Mike de Jong appeared remarkably relaxed about the trial balloon floated by the Harper government this week, to cap the Canada Health Transfer at a lower rate than expected.
Maybe it's the calming effects of the matcha tea lattes the B.C. Health Minister discovered just this week. More likely, it's his game face.
The high-stakes match to shape the 2014 health accord gets under way Sunday night, when Canada's finance ministers converge in Victoria. The premiers will gather here in January to carry on what will likely be a lengthy series of negotiations to establish a new formula.
"The fact that Ottawa is talking about the finite ability that we have as governments to continue increasing funding is not a surprise," Mr. de Jong said in an interview this week.
No surprise, perhaps, but there is considerable anxiety behind the scenes about just what Ottawa is proposing. After a steady stream of annual 6-per-cent increases, Ottawa is signaling that it will be more parsimonious with health dollars in the future, and there is no bigger issue on the horizon for federal-provincial relations.
The current 10-year Canada Health Transfer accord expires in 2014. It makes up roughly half of the transfers to the provinces – this year, $27-billion in cash and more than $13-billion in tax credits will flow from the federal government to the provinces and territories for health care.
Federal Finance Minister Jim Flaherty promised just last month that his government will maintain growth in health transfers at 6 per cent through to the fiscal year 2015–16. Probably the first question he will face from the provincial finance ministers is whether Ottawa is backtracking on that commitment. Then they can worry about what the next deal will look like.
Ottawa has indicated it is looking at a new per-capita formula – which would be bad news for B.C., unless it is adjusted for age and gender. But there are any number of variations floating around: The prescription could be tied to economic growth or growth plus inflation. The provinces may be offered individual deals instead of a single national formula.
Premier Christy Clark vowed earlier this year to lead this debate. Last month, Mr. de Jong made the opening move at a meeting of health ministers, proposing a scheme to reward provinces – like B.C. – that can reduce smoking rates, for example. (B.C. health ministers do love to lord certain health statistics over other provinces: We have the highest youth and adult physical activity rates, we lead in reducing obesity rates, and we eat more fruits and vegetables.)
But maligned as B.C. is about its infatuation with yoga outfits, the cost of health care in the province has been rising at an alarming rate, and no one ever thanks government for paying the bill. Health care consumes the largest share of the provincial budget. Since 2004, the province's health-care spending has climbed by an average 6.2 per cent every year. Starting next year, Mr. de Jong is supposed to manage a budget increase of less than 3 per cent.
That is a supremely ambitious target. But if B.C. can rein in health costs, it will free up money for other programs – maybe the kinds of things that do pay off for a governing party at election time.
Here's what B.C. is proposing: The new funding formula should provide incentives to provinces that find efficiencies in health care. (B.C. will point to its move to patient-focused funding as an example.) Second, reward provinces that improve health outcomes, thereby reducing the burden on the medical system. "There is an emerging realization that these are the kinds of linkages that need to be made," Mr. de Jong said.
A leaner funding formula from Ottawa almost certainly means the provinces will have to put the squeeze on their health-care budgets. There will, no doubt, be a scrap over the details. But B.C. (among other provinces) is already adjusting because they know what is coming. "The rate of increase has doubled in 10 years," Mr. de Jong said. "It cannot double again in the next 10 years."
The British Columbia vision for leading the debate is sidling up to Ottawa to say, sure, we all need to cut costs – let's do it in a way that suits B.C. So far, there is little sign that the other provinces are willing to follow.
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Reining in spending
Health-care spending makes up 42 per cent of the entire B.C. budget.
Ottawa will contribute $3.8-billion to B.C. for health-care funding this year, a figure that is expected to rise by 6 per cent each year for the next three years.
But B.C. is aiming to put the brakes on health-care costs.
The budget for next February is weeks away from being finalized, but here's the forecast for the Ministry of Health's budget from earlier this year:
Fiscal 2010-11: $14.7-billion
Fiscal 2011-12: $15.7-billion (6.7-per-cent increase)
Fiscal 2012-13: $16.2-billion (2.8-per-cent increase)
Fiscal 2013-14: $16.8-billion (3.7-per-cent increase)
Justine Hunter