Unequal access to Health Care: New Funding formula hurts smaller provinces

February 9, 2015

In its most recent budget, the Conservative government implemented a new funding formula for transfers to the Provinces. Many may not have noticed as it was not widely known, but transfers to the Provinces will now be based on per capita instead of the old equalization model.

“Transfers to the Provinces will now be based on per capita instead of the old equalization model.”

While some may say this is not a big deal, its ramifications for Canada’s health care system are dire.

Canada is a federation. This means the Provinces and the federal government must work together, through negotiation, when it comes to fiscal transfers. That has historically been the case under all previous federal governments. It is not always the easiest, but it has worked well.

In December of 2012, the federal government unilaterally announced that it would cut increases to health transfers by up to 50%, without negotiating with the Provinces. It was a take it or leave it announcement – no negotiations.

Provincial Premiers were furious over the decision and lack of consultation. Through the Council of the Federation, the Premiers have been calling for the Prime Minister to meet with the Premiers on Health, but he has refused.

The move to per capita transfers means that health care transfers will not be based on need, but on population alone.

We know there are a number of provinces with smaller populations and many with a disproportionately large number of seniors – it will cost those provinces more in order to deliver the care they need, when they need it.

In 2014-2015, health transfers to the provinces increased by $1.8 billion, however Alberta is getting nearly $1 billion of those transfers. Nova Scotia, on the other hand, will only get a $17 million increase. BC will only receive a $16 million increase. In fact, under the new formula, Newfoundland and Labrador would have actually seen a decrease in total transfers, but because they were promised that transfers would not decrease, the province will get the same as last year.

Provinces are already struggling under deficits and are only just recovering from the economic downturn. Many face hard choices when it comes to health care services.

The reality is, smaller provinces with a large proportion of seniors may have to either cut services or increase revenues.

Alberta, with the youngest population in Canada, received a disproportionate increase in transfers.

In the last report of the Health Council of Canada, which disbanded earlier this year when the Conservative government refused to extend its mandate, they noted that they were already seeing signs that the province in which you lived impacted the level of health care you receive.All Canadians should expect the same high quality, comprehensive access to care, no matter where they live, according to the Canada Health Act.

We must act now to ensure the sustainability of Medicare for all Canadians.