billion.
Since 2006, that amount has increased by 6 per cent annually. But, come April 1, 2013, thanks to an “agreement” that was unilaterally imposed by the previous Conservative government, the increase will be 3 per cent (or, for the sticklers, the three-year average of nominal GDP growth, or 3 per cent, whichever is higher.)
The provinces and territories denounced this “cut” (read: decrease in increase). The Liberals, for their part, said they would stick to the 3-per-cent cap but offered additional monies if it was spent in their priority areas – namely, home care and mental health.
There were talks in December, but they quickly broke down. The provinces and territories demanded an annual escalator of 5.2 per cent; the feds countered with an offer of 3.5 per cent and targeted funding of $11.5-billion. There was, of course, some grumbling from the provinces and territories about wanting the money with no strings attached, and some reminders from Ottawa that it can demand some accountability for the monies that are transferred.
Ottawa quickly shifted its strategy to negotiating individual deals with the provinces. New Brunswick was the first to bite, and then the other provinces fell, like a slow-moving game of dominoes.
There were some claims that Ottawa took a divide-and-conquer approach, but it is probably more accurate to say that they allowed the provinces and territories to save face.
Because in the end, the provinces and territories (almost) all agreed to the federal offer, but by doing so individually they were able to tout their autonomy, get better media coverage and in some cases strike extra side deals, such as money for the opioid epidemic in British Columbia and an agreement on private funding of MRIs in Saskatchewan.
All the agreements, save Quebec’s, feature a clause that says Ottawa and the province will jointly “develop performance indicators and mechanisms for annual reporting to citizens, as well as a detailed plan on how these funds will be spent.” (The Quebec deal says that it will develop “mechanisms for reporting to citizens that reflect the principle of asymmetrical federalism.”)
The other thing that was highlighted with individual agreements is how much each province and territory will receive. For example, Ontario’s leaders were able to tell voters that they were able to extract an extra $4.2-billion out of Ottawa by taking a hard line; Quebec $2.5-billion; Alberta $1.3-billion and so on. (Manitoba is holding out because it wants to spend its share on indigenous health, not just home care and mental health, but that will be resolved before April 1.)
But here’s the key aspect of the deals that no one is really talking about: In the end, both Ottawa and the provinces/territories will be getting almost exactly what they asked for at the negotiating table.
Here’s how the math works: If you increase the CHT by 5.2 per cent annually – as the provinces/territories demanded – Ottawa would be on the hook for an additional $24-billion over the next 10 years. But if you increase the CHT by 3 per cent a year, the federal government would see transfers increase by $13-billion. Then they would, in separate deals, pay out an additional $11.5-billion. Magically, you come up with $24-billion over 10 years.
In the end, we get a classically Canadian solution where nobody really compromises and everyone saves face.
What matters in the end is not whether we have one health accord or 13 health accords. What matters is: Will the transfer of these monies result in better health care? In our obsession with divvying up the dollars and determining winners and losers, we seem to have skimmed over that small detail.Report Typo/Error