Justin Trudeau uses divide and conquer tactic on health care funding

Just before Xmas last December the Liberal government offered the provinces a little more than half of what the previous right-wing Harper government had been paying Canadian provinces.

As mentioned in a previous Digital Journal article, the offer ran for just one day. There was no discussion of alternatives such as the 5.2 percent increase put forth by the premier of Prince Edward Island. Finance Minister Morneau's offer was 3.5 percent over five years. The Conservatives had been paying six percent. The rate will go back to three percent in April unless there is an agreement. The provinces were angry that the Liberal government came with a take-it-or-leave it attitude. They had hoped that there would be discussion and a negotiated agreement. The tactic shows the Liberal government is not willing to negotiate with the provinces but will try to impose policy on them, a policy far less liberal in its funding then that the right-wing Conservatives had been following. Ever since the meeting Ottawa has been trying with considerable success to strike deals with individual provinces.

Three eastern Liberal provinces broke ranks. First New Brunswick struck a deal and then Nova Scotia and, Newfoundland and Labrador. Also in the north Yukon and two territories came to an agreement with Ottawa. Now one of the prairie provinces, Saskatchewan, has also broken ranks and reached an agreement with Ottawa.

Saskatchewan has also reached a separate agreement with the federal government over private MRI clinics. The province will have a one year reprieve to show that private MRI's do not hurt the public health care system. Under the deal Saskatchewan will receive $190.3 million for home care and $158.5 million for mental health services but over ten years. The agreement comes just a day after the agreement with the Yukon, the two territories Nunavut and the Northwest Territories.

While Ottawa may have succeeded in destroying the solidarity among the provinces in opposing the original deal, the five most populous provinces have yet to sign, as well as Prince Edward Island. Even though they have struck a deal with the Liberal government, Saskatchewan and the territories added their signatures to a letter sent by the other provinces to the PM Trudeau:"Premiers remain united and determined in seeking a multilateral agreement. Premiers also recognize that provinces and territories face unique local circumstances, which led some of them to sign bilateral health agreements. However, premiers representing 90 per cent of Canada's population continue to seek a fair deal for long-term health funding from the federal government."

The holdout provinces have said the deal offered by Ottawa last December will further reduce the federal government's share of health spending to unacceptably low levels. Health care is jointly funded by the provinces and the federal government with each province having its own plan that must be in accord with the Canada Health Act. The federal funding helps out particularly those poorer provinces who have problems funding the level of service of richer provinces, so that there is a more uniform quality of service across the country.

The Quebec health minister criticized the Saskatchewan agreement and argued that the agreement on MRI's violated the law as MRI are to be free and publicly paid for. Saskatchewan allows residents to pay for an MRI test in a private clinic. In return the private clinic must offer a scan free to someone on the public waiting list. Back in November Jane Philpott, the federal health minister warned the Saskatchewan health minister that under the Canada Health Act the federal government could withhold funds from provinces that charged for medically necessary services. Federal officials claim that the MRI agreement is unrelated to the deal on funding. Obviously it sweetens the deal for Saskatchewan.

The Saskatchewan Health Minister Jim Reiter said that Saskatchewan would have a year to prove to the Liberal government that its policy on MRI's is consistent with the Canada Health Act. Of course it is de rigeur in Canada for politicians to claim they support our health care system, even Conservative Premier Stephen Harper did so. However politicians at the same time would like to "modernize and improve it" often by having more private involvement which pleases some lobbyists and can bring in more donations. Philpott's office displays the common rhetoric in its statement:"Minister Philpott is committed to working with Saskatchewan to strengthen our publicly funded, universal health-care system, while at the same time upholding the principles of the Act, and has asked officials to work with Saskatchewan officials over the next year in this regard,"Among the ways the Liberals are strengthening the system is by reducing funding and refusing to negotiate funding with the provinces. When a province such as Saskatchewan introduces private for profit services as with the MRIs, it does not punish the province but gives it a year to show that it does not harm the operation of the Canada Health Act. Former Conservative PM Harper who was always criticized by the Liberals provided almost twice as much.

Liberals keep Harper's cuts to federal health transfers

Back in 2011, the Stephen Harper Conservative government announced, without agreement of the provinces, that funding of health care transfers would be reduced by $36 billion.

Discussion of the reduced funding in 2011 that outlined health care spending up to 2024 can be found in this Globe and Mail article. The annual funding rate would be reduced from six percent annually down to three percent. The federal transfers are essential in helping poorer provinces offer health care that is consistent with the Canada Health Act and is meant to ensure the quality of care is at a reasonable level throughout Canada.

Liberal Health Minister Jane Philpott, on CTV Question Period said that the Liberals will maintain Stephen Harper's lower targets on health care transfers. Often governments will promise one thing during an election campaign but then renege on the promise after the election. This often causes considerable backlash and can hurt ratings. In this case the Liberals did not promise anything concretely during the 2015 election campaign but simply gave the impression that they might do something. Liberal leader Justin Trudeau said: "We are committed to renegotiating, to re-engaging on the health care accords, on the Canada health transfer, with the provinces ... We need a federal government that is willing to sit down and work with the provinces, not dictate at the provinces but set clear targets and expectations." The statement plays on the fact that the Conservative decision to reduce funding was taken unilaterally — a move objected to by many provinces. The statement says nothing about increasing funding.

At the time that the Conservatives announced the cuts to funding, the Parliamentary Budget Office said the cuts meant that provinces "cannot meet the challenges" of an aging population and Ontario's finance minister went so far as to call it a "frontal attack on public health care." Also at the time, the Liberals complained about Harper's health cuts that they called "dictatorial." Among Liberals who made such accusations were Bob Rae, Liberal interim leader and one time New Democratic Premier of Ontario. Rae described the cuts as "dictatorial federalism." The current Minister of Public Safety, Ralph Goodale, complained that the cut backs were announced just before Christmas and were done by brute force. Goodale also used the phrase "dictatorial federalism."

Stehan Dion, Minister of Foreign Affairs, complained about the failure of the Conservatives to work with the provinces and territories and held the Conservatives responsible for the poor health care system. Numerous other prominent Liberals also spoke out against the cuts.

Perhaps, some day, the Liberals will actually try to increase funding and negotiate a new funding formula with the provinces. However, for now the Liberals are carrying on with the health transfer policies inherited from Harper's "dictatorial federalism" and they now support the very austerity and cutbacks that they formerly spoke out against.

The announcement that the Liberals will carry on with the cuts Harper made to health care transfers comes shortly after Environment Minister Catherine McKenna's revelation that the Liberals will not seek any stronger targets for the reduction of carbon pollution than those set out by the Harper government last year.