Premiers’ demands for long-term health funding increase takes back seat to pandemic

OTTAWA — A first ministers meeting Thursday that was supposed to be devoted to long-term, federal health-care funding seems destined to be hijacked by a more urgent priority: surviving the COVID-19 pandemic.

Prime Minister Justin Trudeau opened the daylong virtual meeting talking about the need to work together on the rollout of vaccines to inoculate Canadians against the novel coronavirus. He also summarized everything the federal government has done to help the provinces cope with COVID-19.

He reminded premiers that Ottawa has covered 80 per cent of the costs of fighting the pandemic.

“Our focus is keeping Canadians safe, supporting small businesses and laying the groundwork for the economy to come stronger than ever,” he told premiers in a statement broadcast live on his Twitter feed.

Only then did Trudeau briefly acknowledge that the meeting is also “an opportunity” to discuss the premiers’ unanimous demand for at least $28 billion more each year in unconditional federal transfers for health care.

“I know that this is a major priority for many of you and it is for me as well. Our government is determined to offer Canadians the efficient and high quality health care they deserve.”

Premiers asked for the meeting in September and wanted it focused exclusively on long-term health-care funding.

In his own opening remarks, Quebec’s Francois Legault, chair of the premiers’ council, reminded Trudeau that “we are first here to talk about the huge problem of the health transfers.”

The federal government this year will transfer to the provinces nearly $42 billion for health care, under an arrangement that sees the transfer increase by at least three per cent each year.

But the premiers contend that amounts to only 22 per cent of the actual cost of delivering health care and doesn’t keep pace with yearly cost increases of about six per cent.

Starting next year, they want Ottawa to increase its share to 35 per cent and maintain it at that level, which would mean an added $28 billion, rising by roughly another $4 billion in each subsequent year.

Legault thanked the federal government for the billions it has provided during the pandemic and acknowledged that it has racked up a “historic” deficit as a result. But he argued that those are “non-recurrent” expenses and that, once the pandemic is over, Ottawa will be in a better financial position than the provinces and territories.

Nevertheless, he said premiers have agreed to also discuss the vaccine rollout, which is to begin next week and is scheduled to take up the first half of the meeting.

Legault said it’s “urgent” for premiers to know how many doses each province and territory is to receive between now and the end of January and “at what pace.” They need that information so they can determine the measures they need to put in place over the coming weeks, he said.

On Wednesday, Legault and other premiers conceded they don’t expect to resolve the health funding issue in Thursday’s meeting.

New Brunswick’s Blaine Higgs said he hopes first ministers can at least agree on a schedule for meetings to come on the issue. Ontario’s Doug Ford, meanwhile, was hoping to persuade Trudeau to commit to a resolution in time for increased funding to be included in the next federal budget.

The premiers’ demand for more health-care cash comes as the federal government is facing an unprecedented deficit approaching $400 billion. More billions are yet to be doled out to help Canadians weather the pandemic and encourage the shattered economy to eventually bounce back.

In calculating the federal share, the premiers include only the cash transfers they get from Ottawa. They do not include the billions in annual tax transfers they also get — essentially tax room vacated by the feds so that provinces and territories can increase their taxes to help pay for health care.

In a 2008 report, the auditor general of Canada pegged the value of the tax transfer for health care at $12.6 billion. 

On top of the annual transfer this year, Trudeau said the federal government has given the provinces an extra $25 billion help them cope with the fallout from the pandemic, including more than $10 billion specifically for pandemic-related health-care costs.

The federal government has also spent billions buying personal protective equipment, rapid-testing kits and lining up purchases of potential vaccine candidates.

However, the premiers contend all that extra money is one-off; what they need is an increase in annual health transfers to ensure stable, predictable, long-term funding.

This report by The Canadian Press was first published Dec. 10, 2020.

Joan Bryden, The Canadian Press