‘Tug-of-war’: Health spending debate between feds, provinces still up in the air

Canada’s federal and provincial governments’ nearly two-year fight over the need for new spending on the country’s universal healthcare system will drag into next year and could further erode confidence in the already strained system.

The healthcare system, facing challenges before the pandemic, has been put under further strain since, with a severe labor shortage leading to temporary closures of emergency rooms.

Leaders of provinces and territories, which administer health services, want more money – known as health transfers – from Ottawa to bolster the overloaded system, but the government is pushing back.

With no agreement this year, healthcare system is likely to be at the center of political debate in 2023.

Liberal Prime Minister Justin Trudeau’s government wants an agreement sealed next year, according to Guillaume Bertrand, a spokesman for federal Health Minister Jean-Yves Duclos.

Provinces want the share of healthcare costs covered by federal transfers to rise to 35% from 22% now, and to maintain that level over time. The federal government says that it is already covering 35% of spending by some measures.

Ottawa is offering more money, though it has not yet said how much, but on the condition the spending meets certain objectives, including on backlogs, health-worker support and data collection. The provinces say they retain authority over decisions on how the money is spent.

“If I were to send people all the money they need in the provinces, there is no guarantee that … folks would be waiting less time in the hospitals,” Trudeau said in an end-year interview with the CBC broadcast on Tuesday.

“One of the only levers I have is saying, ‘I’m not giving you this money with no conditions,’” he said.

About half of Canadians surveyed last month said they were satisfied with health services over the past year, down from 66% in 2021 and 68% in 2020, according to an Ipsos Canada poll.

People are also increasingly concerned about the future viability of universal healthcare, with 57% saying they believe the current rate of spending is unsustainable, up from 52% last year, Ipsos said.

“Canadians are very pessimistic about our ability to be able to sustain the current level of spending,” said Sebastien Dellaire, senior vice president at Ipsos Canada.

Canada has the fourth-lowest number of funded acute care beds per capita among countries in the 38-member Organisation for Economic Cooperation and Development.

While increased spending could bring improvements, it will not address the most crucial problem: a rapidly aging population.

As the baby-boomer generation ages, healthcare costs will spike, according to the Canadian Institute for Health Information (CIHI), a state-funded research body.

The average spending on someone 80 or older is seven times that of someone 64 and under, CIHI said, noting public spending per person increased 36% from 2011 to 2020.

In 2021, some 861,000 of Canada’s nearly 39 million people was 85 or older, according to Statistics Canada. That number is projected to rise steadily to more than 2.7 million by 2050.

“This is a federal-provincial government tug-of-war over who’s going to pay for a failing health care system,” said Nadeem Esmail, a senior fellow with the right-leaning Fraser Institute think tank.

(Reporting by Steve SchererEditing by Tomasz Janowski)