Canadian Health Coalition

Budget 2014 triggers Harper’s plan to dismantle national health care

By Michael McBane, The Hill Times, February 17, 2014

Federal transfer payments to provinces were first used in order to establish national standards in health care delivery across Canada. On Tuesday, February 11th, Prime Minister Harper turned this on its head by tabling a budget that will use federal transfers in order to eliminate national standards in health care.

Buried on page 279 of the 2014 federal budget is a measure that will make it next to impossible for provinces to provide health care services on equal terms and conditions. The purpose of this budget item is to strike a blow to the heart and soul of universal health care in Canada.

The Harper government is eliminating the equalization portion of the Canada Health Transfer (CHT) and replacing it with an equal per capita transfer. This means that less populous provinces with relatively larger and more isolated populations will have more and more difficulty delivering more expensive universal health services.

Likewise, provinces with relatively larger proportion of older residents will also be hampered in delivering universal quality care. The move to an equal per capita cash transfer will widen the gap between the have and the have-not provinces and make it next to impossible to maintain national standards in health care.

It is estimated by the Premiers that this one budgetary move will create a funding gap for the have-not provinces of $16.5 billion over the next 5 years. The only province to benefit from this change is Alberta, with its growing, younger population.

Justice Emmett Hall, a principal architect of national health care in Canada, articulated the platform required to realize a national health care system. In order to establish and achieve high national standards for health services, the federal government needed to establish a funding formula that took into account the capacity of provinces (and territories) to achieve national standards. In other words: no equalization in health transfers, no national Medicare.

This regressive budgetary change will be matched with a second regressive measure. Beginning in 2017, the six percent annual increase for the health transfer will be replaced with a formula that links the health transfer to economic growth. This means that in times of high unemployment and economic downturn – when Canadians need access to care the most – the federal transfer will be reduced. This measure alone will result in a $36 billion cut in federal funding for health care over the next decade.

With Harper’s cuts to health care funding, the share of federal CHT cash payments in provincial-territorial health spending will decrease substantially from 20.4 per cent in 2010-11 to less than 12% over the next 25 years. This, according to the Parliamentary Budget Office, will bring the level of federal cash support for health care to historical lows. National Medicare was implemented across Canada by provinces and territories on the understanding that the federal government would contribute roughly 50 percent of the spending on Medicare.

The shrinking level of federal funding for health care will be matched by a withdrawal of federal enforcement of national standards contained in the Canada Health Act. The use of the spending power to establish national standards is common in all OECD federations. National Medicare will clearly not survive this ‘cut and run’ course being set by the Harper government. Instead, it will fragment into 14 separate pieces where access to essential care will depend on where you live and your ability to pay.

Instead of working with governments across Canada on a plan to meet the growing health care needs for seniors care in Canada, the Harper government is putting in place a series of measures that will make it next to impossible for provinces and territories to meet the growing needs of their people.

As Pope Francis observed: “A people that does not take care of its elderly and children and youth has no future, because it abuses both its memory and its promise.” Budget 2014 eliminates the fiscal deficit by creating a moral deficit.

How much pain and suffering will Canadian voters let the Harper government inflict on the sick, the frail elderly, veterans and pensioners? How long will citizens tolerate the offloading of billions of dollars of health care costs?

The one big thing that stands in the way of Harper’s plan to slowly strangle Medicare is the people of Canada.


Michael McBane is the Executive Director of the Canadian Health Coalition