Bill C-39 (Historical)

An Act to amend the Federal-Provincial Fiscal Arrangements Act and to enact An Act respecting the provision of funding for diagnostic and medical equipment

The purpose of this enactment is to give effect to the 2004 10-Year Plan to Strengthen Health Care by increasing the Canada Health Transfer in the fiscal years in the period beginning on April 1, 2004 and ending on March 31, 2014 and establishing a Wait Times Reduction Transfer, payable first to a trust for the benefit of the provinces, and then directly to provinces as of the fiscal year 2009-10. This enactment also provides funding to provinces for diagnostic and medical equipment.

Bill C-39

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, greater clarity is needed here. The government had indicated to us that it would be prepared to accept an amendment to Bill C-39, so that the specific agreement with Quebec on health, reached last September, amends the entire bill and not just the clause on parliamentary review, as is currently the case.

Could the minister tell us clearly, simply and publicly if she intends to ensure that the agreement reached with Quebec on health is integrated, yes or no?

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, Bill C-39 references the communiqués that the hon. member is concerned about. By referencing the communiqués, it therefore incorporates those communiqués into the legislation itself. That in effect addresses the hon. member's concerns.

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, Bill C-39 enacts the agreements reached last September on health. We have realized, however, that in its current form, this bill does not respect the specific agreement reached with Quebec on September 15, which recognized Quebec's full jurisdiction and full control over health.

Is the Minister of Intergovernmental Affairs prepared to commit to integrating this specific agreement with Quebec into all the clauses in Bill C-39, and not limiting its effect to the lone clause on parliamentary review?

Federal-Provincial Fiscal Arrangements Act

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Madam Speaker, leaving the trade issues aside, Bill C-39 in part certainly is moving in the right direction in terms of reaffirming our commitment to a public health care system in Canada. If we could build in the accountability measures and the publicly delivered not for profit measures, I think many of us would feel far more comfortable.

We have not seen the kinds of initiatives that we would like to see from the government in terms of protecting our public health care system. We have certainly seen creeping privatization, with private MRI clinics and a number of other issues coming up on which the government is not actually acting. It can take any number of years for measures to be brought forward under the Canada Health Act. They just do not get dealt with in a timely fashion.

We would encourage the government to actually enforce the regulations that are currently available and to look at tightening up that loophole.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Madam Speaker, I rise today to speak in favour of Bill C-39, but with some reservation.

We are pleased that after 10 years of cuts to the provinces for social spending, the Liberal government finally realizes that tax dollars should be spent on more than artificial debt targets and that Canadians want a balanced approach to financial management in Canada, an approach that protects and enhances the social safety net that helps define us as Canadian.

This funding formula will close the gap in funding identified in the Romanow report on health care. We welcome the end of reduced federal funding for health care and support the move to funding 25% of health care spending by government. It is about time. We cheer the Liberals' realization that costs increase over time and that base funding must increase, or in real dollars the amount of money available goes down.

The addition of an escalator clause in this agreement is very welcome; however, this agreement is missing an important element. Our system of governance in Canada is based on a series of checks and balances, but this legislation provides no check on how health care funding dollars are spent. Again and again, Canadians are telling us that they want to know where their tax dollars are paying for public health care and where those dollars are increasing the profits of private health care corporations.

Immediately after being sworn into office, the federal health minister said:

--what we need to do is stem the tide of privatization in Canada and expand public delivery of health care so we have a stronger health care system for all Canadians.

Since this agreement was signed in September 2004, health care advocates have been asking the health minister to affirm that the enabling legislation, when it comes forward, would include provisions to protect publicly funded and publicly delivered health care in Canada. There is nothing in this legislation to protect small communities and Canadians from for profit health care.

Since the actual agreement was made, I have been reading an analysis on the 10 year health plan. Again and again, I read how Canadians want governments to be accountable for the health dollars spent by Canadians, but they rarely get that accountability. This accountability discussion has been an ongoing issue. In 2000 the first ministers made a commitment to regular reporting and they indicated that it would be a process that allowed for third party verification, yet there are huge gaps in the data.

The last annual report from the Minister of Health could not indicate where money was being spent on the for profit delivery system, and in the report from September 2002, the Auditor General indicated that Health Canada is unable to tell Parliament the extent to which health care delivery in each province and territory complies with the criteria and conditions of the Canada Health Act. This is a serious shortcoming in this current piece of legislation before the House.

I want to quote from a paper written by Cindy Wiggins, a senior researcher from the Canadian Labour Congress. It is important that this is read into the record because this is how working Canadians see this agreement. It states:

The unified front maintained by the provinces during federal-provincial/territorial negotiations also has a significant downside for national social programs. Democratic deficits and provincial-territorial unity come at a cost. Dissent is muffled. Issues on which there is no consensus simply do not make it to the federal-provincial/territorial negotiating table, regardless whether such an issue is a key priority of the public.

