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Equity Critical to Fixing Canada’s Broken Health Funding Model

Treaty 1 Territory, Homeland of the Red River Métis, Winnipeg - Dougald Lamont, leader of the provincial Manitoba Liberal Party and MLA for St. Boniface, has written to Prime Minister Justin Trudeau, Federal Health Minister Jean-Yves Duclos, and Canada's Premiers, calling for equity to be restored to the formula used to calculate federal health transfers to the provinces.

Lamont said if the Federal Government returned to the previous funding formula, nine out of ten provinces would see increases in their budgets without the Federal Government having to increase funding. Only oil-revenue-rich Alberta would see a drop.

That's because prior to 2014, the formula used to calculate federal health transfers to provinces took into consideration factors like the age, health, and poverty of the population. It also took into consideration whether the population was spread widely over remote rural or northern areas.

Equity was stripped out of health agreements under the Harper Conservatives in the 2007 budget, although it only kicked into effect in 2014. As a result of the change, the Canada Health Transfers were calculated on a strict per capita basis, which meant every single patient is treated as having the same costs.

"In 2007, Conservative MPs across the country voted to make permanent funding cuts to their own provinces. If we reversed this mistake, nine out of ten provinces would see substantial increases, and it wouldn't cost the federal government a dollar more," said Lamont. "Making sure you flow money to the people who need it, and take into consideration extra costs like distance and health, is fairer and more efficient."

Lamont said by making the change, the Conservatives had created a 'ticking time bomb' for provincial health care systems and provincial finances. The long-term funding losses to some provinces is in the billions and the people impacted the most by service cuts are seniors in rural areas.

The Conservative Government of Stephen Harper slipped the change into the 2007 budget, though it did not take effect until 2014. Conservative MPs who supported the measure included Maxime Bernier, Patrick Brown, Pierre Poilievre, Andrew Scheer, Brian Pallister, and James Bezan.

A Globe and Mail article from October 9, 2013, wrote:

"Based on estimates for 2014-15, Alberta will receive $954-million more under the new formula than under the current formula - $235 for every man, woman and child in the province. Every other province will lose money as follows: Ontario, $335-million; British Columbia, $272-million; Quebec, $196-million; Newfoundland, $54-million; Manitoba, $31-million; Saskatchewan, $26-million; Nova Scotia, $23-million; New Brunswick, $18-million; and Prince Edward Island, $3-million."

Lamont said the decision was one of several where Conservatives policies have wreaked havoc on health care and provincial finances alike. The Conservatives' other changes, including unilaterally reducing health care funding increases from 6% down to 3% a year, and freezing total transfers to provinces for half a decade.

Between 2010-11 and 2015-16, total federal transfers to Manitoba only increased by $11-million - a per capita increase per Manitoban over five years of $8.50 per person.

On July 12, 2022, the Premiers unanimously asked the Federal Government for more funding, citing an historic commitment to fund health care 50/50 with the provinces, and that the federal share of funding should go from 22% to 35%. The 50/50 provision has not been in place since 1976, when provinces and the federal government agreed to a different arrangement that transferred a substantial portion of the federal funding to the provinces through a redistribution of federal taxing power to them, instead of a cash transfer. Health care and transfer payments need to be recognized as essential investments in Canada's prosperity.

"You can't have freedom and prosperity without fairness," said Lamont. "Health transfers and equalization are all investments in national prosperity. It's an investment that pays back and makes the whole country richer - including 'have' provinces. We have to remember that."

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