Feds Spending Plan Heads to Confidence Vote as Provinces Seek More Health Care Cash

Feds Spending Plan Heads to Confidence Vote as Provinces Seek More Health Care Cash
Prime Minister Justin Trudeau holds a press conference at Rideau Cottage during the COVID pandemic in Ottawa on Dec. 1, 2020. (The Canadian Press/Sean Kilpatrick)
The Canadian Press

OTTAWA—Canada’s most populous province says the federal Liberal government missed an opportunity in its new spending plan to signal more help for health−care systems, setting up a potential showdown next week between the prime minister and premiers.

Prime Minister Justin Trudeau will meet Dec. 10 with the country’s premiers, who have been demanding a meeting since September to talk about the annual federal transfer payments to provinces and territories for health care.

The fiscal update released Monday, which proposed some $25 billion in new spending to top up and expand existing programs and create new, targeted support for hard−hit industries, did not detail a bump in health−care spending beyond the original plan.

Provinces say the proposal still falls well short of what is needed to properly fund their systems, not including the added costs associated with COVID−19.

“The obvious question that Canadians are asking is what is more important than a sustainable health−care system, especially in the middle of a global pandemic?” said Ontario Finance Minister Rod Phillips.

On Tuesday, Trudeau said he planned to hear out the provinces about their needs during and after the pandemic, but wouldn’t commit to added spending.

His Liberal government’s fall economic statement must first survive a confidence vote in the House of Commons. Failure to gather the necessary support would mean the minority government falls, which could plunge the country into a federal election.

“I am reasonably confident that none of the opposition parties wants an election right now. We certainly don’t want one,” Trudeau told reporters outside his Ottawa residence.

“We want to get these supports out to Canadians. And there are certainly things in this fall economic statement that every party should be able to support in terms of helping Canadians.”

Spending to date is putting the federal deficit on track to reach $381.6 billion this year, but the government’s math says it could close in on $400 billion if widespread lockdowns return in the coming weeks.

The document showed health transfers to provinces will rise to $43.1 billion next year from $41.9 billion this year, as part of a prearranged three per cent annual increase.

Provinces say annual cost increases are closer to six per cent. They want the federal government to boost its share of health−care funding by an extra $28 billion this year with annual increases of $4 billion thereafter.

The Liberals argue they’ve sent plenty to the provinces for pandemic−related measures, totaling $24 billion for things like contact tracing and testing. to support health−care systems across the country.

Still, Intergovernmental Affairs Minister Dominic LeBlanc said that health−care spending will be a key agenda item during next week’s meeting.

“The discussion of how to support a long−term sustainable public health system, which is a priority that we share with all governments across the country will be very much the subject of the discussion,” LeBlanc said Tuesday at a news conference in Ottawa.

Pandemic−related spending has sent the total federal transfers this year to $99.7 billion. Next year, the amount falls to $82.1 billion, near where it was before the pandemic, based on figures in the fall economic statement.

Conservative finance critic Pierre Poilievre said the Liberals’ spending binge pre−pandemic has blown the margin now to increase transfers to lower levels of government.

“There’s not a lot of room left for other commitments because of (Trudeau’s) irresponsible and insatiable appetite for spending other people’s money,” Poilievre said.

Rebekah Young, Scotiabank’s director of fiscal and provincial economics, wrote in an analysis that one−off transfers to provinces were necessary under the circumstances, but there needs to be a structural shift in the long−term to make the country’s finances sustainable.

“And the discussion should be broader than expenditure−shifting, as provinces have been reluctant to take up revenue capacity given up at the federal level in recent years,” she wrote.

By Jordan Press