The ONW Salon: Where Do Health Care Talks Go From Here?
The federal Liberals have taken an a $11.5 billion dollar offer to fund home care and mental health off the table, and negotiations have failed for a deal between Ottawa and the provinces on health care funding. Where do the talks go from here, or are they permanently stalled? Richard Mahoney, John Capobianco and Tom Parkin discuss.
It's that time of year again. The provincial ministers are wrapped snugly in their capitals, struggling with one of the most important and challenging jobs in Canadian politics: dealing with the constant demands of an ever-growing health care system and keeping up with the enormous expectations for improvements that we place on them and their federal counterparts.
While on the Christmas metaphor, it is also true that provincial health ministers, as a rule, often have visions of a federal Santa Claus or sugarplums dancing in their heads. Given that most of them face a situation where they gobble up ever increasing shares of their provincial budgets, they would prefer the feds arrive with cheques under the tree, and no strings attached.
While provinces need predictable funding so they can meet the demand, it is fair to say they have that, courtesy of former Prime Minister Stephen Harper's diktat of a 3 per cent escalator. There were no meetings, no discussions, just a solution imposed by a one size fits all Prime Minister Harper, who also made no attempt to do what his predecessor Paul Martin did - tie the increased investments into national priorities, such as decreased wait times. In fact, Mr. Harper even ignored the mandate in the deal reached by Martin and the then Premiers. He just put the cheque under the tree, with no attempt to ensure that the money was spent on the objectives agreed to by all of them.
I think what the Trudeau government is doing is sensible - it has offered an increased investment of $11.5 billion in return for certain metrics in planned investments in home care and mental health. We need progress in both those areas and so tying that increase to shared objectives in those areas is what a responsible federal government should do.
To simply hand over the money with no accountability of investment and progress is not smart, not accountable and does not advance shared goals of reforming and improving the system. I am confidant that discussions will continue, and that progress can and will be made.
There was a reason why former PM Harper didn’t give these federal/provincial meetings much air while he was in charge and it was for this very reason - grandstanding. You know that any negotiations that are done in public can become disastrous, especially when they involve a dozen or so politicians.
What we saw the other day when the provincial Finance (and later Health) Ministers got together with federal Finance Bill Morneau and Health Minister Jane Philpott was a complete breakdown in negotiations before they even got started. The provincial Ministers couldn’t run fast enough to the microphones to express their displeasure with what was being offered by the feds.
Everyone following this knew this was coming up. Former CPC Finance Minister, the late Jim Flaherty, decided back in 2011 that the Canada Health Transfer (CHT), which the feds give the provinces, was not sustainable at the rate of somewhere near 6% more a year and was going to cut the annual rate of increase to equal the rate of economic growth or 3 per cent, whichever is higher, starting 2016-17.
The Liberals never really mentioned this during the campaign - go figure - but merely said that they would sit down with the provinces and negotiate a “better” deal for them on health transfers. Well, here we are: the Liberals are suggesting about the same level of increase as the Conservatives (sorry, 3.5 vs. 3%) and to their surprise are getting blasted by most of the provinces.
I give the feds credit for adding to this $11.5 billion over 10 years for home care and mental health funding, including money for initiatives on prescription drugs and other innovations, but the provinces see that as one-time funding that doesn't address the ongoing health issues facing their respective provinces beyond these important ones, and they need the consistency of regular, stable funding to provide the services they do for their constituents.
The talks aren't dead yet - this is what happens when you negotiate in public. Wait for the counter-offers from the feds and the compromising will begin.
The narrative of an “ever growing health care system” is the one that justifies cuts. It reminds me of a recent opinion piece by the right-wing MacDonald-Laurier Institute that again tells us “Canada’s health-care system is fiscally unsustainable.”
Public health care costs are actually falling. According to the Canadian Institute for Health Information (CIHI), in real terms since 2011, health spending has decreased by an average of 0.6% per year. That’s a 5% total decrease.
Our total public and private health spending is similar to other wealthy countries. Measured against GDP, we spend less than France and Germany and more than Japan and the United Kingdom. We spend a lot less than Americans who, CIHI says, spend 17.1% of their GDP on health care.
Of course, the private health care companies and governments have been telling Canadians that health care is unsustainable for so long many believe it. So, politically, the Trudeau Liberals have had a pretty easy time putting out the spit that this is just “greedy provinces.” The Trudeau Liberals arrogantly tell provincial governments – who actually run the health care and who are the ones cutting costs – that they need to “transform” their systems and be “innovative.” Premiers are right to be insulted. It’s nonsense.
The Liberals came to power making some promises. They promised $3 billion for home care. They promised to encourage collaboration between provinces on a pharmacare solution, to bring prices down. They promised high-quality mental health care. The last two issues aren’t even in the federal government’s scope. As far as I am aware, none of the three has advanced.
The federal government doesn’t do much in health care – that’s the role of provinces. They provide money in exchange for enforcement of the Canada Health Act. They create a table to discuss issues of mutual concern, like data, like pharmacare. But they want to show off like they’re the boss. Perhaps someone needs to retake the course in Canadian federalism.
