No Strings Attached: Canada’s health care deal lacks key conditions

There’s more money on the table—but without adequate strings attached, the provinces could end up spending it on tax cuts instead of fixing health care.
February 15, 2023
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As emergency rooms are overwhelmed, surgery wait times continue to lengthen, and under-resourced childrens’ hospitals face surges related to viral infections like COVID, the  provincial and territorial governments have accepted the federal government’s new health care funding deal.

But there’s more than meets the eye with this deal.

It provides an additional $46.2 billion to provinces and territories over the next 10 years, but not all of that money will have conditions attached.

The deal  requires provinces to spend 58 cents out of every new dollar on actual new health care programs—barely a majority—while leaving the remaining without requirements.

So what will this new money buy? Not necessarily new health care improvements.

A position paper jointly authored by all of the provinces and territories in 2021 suggests that the provinces’ position coming into the negotiations was a plan to spend zero dollars of the increased federal transfers on higher health care spending. They actually wouldn’t change any operational funding in any department if they got extra federal funding. According to the model they outlined, the provinces and territories would use the extra federal health care money to pay down their deficits—although all of the big provinces now have cumulative surpluses projected for the future.

So despite provincial ad campaigns that show destitute doctors and nurses begging for federal funding, the question of who is responsible for the crisis in Canadian health care is not so clear cut. Health care is a provincial jurisdiction and the big provinces are flush with cash. It's not money stopping them from fixing their systems, it's political will.

The federal government can, and should, increase funding to the health care system—but that money shouldn’t have strings attached, it should have chains that ensure new health care money is actually spent on improving health care.