Defections boost feds in health care fight

Ottawa is four steps closer to winning the bitter federalprovincial fight over health-care funding.

Saskatchewan, Nunavut, Yukon and the Northwest Territories are the latest to bolt from the so-called provincial/ territorial united front in order to sign bilateral deals with Ottawa. They join New Brunswick, Nova Scotia and Newfoundland, which abandoned the common front shortly after talks between Ottawa and the 13 provinces and territories collapsed last month.

All seven jurisdictions have agreed to earmark hundreds of millions of dollars in special funds provided by Ottawa for home care and mental health services, both of which are deemed priorities by the federal Liberal government.

The seven have also agreed to accept a funding formula that would see Ottawa reduce its overall share of provincial health care spending from 23 to 20 per cent.

Before their common front collapsed, the country’s 13 provinces and territories had been united in their demands. They wanted Ottawa to boost its share of health care spending to 25 per cent. And they wanted any sweeteners, such as extra money for home care, to come with no strings attached.

For its part, Ottawa wanted to limit its spending increases. And it wanted to ensure that at least some of the money it did spend was used to fund home care and mental health, as promised by the Liberals in the 2015 election campaign.

There were negotiations of a sort. Ottawa made an offer; the provinces and territories said no; the federal government called off the talks. Then it began to target the provinces and territories one by one.

At one level, this is a story of gamesmanship. Federal Health Minister Jane Philpott and federal Finance Minister Bill Morneau have out-gamed their provincial and territorial counterparts. They knew that the poorer provinces and territories would be more likely to break ranks and acted accordingly. At another level, this is an example of how nothing much changes. Federal governments going back to the Pierre Trudeau era have fretted about financing provincial programs over which they have little control.

It is no accident that Prime Minister Justin Trudeau’s formula for reducing Ottawa’s share of health care spending is near-identical to the one proposed by former prime minister Stephen Harper. Conversely, provincial governments have long feared getting caught up in Ottawa’s health care enthusiasms of the moment. Provinces want to know that if they use federal money to establish, say, better home care that this funding will continue.

What does any of this mean for Canadians who need health care? That’s tougher to decipher.

Bilateral health care deals are not new. Greg Marchildon, the former executive director of Roy Romanow’s royal commission on the future of health care and now a University of Toronto professor, notes that in the 1950s, most health deals were bilateral arrangements between Ottawa and specific provinces, with the federal government retaining the right to determine how its money was spent.

Under pressure from Quebec, which opposed federal oversight in areas of provincial jurisdiction, these were largely replaced in the 1960s by a more hands-off system in which Ottawa transferred money to the provinces under a general understanding that it would be used for healthrelated purposes.

But now there seems to be a feeling in Ottawa that the provinces are botching medicare — that they are using federal money simply to prop up a wasteful status quo instead of transforming the system.

Hence the federal government’s affection for tying at least some health money to specific programs, such as home care. Hence, also, its willingness to negotiate individual deals with each province and territory.

Ottawa’s critique is partly true. Even Dr. Danielle Martin, a staunch defender of medicare, argues in her new book, Better Now, that Canada’s health system can be made more efficient by, for instance, discouraging unnecessary medical tests.

But the provinces aren’t wrong when they say they need Ottawa’s financial help. Home care is a capital idea — as long as it’s not used as an excuse by cash-strapped hospitals to dump patients who need acute care.

Money alone may not suffice to provide good health care. But it is necessary. As Philpott and Morneau pick off the provinces one by one, they might want to keep this in mind. Thomas Walkom appears Monday, Wednesday and Friday.