Provinces, Ottawa need to compromise on health care

Provincial and federal ministers, unable to reach an agreement on health-care funding this week, packed up and went home. But they shouldn’t get away with it. Like misbehaving children, they should be sent to their rooms to consider their actions, then come back to work things out.

And they need to bring with them a little more willingness to compromise and to search for mutually beneficial solutions. These are highly paid, experienced people — we expect better of them.

It’s no surprise Monday’s talks fell apart — both sides arrived with entrenched positions.

B.C. Health Minister Terry Lake said last week he saw little point in attending the meeting of finance ministers and health ministers unless the federal government budged from its position.

“Until I get something a little more concrete, I really don’t feel the justification to be going all the way to Ottawa,” Lake said.

Quebec Health Minister Gaetan Barrette had said he would walk out if the feds didn’t come up with more money.

And for his part, federal Finance Minister Bill Morneau said the provinces were asking too much. “The provinces’ requests are out of the realm of anything that we would consider,” he said.

History plays a role here. In 2004, then-prime minister Paul Martin reached an agreement with the provinces and territories that would see the health transfers from Ottawa grow by six per cent a year. That formula was set to expire in 2014.

In 2011, the Conservative government of Stephen Harper announced it would extend Martin’s commitment to 2017. At that point, the increase would be dropped to three per cent a year, or an amount tied to GDP growth, whichever is higher.

Understandably, the provinces objected. When the federal government mandated universal health care in the 1960s, it agreed to pay 50 per cent of health-care costs to entice the provinces to sign on. That share has steadily declined, and today is about 23 per cent.

With the escalator limited to three per cent, Ottawa’s share will decline to 20 per cent within the next decade. The provinces would like to see the share go back up to 25 per cent.

But Ottawa is unwilling to go that far. Initially, the finance minister offered to raise the annual transfer payment by 3.5 per cent.

However, Morneau set some conditions. He wanted more money spent on home care and mental health — two priorities the federal government believes have been neglected. And to gain buy-in from the provinces, he offered an additional $11 billion over 10 years for these two programs.

But the provinces saw this as Ottawa intruding on their turf, and rejected the proposal. Morneau then retracted his offer, and announced the annual funding increase would revert to three per cent. At that point, the provinces walked out.

It’s a difficult situation. Justin Trudeau made generous promises on the campaign trail, perhaps giving cause to think the Grinch might have been replaced by Santa Claus. As prime minister, Trudeau is encountering reality. The federal treasury is not a miraculous pitcher; the flow of funding has its limits, deficits notwithstanding.

And some of this was foreseeable — you don’t begin negotiations with your final offer. You always leave room to sweeten the deal in later rounds of negotiations.

But some of it was also childish. Both sides have resorted to take-itor-leave-it, my-way-or-the-highway stances. Compromises are necessary — you can’t always get what you want, no matter how justifiable your position. You have to be prepared to take what you can get.

So everyone should stop with the grandstanding and get back to working out an agreement. This is far too important a matter for egos and posturing.—