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Ottawa and the provinces and territories are inching closer toward a 10-year funding deal that would provide a hefty increase in federal health transfers, along with bilateral financial agreements in areas such as long-term care.

While talks still continue, there is growing optimism among federal, provincial and territorial officials that a health care agreement could be unveiled at a first ministers meeting, likely in February before the federal budget is tabled in March or early April, according to two sources, one federal and one provincial.

Provincial and territorial governments have been grappling with overcrowded hospitals, long waiting times in emergency rooms, backlogs in medical procedures and shortages of doctors and nurses in the wake of the pandemic and long-term systemic issues.

The federal source declined to say whether Ottawa is prepared to offer a full 13-percentage-point increase in the Canada Health Transfer as demanded by the provinces. Premiers have been pushing for the CHT to cover 35 per cent of the cost of health care, compared with the current 22 per cent.

But the source said any deal would involve billions of dollars of new federal money in transfers and separate funding in bilateral agreements with provinces and territories. If a deal is concluded, the source said these jurisdictions will have more than enough money to improve their health care systems.

For example, the federal and Ontario governments are deep in talks on a deal that would see Ottawa transfer $70-billion to the province over the next decade, according to the federal and provincial sources. Some of this money would be earmarked under a bilateral agreement for home care and building long-term care facilities to reduce the stress on hospitals, they said.

Other provinces and territories are working on separate arrangements to meet their specific needs, such as the Northwest Territories and Yukon, as well as the Atlantic provinces, the federal source said.

The Globe and Mail is not identifying the sources because they were not authorized to discuss the sensitive health care negotiations. Federal Health Minister Jean-Yves Duclos and Intergovernmental Affairs Minister Dominic LeBlanc have been the lead negotiators for Ottawa.

In exchange for billions in new money, provinces and territories will have to agree to national accountability measures and reforms to improve their health care systems.

The premiers had stood firm against any federal conditions in exchange for extra federal funding, but Ontario Premier Doug Ford broke from the pack last week. He announced that Ontario is willing to accept Ottawa’s demands for a national health data system; reforms to reduce the backlog in surgeries and diagnostics; and measures to hire and retain more nurses and certified nursing assistants.

On Wednesday, Quebec Premier François Legault said he also is ready to share data on the province’s health care systems, a move that will likely result in other premiers following in step.

“Doug Ford and I have agreed to provide the data. It’s two provinces. Two big ones,” Mr. Legault told reporters.

Prime Minister Justin Trudeau expressed optimism this week that a health care deal is near and indicated that he is willing to significantly boost funding beyond the one-time top-ups given to the provinces and territories during the pandemic.

“There is still work to be done, but we feel that there is a very positive momentum,” he told reporters in Shawinigan, Que., on Wednesday. “Let’s be very clear, the investments we’re talking about with the federal government … are for the medium term, the long term of improving our health care systems.”

A possible outline of a health care deal will be discussed at a federal cabinet retreat taking place on Monday and Tuesday in Hamilton. Mr. Trudeau has acknowledged that the country’s health care system is “strained, if not broken” and needs longer-term funding to deal with the shortcomings.

The federal source said cabinet will also discuss the state of the Canadian economy and what measures could be included in the federal budget. Among the topics: how the country can take advantage of global demand for Canadian critical and rare earth minerals that are needed to produce batteries for electric vehicles and other green technology.

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