Social Policy in Ontario

Queen’s Park must pull its weight on health care spending

Posted on February 8, 2023 in Health Debates

Source: TheStar.com — Authors: Sheila Block

TheStar.com – Opinion/Contributors
Feb. 7, 2023.   By Sheila Block, Contributor

Ottawa is right to demand accountability for public dollars. It is right to attach conditions to federal health care funding.

If there’s one thing Canadian politicians agree on, it’s this: our health care system needs more money. With crowded emergency rooms, long wait times, and too few staff, health care is in critical condition. We need to save the patient, and it will take a transfusion of cash.

So which level of government should come to the rescue?

Canada’s premiers have been crying poor for a couple of years now, demanding billions of dollars from Ottawa. We’re at the point where a casual observer might think health care is primarily a federal responsibility.

It’s not. It’s a provincial responsibility. And some provincial governments — Queen’s Park, I’m looking at you — are not living up to their obligations to pay.

In Ontario, that became crystal clear on Tuesday when the Financial Accountability Office (FAO) released its prebudget review of provincial finances. One of the main take-aways from the report is that the province is underfunding vital services.

The biggest shortfall will be in health care, the FAO says. Under current plans, funding for health care over the next three years will be $5 billion less than what is needed just to maintain existing programs.

Health care was already underfunded, but with this kind of budgeting, programs will be cut, not fixed.

Meanwhile, our finance minister is stockpiling “excess funds” worth $19.7 billion over three years. The FAO estimates that much of this money is in contingency funds not earmarked for a specific purpose. That’s easily enough to cover shortfalls in underfunded areas like health, education, justice, and post-secondary education.

You wouldn’t know it from listening to Queen’s Park, but Ontario’s finances are in very good shape right now. Following last year’s $2.1 billion budget surplus, the FAO estimates the province will have a small deficit this year but then surpluses next year and beyond.

The big measures of fiscal health are all moving in the right direction. The provincial debt is shrinking relative to the size of the economy. The cost of interest payments on the debt, relative to revenues, is shrinking, too.

Ontario remains a rich province. We are perfectly capable of pulling our weight on health care.

There are, of course, good reasons for federal health funding, including to ensure that all provinces are able to meet high standards of care. But Ottawa is right to demand accountability for public dollars. It is right to attach conditions to federal funding.

According to news reports, one concern for federal negotiators is very basic: they want guarantees that federal dollars for health care will actually be spent on health care.

When it comes to drafting a bilateral deal with Ontario, this is no small matter. Since being elected in 2018, the current government at Queen’s Park has brought in over two dozen tax cuts, tax credits, and fee cuts. These changes are draining at least $8.2 billion a year from provincial coffers. That money — or some of it, anyway — could easily have gone to health care.

It didn’t.

Last summer, federal intergovernmental affairs minister Dominic Leblanc spelled out the federal view in plain language: “We’re not going to increase the federal spending to provinces for health care so they can then reduce their own spending,” he said. In a pointed reference to Ontario, he added that federal health care dollars should not be spent “to send cheques to people on the eve of an election.”

If reports are accurate, it now appears that any bilateral deal between Ontario and Canada will require that the province at least maintain current spending levels (presumably adjusted for inflation). That’s not a high bar. Ottawa could do more, especially when it comes to blocking provincial plans to siphon public dollars into private profits. We shall see.

Regardless of what happens next, though, one thing is clear: when it comes to health care spending, Ontario needs to start pulling its weight.

Sheila Block is a senior economist with the Ontario office of the Canadian Centre for Policy Alternatives.

https://www.thestar.com/opinion/contributors/2023/02/07/queens-park-must-pull-its-weight-on-health-care-spending.html

Tags: budget, featured, Health, jurisdiction, privatization, standard of living

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