Health transfers | Ottawa offers provinces and territories $46.2 billion over 10 years

(Ottawa) The provinces were calling for an increase in health transfers of $28 billion a year to tackle the ills that afflict health networks across the country. The Trudeau government offered them a completely different remedy: an average increase of $4.6 billion per year.

Prime Minister Justin Trudeau unveiled the details of the federal offer during a two-hour meeting with his provincial and territorial counterparts. In all, the Trudeau government plans to increase transfers to the provinces by $46.2 billion over the next decade. From this envelope, Quebec would get some $9 billion more if the proposed agreement is accepted, according to the calculations of federal officials.

In the immediate term, the Trudeau government is proposing to offer a $2 billion lump sum payment this year to help provinces respond to immediate pressures, including in children’s hospitals and emergency rooms, and to reduce long waiting times. waiting for surgeries.

The only real gain for the provinces concerns the annual increase in health transfers. It would be set at 5% for a period of five years, as the provinces wished, starting in 2024-2025. But thereafter, the current formula – either a minimum of 3% or a rate equivalent to inflation if the latter exceeds the threshold of 3% – would again be in force.

To get their share of the pie, provinces should commit to improving the way health information is collected, shared, used and communicated to Canadians.

“The catch-up we asked for is not there. So that does not solve the fundamental problem of funding health care in Canada,” said Quebec Premier François Legault during a press conference with his counterparts from the provinces and territories.

Chairing the Council of the Federation this year, Manitoba Premier Heather Stefanson said the premiers wanted to take a few days to “digest” the federal government’s offer. She intends to call a meeting of the Council of the Federation in a few days to take stock.

But the provinces and territories have little hope of forcing the hand of the federal government to revise its proposal upwards.

“What I understood from Mr. Trudeau is that it was a pretty final offer,” said François Legault. “Obviously, no matter the amount, even if it’s small, it’s welcome. But in fact, this is very far from what we need in the long term to finance health care. It is certain that for the next few years, if I speak for Quebec, we will invest the amounts necessary to straighten out the health network. […] But the fact remains that this is not sustainable in the long term. So, we will have to have other discussions with the federal governments that will be there, ”he added.

For his part, the Premier of Ontario, Doug Ford, argued that the federal proposal falls far short of provincial expectations, and that it should constitute, according to him, a starting point for new discussions.

Under the federal proposal, Ottawa is including $25 billion in new funding over 10 years for provinces and territories that enter into bilateral agreements with Ottawa.

Wanting to expose his version, Justin Trudeau went to an Ottawa hospital on Tuesday evening to defend his proposal. He pointed out that Ottawa’s financial effort will be considerable: in all, $198.6 billion will be paid to the provinces for health over the next 10 years, including $46.2 billion in new funding. He confirmed that the offer was essentially final.

“This is a massive investment in health care,” argued Mr. Trudeau, referring to the sum of 198 billion and pointing out that several provinces are posting budget surpluses, unlike the federal government.

The tax cuts promised by Quebec should not have an impact, says Legault

Before learning of the federal government’s offer, Mr. Legault had defended his intention to reduce taxpayers’ taxes as of the next budget. According to him, this should have no impact on the talks that the provinces and territories have with Ottawa on the increase in health transfers.

Mr. Legault pointed out that Quebec taxpayers are the most taxed in North America and that they will remain so even after the reduction in the tax burden that his government intends to announce in the next budget.

“It is important to remember that tax rates in Quebec are higher than elsewhere in the rest of Canada and the United States. You know, my obsession is to close our wealth gap with the rest of Canada. For that, you have to have incentives. Currently, the very high tax rates in Quebec are not helping to eliminate this wealth gap with the rest of Canada,” he said.

“I don’t think it has anything to do with it. We will continue, despite the promised tax cuts, to have very high taxes in Quebec,” he added.

Over the past two years, the provinces and territories have united to demand a substantial increase in health transfers of $28 billion per year. According to their calculations, this would allow Ottawa to pay 35% of health care costs in the country, compared to 22% today.

The Trudeau government had already made it known that it had no intention of acceding to this request, going so far as to point out that the provinces have sufficient immediate financial capacity in the short term to invest more in the health system if they wish.

The federal government also contests the calculation method and maintains that it already pays 35% of the costs if we take into account the tax points transferred to the provinces in the 1970s.

WHAT THEY SAID