Breaking down the numbers: A closer look at Canada’s $46.2B health-care funding

Analyzing the impact of Canada's new health-care funding deal

A doctor tends to a patient.
A doctor attending a patient. Canadas new health care funding deal is designed to address family health services. (Pexels) 

The federal government recently pledged to increase health funding to provinces and territories by $196.1 billion over 10 years, including $46.2 billion in new funding, to support health care in response to the ongoing COVID-19 pandemic and long-standing issues with the system. While the proposal was accepted by Canada’s premiers, it has also raised questions about the long-term sustainability and effectiveness of the system overall.

Here’s a closer look at Canada’s new health-care funding, its potential impact on the system, as well as some of the the concerns and criticism surrounding the deal.

What are the goals of Canada’s new health-care funding?

Formally known as the Canada Health Transfer (CHT), the federal funding is designed to improve access to high-quality care for all Canadians and is expected to have a significant impact on the system. It is intended to strengthen the health-care system, improve access to care and enhance public health measures.

“It is an extension of the existing plan, it does not change the existing plan very much at all,” said Raisa Deber, a professor at the University of Toronto with the Institute of Health Policy Management and Evaluation.

The federal government’s intention is to work with the provinces and territories to improve the health care system by focusing on four shared health priorities: expanding access to family health services, supporting health workers, improving access to mental health and substance use services, and modernizing the health care system with standardized health data and digital tools.

The funding will be distributed partly through the Canada Health Transfer (CHT) and partly through tailor-made bilateral agreements with provinces and territories that allow for flexibility for jurisdictional health care system needs. The government proposes an immediate unconditional $2 billion CHT top-up and guaranteed five per cent growth to the CHT for the next five years.

In return for the funding, provincial and territorial governments must commit to developing and using comparable indicators through the Canadian Institute for Health Information (CIHI) and its data partners. They must also agree to adopt common standards and policies related to data.

How will the $46.2B be allocated?

Canada will provide a five per cent annual increase to the CHT for the next five years, and a three per cent increase each year after that, to ensure a permanent increase that would provide an estimated $17.3 billion over 10 years.

The funding will be given to the provinces and territories, which are responsible for the delivery of health care in Canada. Health-care providers, which are any entities or organizations that deliver health-care services, such as hospitals, clinics, long-term care facilities, and community health centres, across the country will receive funding in different amounts, depending on various factors, such as the services they provide and the number of patients they serve each year.

How will the money be spent?

The new funding includes $25 billion specifically earmarked for the four priority areas: family health services, health workers and backlogs, mental health and substance use, and a “modernized health system.” The remaining funding will be provided to the provinces and territories to use as they see fit to support their health-care systems.

That funding will be contingent on the provinces and territories developing “action plans” detailing how these funds will be spent and how progress will be measured.

What are the potential benefits of the new plan?

Some experts are praising the accountability the plan creates. Michael Carter, a professor in the department of mechanical at the University of Toronto, believes the deal is a step in the right direction.

“I think it is useful,” he said in an interview. “The good side is that there is a great deal of additional funding that is being given to the provinces. And the federal government says in return, they want the provinces to tell them what they did with it.

“It is really important to know what we are doing and how we spend our money in health care.”

How have the premiers and provinces responded?

Canada’s premiers have accepted the deal and have agreed to hold bilateral meetings with individual provinces to finalize funding agreements. While the premiers were “united” in their decision to accept the proposal, they have cautioned that the cash injection is not a long-term solution to the health-care funding needed within the country. 

“They fight about how much money the feds will give, and they fight about what terms and conditions will be,” said Deber.

“They wanted to guarantee that you will continue to have the cash infusion.”

Expert recommendations and calls to action

The health-care experts agree that the new deal represents an important step forward, but that more work needs to be done to address long-standing issues and improve healthcare outcomes for all Canadians.

Carter said there needs to be a “non-political organization to publicly say, ‘This is what we need, this is how we should be supporting, this is how we should be spending our money, et cetera.”

Even so, Deber said the provinces still need enough room to establish their own priorities.

“I think a big thing we should be doing is looking at what services are necessary, without restricting it to who delivers them and where they are delivered,” she said.

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Posted: Feb 22 2023 3:55 pm
Filed under: Opinion