Provinces gain nothing in health funding holdout

8 months on, all have accepted original offer

Eight months after the provinces and territories rejected an $11-billion health funding offer from the federal government in what looked like a show of solidarity, all have now signed on, one by one, to more or less exactly that offer.

Manitoba, the last holdout, reached an agreement with Ottawa Monday that will see the province receive its share of the $11 billion over 10 years that the Trudeau government has earmarked for home care and mental health care, with an additional $5 million the province plans to use to fight kidney disease and the opioid crisis.

But on the issue that had the provinces crying foul during meetings in December — the slashing of the annual increase in health transfers from six per cent to about three per cent — they have come up empty-handed.

“The federal government has had their way with this one,” said Dr. Matthew Stanbrook, deputy editor of the Canadian Medical Association Journal. “I think at the end of the day, the provinces get what the federal government says they’re going to give them.”

Health transfers to the provinces increased by six per cent annually from 2004 until last spring, but the Harper government planned to cut that to three per cent or nominal GDP growth in 2017. In December, the new Liberal government offered 3.5 per cent instead, but the provinces turned it down, insisting they needed at least 5.2 per cent growth. Now, they’re getting the three per cent minimum the Harper government envisioned.

Livio Di Matteo, an economist at Lakehead University who studies health economics, said the provinces gained little, in the end, from taking a stand.

“I think they tried to get more and it backfired on them,” he said. “I think the federal government pretty much knew what it wanted.”

Di Matteo thinks the provinces thought the change in government in Ottawa would give them more leverage. Prime Minister Justin Trudeau campaigned on a promise to negotiate a new health accord. “I think they kind of miscalculated that and there was no budging,” he said.

Soon after the failed health talks in December, the Trudeau government began signing agreements one-onone with the provinces and territories. New Brunswick was the first to fold in December. When Quebec, Ontario and Alberta followed in March, they left Manitoba as the last province standing.

There are some differences between the provinces’ arrangements — Quebec, for instance, has retained its right to decide how its funds are used — but an official in Health Minister Jane Philpott’s office confirmed the agreements are “essentially what was being proposed in December.”

“What (the federal government) did in a sense was politically quite astute in that they negotiated province by province so that every province felt special,” Di Matteo said. “Someone seems to have known what they were doing behind the scenes.”

Stanbrook said he thinks Manitoba held out “mostly to make a political point of being the last one to refuse.”

In Winnipeg Monday, Manitoba Health Minister Kelvin Goertzen insisted the funding agreement is not the last word on the new health accord the Liberals promised. “That has still not happened, and we still expect that it should happen,” he told reporters. “We’ve not signed on or agreed that three per cent is good for health care in Canada.”

But Michael Decter, a health policy expert who chairs the not-for-profit Patients Canada and a former Ontario deputy minister of health, says that’s “a distinction without a difference.”

“If you really didn’t like it, why did you sign it?” he said.