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HomeWorld NewsPoliticsTrudeau pitches 10-year health-care deal with $46B in new spending

Trudeau pitches 10-year health-care deal with $46B in new spending

Prime Minister Justin Trudeau announced Tuesday the federal government is prepared to increase health-care spending by an eye-popping $196.1 billion over the next decade — a cash injection Ottawa is pitching as a generational fix for an ailing system.

Of the $196.1 billion promised by the federal government for health care, $46.2 billion will be entirely new spending — funds that go above and beyond what was already budgeted for the years ahead.

To start, provinces and territories will get an unconditional $2 billion boost to the Canada Health Transfer (CHT) to address what the federal government calls “immediate pressure on the health-care system, especially in pediatric hospitals, emergency rooms and surgical and diagnostic backlogs.”

Trudeau’s proposal also includes a five per cent annual hike to the CHT for the next five years, with a built-in mechanism to permanently increase funding in the years after.

After the first five years, the CHT escalator will revert to a three per cent increase each year — but provinces and territories will be starting from a bigger base after years of larger than normal increases.

Government data suggests this funding boost will increase the CHT by some 61 per cent over the next 10 years. That amounts to about $17.3 billion in new money for the provinces and territories to prop up a faltering system.

To access the enhanced CHT, provinces must first commit to improving how health data is “collected, shared, used and reported to Canadians to promote greater transparency on results, and to help manage public health emergencies,” the government said in a background document supplied to reporters.

The federal government wants this data so that it can better track health-care performance and outcomes.

It also says it want this information shared more efficiently between primary doctors, pharmacists, specialists and the hospital system.

“Canadians should be able to access their own health information and benefit from it being shared between health workers across health settings and across jurisdictions,” the government said in its backgrounder.

Trudeau is also pitching $25 billion over 10 years to advance what the government is calling “shared priorities.” 

This new $25 billion pool of funds is in addition to the $7.8 billion over five years the government already has earmarked for mental health, home and community care and long-term care.

As part of ongoing health-care talks, the federal government has said it wants to sign bilateral deals with each province and territory to earmark money for the health-related issues that each jurisdiction cares about most.

But Ottawa is insisting that those new funds be directed at four priority areas: family health services, health workers and backlogs, mental health and substance use and a “modernized health system.”

The new federal funding will be contingent on the provinces and territories chipping in some of their own money for these “shared priorities.”

They also must agree to uphold the Canada Health Act, federal legislation designed to ensure that access to health care is based on need and not an ability to pay.

Prime Minister Justin Trudeau speaks with media as he arrives for a health care meeting with premiers on Tuesday, February 7, 2023 in Ottawa. (Adrian Wyld/The Canadian Press)

The premiers will be asked to develop an “action plan,” which will detail how these funds will be spent and how progress will be tracked.

Canada spends roughly $330 billion a year on health care, according to data from the Canadian Institute for Health Information.

Last year, the CHT cost the federal treasury $45.2 billion. Even before today’s talks, it was set to increase to $49.1 billion in this fiscal year.

With the new funding announced Tuesday, the CHT and the separate bilateral funding arrangements will be worth about $54 billion in 2023-24.

This new $25 billion pool of funds is in addition to the $7.8 billion over five years the government already has earmarked for mental health, home and community care and long-term care.

Ottawa is also proposing $1.7 billion in new spending over the next five years to increase the wages of personal support workers (PSWs). There’s another $150 million over five years for the Territorial Health Investment Fund, to help the Northwest Territories, Nunavut and Yukon pay for some of the added costs that come with health care in the north.

In addition to this new cash for the provinces and territories, the federal government is promising more money for Indigenous health, an area that is largely under federal jurisdiction.

Trudeau’s plan calls for an additional $2 billion over 10 years for an “Indigenous-specific funding stream,” to address what the government called “unique challenges” that “Indigenous peoples face when it comes to fair and equitable access to quality and culturally safe health care services.”

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