On April 7, Finance Minister Chrystia Freeland presented a $60 billion dollar budget that includes $29 billion in new spending, and commits to more than $7.8 billion in health care spending over the next five years.
Since the election, the Liberals have made numerous commitments to primary care, mental health, long-term care, public health, pharmacare, and dental care. This budget is the first glimpse we have of how the government will prioritize those commitments.
- Liberal/NDP Supply & Confidence Agreement: Following the agreement made between the governing Liberals and opposition NDP, the Liberals included language from the agreement to secure NDP support for the budget. It is clear that on some files, such as pharmacare, considerable policy work is required.
- Dental care is prioritized over pharmacare: To ascertain the level of commitment a government has towards any given policy priority, look no further than how much funding is associated with that policy commitment. While dental care has a clearly articulated policy with $5.3 billion to implement it, the budget is silent on what the government means when they speak of pharmacare, nor does it have any financial commitment at this time. Notably, there is no mention of previous government commitments to address drug pricing.
- Not a health care budget: Despite the Liberal and NDP Supply and Confidence Agreement having a strong focus on health care, the 2022-23 federal budget is certainly not a health care budget. Instead, it is focused on affordability, housing, economic recovery, defense spending, and climate change.
- Continued targeted investments to PTs, with no substantive change to the Canada Health Transfer: In fact, separate from this budget, the federal government tabled a $2 billion spending bill several weeks ago to help PTs address surgical backlogs. Overall, the budget notes that $69 billion has been spent over the past number of years in response to the ongoing pandemic.
- No commitment to pandemic review(s): While it would be welcomed by some, and largely seen as a necessary step to improve Canada’s ability to respond to crises, there is no mention of any pending reviews of Canada’s public health functions or of pandemic related initiatives. However, the budget does include over $486 million for the Public Health Agency to shore up its disease and virus surveillance capabilities and National Emergency Strategic Stockpile.
- Missing election commitments: A number of commitments from the Liberal platform are noticeably absent from the budget, including some funding for long-term care and investments for personal support workers.
- Snap election? Don’t count on it: With the support from the NDP all but assured, and the Conservative Party undergoing a leadership race, swift passage of this budget bill can be expected.
- Follow the money: There are a number of new funding programs currently not defined, such as a Canada Growth Fund. Over the coming weeks and months, it will be important to determine delegated authorities and ownership over particular pots of funding to either shape or access new federal dollars.
- PT health care funding angst: There will be plenty of political tension growing over Canada Health Transfers as the federal government tries to implement a new dedicated Mental Health Transfer while hitting the mid-way point of the 2016-2017 Health Accords for Home and Community Care and Mental Health and Addictions. PTs have been adamant that the federal government needs to increase its share of health care expenditures. With new funding needing to flow to provinces on many aspects of the health care system, PTs will continue to increase this pressure, especially as the federal government’s balance sheet continues to improve in the out-years, relative to provincial budgets.
- Heavy on commitments, light on detail – where do we go from here?: Pharmacare’s first appearance in the Liberal budget was in 2019. Little tangible work has been done to move this forward from a policy concept to government policy that can be implemented. With the light touch on pharmacare in the 2022 Budget, expect a slow policy development process throughout 2022 as the government determines what language and funding commitments to make on pharmacare in the next budget.
Budget Summary and Insights
Canada Health Transfer (CHT)
In the weeks leading up to the pandemic in 2020, Premier’s converged on Ottawa, calling for the federal government to significantly increase the Canada Health Transfer. In addition to being an annual request by PTs, this also takes centre stage during any health accord “negotiations”, the last of which was seen in 2016-17. Throughout the pandemic, the federal government provided billions in transfers to support pandemic management and recovery, but did not increase the annual health transfer that currently increases at 3% or GDP (whichever is greater, which in this case, GDP is 4.8%).
PTs prefer the CHT to other federal health spending, as there are no conditions on how the funds must be spent. Provincial and territorial governments are again preparing for a public tussle with the federal government working to galvanize public support in favour of unconditional health transfers over the federal government’s preferred approach of targeted funding, i.e., home care, long-term care, mental health, dental care and pharmacare. To that end, the federal Liberal’s made the following commitments in today’s budget:
- In 2022-23, the Canada Health Transfer will provide PTs $45.2 billion in support—an increase of 4.8 per cent over the baseline for 2021-22. PTs have called for the federal government to significantly increase their contribution to the Canada Health Transfer to 35% of health care expenditures, which would be over $60 billion dollars in 2022-23.
- The CHT does not include the $69 billion provided to PTs since 2020 to support the response to and recovery from the pandemic.
The budget also notes that “any conversation between the federal government and the provinces and territories will focus on delivering better health care outcomes for Canadians”. Translation: There will be no further increase to the CHT beyond the budgeted 4.9% increase for this fiscal year, but the opportunity for targeted investments remains.
