Premiers call dibs on federal money before it’s all spent

Posted on December 11, 2020 in Governance Debates

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Theglobeandmail.Com – Opinion
December 10, 2020.   Campbell Clark

There is a general operating principle for the Canadian federation, and the coronavirus pandemic has reinforced it: The federal government is not much good at doing things, but does pay bills, while the provinces do most things yet complain they can’t afford to.

So when Prime Minister Justin Trudeau met premiers (virtually) on Thursday to talk about health care, it wasn’t a surprise he wanted to talk about what the provinces would do with the vaccines the feds bought, and the premiers insisted the key topic was how much more money Ottawa should give them.

Both have a sense of urgency. The Prime Minister insisted the country has to get through a crisis. The premiers want to lay claim to federal cash before Mr. Trudeau spends it all.

The premiers were calling dibs.

They went in asking Mr. Trudeau for a meeting in January or February to negotiate a new long-term arrangement for health care funding. Mr. Trudeau came out saying he is focused on getting through the pandemic.

There is nothing new about premiers asking for more health care money. That’s what they do. But this time, they might have noticed that Ottawa is projecting years of big deficits and planning three years of stimulus spending. Mr. Trudeau already has a long spending wish list. If the premiers want to press Ottawa to spend on health care, they’d better do it before next spring’s budget. After that, Ottawa’s money might well be spoken for – for a long time to come.

So the premiers thrust their hands out. Quebec Premier François Legault said the provinces are unanimous in calling for Ottawa to increase their share of health care funding to 35 per cent from 22 per cent. That’s $28-billion more a year, and rising.

Why 35 per cent? Maybe the premiers picked it out of a hat. It’s a round number and more money. There is no objective “fair share.” It’s whatever the political market will bear.

If you take the politics out of it, you might wonder why the provinces are asking for federal money at all. Health care is provincial jurisdiction. They can levy taxes like Ottawa. If they need more money, they could raise taxes. Or borrow. But they don’t want to.

In fact, if health care is more important to Canadians than what the feds are doing, it would make sense for all provinces to increase taxes, while Ottawa cuts them. That’s what the feds did back in 1977, when Ottawa transferred tax points to the provinces. But they won’t want to do it again, because they don’t get any credit. The provinces won’t count it as funding for health care.

Yet there is a reason that Ottawa got into funding health care, and other things the provinces do: Voters care about them. Federal politicians seem to think Canadians aren’t very driven by the things in federal jurisdiction, like the military, diplomacy and Indigenous policy. A lot of what Ottawa does is sending money to people or provinces. But health care? Voters think that’s important.

The thing is, Mr. Trudeau doesn’t want to just send cheques. He wants to say he paid for something new and specific that Canadians want. He told the premiers that Ottawa might fund better long-term care, or pharmacare. Mr. Legault said the premiers don’t want a new federal health care initiative, they want help paying the bills. And he wasn’t just speaking for Quebec: Several premiers made a similar point.

It seems hard to fathom. Mr. Legault, more than any other premier, needs to improve long-term care, after COVID-19 brought a tragic catastrophe to the province’s seniors’ care homes. And he’s right when he says provincial finances will be squeezed for decades by ever-rising costs of health care.

But then, history shows the premiers should be wary. Prime ministers tend to be more willing to pay for a new initiative – like the advent of medicare – than they are to keep paying over time.

That’s the problem the premiers really need Mr. Trudeau to address – not the doomed demand for $28-billion now, but getting the feds to stop paying a declining share of the country’s health care costs. And they’d better get Mr. Trudeau to commit to it quickly, before the money is gone.

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