Dedicated revenues cover most of increase for Ontario’s health care in 2013-14

This year Ontario is adding $1.3 billion to fund health care for 2013-14, but most of that increase will have come from dedicated sources amounting to almost a billion dollars.

Net contribution from general taxation will be about $360 million.

This is where the rest comes from:

• The net increase in the Canada Health Transfer (6%) will be $671 million.
• The net increase in revenue expected from the Employer Health Tax will be $134 million.
• The net increase in revenue from the much maligned Ontario Health Premium will be another $135 million.

Had the Wynne government followed Dwight Duncan’s plan from last year, the net contribution from Ontario’s general revenues would have only been a paltry $60 million to reach the $1 billion that the government had originally forecast as an increase for 2013-14.

Of the $48.8 billion to be spent on health care this year, the Feds can claim to be directly paying $12 billion through the Canada Health Transfer, or slightly less than 25 per cent.

The Employer Health Tax will contribute $5.3 billion (10.9 %) and the Ontario Health Premium will raise a total of $3.2 billion (6.5 %).

While $1.3 billion is nominally more, it is less than what is needed to cover basic inflation (1.2 %) and the impact of population growth (1 %) and aging (1 %) on the health system. Inflation in health care normally runs higher than the general inflation rate. For example, Ontario estimates drug costs will rise by 5.4 per cent this year.

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