Trudeau open to more health funding for provinces as premiers criticize fiscal update

Theglobeandmail.com
Dec. 2

Prime Minister Justin Trudeau said on Tuesday he is open to negotiations on additional health care funding for the provinces at next week’s First Ministers’ meeting, but repeated his government’s assertion that 80 per cent of the money going toward COVID-19 emergency spending is coming from Ottawa.

Provincial leaders criticized Monday’s federal economic update because it did not contain a pledge to increase the rate at which annual health care transfers from Ottawa will rise. They said that in addition to current pandemic spending, billions more will be needed in future years to address the rising cost of caring for an aging population, along with other pressures.

Speaking with reporters in Ottawa on Tuesday, Mr. Trudeau said he looks forward to meeting with the provincial and territorial premiers on Dec. 10 “to look at how we can ensure that we’re supporting people right now and that our health care systems are sustainable into the future.”

The economic update shows federal transfers to other levels of government for health care and other services jumped to $99.7-billion this year from $79.2-billion last year, but are projected to drop to $82.1-billion in 2021-22. When asked whether that projection could change after next week’s meeting, Mr. Trudeau was noncommittal.

Quebec Premier François Legault, who chairs the premiers’ group the Council of the Federation, said health care funding is the only subject that will matter at the meeting.

He pointed out that the federal fiscal update included a deficit of nearly $400-billion, but pandemic measures led to much of the increase, and “almost none of it is recurring spending.”

Mr. Legault said Ottawa still has substantially more fiscal room than the provinces, which cover 78 per cent of spending on health care.

“Two-thirds of health spending is on salaries, so that shows you that our costs are recurring,” Mr. Legault said.

The Quebec Premier said any increase in the payments to the provinces for health must come without strings, citing as an example Mr. Trudeau’s proposal to impose national standards for long-term care.

“I don’t see what the federal government knows about nursing homes,” Mr. Legault said. “If he wants to help with nursing homes and hospitals, he has to boost recurring funding.”

Federal Conservative health critic Michelle Rempel Garner said she hopes the Prime Minister will understand the dire situation of many provincial governments and put forward tangible measures to get Canada out of the COVID-19 crisis, such as increased rapid testing and a public plan for vaccine deployment.

“I think we are at this juncture right now where public health in Canada is top of mind both at a provincial level and a federal level,” she said.

“I do think it is time for the provincial governments to be raising these issues [on the] long-term sustainability of services.”

NDP health critic Don Davies said on Tuesday that the provinces are raising an “absolutely legitimate” point, adding that pressure on the federal government is welcome.

He said governments have seriously underfunded Canada’s public health care system over decades, adding that the federal contribution has withered to 22 per cent.

“It has to be addressed,” he said.

The Conservatives, Bloc Québécois and NDP all criticized Monday’s update, and Mr. Trudeau said it will stand or fall in a vote in Parliament that could trigger an election.

“[These are] economic measures that, of course, will be a matter of confidence,” he said.

“I am reasonably confident that none of the opposition parties wants an election right now. We certainly don’t want one. We want to get these supports out to Canadians and there are certainly things in this fall economic statement that every party should be able to support, in terms of helping Canadians.”

Monday’s update included $1-billion for a “safe long-term care fund” that will help provinces with such costs as infection prevention and control. It also suggested conditions will be attached.

“Funding will be contingent on a detailed spending plan, allocated on an equal per-capita basis and conditional on provinces demonstrating that investments have been made according to those spending plans,” the update stated.

It said provinces will be able to use their share of the fund to undertake activities that also include improvements to ventilation in care homes, hiring additional staff or topping up wages.

The Canada Health Transfer (CHT) increases automatically each year according to a formula linked to economic growth, with a guaranteed annual increase of at least 3 per cent. Monday’s update said the transfer is scheduled to rise from $41.9-billion this year to $51.1-billion by 2025-26. The provinces have complained for many years that the percentage increase is less than the rate at which health care costs have been rising.

Other federal transfers to the provinces include the Canada Social Transfer, equalization, territorial financing, the gas tax fund and money dedicated to home care and mental health.

Ontario Finance Minister Rod Phillips said on Tuesday that the federal government could have addressed the need for health care transfers to increase by a higher percentage in its fiscal update but chose not to do so.

“This was an opportunity to signal something, and I think the federal government missed that opportunity,” he said, adding that next week’s talks with premiers and the Prime Minister will be crucial.

With the Quebec Premier leading the charge, Mr. Phillips said, the premiers are united on the need for “fundamental change” because the federal share of health care funding has declined to just 22 per cent of the provinces’ bills and is still trending downward. Mr. Phillips said he expected talks on the issue to extend into 2021.

He also said Ontario welcomed Ottawa’s removal of sales taxes on masks, new spending on improving water quality on First Nation reserves and changes to the fiscal stabilization program, which helps provinces in economic distress.

New Brunswick Premier Blaine Higgs said the premiers plan to argue that all federal transfer payments should be increased from around 20 per cent of provincial revenue to closer to 35 per cent.

He stressed that health care spending is a provincial responsibility, but said he’s not opposed to some kind of reporting to help the federal government track standards across the country.

“I’m not against having some understanding of what our health standards are.”

Newfoundland and Labrador Premier Andrew Furey said he’d like to wait until the First Ministers’ meeting to discuss federal health transfers.

Manitoba Premier Brian Pallister said on Monday that the federal government has to strengthen the federal-provincial partnership on health care, adding more health care funding is urgently required.

“COVID-19 has made that need even greater,” he said.

PEI Premier Dennis King said his government is grateful for any federal support that will help deliver quality health care.

“We were pleased to see this referenced in the fiscal update and now we will begin to work with our federal partners to ensure the investment is put to good use in Prince Edward Island.”

Colleen Flood, a research chair in health law and policy at the University of Ottawa, said the pandemic has increased health care needs.

“But I think the same question needs to be asked, as we put more dollars into the health care system, what will we get in return?” she said, adding that the federal government must ask that on behalf of Canadians.