Healthcare funding settled between federal and provincial government 

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A nurse helps a patient to walk with a cane. A clock ticks behind them on a blue background. 
Here’s to hoping all this money is put to good use mohammed_hassan via Pixabay manipulated by Lee Lim

Scrooge, meet the healthcare funding ghost of past, present, and future

The federal and provincial governments have been in a back-and-forth fight over healthcare funding for years. As a result, the federal government announced an increase of $46 billion in healthcare funding over the next 10 years.  

The increase in funding will reach the provinces through several different avenues, the largest four being the already standing Canada Health Transfer, new bilateral agreements, Indigenous health priorities, and other smaller initiatives. The increase in funding is being given on the condition that provinces increase reporting on health care outcomes. 

The Canada Health Transfer is the main way the federal government provides funding, and this budget involves an immediate $2 billion increase and a guaranteed five per cent increase each year.  

The new funding will be targeted towards four priorities, including increased access to family health services, improving access to mental health services, supporting healthcare workers, and modernizing healthcare. Premier Scott Moe told CBC’s Sunday Scrum on February 13 “those priorities are shared.” 

The bilateral agreements must be signed with each province specifically, and these bilateral agreements will account for $25 billion of the promised $46 billion. The bilateral agreements offer more flexibility outside of the four priorities for funding. There is also $11 billion earmarked for Home and Community Care and Mental Health and Addiction Services. Another $2 billion is targeted to address inequities in Indigenous healthcare. 

The new funding comes amid long wait times for both emergency rooms and operations, and even emergency room closures in some places around the country. In a statement by the prime minister, he acknowledged the health care system “hasn’t been living up to expectations,” and has been under “enormous strain.” 

For reference, before this most recent increase in funding, the federal government covered 22 per cent of the total cost of healthcare. However, it hasn’t always been this way, and it isn’t what the premiers are asking for. When public healthcare first became implemented in Canada in the 1960s, the federal government covered a full 50 per cent of insured health services.  

Under the government of Pierre Trudeau in the late 1970s, the transfers were changed to a block amount instead of an agreed proportion. This had some advantages, such as funding health care programs that aren’t insured, but it also opened the healthcare budget up to being cut in future budgets, which did indeed happen throughout the 1980s and 1990s.  

By 2001, the Romanow Commission, which was set up to investigate healthcare spending, found that the federal government was only paying 18.7 per cent of insured costs, which was 14 per cent of total costs, and recommended that the minimum payment should be 25 per cent of insured costs.  

In 2023, the premiers are currently pushing for 35 per cent of total healthcare spending to be covered by the federal government, which would be an increase of about $28 billion a year. The $46 billion increase is spread out over 10 years, so it would average only 16 per cent of what the provinces have asked for.   

Still, Premier Moe said “any increase in the area of healthcare is most certainly appreciated.” Though, he did note that it is “far lower than what the request was.” 

Saskatchewan’s plan for spending will be required to be in line with the four priorities set out by the federal government. As well, Premier Moe said “the largest challenge” for Saskatchewan healthcare is “the number of qualified people.” In addition, the number two challenge is “surgical wait times,” referring to the continued surgery backlog from the COVID-19 pandemic.  

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