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Atlantic provinces want age to be factor in federal health funding formula

OTTAWA – Health ministers from the rapidly aging Atlantic Canada region say the future formula for federal health transfers should take into account how many people in each province have entered their golden years.

July 20, 2016  By Andy Blatchford The Canadian Press

The prickly debate over federal health transfers has been quiet in recent years, but has begun to resurface with the current funding formula set to expire at the end of the fiscal year. It’s expected to be a dominant topic at the meeting of provincial and territorial premiers beginning Wednesday in Whitehorse.

As provinces negotiate a new deal with the federal government, premiers have called on Ottawa to cover at least 25 per cent of their health costs. Many say the level is already well below that mark.

But even an agreement among provinces on a funding formula could be a challenge because of demographic differences.

New Brunswick Health Minister Victor Boudreau said smaller populations in Atlantic Canada are aging faster than other regions, which adds to health-care costs.


“It’s not unique to us, but it certainly is something that is affecting us and is going to affect us sooner and harder than anybody else,” Boudreau said in an interview before the start of the Council of the Federation meetings.

“(In) some of the younger, populated provinces for example, the demographic argument is not one that they necessarily support with open arms. So, again, every province has its particular challenges.”

Boudreau said a national consensus on funding would be the best way forward for everyone. But he added federal Health Minister Jane Philpott has hinted Ottawa is open to bilateral agreements with individual provinces if a Canada-wide deal cannot be reached.

Newfoundland and Labrador’s health minister warned a straight per-capita funding formula would hit Atlantic Canada “fairly hard.”

“I think there’s general agreement, certainly on the eastern side of the country, that age needs to be a factor in weighting those payments,” John Haggie said in an interview before the meetings.

Haggie said Philpott has signalled the feds want the relationship to shift from the “unrestricted money” of a health transfer into “more targeted” cash within an accord.

When it comes to targeted money, the concern for Haggie is that federal priorities don’t always match the priorities of every province.

He noted Ottawa committed to spend $3 billion over four years across Canada on improving home care, a campaign promise that was later omitted from the federal Liberals’ March budget.

Haggie said there have also been discussions between Ottawa and the provinces about a $3-billion commitment – to be paid out in two $1.5-billion blocks – for mental health and addiction.

There were also federal-provincial discussions on another $3-billion health investment, he said.

“But it wasn’t clear after speaking to the federal minister that we weren’t actually talking about the same $3 billion being spent three different ways, three times over,” Haggie said.

“The signals have been a little bit mixed quite frankly.”

Last week, Quebec Health Minister Gaetan Barrette said Ottawa has signalled it intends to let the annual increase in health transfers fall to as low as half its current rate.

Barrette said his officials have been told Ottawa has no appetite to keep the escalator at its current level of six per cent. Starting in 2017-18, the transfer is scheduled to grow only as much as Canada’s nominal GDP, with a guaranteed minimum increase of three per cent.

Provincial leaders, including Barrette, have voiced concerns about a possible drop in the escalator as they face growing heath-care costs.

Nova Scotia Health Minister Leo Glavine has said big provinces like Ontario and Quebec are “certainly driving hard” to see the annual increase stay at six per cent.

Glavine’s province is seeking a formula based on the percentage of residents over 65. By 2030, about 30 per cent of Nova Scotia’s population will be older than 65, he added.

Prime Minister Justin Trudeau was asked Wednesday about a possible impasse in the talks.

“I’m looking forward to robust discussions with the provinces as our health minister talks about the kind of future for our health-care system that we need.”

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