After two days of negotiations, provincial and territorial health ministers left Toronto at an impasse over health care funding.
Provincial and territorial ministers were hoping to convince Ottawa that a planned cut to the rate of increase for the health transfer should be reversed.
The current annual rate of increase for the federal health transfers is six per cent — a funding formula established in 2004 under the last health accord. The federal Liberals are looking to slash the rate of increase to three per cent starting in April.
Two weeks ago Nova Scotia Health Minister Leo Glavine said the goal of the meetings was to “hammer out the details of an accord,” instead the group agreed to more talks and punted the debate around the health transfer to the premiers and prime minister.
Controlling health care costs in recent years being used against provinces
Philpott argues that because provinces have been able to keep their health care spending in line a higher increase in federal spending isn’t needed. But Dalhousie University Professor Katherine Fierlbeck says just looking at provincial budget increases doesn’t paint the full picture.
In Nova Scotia, for example, she says that while the government has held the line on health care spending, its done so by pushing back spending on so-called “invisible needs” and focusing on front-line care.
However, she says that can only continue for so long before it comes to a head. “Politically these are cost expenditures that have been ignored for a long time and the problem as we’ve begun to realize is that you can only put these off for so long,” she said.
“As the auditor general has mentioned, we’ve got huge requirements in capital spending that we have to meet. And the question is where is this funding going to be coming from and that’s what I think Nova Scotia as well as other provinces are really quite worried about.”
In a spring report, Nova Scotia Auditor General Michael Pickup said the province needs $85 million in urgent infrastructure repairs and maintenance.
‘Feds really hold the reins here’: Fierlbeck
Because the federal government holds the money bag, it also “holds the reins,” Fierlbeck said. In addition, the federal Liberals’ popularity strengthens their bargaining position she said.
In order to move away from the periodic flash points over federal funding, she suggests both levels of government should learn from recent history. For the provinces, she says that means avoiding the hand that feeds them.
“If they become too recalcitrant and if they become too demanding than they might end up with a lot less than they could have had they agreed to be a little bit more diplomatic.”
However, at the same time she says the Trudeau Liberals also need to tread carefully pointing to the Harper Government’s heavy handed approach with the provinces, she said that too could “come back to bite them.”
–With files from The Canadian Press