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Liberals Holding Provinces Hostage On Health Funding: Gaétan Barrette

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OTTAWA — Quebec’s health minister says the Trudeau government is holding the provinces hostage by offering a surprise last-minute “take-it-or-leave-it” health-care deal that offers less cash than the Liberals pledged during last year’s election campaign.

“Everything came out of the blue,” Quebec Health Minister Gaétan Barrette told The Huffington Post Canada Saturday morning.

“They are trying to push down our throat an agreement, in terms of CHT [Canada Health Transfer], that is worse than the Conservatives and less than their electoral campaign commitment, and at the last minute. And we are supposed to be happy on Monday?” he said.

“We are being taken hostage by Bill Morneau. There has been no proper negotiations, and that will impact services that we provinces will have to provide.”

bill morneau
Finance Minister Bill Morneau speaks to the economic community during a luncheon in Toronto on Dec. 14, 2015.

Canada’s provincial and territorial ministers of finance and health are scheduled to sit down Monday with their federal counterparts in Ottawa to talk about health-care funding. The finance ministers are having dinner Sunday.

On Friday, Barrette said, he and his provincial counterparts received phone calls from federal Health Minister Jane Philpott promising that a “satisfactory proposal” was coming that included more money for mental health.

“We are being taken hostage by Bill Morneau."


The two had not spoken since a brief meeting in late September, and there had been “no negotiations whatsoever” between departments, he said — facts undisputed by Philpott’s office.

While Barrette was on the phone with Philpott, Quebec Finance Minister Carlos Leitão received a letter from federal Finance Minister Bill Morneau outlining Ottawa’s proposal.

Morneau offered to raise the minimum annual increase of the CHT to 3.5 per cent from 3 per cent and add $8 billion over 10 years for home care and mental health, Barrette said. Though a federal source said Ottawa’s “initial” offer was 3.5 per cent and $9 billion over 10 years.

The Liberals had previously said increases in CHT payments would drop, as planned, from the current 6 per cent to, whichever is larger, 3 per cent or nominal GDP growth (a measure of GDP plus inflation).

gaétan barrette
Quebec Health Minister Gaetan Barrette responds to questions at the provincial legislature in Quebec City on Nov. 2, 2016. (Photo: Jacques Boissinot/Canadian Press)

Morneau’s spokesman Dan Lauzon wouldn’t comment Saturday on the specifics of the Friday offer saying “talks are ongoing.”

In an interview on CBC radio’s “The House,” Morneau said Ottawa is prepared to invest more money if it can get an agreement that includes measurable outcomes, better home-care and better mental health possibilities.

“But if we don't, because provinces don't get on that page, we will stick to our campaign promises,” the federal finance minister said. He repeated that “Monday is the day.”

During the election, the Liberals promised to address mental health needs and the growing cost of prescription drugs.They pledged to immediately invest $3 billion over the next four years on home care — but then included no money in last year’s budget.

“Canadians are going to suffer."

By lumping mental health and home care together, Barrette said, Morneau’s offer amounts to not much more than the $750 million the Liberals pledged yearly for home care alone and less money than what was previously expected for mental health.

“By not funding properly home care and mental health, Canadians are going to suffer,” he said.

Moving away from a floor of either nominal GDP growth or 3 per cent to a 3.5 per cent annual increase actually means less money, he also argued. Private sector forecasts suggest that nominal GDP growth will average 3.98 per cent over the next five years.

“We all know that projections two years from now are 3.8 per cent and up to 4.1; it will never go back to 3.5 per cent,” he said.

Ottawa’s offer is “totally unacceptable” and “a bit insulting,” Barrette added.

Conservative government took a similar approach

Morneau’s tactics may be reminiscent of the Conservatives’ unilateral action on health care. Five years ago, on Dec. 19, 2011, the finance minister, Jim Flaherty, surprised the provinces and territorial leaders by presenting a take-it-or-leave-it offer on health transfers over lunch.

Flaherty’s offer increased transfers to 6 per cent until 2016-2017 but after that shifted to a system based on increases in nominal GDP growth. A floor of 3 per cent ensured transfers never dipped below that. The provinces at the time described the unilateral and surprise offer as “totally unacceptable” and as “a frontal attack on public health care.”

On the campaign trail, Trudeau condemned prime minister Stephen Harper’s unilateral approach and said his government would do things differently.

The Liberal platform stated Trudeau would “restart” meetings with provincial and territorial leaders to negotiate a new health accord that would address the needs of an aging population and include a long-term agreement on funding.

justin trudeau
Prime Minister Justin Trudeau speaks during a news conference in Ottawa on Nov. 29, 2016.

“We will restart that important conversation and provide the collaborative federal leadership that has been missing during the Harper decade,” the platform states.

While the Liberals have negotiated successfully with the provinces on expanding the Canada Pension Plan and a climate change pact that includes placing a price on carbon use, Barrette suggested the Grits are walking away from the negotiating table after getting what they want without addressing the provinces’ most pressing concern: health care.

“Mr. Trudeau said he wanted collaboration. Is this collaboration?” he asked.

“How is it that they took a year to negotiate the climate change agreement, and we are going to have what two hours Monday to negotiate [health care]? That is totally unacceptable.”

While Barrette is livid and said he has “no appetite” for Morneau’s proposal, Quebec’s finance minister noted that several of his counterparts are heavily in debt and might feel pressured to say yes.

“Mr. Trudeau said he wanted collaboration. Is this collaboration?”

“Some provinces are so in the red that they might take it, but it’s a mistake,” he said. “The federal government is playing provinces against each other, as it always does, to, at the end of the day, have [its] way.”

He planned to spend the weekend talking with his provincial and territorial counterparts in hopes of presenting a common front in Ottawa on Monday.

Ministers split on deadline

Meanwhile, Morneau and Philpott seemed to be engaged in a bad cop, good cop strategy.

Philpott’s press secretary, Andrew MacKendrick, suggested that Monday may not be a hard deadline.

“Mr. Morneau has come out a bit more firm,” McKendrick told HuffPost himself, refusing to draw a firm line. “[Philpott] is cautiously optimistic.”

“Monday is a real opportunity with the ministers of finance and the ministers of health, when they are all together, to really have a fulsome conversation … to figure out the details and, hopefully, come out with some results,” he said.

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