On Feb. 7, the federal government announced a $46.2-billion increase in health funding to provinces and territories over the next 10 years.
This long-awaited offer — accepted by premiers across the country — is a necessary step to transform Canada’s health care system, which requires stabilization, sustainability and investment in reform.
The Canadian Medical Association (CMA) has been advocating for a long-term increase to the Canada Health Transfer (CHT) as well as new accountability measures to ensure quality outcomes and value for money for both providers and patients.
What’s in the health funding envelope?
Federal funding includes three core components:
An immediate and unconditional $2-billion top-up to the Canada Health Transfer (CHT) to address the pressure on emergency and operating rooms, as well as pediatric hospitals;
a 10-year federal funding commitment via the Canada Health Transfer, including a 5% annual increase for the first five years; and
bilateral agreements with each respective province or territory, a 10-year funding commitment of $25 billion.
Other investments include:
$1.7 billion over five years to support hourly wage increases for personal support workers (PSWs) and related professionals and to recruit and retain healthcare workers;
$150 million over five years for the Territorial Health Investment Fund to strengthen service delivery; and
$2 billion over 10 years for Indigenous health.
What about provincial accountability for federal health funds?
Despite being the largest major transfer of federal funds to provinces and territories, money from the CHT does not necessarily have to be spent on health care.
In order to secure the increased CHT funding outlined in the Feb. 7 agreement, provinces and territories must commit to:
Improving health care information collection and reporting;
developing and using comparable performance indicators via the Canadian Institute for Health Information (CIHI); and
adopting common standards and policies on health data.
What happens now?
The federal health minister and intergovernmental affairs minister are in the midst of finalizing bilateral agreements with each province and territory.
These agreements are centred on four shared health priorities, tailored to each jurisdiction:
Expanding access to family health services, including in rural and remote areas;
supporting health workers and reducing backlogs;
improving access to quality mental health and substance use services; and
modernizing the health care system with standardized health data and digital tools.
In addition to these shared priorities, provinces and territories must commit to advancing foreign credential recognition and labour mobility for health workers, beginning with multi-jurisdictional credential recognition.
What do the provinces and territories want from bilateral health funding deals?
Collectively, the premiers have asked Ottawa for a formal review process to ensure long-term sustainability — avoiding what they call a “fiscal cliff” when deals expire.
The premiers highlighted this in a recent letter to Prime Minister Justin Trudeau: “To achieve our shared goals, further constructive discussions are required to plan for the longer term predictability and stability that Canadians expect in their health care systems.”
When will patients and providers see the impact of the new funding?
It will be a while.
Bilateral agreements are expected to be finalized by the end of March — which is also when the federal budget is set to be tabled — but part of those deals is a three-year action plan from each province and territory, which will likely to take months to develop.
Why is this funding package necessary?
Canada spends more than $300 billion annually on health care — about 13% of our GDP, or the second highest among OECD countries — and yet we lag on key performance indicators.
More than 70% of the health care spending is publicly funded through tax revenues: The provinces and territories spend approximately 78%, with the federal government providing the rest primarily through the Canada Health Transfer (CHT). In return for this funding, the federal government requires provinces and territories to comply with the provisions of the CHT.
Provinces and territories need long-term, stable funding to manage increased costs.
Investment alone, however, isn’t enough.
It will take efficiency, innovation and flexibility — as well as increased accountability — to improve delivery of care. The federal funding package is a first step in that direction.