B.C. Finance Minister Colin Hansen, centre, pauses while tabling the provincial budget as Premier Gordon Campbell, second right, and caucus members applaud at the Legislature in Victoria on March 2, 2010.DARRYL DYCK/The Canadian Press
With health care costs on the way to eating up half its annual budget, the British Columbia government has introduced a budget that counts on wage freezes, "pay for performance" and other measures to keep a lid on expenses.
And to highlight the hefty tab, the government yesterday said it would allocate revenue from five different sources - including the new Harmonized Sales Tax - to health care, a tactic that was immediately slammed as window-dressing aimed at making the HST more palatable.
"It's really an attempt to popularize the HST, while at the same time demonizing health care costs," said Judy Darcy, secretary-business manager for the Hospital Employees' Union. "I don't think British Columbians are going to fall for it."
The new bookkeeping approach and accompanying legislation will help taxpayers understand how their money is being used, Finance minister Colin Hansen said.
"It helps demonstrate to British Columbians the magnitude of health care costs," Mr. Hansen said in a question-and-answer session with reporters. "We need to find ways that can help demonstrate to average British Columbians the connection between the tax dollars they pay and the services they get."
The province will introduce legislation to require the Minister of Finance to report each year on planned health care spending increases and how they stack up against revenue from the HST and four other sources.
Those other sources are MSP premiums, tobacco taxes, lottery revenues dedicated to a provincial health account and federal health transfer payments.
Up to now, revenue from those sources - and from the pending HST - would have gone into one consolidated pot.
There will be a gap of more than $6-billion between the revenue from those five sources and forecast health spending of $16.5-billion in 2010.
"Even by dedicating every single penny of those revenues to health care, it only covers a fraction of the costs," Mr. Hansen said.
Health authorities had to slash programs to meet a $300-million funding shortfall last year and there is little in the new budget to address long-term health costs, said Rachel Tutte, co-chair of the B.C. Health Coalition.
"We're looking for support to keep seniors in their homes, for prevention, for community health centres, that allow people to maintain their health and prevent them from going into the hospital," Ms. Tutte said. "And we're not seeing any of that in this budget."
The province is predicting that health care costs will climb less steeply in 2012 than next year, largely as a result of wage freezes.
There are no wage increases on the table in contract talks. Wages and benefits account for as much as 70 per cent of provincial health authorities' budgets.
Health spending is on track to account for 42 per cent of all government expenses by 2012-2013.
Provincial health authorities spent the past year scrambling to balance their budgets by everything from boosting parking fees to cutting programs in areas such as psychiatric care.
The budget allocates $80-million this year and $180-million next year for "innovation, pay for performance and integration and standardization of health care operations and service delivery."
MSP premium rates will increase in January by $3.50 a month for individuals and $7 a month for families.
The HST comes into effect on July 1, 2010.