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Rapid Recap: Federal Fall Economic Statement 2023


November 21, 2023- With the Liberal Party low in the polls, today’s federal Fall Economic Statement (FES) comes at a time when the government needs to show meaningful progress on top of mind issues, noticeably, affordability. With billions in health funding already provided in the previous budget and the vast majority tied up in bilateral health agreements that are not yet in place with provinces, this FES is not focused on health care. Additionally, the federal government has turned its attention to cost containment and deficit reduction, something provinces and territories are also grappling with.

In the spring federal budget, the government committed around $50B in new funding for health through bilateral agreements and the Canada Health Transfer. This funding will be provided in three different bilateral agreements (in addition to Canada Health Transfer increases):

  1. Mental Health and System Modernization

  2. Aging and Dignity 

  3. Rare Drugs Strategy

British Columbia is the only province to date to sign a tailored health funding agreement with the federal government. Funding does not flow until provinces and territories have signed agreements, which means billions have been set aside earmarked for these agreements.

What, then, does the FES mean for health care? Aside from the cancellation of the GST/HST for psychotherapy and counseling services, there was no new funding announced. The government’s supply agreement with the New Democrats has tangible commitments yet to be fulfilled, notably, pharmacare. Although pharmacare was not addressed directly in the FES, NDP Leader Jagmeet Singh confirmed he is confident that a bill on pharmacare is still possible. The impasse between the Liberals and NDP has been focused on single-payer pharmacare, something the governing Liberals continue to shy away from for fiscal concerns.

Key Takeaways

The FES focused on affordability and supporting the middle class with the current high cost of living. There was an announcement of a new Canadian Mortgage Charter to provide tailored mortgage relief for those Canadians who are facing financial difficulty.

  • The FES does not prioritize health, which is a concern given the 2023 deadline for the implementation of the Pharmacare Act as part of the Supply and Confidence Agreement with the NDP.

  • Only B.C. has signed onto one of the three potential bilateral agreements, meaning there are still billions of untapped health care dollars available for provinces and territories.

  • GST and HST are being removed from psychotherapy and counseling therapy services.

  • There was a commitment to announce in the coming months the next phase of increased labour mobility of health care workers interprovincially to reduce barriers and meet labour market needs.

Looking Ahead

The NDP Supply and Confidence Agreement is set to last until the 2025 Federal Budget, with the next general election legislated to take place in October 2025. If the NDP backs out of the agreement, an election is not guaranteed as the Liberals would then operate on a vote-by-vote basis.

Notably, the Liberals have received alternating support from the NDP and Bloc Québécois since 2019, including in the past few weeks, where the Bloc backed the Liberals in a Conservative motion on the carbon tax — a motion also supported by the NDP. There is little to gain for the Liberals, NDP and Bloc if they go to an election. As of now, the Conservatives  would take seats from all parties and likely form a majority government.

With conciliatory comments from the NDP Leader following the release of the FES, it is likely that the FES will pass with the support of the NDP. Expectations have also been raised that we will see a pharmacare bill before the end of the 2023 Parliamentary session.