01/17/2017 13:52 EST | Updated 01/18/2018 00:12 EST

Saskatchewan, Ottawa reach health-funding deal despite province's concerns

REGINA — The so-called united provincial front aimed at forging a new national agreement on health-care funding disintegrated even further Tuesday — this time with Saskatchewan striking a bilateral deal with the federal government.

Saskatchewan's deal with Ottawa holds the health transfer increase to either three per cent or the three-year moving average of nominal GDP growth — whichever is higher.

It also includes an additional $348.8 million over 10 years for home and mental-health care — money the federal government says will improve mental-health services for children and youth and reduce the number of hospital patients better cared for at home or in the community.

The province had little choice but to sign the deal, Saskatchewan Health Minister Jim Reiter suggested Tuesday.

"The federal government made it very clear that they weren't going to have a first ministers meeting on this and that they weren't going to budge off those numbers," Reiter said.

"There's some very significant stresses in mental-health and home care in this province, and we thought it was time to get on with the work."

Late last month, the federal government offered to increase health transfer payments by 3.5 per cent annually and fork out another $11.5 billion over 10 years in targeted funding, primarily for home care and mental health.

The provinces and territories rejected the offer, only to see their united front splinter as New Brunswick, Newfoundland and Labrador, Nova Scotia, Yukon, Northwest Territories and Nunavut all forged bilateral agreements.

Indeed, any notion of a united front "went by the wayside" long before Tuesday's announcement, Reiter said.

The remaining provinces are nonetheless standing by their demand for federal health transfers to grow by 5.2 per cent each year, and that Prime Minister Justin Trudeau meet with the premiers to discuss health funding.

Those provinces still represent close to 90 per cent of the Canadian population — a plurality Ottawa cannot ignore, said Quebec Health Minister Gaetan Barrette, an outspoken thorn in the side of the federal government on the issue of health funding.

"It is, again, a tactic on the part of Ottawa to try to divide and conquer," Barrette said in an interview.

"But at the end of the day, Canadians need to remember that it will result in a very significant reduction of funding — therefore a reduction of services towards vulnerable Canadians."

After the Saskatchewan deal was announced, Quebec received a message that Barrette called  a "thinly veiled threat from Ottawa" urging the province to negotiate a bilateral deal in order to avoid missing out on additional funding.

"To me, in political words, this is as close as you can get to a threat," he said. "I can tell you one thing, this is not (how) you define a federation, this is the way to define a dictatorship."

The provinces have been receiving six per cent annual increases in federal health transfers for over a decade. Starting in April, that rate falls to either three per cent or the three-year moving average of nominal GDP growth, whichever is higher.

Three territories and seven provinces, including Saskatchewan, released a joint statement Tuesday reiterating their argument that Ottawa's share of health spending would continue to fall over the next 10 years under the federal government's proposal. 

Reiter also said Ottawa plans to permit Saskatchewan continue with private MRI scans for at least the next year. Saskatchewan's legislation allows private MRIs as long as the clinic does a second scan at no charge for a patient on the public wait list.

"It's a year to prove that it works, that it conforms to the Canada Health Act."

He has said the policy led to 2,200 MRI scans — all at no cost to the taxpayer — and that 1,100 people have been taken off the wait list.

Federal Health Minister Jane Philpott had threatened to take a hard line against the practice. In a statement Tuesday, the Canadian Health Coalition accused Philpott of backing down in order to get the funding deal done.

— with files from Andy Blatchford in Ottawa