Finance Minister Jim Flaherty laid down a new deal on federal health and social transfers Monday that will tie funding to the performance of the national economy but leave provinces free to spend that money how they like.
Previous Prime Minister Paul Martin’s health accord gave the provinces 6 percent increases each year but came with requirements to address wait times and access to primary care. While Flaherty will extend that plan three years, after that Ottawa’s health transfers to the provinces will be tied to economic growth while the Canada Social Transfer will increase at 3 percent, the same as it is now.
Provincial finance ministers expressed outrage at the deal, demanding negotiations and criticizing Flaherty’s take-it-or-leave-it offer, though B.C. Finance Minister Kevin Falcon said he was happy with the plan.
Unlike previous agreements, Ottawa is not attaching stipulations or performance requirements to the money.
Flaherty notes in a release that the health transfer will reach record highs—$30 billion per year in 2013-14 and $38 billion per year in 2018-19. Critics say that figure overlooks the provinces much larger portion of healthcare expenses.
Armine Yalnizyan with the Canadian Centre for Policy Alternatives wrote in a Wednesday blog entry that the feds currently cover 21 percent of provincial health expenses in a deal that was originally conceived as 50-50 decades ago.
While Flaherty defends the change as a needed measure in times of austerity, Yalnizyan said such spending pales beside $220 billion in tax cuts since 2006. The government defends those cuts as necessary to spur economic growth.
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