What You Need to Know About the Federal Government’s Offer to Provinces and Territories
Provinces and Territories (PTs) have been seeking a meeting with the Prime Minister for months, calling for significant increases in annual funding contributed through the Canada Health Transfer. Today, the Premiers and Prime Minister finally met to discuss an offer tabled by the Government of Canada.
There is no deal, yet. The Federal Government tabled a 10 year offer with $46.2 billion in new funding, consisting of:
- An immediate $2 billion Canada Health Transfer top up
- A guaranteed 5% Canada Health Transfer escalator for 5 years conditional on data sharing valued at $17 billion over 5 years
- $25 billion over 10 years in new funding for bilateral agreements on shared health priorities
- $505 million over 5 years for Canadian Institutes of Health Information, Infoway and federal health data partners
- $150 million for the Territorial Health Investment Fund
- $2.5 billion for Indigenous health
- Maintaining existing bilateral health care agreements on Mental Health & Additions and Home & Community Care (2016-17)
Premiers’ Perspective:
- The Premiers will not confirm their acceptance of the agreement and will be taking it back to digest and discuss together over the coming days. Premiers indicated that the conversations are a good starting point and transforming health care is not just about money but also innovating an out of date system.
- Provinces and Territories are disappointed funding is lower than what they asked for, as they are concerned about the long-term growth and cost pressures on the health care system. Premiers are seeking an additional $28 billion per year in funding through the Canada Health Transfer.
- The Premiers (in particular the Quebec Premier) are pleased that there are no conditions with how they can disperse the money and therefore they can use it based on the needs of their own jurisdictions.
- Despite the Manitoba Premier saying that there is not a lot of “new” money, other Premiers did highlight the new funding in this offer, particularly the Premier of Nova Scotia.
- Despite calls from the federal NDP leader today, the ongoing discussion about independent health facilities and private delivery of publicly funded health care was not publicly discussed. The Government of Canada continued to indicate they will uphold the Canada Health Act, and there is no indication that any government is in contravention with the act.
- Premiers did note that new funding to support Indigenous health is welcome but needs to go beyond on-reserve support.
What Happens Next?
- The Council of the Federation (ie, Provincial and Territorial Premiers) will meet within days to discuss further. It is highly likely that Provinces and Territories will accept the offer, despite it not being as high as governments would like. When pushed by reporters on who would not accept the offer, Premiers did not respond directly.
- In a briefing delivered to stakeholders Tuesday evening, Health Canada indicated that the Minister of Health and Minister of Mental Health will be writing to provincial and territorial counterparts in the coming days with plans on how the offer from the Government could advance, and if PTs accept, bilateral negotiations could then commence.
- Governments across Canada would like to have this fiscal arrangement confirmed in order to finalize fiscal plans and annual budgets. As such, confirmation of the Federal offer — potentially with changes, if the Council of the Federation proposes them — would come within weeks, not months.
- Following the Federal Budget’s royal assent, a process would be struck similar to 2016-17 to revise and establish new health indicators, led by the Canadian Institute for Health Information.
Key Takeaways
- At a high level, there are a few notable policies that are not included in the Government of Canada’s offer: pharmacare, dental care, a dedicated Mental Health Transfer and any mention of the Government of Canada’s financial commitment to a National Rare Drugs Strategy.
- The Federal Government will have a difficult task ahead partnering with Provinces and Territories on adding new federal driven health priorities given PTs need to improve existing health services.
- The offer includes funding that would benefit federal pan-Canadian Health Organizations, which will be leveraged to implement some of the light-conditionality of funding like data reporting.
- On the data front, the Federal Government is not wholly changing their approach (e.g. they are not funding or mandating a national data system), but they have put substantial dollars behind pan-Canadian agencies to make progress on national data priorities and are using their funding lever to push the provinces to take a more collaborative/national approach to data moving forward.
- The commitment to increase the Canada Health Transfer to a 5% escalator was an easy commitment for the Federal Government to make, considering the 2023-24 increase to the Canada Health Transfer is set to increase at 9.3% already. However, if the economy does face a recession this would be beneficial to provincial health spending plans. The former Conservative Government constrained the Canada Health Transfer’s growth from a 6% annual increase (established in 2004 by the Martin Government) to grow in line with a three-year moving average of nominal gross domestic product (GDP), with total funding guaranteed to increase by at least 3% per year – which will now be 5% for at least the next five years.
- In the world of public opinion, it will be difficult for Provinces and Territories to make the case that the Federal Government is not contributing enough new funding, especially when smaller provinces will see a demonstrable increase in funding.
- The 2016-17 Health Accords saw an offer of $11 billion over ten years for bilateral deals. This offer today is considerably higher – $25 billion for bilateral deals – over the course of the next ten years.
- Like anything, the details matter. If PTs accept this offer, the bilateral deals will determine the extent to which this offer drives any change in what the provincial health systems actually do.
- The multi-month process ahead to establish indicators will give stakeholders and the public an opportunity to inform how the success of this spending will be measured. It will take time to develop new indicators, and years for those indicators to be reported on. The 2016-17 accords only had substantial reports on health indicators released in December 2022.
Additional Detail
Canada Health Transfer (CHT)
To access the CHT, the Federal Government is requiring PTs to:
- Commit to improving the collection, sharing and use of health information.
- Agree to common standards and policies relating to data.
- Review, develop, and use common indicators in tandem with CIHI and its data partners, including for Indigenous Health.
- CIHI will lead a process with provinces, territories and experts to review and refine the existing common indicators and develop a broader list, including new indicators.
Bilateral Agreements
- As part of the bilateral agreements, PTs will be asked to develop action plans with tailored indicators describing how funds will be spent (incremental to existing spending) and how progress will be measured.
- These agreements will advance the four shared health priorities:
- Expanding access to family health services, including in rural and remote areas;
- Supporting our health workers and reducing backlogs;
- Improving access to quality mental health and substance use services; and
- Modernizing the health care system with standardized health data and digital tools.