Skip to content

Trudeau government implements Harper government’s funding formula for health care

The Trudeau government has struck twelve deals with individual provinces and territories that end the 6 per cent funding escalator for public health care and worsens the risk of services being cut and privatized.

During the October 2015 federal election, Justin Trudeau and the Liberal Party promised: “We will negotiate a new Health Accord with provinces and territories, including a long-term agreement on funding.”

Given the Liberals had denounced the Harper government’s imposed funding formula, many voters not unreasonably read this election promise as the Liberals pledging as a government to have a summit with the provinces and to negotiate a long-term agreement that would cancel the Conservative plan to tie health care transfers to the GDP (with a minimum three per cent annual increase).

But now The Globe and Mail reports, “The deals bring an end to the 6-per-cent annual increases in the Canada Health Transfer (CHT) – the money that Ottawa transfers to provinces and territories to help pay for health care – that have been in place since 2004. The CHT will instead rise by 3 per cent annually, or by a three-year average of nominal GDP growth, whichever is higher.”

In other words, the Liberal government has just implemented Harper’s funding formula for health care.

Yesterday, Council of Canadians health care campaigner Michael Butler commented in this campaign blog, “This will ultimately mean lower quality health for Canadians from coast to coast.”

In addition, rather than reaching agreement through a federal-provincial summit, the government has made twelve individual deals with the provinces and territories. Health minister Jane Philpott says, “This is not about divide-and-conquer.”

In January 2012, then-Parliamentary Budget Officer Kevin Page estimated that this funding formula would cost the provinces about $31 billion over a ten year period. In July 2012, the provincial premiers forecast the loss would be closer to $36 billion. In July 2015, the Canadian Federation of Nurses Unions estimated the loss at $43.5 billion over an eight year period.

Just after the election, Butler wrote the newly appointed health minister and highlighted, “It is our hope that the new federal government reverses the Harper government’s funding model to a per capita Canada Health Transfer model, and implements a 6 per cent escalator for federal transfers to the provinces to reach a minimum goal of 25 per cent federal funding of provincial health care costs.”

Unfortunately, the federal health minister has not reversed the Harper government’s funding model, has not implemented a 6 per cent escalator, and the federal government’s share of health care spending is set to fall to about 14.3 per cent over the next twenty years.

The Harper government’s funding formula will be implemented by the Trudeau government starting on April 1.

To read our alternative vision, please see Butler’s chapter on health care (pages 81-87) in the Alternative Federal Budget here.