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Trudeau keeps Harper’s health care funding formula

Liberal health minister Jane Philpott

The Trudeau government will maintain the Harper government’s funding formula for health care transfer payments.

In terms of background, the Canadian Press explains, “The last 10-year health accord, which included an annual six-per-cent increase in health transfers to the provinces, expired in 2014. The previous Conservative government refused to renegotiate it and unilaterally declared that the six-per-cent escalator would end in 2017.” The Conservative plan was to tie health care transfers to the GDP with a minimum three per cent annual increase between 2017 and 2024.

The Liberals in opposition rejected the Conservative plan.

In April 2014, Liberal MP Judy Foote said, “The Conservatives seem determined to dismantle public health care by drastically cutting federal transfers to the provinces and territories.” And in May 2015, just months before the election, Liberal MP Hedy Fry said, “That will represent a $36-billion cut to the transfers they’re currently getting. This is going to be a huge loss. Given the increase in aging, given all the demographic and geographic needs, what’s going to happen there?”

And they promised voters something different during the the October 2015 federal election: “We will negotiate a new Health Accord with provinces and territories, including a long-term agreement on funding.”

They even maintained in March 2016 at the time of the last federal budget, “The Government is committed to working in partnership with provinces and territories to negotiate a new multi-year health accord that will improve health care in Canada and boost health outcomes for all Canadians.”

But now CTV reports, “Health Minister Jane Philpott says the Liberal government won’t increase the health-care funding formula imposed by former prime minister Stephen Harper’s government.” Philipott says, “That conversation is largely a conversation between finance ministers and at this point I have no reason to believe that we’re going to change that. …I do not intend to push for an increase in the escalator.”

What are the implications of this?

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, Council of Canadians health care campaigner Michael 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 government has not reversed the Harper government’s funding model, it has not implemented a 6 per cent escalator, and the federal government’s share of health care spending is set to fall to about 18 per cent within a decade.

The Harper government’s funding formula will be implemented by the Trudeau government starting in April 2017.