Prime Minister Justin Trudeau chairing a meeting on health care with Canada's provincial premiers.
Prime Minister Justin Trudeau chairing a meeting on health care with Canada's provincial premiers on February 7. 2023. Credit: CPAC Credit: CPAC

The federal government has put its money, or at least some of it, where its mouth is on health care.

On Tuesday February 7, Prime Minister Trudeau and his colleagues made public a comprehensive, 10-year funding offer to the provinces.

Finance minister Chrystia Freeland says the plan will increase the federal contribution by nine per cent in the first year, rising by five per cent per year in subsequent years.

All-in-all the new federal funding arrangement would amount to more than $46 billion in new funding.

Part of that increase would come in the form of somewhere between $15 billion and $20 billion more to the Canada Health Transfer (CHT), which all provinces receive on the basis of population.

An even bigger part will come as $25 billion in new money.

The federal government has invited the provinces and territories to sign bilateral agreements to spend that new money in four key areas:

  • Family (or primary) health care, 
  • Assuring there enough health workers to clear current backlogs, 
  • Mental health and drug abuse, and 
  • A large undefined area they call “a modernized health system”

The premiers’ reactions were muted. They were not overjoyed. They had demanded an immediate increase in the annual federal health contribution of $28 billion. 

But the premiers were satisfied, if without enthusiasm, to accept any increase in funding for what is an entirely provincial area of responsibility. The constitution makes that clear. The federal government only gets involved in health through its right, upheld over the years by court decisions, to spend federal money in fields of provincial jurisdiction.

A final offer?

The Trudeau government is treating its financial offer as a final one. The Prime Minister does not appear open to negotiations with the provinces, unlike a previous Liberal Prime Minister, Paul Martin.

In 2004, then-PM Martin came to a multi-day First Ministers’ meeting with an offer of $12.5 billion in new money for health care. The premiers almost all balked, saying it was not enough.

After a few days of intense, behind-closed-doors negotiations, Martin upped his offer by 50 per cent, in a new 10-year deal, which included six-per-cent-per-year increases, and a special $4.5 billion fund to reduce wait times.

Today, the premiers and territorial leaders say they are going to examine the Trudeau offer, but few expect the kind of negotiation with their federal counterpart we saw nearly two decades ago.

The premiers can at least take comfort from the fact Justin Trudeau’s approach has not been as abrupt and high handed as that of his Conservative predecessor Stephen Harper.

As the Martin funding deal approached its end, in 2014, Harper dispatched his finance minister, the late Jim Flaherty, to a meeting of his provincial finance counterparts.  There, Flaherty, without forewarning, dumped a take-it-or-leave-it health funding proposal on the table.

The provincial ministers received this federal surprise over lunch, and many were livid. 

But Harper, who had a distinctly passive-aggressive attitude toward what he considered to be Canada’s too-socialist-by-half health care system, was blithely indifferent. 

And so, in 2014, Harper cut Martin’s six per cent annual escalator provision to three-per-cent-per-year, to take effect in 2015.

Harper lost the election of that year, but three per cent increases in federal health transfers is what we have been living with ever since. 

The new 2023 Trudeau government offer is thus the first major proposed increase in ongoing federal health funding in close to two decades.

The current federal government has made many one-off and ad hoc federal health spending commitments, notably in response to the COVID pandemic. 

The new plan, however, is Trudeau’s first attempt to do what Paul Martin claimed he would do: Fix health care for a generation. 

An enhanced federal role in health policy

Overall, since the Mulroney government of the 1980s, federal governments, mindful of their own bottom lines, have tended to severely limit or even cut the federal contribution to health and other provincially-run social services. 

During the 1990s, the Chrétien government, with Paul Martin as finance minister, instituted some of the most severe cuts ever undertaken to federal transfers to the provinces. Chrétien and Martin bought the provinces’ acquiescence by loosening or eliminating the strings attached to federal dollars.

At the time, the federal government’s sole focus was on reducing its deficit to zero, and it had little opposition in Parliament. The New Democrats had been reduced to a rump without party status, while the main non-Quebec opposition party, right-of-centre Reform, wanted even more severe cuts.

Now, Justin Trudeau and his team want to, ever so gingerly, reassert a federal role in health policy. 

If we are to believe their words, Trudeau’s team understands that money alone will not cure what ails health care in Canada. 

Many who have studied our system argue we have to figure out how to deliver health care differently. 

That does not mean more outsourcing to the private sector. 

There are many unanswered questions about how Ontario’s recently announced plan to expand access to insured surgeries in private facilities will work. The biggest and most concerning one is: Where will the trained professionals who would work for the new corporate, for-profit surgery centres come from – if not from the public system?

Carrying out more routine procedures outside hospitals, in not-for-profit and community settings, could very well be part of the health care solution. But only a part.

The bigger piece that cries out for fixing is primary care, with over six million Canadian adults lacking family physicians.

Many health experts are now calling for a new approach to primary care. The model of individual family doctors running what are essentially small businesses, all on their own, has manifestly failed. 

What knowledgeable people such as physician and former federal health minister Jane Philpott propose is multi-disciplinary teams, where the skills of non-doctor health professionals such as nurse-practitioners can be fully harnessed, and where doctors and other professionals would not be remunerated on the archaic and arcane fee-per-service model. 

One of the most interesting comments following the federal funding announcement came from the premier of Newfoundland, Andrew Furey, who is a physician.

Furey said Canada’s health care system is stuck in the 1960s. 

When the idea of universal health care first emerged in this country, more than six decades ago, the focus was almost exclusively on doctors in private practice and hospitals. Public health insurance was designed to cover those two, admittedly essential, elements of health care. 

Other, equally essential aspects – including outside-of-hospital nursing care, preventative medicine, pharmaceuticals, psychological counselling, and dental care – were beyond the purview of our 1960s’ definition of health care.

The time has come to drag Canada’s conception of health care from the1960s into the 21st century and this new federal initiative might just herald the beginning of that process. 

Or is that being too hopeful?

Karl Nerenberg

Karl Nerenberg joined rabble in 2011 to cover Canadian politics. He has worked as a journalist and filmmaker for many decades, including two and a half decades at CBC/Radio-Canada. Among his career highlights...