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Health Accord loss means a new decade of our public health care being underfunded

Today the governments of Ontario, Quebec and Alberta all signed bilateral health funding deals with the Federal government. Health Minister Jane Philpott made the announcement during Friday’s question period, but details of the funding agreements were not immediately made available to the public. This will ultimately mean lower quality health for Canadians from coast to coast. As our public health care allies stated in a press release, “With the reported signing of bilateral deals by Quebec, Ontario and Alberta today, hope for a Health Accord that will protect and improve Canadians’ equal access to health care for the next decade is gone. Health care will now become a major issue leading in federal election, advocates vow.”

What is clear is that co-operative federalism has given way for the time being to a system of balkanized health funding taking medicare back in its history to bilateral transfer period of 1948-1961. What we need is a Health Accord and funding arrangement that ensures a set of national standards from coast to coast. Moving forward with a fragmented and patchwork system will only further splinter our medicare at a time when we need to be moving with transformative national initiatives like a universal pharmacare program, a national senior’s strategy and a national mental health plan. 13 bilateral agreements (12 of which are now in place) will not be able to offer the comprehensive approach needed to benefit patients and the public.

We had noted previously that the value of a human life is often hidden in the footnotes and technical appendixes of federal budgets. The appendix tables of the 2016 federal budget made it clear that the Liberal budget planned to maintain the Harper Conservative government’s reduction in the Canada Health Transfer (CHT) to the provinces relative to the GDP.  On the whole, today’s announcement all but ends the negotiations that began last fall when Ottawa said it would no longer increase the Canada Health Transfer by 6% annually (Manitoba remains the only province not to have singed). With the provincial goverments capitulating to the Trudeau/Harper government’s health funding model (3% or the three-year average of nominal GDP growth, whichever is higher for the Canadian Health Transfer) it marks a new decade of our public health care being underfunded. 

Ontario and Quebec had been two of the most vocal critics of these irresponsible bilateral health deals. We previously highlighted the short sighted nature of these bilateral deals – see here. Ontario’s own data showed that a minimum of a 5.2% CHT escalator was needed to meet projected the health costs, not 3%. Tellingly, the health ministers of Ontario and Québec are not commenting publically on these deals at this point.  What is overly apparent is that they have sold out the public in their provinces for the next decade.

Yesterday, there was the release the 2017 Alternative Federal Budget – High Stakes, Clear Choices. In the report we highlighted how federal share of national (provincial and territorial) health expenditures remains below the funding floor of 25% called for by the Romanow commission; with the funding formula signed today it means the share of federal funding will be reduced to 14.3% by 2037. We also advocated for the need for a new national health accord and noted, “we need less political gamesmanship regarding issues like homecare and mental health; these two issues are indeed important, and for that reason should not be proposed with ‘sunset funding’ but should be included in the Health Accord. It is intellectually dishonest to pit health accord funding against funding for these initiatives, and will be detrimental to the overall health of the nation.”

The Parliamentary Budget Office (PBO) and the Council of the Federation have recognized that the cut to the Canada Health Transfer (CHT) amounts to at least $36 billion in 10 years, or the equivalent of the entire 2016 CHT.  Other estimates put this asphyxiation of the health care system through reduced federal transfers at $43.5 billion over the first eight years alone.  The provincial and territorial governments believe that the loss could be as high as $60 billion over the next decade. Make no mistake, this is a policy trajectory that will lead to the further erosion of our universal public health care. As it stands, nearly 40% of most provinces’ budgets are spent on health care. The current federal contribution to health care is approximately one fifth of provincial health spending; this highlights the erosion of federal responsibilities from the original 50/50 funding arrangement. The PBO has also noted this shift (which we witnessed to conclusion of today) will mean increasing burden onto the provinces and away from the federal government’s books to the tune of nearly $1.1billion annually.

It is worth remembering that this reduction in health funding comes at an extremely inopportune moment. Overall, Canadians are less equal today than at any other time in our country’s history, with the richest 1% receiving 12% of all taxable income compared to 7% in the 1980s. This income gap has accelerated without remorse in recent years and this pathological asymmetry in wealth distribution is harming Canadians. Roughly 40,000 Canadians die prematurely each year as a result of the tenuous calculus of social inequality (equal to 110 Canadians dying each day).

History will not look back kindly on the failed health accord negotiation and insufficient bilateral. Additional funding for homecare and mental health, while legitimately needed, were used as a tool to drive down the federal share of the CHT and score political points with voters (which was put ahead of the overall sustainability of our medicare). Further, this funding is temporary and nowhere does it appear that home care and long-term care will be brought into the CHA, or that money for mental health services will be incorporated into the CHA accountability process. The health of Canadians, at a time when we need quality public health care more than ever, deserves better than what the public is witnessing.  The decisions made today will lead to the further erosion and privatization of the medicare that Canadians rely on.

Lastly, it is worth highlighting that while the policy discussion and media talking points surrounding the future of our medicare remains inundated with buzzwords like ‘health transformation’, ‘less bureaucracy’, ‘efficiency’, ‘innovation’, and other empty signifiers, these words mean little. What they do is create a false dichotomy that is presented by the government of choices between external economic forces and the health of Canadians; this serves to reinforce an artificial and deterministic narrative that universal healthcare is unsustainable. This ideological conditioning produces and conceals the social relations driving our government’s neoliberal policy and increased health care privatization. While buzzwords and the positivist approach to health policy and economics has gained normative status, the spurious framing it creates leads to distorted trade-offs between the universality of wellbeing and cost containment. This has led to bilateral transfer agreements, short term funding models, increased privatization and a lack of a comprehensive national vision for truly improving patient outcomes. The publically funded portion of health care has remained stable as a percentage of the GDP for over 30 years, but where costs are out of control are the areas outside of the medicare umbrella (like drug, homecare, or physiotherapy costs). Health care financing in Canada needs to be reframed. The problem of cost containment is a political problem, not economic. It is the political choices, the underlying value systems and the policies our government have crafted which guide the possibilities of what is achievable for medicare. Health is political and our government has an obligation to make sound policy choices that protect the public’s interest. We can afford to dare.