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An eventual increase in federal transfers to provinces for health care will come with strings attached.

Trudeau promises to boost federal health transfers when the pandemic is over

Prime Minister Justin Trudeau promised after meeting with premiers that the federal government will increase transfer payments to the provinces for health care after the immediate crisis of the pandemic is over.

It’s not the immediate increase of at least $28 billion more in unconditional transfers each year the premiers were seeking. However, Trudeau said the federal government will increase its share of the cost of health care in the years to come, and continue to help provinces with extra costs linked to the pandemic, “whatever it takes, as long as this pandemic lasts.”

That includes fully covering the cost of COVID-19 vaccines, so “the provinces and territories won’t have to use their funding,” and creating a federal compensation program for people who experience rare adverse reactions.

Quebec Premier Francois Legault said the premiers are disappointed that the federal government “refused” to discuss immediately increasing its share of healthcare costs from 22% to 35%. Saskatchewan Premier Scott Moe said he was hopeful that the 13 first ministers could regroup and strike a new deal next year.

This year, the federal government will send provinces nearly $42 billion for health care under an arrangement that sees transfers increase by at least 3% each year. Premiers contend that doesn’t keep pace with yearly increases in expenses of about 6%.

Trudeau acknowledged that the pandemic has laid bare longstanding problems in long-term care and “hospital beds are almost full” as the number of hospitalizations related to COVID-19 continue to climb across the country. “We recognize our health care system needs fresh injections of federal funds,” he said.

However, he noted that Ottawa has already sent provinces and territories an extra $25 billion to cover costs related to COVID-19, amounting to “eight out of every 10 dollars invested in fighting this pandemic.” And future increases in the federal share of health care costs will come with strings attached, including requirements around “accountability and transparency.”

Trudeau did not commit to a specific timeline for hashing out a new deal with the provinces. “We need to do that in a way that is right for the coming years and decades, and right now there’s a lack of certainty,” he said. “We don’t know what our economic situation will be in three or four months or three or four years.”

Other health care priorities discussed at the meeting included boosting resources for seniors’ care, collaborating on virtual care, and moving forward on a universal pharmacare system. Trudeau alluded to pushback from some provinces on that last point, noting the federal government looks forward to “working with the premiers who are ready.”

Canada’s 13 first ministers also received an update on the rollout of Pfizer’s COVID-19 vaccine. Dr. Theresa Tam said the federal government will be “leveraging and enhancing” existing post-market surveillance systems. The first doses of the vaccine will arrive in Canada on Monday and the provinces have indicated they have the infrastructure, training, materials and supplies in place to start immunizations at 14 priority locations.

Photo credit: iStock

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