The Trudeau Liberals called Harper dictatorial for a unilateral cutback to 3%. But that’s what Trudeau is doing now. The only difference is that he’s pulled the provinces together to tell them what’s what.
My advice, for what it’s worth: give an increase to cover inflation and population growth. Use matching money to encourage them to use co-operative federalism to design pan-Canadian systems that will deliver better health care and efficiencies that benefit Canadians.
John does have a point that “grandstanding” happens in these federal provincial meetings. And, yes, the feds are generally on the receiving end of that grandstanding and sometimes that hurts politically. But I have always thought that was never a sufficient excuse for a federal government to avoid meeting at all. Sometimes you have to pay the price - meeting with the provinces is part of your job as PM. And so while it may not be easy, it is important to do and that is why Justin Trudeau and his Ministers are doing it.
And they are succeeding where the previous government failed, or refused to act. In June, Finance Minister Morneau pulled off a historic agreement to enhance the Canada Pension Plan.
This results in increased benefits for millions of Canadians, better retirement security, with a big increase in the maximum amount of income covered, and therefore paid out, to Canadian workers.
And then recently, a national climate plan was released - an historic development that puts a price on carbon and allows Canada to meet its global commitment to reduce emissions and deal with climate change
I doubt there will be a First Minister’s meeting on health, given that Ministers could not agree on a path forward. But I do think the feds will pursue one-on-one agreements with the provinces so that the over 500.000 Canadians under 25 who are not getting adequate mental health care now, receive adequate care. And so that the commitments made by Mr. Trudeau on home care during the election campaign are kept and implemented.
Some provinces have already indicated they will proceed one-on-one with the feds, in the absence of an agreement with all of the provinces. In the end, I predict most provinces will reach some agreement with the federal government on this, and people will get the investments in improved care that they deserve.
Richard, the big difference with the policy initiatives you mention - CPP and the climate plan - is that they were done in private: federal ministers meetings with their provincial counterparts by phone, in one-on-one meetings, essentially out of the public eye. That is how the former government operated when it came federal/provincial issues.
Look, notwithstanding what happened the other day with the conference, the feds took a hit in the media when various Liberal counterparts who were supportive during the election (and in most cases, since), took massive shots at the federal government - something the Liberals didn't need as people are now going into the holiday season.
Do I believe a deal will be done? Yes, it has to happen. The question now is who blinks first and how many times. The Liberals are in a tight fiscal situation so PM Trudeau and his Ministers have to balance the many campaign promises, especially in the healthcare space, with the fact that the government ran a $7.8 billion deficit over the first half of the fiscal year, largely due to a 7% hike in program spending.
Finance Minister Morneau's November economic update projected a $25.1 billion deficit for the current 2016-17 fiscal year, which has been forecast to reach $27.8 billion the next year before he intends to start shrinking it. This is why the feds don't have much room to manoeuver when it comes to CHT negotiations and the provinces know this.
So, what does this mean for the provinces? I predict that they will eventually come to terms with the fact that the 3.5% increase will become reality and the feds will promise more money in other areas.
Richard, I don’t understand what your points about climate change and pensions have to do with health care. And John, I don’t know what the deficit has to do with this. The federal government has a $300 billion budget. The difference between 6% and 3% for the Canada Health Transfer amounts to less than $1 billion next year.
The instant any federal party makes promises to take action in the provincial jurisdiction it is setting itself up for exactly what we saw this week. The federal government doesn’t run health systems. It has no expertise and really nothing to offer except money and a table for collaboration. Oh, and enforcement of the Canada Health Act.
When a party makes promises that are in the provincial jurisdiction they are immediately giving provinces a stick with which they can hit that political leader once he or she is elected. But political parties keep making the same mistake because they want to have a bullet in the platform about how they’re going to improve home care or mental health care.
The mistake gets even worse when they arrogantly start to believe they have a stick with which to hit the provinces. When they find out they don’t, the last refuge – as we’ve seen recently – is to go back to the “greedy provinces” narrative. To go back to the narratives about how provincial health care systems are un-innovative, un-transformative. It’s political spin to find a way out of a problem of their own making. And it’s exactly the kind of rhetoric that opens the door to privatization.
So let's get back to first principles. The federal Liberal government wants to dictate to provinces that they implement Liberal Party promises and attach idiot strings on funding mittens to ensure they do so.
But don't be surprised when the people actually managing the health system balk. In my experience, people don't like divas swanning in to tell the grunts how to do their job. That's just human.
Richard Mahoney is a lawyer with deep experience in politics and governance. He is a former senior advisor to the Rt. Hon Paul Martin, a former Campaign Chair and President of the Ontario Liberal Party. John Capobianco is a Senior Partner and National Public Affairs Lead at FleishmanHillard. He has been a Conservative strategist with over 30 years of political activism at all three levels, including as a former federal Conservative candidate. Tom Parkin is a veteran NDP strategist and a frequent commentator on national issues.
Posted date : November 29, 2016