Seen as the most achievable and deliverable of the health commitments made in the Supply & Confidence Agreement, the most significant new health funding in the budget is for dental care. The Budget commits $5.3 billion over five years to dental care, starting this fiscal year, in addition to $1.7 billion ongoing.
The dental care program will be limited to families with incomes less than $90,000 annually, with no co-pay for families earning less than $70,000. The rollout will be staggered accordingly:
- Children under 12 in 2022
- Children under 18, seniors and persons living with a disability in 2023
- Full implementation by 2025
The Budget language on pharmacare mirrors the Supply & Confidence Agreement, with a vague commitment to work towards a universal national pharmacare including aiming to table a Canada Pharmacare Act by the end of 2023. Following its passage, the Canada Drug Agency will be tasked with developing a national formulary.
The budget also commits to developing a “bulk purchasing plan”, which is particularly ambiguous at this time. It does not appear that this plan will be developed until after 2023.
Long-term Care, Home Care & Seniors Care
Despite a high profile commitment in the Liberal Party’s 2021 election platform to increase federal transfers for long-term care to $9 billion over five years, up from the $3 billion announced in Budget 2021, there is no new money for long-term care in this year’s budget. Any additional funding for long-term care apart from what was announced last year will be drawn from Canada Health Transfer payments.
There is no new dedicated funding for home care beyond the $6 billion over ten years announced in 2017. The Budget does contain a commitment to double the expense limit for the Home Accessibility Tax Credit. Canadians will now be eligible for a tax credit of up to $3,000 for home renovations aimed at making their home more accessible and supporting people to age at home.
The Budget also contains commitments to the creation of a panel to study the creation of an “Aging at Home Benefit”, in addition to $20 million over two years to expand the New Horizons Seniors Program.
Life Sciences Sector Investments
The 2022 budget does not appear to include any specific life sciences sector investment. Instead, the budget refers to previous investments made, including a $1 billion allocation to the Strategic Innovation Fund to support Canadian life sciences and bio-manufacturing firms and develop more resilient supply chains. Broader investment and innovation commitments, included are:
- Proposing to establish the Canada Growth Fund to attract substantial private sector investment to help meet important national economic policy goals. The fund will be initially capitalized at $15 billion over the next five years.
- Intending to create an operationally independent federal innovation and investment agency, and proposing $1 billion over five years, starting in 2022-23, to support its initial operations.
- Undertaking a review of the Scientific Research and Experimental Development (SR&ED) program to ensure that it is effective in encouraging R&D that benefits Canada, and exploiting opportunities to modernize and simplify it.
Mental Health & Addictions
As noted in the Liberal’s election campaign platform and in subsequent commitments, the budget affirms the government’s intention to “engage with provinces and territories to inform the development of a new Canada Mental Health Transfer that will support the expansion and delivery of high quality and accessible mental health services across Canada”. There is no indication of how much funding would be put in place to support this new transfer payment. Separately, specific investments in the budget include:
$140 million over two years, starting in 2022-23, for the Wellness Together Canada portal so it can continue providing Canadians with tools and services to support their mental health and well-being.
$100 million over three years, starting in 2022-23 for the Substance Use and Addictions Program to support harm reduction, treatment, and prevention at the community level.
$3.7 million over four years, starting in 2022-23, to the Treasury Board of Canada Secretariat for Black-led engagement, design, and implementation of a Mental Health Fund for Black federal public servants.
Public Health & Emergency Preparedness
The Budget contains two significant commitments to the Public Health Agency of Canada for emergency preparedness, including $436 million over five years for surveillance and risk assessment, and $50 million for the National Emergency Strategic Stockpile to maintain a sufficient supply of medical supplies including personal protective equipment (PPE).
Health Human Resources
Staffing shortages have affected every part of the health system throughout COVID-19, and addressing health human resources challenges has been top of mind. Budget 2022 contains a commitment to expand the forgiveness of student loans of nurses and doctors who move to work in rural or remote communities, including increasing the maximum amount of forgivable loans to 50 per cent. There is also a commitment to expand the roles which will be eligible for loan forgiveness in an announcement this year, in addition to reviewing which communities are eligible.
Additionally, the budget proposes new funding, $115 million over five years, to expand the Foreign Credential Recognition Program and help up to 11,000 internationally trained health care professionals get their credentials recognized and find work in their trained field.
Budget 2022 contains commitments to three major areas of health research. This includes $20 million over five years to research the long-term effects of COVID-19, $20 million over five years to expand the study of dementia and brain health and $30 million over three years to support ongoing study and innovation at the Centre of Aging and Brain Health Innovation.
Other Health-Related Commitments
- The Budget includes language that would introduce an excise duty on vaping products effective October 1, 2022.
- $25 million over two years to pilot a Menstrual Equity Fund to improve access to menstrual products.
Read Budget 2022-23: A Plan to Grow our Economy and Make Life More Affordable here.
Read the Federal Government’s News Release on Budget 2022-23 here.
Read the Federal Budget 2022 Health Backgrounder here.
Read the Liberal-NDP Confidence and Supply Agreement here.