Canada to Add Funds, Expand Health System
By Randall Palmer
OTTAWA (Reuters) - Canada's political leaders reached an 11th-hour funding deal on Wednesday aimed at preventing further erosion of the country's ailing universal health care system but greatly expanding its coverage.
The federal government agreed to transfer an additional $8 billion to the provinces, while the provinces agreed to expand medicare over time to cover expensive drugs and home care.
The provinces, which were hit by federal spending cuts in the 1990s, quickly denounced the federal grant as insufficient and said they would be coming back for more.
"We will continue the battle, democratically of course," said Bernard Landry, the separatist premier of French-speaking Quebec.
Landry denounced Canadian Prime Minister Chretien as a "predator" for not being willing to part with more of the federal government's expected budget surpluses.
But in the end, the provincial premiers, most of whom face elections this year, could not walk away from the cash.
"At the end of the day, when you're told 'take it or leave it,' the patients come first," New Brunswick Premier Bernard Lord said.
Both sides recognized that the public wants repairs to a system that suffers from long waiting lines and a shortage of doctors and nurses.
Despite the system's problems, Canadians often cite it as an important cultural difference between their country and the neighboring United States.
The expansion to cover costly drugs and home care, together with a commitment to expand group medical practices where nurses would see patients in some cases, were part of a reform package aimed at making the health system more efficient.
As part of the C$12 billion total new money, the provinces will get C$2.5 billion before the end of the fiscal year on March 31. They will receive a further C$7.5 billion over the following three years.
If Ottawa is still running a surplus above the normal contingency reserves next January--as it has regularly for the last several years--the provinces will get another C$2 billion.
The federal government helps fund the health system and the provinces administer it.
Health spending has eaten up an increasing share of provincial budgets, now around 40%. The provinces say that with the federal government running regular budget surpluses, it should turn over a lot more to the provinces.
Total health spending--including private spending for things not covered by medicare--amounted to an estimated C$112 billion last year.
The federal government is giving C$19.1 billion in the current fiscal year to the provinces as a general transfer for health and social spending.
In November, a federal health commission recommended an increase of C$15 billion in federal health spending over the next three fiscal years, and the provinces also demanded this amount.
In addition to the C$12 billion through 2005-06, the government committed a further C$11.8 billion in new money for the following two fiscal years.
While the premiers of all 10 provinces agreed to the federal arrangement, the premiers of the three sparsely populated northern territories refused to sign on. They will negotiate their grants from Ottawa separately.