Tories set to steer new course on health care funding

Posted on in Health Policy Context

Source: — Authors: – news/politics/secondopinion
Published Friday, May. 27, 2011. Last updated Saturday, May. 28, 2011.    André Picard

There won’t be a new health accord.

At least not the kind of health accord that we came to expect under previous Liberal governments.

“Health accords are a Liberal invention. Why would Stephen Harper want to do the same thing?” said Judith Shamian, president of the Canadian Nurses Association.

Instead of a long-term deal with all 13 provinces and territories, we can expect a short extension of the current deal – which would fulfill the Conservative campaign promise of maintaining annual increases at 6 per cent – followed by a fundamental revamping of federal transfers.

Bill Tholl, an Ottawa-based consultant who was the long-time secretary-general of the Canadian Medical Association, said instead of an omnibus deal with all provinces and territories, he expects the new majority government to propose signing a series of bilateral agreements.

That approach has several advantages.

First, it reflects Mr. Harper’s political philosophy that health care delivery is exclusively within the provinces’ jurisdiction. Second, it would allow Ottawa to provide targeted funding for initiatives that would be popular in particular regions – for example, money for a catastrophic drug plan in a province like New Brunswick, or a waiting-times initiative in Ontario. Third, bilateral agreements would do away with the need for a first ministers’ meeting.

For all the talk about coming negotiations on the health accord, the fact remains that Mr. Harper has never committed to a first ministers’ meeting on health. (As PM, he has played host to only two gatherings of premiers, both focused on the economy.)

“We want to work co-operatively with the provinces to make the system work better,” is all Mr. Harper said during the campaign.

There is no legal obligation to have a meeting, nor does there need to be a single agreement. There have been only three health accords – in 2000, 2003 and 2004 – since the Liberals dramatically revamped health and social transfers.

During the last negotiations, the premiers extracted a 10-year deal from former prime minister Paul Martin with an escalator clause of 6 per cent a year and very few restrictions on how the money could be used.

Going into a room where all the premiers can gang up on him is not the current PM’s style. Mr. Harper has also said repeatedly that he expects “accountability and results” in exchange for federal dollars. Having a set of benchmarks could ensure a modicum of national standards, which would counter the concern that bilateral deals would lead to regional disparities.

“If this government can tie funding to performance, we would strongly encourage them to do it,” Dr. Shamian said.

The Canada Health Transfer, which currently provides $27-billion in cash and $13.6-billion in tax points, expires in 2014.

During the recent election campaign, to assuage concerns that cuts were coming, Mr. Harper said his government would continue with 6-per-cent annual increases in the health transfer (as did the other party leaders). But, said Megan Leslie, the New Democratic Party health critic, “he didn’t say how long he would keep the 6-per-cent commitment.”

In projections accompanying the most recent federal budget, the 6-per-cent increase was assumed to continue for two years beyond the accord’s expiration, to 2016. After that, it is very unlikely increases will exceed the rate of inflation.

Ms. Leslie said bilateral agreements are a real possibility because the Conservatives have said repeatedly that health is strictly a provincial matter. “They’re looking at just being a source of money,” Ms. Leslie said. “So I don’t really expect any new initiatives or any leadership on health.”

Deb Matthews, Ontario’s Health Minister, said she would like to see a deal on health funding done quickly, before the end of 2012. The province is on record saying it wants another 10-year agreement with 6-per-cent annual increases. Ms. Matthews refused to say if Ontario would be willing to sign a bilateral agreement with Ottawa. “Ideally, we should have a national agreement, but we should let the premiers do their work, do their negotiating,” she said.

Whatever the outcome of those talks, in the long term even more significant changes are coming. Mr. Tholl said the Conservatives have been clear that they are going to revamp the federal-provincial fiscal arrangement, and the Canada Health Transfer will be affected in the process.

One of the most talked-about proposals originates with Ken Boessenkool, a long-time Harper adviser and now an executive fellow at the School of Public Policy at the University of Calgary. He has suggested that Ottawa do away with the myriad programs it has for transfers and equalization payments and instead turn over the monies collected from the federal GST to the provinces.

“The result would be a stable and steady revenue source for the provinces to use for health care and other programs they are responsible for,” Mr. Boessenkool said. This would satisfy the provinces’ desire for more money and Mr. Harper’s twin desires of getting Ottawa’s hand out of provincial jurisdictions and shrinking the federal government.

This debate, coincidentally (or not), is in its infancy and should be revved up by 2016, the next federal election date, and after several provincial elections have brought in a new generation of premiers eager to do health care differently.

Editor’s Note: The secondary headline of the original newspaper version of this article, which was reproduced in some parts of, incorrectly attributed comments to the Canadian Medical Association. The comments were made by the former secretary-general of the CMA. This online version has been corrected.

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