We know provinces and territories have different opinions on the issue of for-profit care. Some provinces are ideologically committed to creating a role for the commercial health care sector. Some already have pursued this path. Others believe that a tier of commercial health care situated within the public system will do irreparable harm to the public, non-profit system and produce poor health care outcomes.

She goes on to say:

This issue has been at the centre of public debate around health care. Canadians are clearly opposed to for-profit health care and view it as a threat to Medicare. This issue was central to the conclusions of the Romanow Commission report. Because of the lack of consensus among the premiers, commercial health care and the threat it poses to Medicare was nowhere on the agenda of the September First Ministers' meeting. We can assume that this will be the same for other national issues, such as child care

As an example of the drive to use public dollars for private delivery, this morning CBC Radio was saying that provinces, especially Alberta, are already saying no to any child care program that directs money to not for profit centres, even though research has proven they provide better care than for profit centres. This is just an example of the public dollars going into for profit delivery.

Ms. Wiggins' paper continues:

The federal government played a role in the silence on commercial health care. For several years now, it has refused to enforce the Canada Health Act with respect to for-profit initiatives which violate the Act. As a result, Medicare has been left without a guardian and remains at grave risk.

I want to emphasize again that we welcome the closing of the Romanow gap, but throwing money at a problem and then refusing to be accountable for how that money is spent is absolutely wrong. While first ministers claim that this funding formula will put the health care system back on sustainable footing, the fact is there is no protection from for profit care and no accountability for how funds are being spent.

Again, from the Canadian Labour Congress paper:

The accountability measures in the agreement do not address this important sustainability issue. Accountability is in the form of reports on progress in areas covered by the agreement, such as wait times and home care.

Those are important initiatives.

Provincial jurisdictions supposedly must meet these reporting requirements as a condition for receipt of federal funds attached to the agreement. Report cards do not solve problems: they identify them. Provinces and territories are only responsible for reporting to citizens in their own jurisdictions - a provincialization of accountability for a national social program. Should provincial jurisdictions fail to meet the reporting requirements in the agreement, there are no consequences for such failure, making true accountability an illusion at best.

Canadians truly want to know where their health care dollars are being spent. Another area that the federal government needs to be accountable to Canadians for is protecting our public health care system from trade regulations. Canadians do not see our health care system purely as a business transaction, however.

Canadians see health care as an essential part of our identity, but when given the chance, the government did not negotiate an exemption for our public health insurance system. It did not exempt health care from World Trade Organization agreements.

Now, because it also refused to enforce accountability and to stem privatization in health care, the government leaves the door open to our health care system being decimated by multinational corporations moving in to provide for profit health care. This is just another example of big box credit card medicine and it is not a route that Canadians want us to go.

One area not mentioned when the Liberals talk about health and human resources is the leeching away of good talent to the private sector. Every private MRI that opens increases wait lists because it must take qualified people away from the public sector. There are simply not enough health care workers out there to staff a public system and a private one, and certainly not health care professionals. We need a pan-Canadian health and human resources strategy that truly identifies the serious shortages that are coming up in the health care professions and we need to act on that now.

Furthermore, the government is moving far too slowly on a pharmacare plan. The cost of drugs is now second only to hospital costs and slightly higher than the amounts we pay to doctors.

Last night in the House we had the first hour of debate on private member's Bill C-274 presented by my colleague, the member for Windsor West. It has a real plan to ease some of the spending crunches that provinces are currently facing with drug costs by reforming the system of patents and allowing generic drugs to enter the marketplace sooner. This is a critical issue as well. The Liberals could have made these changes already, but they have introduced regulations that maintain the status quo and will not help Canadian families access cheaper drugs to keep themselves healthy.

In closing, in view of the lack of accountability from this particular bill and the creeping privatization, we need to have an open and public debate to shine the light on the decisions that were made behind closed doors at the first ministers meeting in September. It is absolutely critical that we have a full review at the committee level on the issue of accountability.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, I am pleased to introduce at second reading an act to amend the Federal-Provincial Fiscal Arrangements Act and to enact an act respecting the provision of funding for diagnostic and medical equipment. It is a very long name, possibly befitting the enormous sums of money involved and the importance of this agreement to all Canadians.

Canadians have told their governments that health care is of primary importance to them. As such, they have asked governments to work together to strengthen the health care system, to improve access to essential services and to reduce the wait times.

Canadians want to ensure the health care system is there for them today and sustainable for future generations. Governments are working to meet those expectations.

