What to know about the government’s new health care funding deal with provinces

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On Tuesday afternoon, Canada’s premiers met with Prime Minister Justin Trudeau to discuss a new 10-year health care funding deal with the federal government. As health care systems across the country buckled during the pandemic, premiers demanded Ottawa increase health transfers to address the resulting problems, including staff shortages and ER wait times.

Here’s what we know:

• On Tuesday afternoon, Mr. Trudeau presented the Premiers with a proposal that would bring total federal spending on health care to $196.1-billion in the next decade. Of that, $46.2-billion is in new funding.
• The new federal money would be divided between the Canada Health Transfer and $25-billion for separate bilateral deals with individual provinces and territories.
• The premiers said they were disappointed in the proposal, which is significantly less than their long-standing demand of bringing the federal share of health care funding to 35 per cent, from 22 per cent. But no premier said they would reject the proposal.
• The health transfer, which was already supposed to increase by 9.3 per cent this year to to $49.4-billion, will get an additional $2-billion top-up, bringing it to $51.3-billion.
• It is expected that the deals will be finalized before the federal budget this spring.

What can Canadians expect out of today’s meeting?

Mr. Trudeau met with the premiers to propose a new long-term health care funding plan during a closed-door meeting on Tuesday afternoon. The premiers have not yet released their response to the proposal. Ahead of the meeting, Manitoba Premier Heather Stefanson and Quebec’s François Legault told reporters in Ottawa on Tuesday morning that they are keen to strike a deal.

Mr. Trudeau has described Tuesday’s session as a “working meeting” and said he doesn’t expect deals to be finalized that day.

What does the proposed health care deal include?

The proposal includes $46.2-billion in new funding over 10 years, which would bring up the total federal spend on health care to $196.1-billion in the next decade.

The new federal money would be divided up between the baseline funding that is sent to provinces and territories through the Canada Health Transfer and $25-billion for separate bilateral deals with individual provinces and territories. The bilateral agreements are expected to cover areas including primary care, staff shortages and surgical backlogs, and mental health.

The health transfer, which was already supposed to increase by 9.3 per cent this year to to $49.4-billion, will get an additional $2-billion top-up to tackle immediate pressures in pediatric hospitals and emergency rooms, and long surgical wait times.

The Liberals also propose growing the rate at which the health transfer increases to 5 per cent a year, for five years. The current floor for increases is 3 per cent.

In return for the federal funding, the provinces and territories will have to improve how health data is collected, share and reported to make it easier to track and compare health outcomes.

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The proposal falls short of the premiers’ original demand of an immediate $28-billion cash injection with no conditions. But Manitoba Premier Heather Stefanson and Quebec Premier François Legault told reporters on Tuesday morning that they are keen to strike a deal.

How have the premiers reacted to the proposals?

During a press briefing on Tuesday afternoon, the premiers described the proposal, which is significantly less than their long-standing demands, as “disappointing.”

But Ontario Premier Doug Ford said he welcomes any new funding “no matter how small or large” and he called the federal offer a “down payment on further discussions.” B.C. Premier David Eby called Ottawa’s proposal “fiscally limited.”

Prior to the meeting with Mr. Trudeau, Mr. Legault said “we are open to a first step in the right direction,” adding that “a substantial amount would be welcome, even if it isn’t the total amount.” After seeing the offer, Mr. Legault said he and the Prime Minister might have a different understanding of what “substantial” means.

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In 2020, the premiers asked for an immediate, no-strings attached increase to the Canada Health Transfer, which is the program in which the federal government transfers funding to provinces and territories for health care. Premiers called for the transfer to cover 35 per cent of the cost of health care, compared with about 22 per cent now. That would amount to about a $28-billion increase. In comparison, Ottawa’s transfer last fiscal year was $45.2-billion.

Mr. Trudeau pushed back against those demands, stating that any new money without conditions was not an option. The premiers rebuffed any federal conditions, until in late January, Ontario Premier Doug Ford agreed to Ottawa’s demand for a national health data system. Other provinces, including Quebec, have since followed suit.

What could the bilateral deals include?

The bilateral deals would allow each province and territory to address regional issues, including improving primary care, addressing staff shortages and tackling surgery backlogs.

Mr. Ford has said his province wants a bilateral agreement to include money to hire more nurses and doctors, reduce backlogs in surgeries, and improve long-term care.

B.C. Premier David Eby’s proposal for a bilateral deal will include additional help with the cost of home and community care, as well as mental-health and addictions initiatives. Newfoundland and Labrador Premier Andrew Furey says his top priority is increasing access to primary care.

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How does health care funding work in Canada?

Provinces and territories receive some health care funding from the federal government through the Canada Health Transfer. Provinces and territories cover around 78 per cent of health care funding, with the federal government providing the rest through health transfers.

In their 2022-23 budgets, the provinces collectively forecast to spend around $203.7-billion on health. This fiscal year, Ottawa sent around $45.2-billion in health transfers.

What have the opposition parties said about the health care meeting?

Ahead of the talks, the Conservatives declined to disclose whether they support increasing health transfers and whether they would uphold a new health deal if their party was to form government.

NDP Leader Jagmeet Singh said his party believes health transfers should be even higher than what the premiers are asking for, so that Ottawa covers 50 per cent of health costs. He also said federal funding should come with strict conditions that it not go toward for-profit, private health care delivery within the public system. Bloc Québécois Leader Yves-François Blanchet said he believes there should be no conditions on the federal money.

With reports from Robert Fife, Marieke Walsh, Bill Curry, Laura Stone and The Canadian Press