Canada's Prime Minister Justin Trudeau takes part in a meeting with Provincial and Territorial premiers to discuss healthcare, in Ottawa, on Feb. 7.BLAIR GABLE/Reuters
First, do no harm. That medical maxim is the best that can be said of the Trudeau Liberals’ proposed increases to federal health care funding.
Those extra billions of dollars – far less impressive than Ottawa had portrayed – will do nothing to address the fundamental flaws in Canada’s health care.
But there are two enormous pitfalls that the Liberals have avoided, so far. The most obvious, and most egregious, mistake by the Liberals would have been to accede to the demands of NDP Leader Jagmeet Singh to bar the provinces from expanding the use of private delivery of publicly funded health care.
Similarly, the Liberals, at least for now, are refusing to cave in to demands from the provinces for a massive increase in federal health transfers without conditions. As we have argued before, it would be folly to simply write the grotesquely large cheque that the provinces were demanding: an immediate increase in the Canada Health Transfer of $28-billion, with annual increases of at least 5 per cent in perpetuity.
If implemented in the coming year, such a move would send the health transfer soaring to $77.4-billion, an increase of 56 per cent. By the end of this decade, the transfer would jump to more than $100-billion. Such an increase would drain federal coffers and create an unacceptable imbalance between who was spending health care dollars – the provinces – and who was footing the bill, Ottawa.
It would be an untenable situation if Ottawa were to attach conditions to such funding, a guarantee of perpetual provincial grousing about abuses of federal spending power. It would be a farcical situation if it did not, with the provinces able to pad their health care budgets and put off needed reforms.
Indeed, there’s no guarantee that any extra federal funds will even flow to health care. According to the Canadian Institute for Health Information, provincial and territorial spending is projected to rise just 1.8 per cent in the current fiscal year, less than half the rate of increase in the federal health transfer.
That rather undercuts the cry from the provinces that Ottawa is beggaring the health care system. Still, this week’s announcement is far less sweeping than the Liberals would have Canadians believe.
To start with, the $46.2-billion funding increase over 10 years is much less impressive on a year-by-year basis, particularly in the early going. For the upcoming fiscal year, the federal government will spend an extra $4.9-billion, including a $2-billion one-time payment. In the following year, there’s only an additional $2.9-billion beyond already projected increases.
Similarly, the 5 per cent floor for increases in health transfers over the next five years looks, at first, to be a substantial commitment. That illusion fades under scrutiny. In the first two years, the health transfer is already projected to increase by more than 5 per cent. After that, the 5-per-cent floor will increase federal health care transfers, but won’t increase the base funding, until fiscal 2029. In that final year, the new formula will bump up base funding, but Ottawa will still avoid a rapid escalation in its annual commitment, for the most part.
So, the Liberals have committed not very much in the way of funds, and Canadians can expect not very much in the way of change to an overstretched health care system.
One happy exception is the tenuous commitment by the provinces to share data on eight key health care metrics, most notably the percentage of Canadians who have regular access to a health care professional. If Ottawa is successful, that database will give Canadians an invaluable tool to measure the performance of their health care system.
That tool will be even more useful if provinces cannot simply pass the collection plate, or shift the blame, to Ottawa. A substantial increase in federal transfers, with conditions, is one option, although Quebec, at least, is sure to resist any such incursion.
A better approach would be for Ottawa to reduce its taxes, as it did in 1977, to allow the provinces to raise theirs. Ceding federal tax points would at once give the provinces additional health care dollars – while making them clearly accountable to their own voters for how those dollars were spent.
Such a move would be far more ambitious than the modest measures rolled out this week. Fixing Canada’s health care woes will require much stronger medicine.