Canada’s premiers kicked off the second day of meetings in B.C. Tuesday by demanding a meeting with federal government representatives to come up with a new agreement on health-care funding.
“It’s past time for the federal government to stop quibbling, to stop saying that we don’t have a problem with our publicly funded national health-care system, and sit down at a table with the 13 premiers from provinces and territories,” B.C. Premier John Horgan, this year’s chair of the Council of the Federation, said Tuesday in Victoria.
Horgan said the two orders of government must meet to “do what Canadians want us to do and get ourselves back on track” with a “world-class health-care system, not one that is crumbling under our feet.”
Horgan said Prime Minister Justin Trudeau promised the premiers that, once the pandemic public health emergency was over, the two sides would meet to hash out the future of health care funding in Canada. No such meeting has been set, he added.
The premiers say the federal government is only covering 22 per cent of health-care costs in Canada. They say they want that federal share raised to 35 per cent and maintained at that level over time.
The federal government, meanwhile, disagrees with the math the provinces are using to determine who should pay for what.
A disagreement over basic facts
In 1977, the way the federal government funds health care was changed. Direct federal funding for hospital and physician services was reduced and the provinces were given authority to collect more in income and corporate taxes to fund health services directly.
The federal government says the tax points given to the provinces cover between nine and 10 per cent of the cost of public health-care services. The premiers say the Canada Health Transfer (CHT) — the largest federal transfer to the provinces — covers about 22 per cent of the cost.
The federal government says that when the CHT and those tax points are combined with the money Ottawa spends on bilateral deals for long-term care, home care, mental health and some other services, the portion of health care spending covered by the federal government in 2021-22 came closer to 38.5 per cent.
“Right now, the federal spending to support public health care is about a third of all spending,” Intergovernmental Affairs Minister Dominic LeBlanc told guest host Paul Hunter on CBC News Network’s Power & Politics Monday.
“They use this fake figure of 22 per cent because they deliberately refuse to acknowledge that $20 billion was generated last year by provinces and territories in tax points that the Government of Canada withdrew from, and they then took up immediately to generate revenue for themselves.”
WATCH: Premiers push for health-care spending increase from Ottawa:
Lee Soderstrom, a retired associate professor of economics at McGill University who has studied the economics of health care in Canada, said the figure cited by the federal government is about right.
“The provinces have already long received about 35 per cent of their total spending on health care. Moreover, contrary to critics of federal cost-sharing, Ottawa has not reduced its share of provincial health costs,” Soderstrom said in an email to CBC News.
Horgan said Tuesday that while the federal government can quibble over who pays for what, Canadians simply want a system that works.
“Back and forths about what number is correct, are tax points as relevant as they were in the 1990s today, as we look forward, those are debates that we should be having together, not through the media,” Horgan said.
“That’s why we are reinforcing today our unanimity to have the federal government call a meeting. We’ll arrive … we can sit down and solve these problems for Canadians.”
A federal government official speaking on background told CBC News that the premiers’ demand for a $28 billion annual increase to the CHT — without a discussion about what the money would be used for — will not fly with Ottawa.
LeBlanc repeated that position again on Monday. He said that any increase in federal health-care funding must come with conditions and with a commitment from the provinces to maintain current levels of funding and keep pace with any increases in federal funding.
“Of course there’ll be strings attached in the sense that we’re not going to increase the federal spending to provinces for health care so they can then reduce their own spending. That would be absurd,” LeBlanc told Hunter.
Horgan said that provincial governments are held accountable for how they spend money through their respective budgeting processes and that every dollar provinces spend is debated in regional legislatures.
“The so-called strings make it sound like there’s some sort of a serf relationship here,” Horgan said. “We are co-governors. We are equal orders of government. There’s not a hierarchy here, we are the same, and we’re saying we need to sit down collectively and figure out where we go from here.”
Horgan also said that he does not see how the provinces can continue to have discussions on sharing the costs of a national pharmacare program or dental program until the overall funding issue is put to bed.
“We shouldn’t be doing that until we have a firm foundation for our entire program,” Horgan said.
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