Whither the Canada health accord?

Paul Martin negotiated health accord, Creative Commons photo
Paul Martin negotiated health accord, Creative Commons photo

The existing health care accord between Ottawa and the provinces and territories is set to expire on March 31, 2014 and the long term consequences are alarming. The issues are complex and the amount of money involved is in the many billions, but the key to understanding what is happening is this: Canada has a public, single payer health system for visits to the doctor and stays in hospital thanks to earlier political leaders, including Tommy Douglas, Woodrow Lloyd and Lester Pearson. Publicly-funded expenditures account for about 70% of all health care spending in Canada. The remaining 30% is private spending on items such as dental and vision care and pharmaceutical drugs. When publicly funded health care was first introduced in the 1960s, its costs were shared on a 50-50 basis by Ottawa and each of the provinces, which actually deliver most of that care. That cost-sharing arrangement has evolved greatly and will change even more dramatically in future, given a unilateral announcement made in 2011 by Jim Flaherty, who was Canada’s finance minister at the time.

Federal contribution dropping

According to a 2013 study by the Canadian Institute of Actuaries and Society of Actuaries, health care transfers from Ottawa to the provinces, which once accounted for 50% of all public expenditures, had fallen to 21% in 2012. The actuaries estimate that the federal contribution would drop to a mere 14.3% by 2037 under the revised formula announced by Flaherty. Continue reading Whither the Canada health accord?