With a majority government in Ottawa, will Prime Minister Stephen Harper thumb his nose at provinces seeking a fresh deal that would transfer billions to sustain their cash-strapped health systems?
Provincial Health Ministers may be discussing strategies to avoid such a catastrophe when they meet in Halifax next month.
During the Federal election Harper said he would only commit to extending the Federal-Provincial Health Accord by two years – to 2016. The 10-year 2004 Accord increases Federal health transfers to the provinces by 6 per cent per year.
Federal Finance Minister Jim Flaherty has mused out loud that he may apply the brakes on spending in any new accord.
Given the present economic uncertainty and a Federal deficit in excess of $30 billion, Flaherty may be urging his boss to renege on his modest election promise of a two-year extension on the present accord.
This has got to make the provinces nervous. In Ontario 23 per cent of health funding comes from the Federal government.
“This is not a debate about transfers to the provinces,” Ontario Finance Minister Duncan said a year ago in an interview with the Globe and Mail. “This is a debate about the future of universal health care.”
Ontario, facing a deficit of its own, is counting on Federal revenues to carry almost half the 3.4 per cent increase in health spending promised during the fall provincial election.
While the last accord was about reducing wait times, Dalton McGuinty wants the new accord to be framed around improvements to seniors care.
With Ontario aggressively slowing the pace of its own spending on health care, such talk becomes moot.
Federal money will reduce the impact of McGuinty’s own funding restraint, but will leave little wiggle room for significant new spending.
The government will insist that they can achieve the contradictory goals of restraint and enhanced service through greater efficiency, but this has little credibility. Even Dr. Alan Hudson, the McGuinty government’s former lead on wait times, said a year ago there is little fat left to cut in the system.
This credibility gap may be a problem for McGuinty as he seeks a new 10-year accord.
It is also unlikely the Federal government will be much interested in any specific health goal. This may be behind suggestions that the Federal government may want to avoid such negotiations and instead simply transfer tax points to the provinces for health.
Transfer of tax points means the Federal government reduces its taxes to allow the provinces to raise theirs by a corresponding amount. There would be no net difference for citizens who pay the bill.
There are fears that this may further weaken Federal governments who wish to enforce the Canada Health Act. The Act allows the Federal government to reduce transfers to provinces that don’t play by the rules, although the Harper government has largely shown indifference to such enforcement. The Act does allow the government to withhold any transfer, not just transfers for health.
Plans are underway for activities around the health minister’s meeting in Halifax. The National Union’s Canadian Health Professional Secretariat has moved its fall meeting to Halifax to participate in a demonstration expected to take place November 25.