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Ottawa Ready To Agree To Unconditional Health Care Transfers With Provinces

Once the pandemic is under control, Dominic LeBlanc says the federal government is willing to negotiate recurring health care transfers.
Minister of Intergovernmental Affairs Dominic LeBlanc appears via videoconference during a news conference on the COVID-19 pandemic in Ottawa, on Jan. 15, 2021.
Minister of Intergovernmental Affairs Dominic LeBlanc appears via videoconference during a news conference on the COVID-19 pandemic in Ottawa, on Jan. 15, 2021.

OTTAWA — The federal government is ready to negotiate unconditional and recurring health care transfers after the pandemic is under control, Intergovernmental Affairs Minister Dominic LeBlanc said Thursday.

“If the economic recovery is clear, if COVID-19 — and, God, we all hope that’s the case — is looking like it is in the rearview mirror this summer, that would be the time where the government of Canada would be in a position to say to [the provinces] this is the amount of money that we are prepared to spend in an ongoing, recurring basis in an unconditional way for health care, for public health care in the provinces,” Leblanc said on CBC News Network’s “Power & Politics” program.

This is the first time Prime Minister Justin Trudeau’s government has stated it is prepared to make unconditional transfers.

On Thursday, six premiers joined a virtual press conference to call again on Ottawa to play a greater role in funding health care, immediately and urgently, arguing that the federal government should be spending 35 cents on the dollar — an extra $28 billion a year — not 22 cents compared with the provinces’ 78 cents, as they said currently happens. This would be a way of getting the federal government closer to an ideal 50-50 split, they said.

Prime Minister Justin Trudeau listens during a news conference in Ottawa on Wednesday.
Prime Minister Justin Trudeau listens during a news conference in Ottawa on Wednesday.

Back in December, when the premiers first made this request, Trudeau said he was willing to increase Ottawa’s portion of the health-care costs but only after the pandemic. He also danced around the issue of unconditional transfers.

He suggested instead that he had priorities he’d like to see funded, such as pharmacare and standards for long-term care homes.

“We will continue to meet [with the provinces] to talk about how we can assure a better long-term financing for the health-care system, with also, obviously, transparency and accountability for Canadians for this health-care system,” Trudeau said on Dec. 11.

Even today, political staffers were telling reporters behind the scenes that Ottawa would not agree to unconditional transfers. They wanted to get a bang for their buck, and that the Liberal government would want to ensure money was spent on health care, not tax cuts.

Alberta Premier Jason Kenney listens as the 2021 budget is delivered in Edmonton Alta, on Feb. 25, 2021.
Alberta Premier Jason Kenney listens as the 2021 budget is delivered in Edmonton Alta, on Feb. 25, 2021.

As if to make the federal Liberals’ own argument, Alberta Premier Jason Kenney said during the premiers’ virtual news conference on Thursday that he might continue to introduce corporate tax cuts to spur investments and bring badly needed jobs into his province — all while asking Ottawa for a bigger handout.

During Trudeau’s first mandate, for example, the federal government insisted on arrangements with most provinces that ensured some new money would be spent in certain areas.

Ontario’s 2017 funding agreement, for example noted that over the next 10 years, the federal government would provide an extra $4.2 billion to be spent on better home care ($2.3 billion) and on mental health initiatives ($1.9 billion).

Quebec’s agreement said Ottawa would spend an extra $2.52 billion in funds targeted to support home care and mental health in the province, but noted the principle of asymmetrical federalism and Quebec’s ability to exercise full control over managing health services, including setting its own priorities.

Quebec Premier Francois Legault speaks to the media at the COVID-19 press briefing on Wednesday.
Quebec Premier Francois Legault speaks to the media at the COVID-19 press briefing on Wednesday.

Quebec’s current premier, François Legault, has been adamant that unconditional transfers are the only option that respects provincial jurisdictions.

“Right now the provinces and territories have a very important problem with financing the health-care services,” he told reporters. “The problem became worse with the COVID crisis, and the solution, we think, involves an increase in health-care transfers without conditions. One of the concerns we have — Mr. Trudeau has already said he wants to make conditional transfers — … we don’t think it respects provincial jurisdictions … and we think it’s important not to centralize and create administrative problems in the Canadian federation.”

While LeBlanc’s answer suggests — and senior staffers confirmed to HuffPost Canada — that Ottawa is willing to bend on unconditional transfers, it still wants the money to be spent on health care and will push for some assurances that the extra cash is tied to demonstrable health outcomes.

It’s also likely the Trudeau government will want to hand out extra money for specific projects, such as long-term care and pharmacare, much as it did for mental health and home-care services.

The change, however, will not come, as some premiers are demanding, in this spring’s federal budget.

“Mr. Trudeau also told us,” Legault said, “that he wanted to focus on the pandemic and then look at health care. We don’t agree with him. We think, on the contrary, there are important decisions that need to be taken now.”

Ottawa is still at loggerheads with the premiers over how much the federal government actually contributes to the health-care system. It argues that it spends far more than 22 cents on every dollar because before 2009, Ottawa transferred tax points to the provinces that were worth billions of dollars, and that that transfer should be accounted for.

“We said to them in December that it would be important that we all understand together a basic set of financial metrics,” LeBlanc told CBC.

Legault told reporters that with an aging population and the increased costs of new technology and medicine, the provinces are having to increase their health-care budgets by five per cent year over year, while the federal transfers rise by only three per cent.

“So, year after year, the proportion of health-care spending funded by the federal government diminishes,” he said, and “the problem gets deeper year after year.”

B.C. Premier John Horgan addresses the media at the Legislative Assembly of British Columbia in Victoria on Monday.
B.C. Premier John Horgan addresses the media at the Legislative Assembly of British Columbia in Victoria on Monday.

British Columbia Premier John Horgan told reporters that every joint-provincial meeting he’s attended as part of the Council of the Federation has been focused on health-care transfers. The pandemic, he said, just brought the problem into graphic light.

“This is...about services for people, he said. “The only way we are going to meet the expectations — and the legitimately high expectations — of the citizens that we serve is by having a cost-sharing formula that is closer to 50/50 than 78/22.”

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