Health Transfers: Canada Split In Two By Funding Edict As Premiers Meet In Victoria

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HEALTH TRANSFERS CANADA
Premiers will arrive in Victoria this week to hash over their response to Ottawa's edict on health-care funding that has left many premiers east of Manitoba seething, and the western ones celebrating the prospect of the federal government finally getting out of the way. | alamy

VICTORIA - A tour of a new, ultra-modern patient-care centre in Victoria — with its smart beds, fresh air ducts and healing gardens — had Canada's premiers praising patient-care innovations Sunday, while resolving to push Ottawa on health-care funding, especially when it comes to the elderly.

Premiers arrived in Victoria for several days of meetings that will see them hash over a response to Ottawa's edict on health-care funding, which has left many premiers east of Manitoba seething, and the western ones celebrating the prospect of the federal government finally getting out of the way.

The premiers and territorial leaders head into meetings that were originally intended to discuss new ways of doing things in the health-care sector.

But the gathering threatens to become hijacked by the kind of infighting that was common before the last 10-year accord was signed in 2004 and many premiers are looking for adjustments to Finance Minister Jim Flaherty's formula that would better benefit their provinces.

There was little sign of the infighting Sunday as the premier's toured the new Victoria health facility. Due to travel delays and other scheduling conflicts, the first gathering played with a short bench.

The premiers of Ontario, Alberta, Quebec, New Brunswick, Newfoundland and Labrador, Saskatchewan and Nunavut were no-shows.

B.C. Premier Christy Clark, who has been positive about the federal government's move last month to tie health-care transfers to expansion of the economy after 2017, said Flaherty's decision to deliver the money on a per-capita basis will unfairly penalize B.C. with its aging population.

"We look at per-capita funding and say it needs to be finessed a bit," said Clark. "We need to find a way to refine the per-capita formula to reflect age."

She said a senior citizen in British Columbian costs the health-care system about $22,000 a year, while a person in their twenties cost the system about $2,000 annually.

Prince Edward Island Premier Robert Ghiz said he's looking for the premiers to reach consensus at the meetings, which conclude Tuesday. He said the current per-capita funding formula also hurts P.E.I., because his province has the smallest population in Canada, but a high ratio of elderly people.

"I don't care where you live, if it's Newfoundland and Labrador, Prince Edward Island, Victoria, British Columbia or downtown Edmonton, every Canadian deserves the best possible health care."

Nova Scotia Premier Darrell Dexter said Ottawa's per-capita funding formula is not fair to provinces when seniors are factored into the plan.

He said seniors over the age 65 currently comprise 16 per cent of the population in Nova Scotia, but are estimated to make up 30 per cent within the next 20 years.

Clark said earlier the Victoria meetings do allow premiers to discuss health-care issues without Ottawa's influence.

"Premiers have sat around these tables for 30 years and said: 'We don't want the federal government to tell us what to do about health care because we have a constitutional responsibility for looking after it,'" she said.

"You can't do it well from Ottawa. One of the highlights of the federal government's announcement in December is they're vacating that field and leaving it to the premiers to whom it rightfully belongs."

Quebec Premier Jean Charest is among those angry at the unilateral way Flaherty introduced the formula last month, and he said last week it's time for Ottawa to take a look at all the money it transfers to provinces.

Provinces have long fought over how equalization payments to so-called have-not provinces are delivered by Ottawa and that formula is up for renewal soon.

"If we choose to live in a federal system of government, there are consequences to that," Charest said. "That requires that there be a dialogue on these matters, which is not the case."

And Nova Scotia is among those concerned Ottawa is simply backing out of its health-care obligations.

Flaherty's announcement came with no policy strings and signalled an end to the type of health-care accords that have guided provinces in their priorities since the late 1990s. The accords attempted to make provinces accountable for federal funding and avoid a patchwork of health services.

"I think the unfortunate consequence of that is we would very likely see . . . essentially 13 different kinds of health-care systems across the country," Dexter said on Friday.

It's been years since Prime Minister Stephen Harper has met with the premiers.

Ottawa has said it will continue to transfer cash to provinces based on the projected six per cent annual increases in provincial health spending until 2016-2017.

After that, though, when the funding will be tied to expansion of the economy, increases will likely average 3.9 per cent a year, compared to the previous six per cent.

Clark said B.C. will be hit disproportionately hard because of its high number of seniors.

If the per-capita funding formula is not adjusted, "it is going to have a huge unintended consequence of taking health care dollars away from senior citizens and transferring them instead to people who frankly, don't use health care very much."

Clark said the fastest-growing demographic in B.C. is people 85 years and older.

Flaherty's funding formula means that after 2017, Ottawa's transfer to B.C. would amount to only a 0.5 per cent increased contribution, while in Alberta, it would amount to a 50 per cent increased contribution.

"That's a pretty substantial difference," Clark said. "That's really going to mean that seniors get hurt."

Matthew Mendelsohn, director of the Mowat Centre for Policy Innovation in Toronto, said his group's research is showing that per capita is just about as fair as any other kind of distribution scheme. That's because the aging population in BC is also found in some other provinces. And aging in one province is offset by remote distances in another, or high immigrant or aboriginal health costs elsewhere.

Parliament's budget watchdog concluded last week that the funding formula will gradually reduce Ottawa's support for medicare, but put the federal government on solid financial footing while leaving provinces with rising debts.

There are also fears no one will benefit from the economies and good ideas that come from working together.

Saskatchewan Premier Brad Wall trumpeted the arrangement's ability for his province to make better choices for its citizens.

"It's a liberating starting position to go to all of these meetings and remind ourselves that we're not there to partner, even with our western partners in B.C. and Alberta, we're not there to be in an alliance with this province and that province."

Both the head of the Canadian Medical Association and a leading federal-provincial relations expert say the lack of federal leadership in the health care file is not the end of the world, and in fact hands the premiers a chance to show some initiative.

“It’s about leadership,” said CMA president John Haggie in an interview. “Now is the time to kind of step up.”

The provinces don't absolutely need the federal government to be involved, said Mendelsohn.

He pointed to the development of specialized clinics, changes in the way doctors are compensated and efforts to deal electronically with health care in remote areas and reorganize the way patients access their primary health care providers.

The premiers have also discussed working together to buy drugs in bulk, and they are all grappling with how best to deliver chronic care and extended care outside hospitals.

So there’s an imperative for the provinces to hold a national conversation, Mendelsohn added, but it does not need to be led or dominated by Ottawa.

“There are all these issues that are huge, huge policy issues, and frankly my view is that the federal government has no idea what to do about any of those because they don’t deliver health care. All of those things that people care about mostly are things that provinces are grappling with,” he said in an interview.

“But I really think it would make a lot more sense and deliver better outcomes if they were grappling about them together, and sharing as much information and expertise as possible.”

— With files from Wendy Cox in Vancouver and Heather Scoffield in Ottawa

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