What Trudeau has offered to the premiers to fund healthcare

Premiers got their fist look at Ottawa’s offer to increase long-term health funding on Tuesday, Feb. 7 at a meeting with Prime Minister Justin Trudeau, but the federal proposal falls short of what they were seeking.

The provinces budgeted about $204 billion for healthcare in this fiscal year and the Canada Health Transfer was set at $45 billion, or about 22 per cent of that. The premiers want the federal share to increase to 35 per cent, which amounts to another $26 billion in this year alone.

Instead, Ottawa put together a 10-year, $196.1 billion deal, of which $46.2 billion is new funding.

Here’s what the Liberals are offering:

$2 billion, no questions asked

The federal government plans to table legislation before the end of March to dole out $2 billion to  provinces to address immediate healthcare needs like surgical backlogs.

There are no strings attached.

Ottawa offered the same amount last year during the Omicron wave of COVID-19.

More money for the Canada Health Transfer

The main source of federal funding for healthcare comes from the Canada Health Transfer, which is the biggest pot of money the federal government gives to provinces and territories.

It’s calculated based on a minimum yearly increase of three per cent or the three-year moving average of nominal gross domestic product (GDP) — whichever is higher. 

Ottawa has now offered to step up the minimum yearly increase to five per cent for the next five years.

The total amount after the five years will serve as the new baseline moving toward. 

The move is expected to give provinces an extra $17.3 billion over 10 years in new support. The federal Finance Department anticipates the CHT to grow by 33 per cent over the next five years, and 61 per cent over the next 10 years.

It all hinges on better data

The increase to the Canada Health Transfer is contingent on an agreement to share comparable data and digitize the health information of Canadians so it can be more easily accessed and shared between hospitals, clinics and jurisdictions. 

Tailored deals with each provinces 

Ottawa has also put $25 billion on the table for tailored one-on-one deals with each province to make progress on four major issues: family health services, health worker shortages and backlogs, mental health and substance use, and health-care modernization. 

The deals will be highly flexible for each province, but they will have to show their work to get the money.

The government says it wants to see a plan from each province and targeted results they hope to accomplish. The provincial and territorial governments will then need to report on their progress.

Higher wages for personal support workers

Trudeau says he’ll give provinces $1.7 billion over five years to increase the pay for personal support workers, who provide the majority of bedside care in long-term care and homecare settings.

No targets have been set yet for how high those wages should be. In the last election, the Liberals pledged to increase personal support worker pay to a minimum of $25 per hour. 

Indigenous health

The federal government put forward $2 billion over 10 years specifically for fair and equitable access to appropriate health care for Indigenous Peoples through a health-equity fund. 

The spending will come after consultations with Indigenous groups. 

Other spending

— $505 million over five years for the Canadian Institute for Health Information Canada Health Infoway, and other federal data agencies to develop new health data indicators, as well as create a “Centre of Excellence” on health worker data, and support other efforts to modernize health data systems.

— $150 million over five years for the Territorial Health Investment Fund for medical travel and to deliver health care in the territories.

This report by The Canadian Press was first published Feb. 7, 2023.