In September 2004 all first ministers signed a 10 year plan to strengthen health care. In support of the 10 year plan, the Government of Canada committed to increase its transfer to provinces and territories for health by the sum of $41 billion over 10 years starting in this fiscal year 2004-05. The increased funding of $41 billion will do three important things.

First, it will strengthen the Canada health transfer, the largest federal transfer supporting health care. It will both increase the base level of the transfer and establish an automatic 6% escalator, which is an unprecedented move to ensure predictable and stable growth in the federal transfer support.

Second, it will create a wait times reduction transfer to assist provinces and territories in reducing wait times according to their respective priorities.

Third, the new federal funding will provide an additional $500 million to provinces and territories for diagnostic and medical equipment, helping to improve access to publicly funded diagnostic services. The commitment to provide an additional $41 billion to provinces and territories will help ensure that current and future generations of Canadians have timely access to essential quality health care across the country.

At the September 2004 meeting of first ministers, a broad consensus emerged between governments on a shared agenda renewal of health care in Canada. That agenda focused on ensuring that Canadians have access to the care they need when they need it. As a result, federal, provincial and territorial governments agreed upon an action plan to ensure viable health care for Canadians setting out commitments to improve access and to reduce wait times.

The federal government is committed to doing its part to support the needed renewal and reform of health care. As part of its contribution to an effective working partnership on health care, the federal government brings a commitment to a growing, stable and predictable health care funding so that provinces and territories can plan for the future.

The bill before us today would provide for new federal funding over the next 10 years in support of the agreement signed by the first ministers on health.

To that end, the Government of Canada commits $41 billion in new federal funding over 10 years to meet those goals set out in that 10 year plan. Bill C-39 would implement those funding commitments.

To accelerate and broaden health care renewal and reform, the federal government will take a number of steps to strengthen the Canada health transfer, otherwise known as the CHT. It will invest an additional $3 billion in CHT in 2004-05 and 2005-6 to close the so-called Romanow gap.

A second important initiative is establishing a new, higher base for the Canada health transfer beginning in 2005-06. In that year the new CHT base will be $19 billion.

This commitment fully satisfies and in fact exceeds the recommendations made in the Romanow report on the future of health care in Canada. That new and higher base of $19 billion includes $500 million in targeted funding for home care and catastrophic drug coverage, clear priorities to many Canadians.

This funding for home care and catastrophic drug coverage recognizes and supports the first ministers' commitments to improve access to home and community care services and catastrophic drug coverage. These commitments are important to improving the quality of life of many Canadians and to ensure that no Canadian suffers undue financial hardship in accessing needed drug therapies.

Also of note, the health reform transfer created as part of the 2003 accord is now being rolled into the CHT effective 2005-06 and beyond. This consolidation of federal support for health reflects the continuing commitment to enhanced transparency and accountability and to support reforms established in the 2003 accord, including primary care, home care and catastrophic drug coverage.

To ensure predictable and sustainable growth in health care funding through the CHT, the government has committed to legislate an automatic escalator. An automatic escalator of 6% will be applied to the new health care transfer base of $19 billion effective in the fiscal year 2006-07.

This rate of growth is higher than the projected rate of nominal GDP growth, the rate of growth of the Canadian economy and, therefore, growth in total federal revenues over the periods 2006-07 to 2013-14. This rate of growth is fully consistent with the recommendations of the Romanow report. In other words, the federal government has agreed to increase the funding to CHT faster than the economy will grow and faster than we anticipate that federal revenues will be realized.

Foremost in the 10 year plan is the need to make timely access to quality care a reality for Canadians. The government remains committed to the dual objectives of better management of wait times and measurable reduction of wait times where they are longer than medically acceptable. All jurisdictions have taken concrete steps to address wait times, particularly in such priority areas as cancer, cardiac care and diagnostic imaging. The bill provides for an investment of the Government of Canada of $5.5 billion over 10 years in wait times reduction transfer.

Funding of $4.25 billion will be provided through a third party trust and accounted for by the Government of Canada in 2004-05. The government recognizes that not all provinces and territories are at the same stage in implementing their wait time reduction strategies. Provinces and territories will now have the flexibility to draw down funding according to their respective jurisdictional priorities to meet their wait time reduction commitments.

This funding will primarily be used for priorities identified by each jurisdiction. These priorities include: clearing backlogs, training and hiring more health care professionals, building capacity for regional centres of excellence, and expanding appropriate ambulatory and community care programs and tools to manage wait times.

Beginning in the fiscal year 2009-10, $250 million will be provided through an annual transfer to provinces and territories in support of health human resources and tools to manage wait times.

The government will also provide to provinces and territories a further $500 million for medical equipment in 2004-05. Building on previous investments in diagnostic and medical equipment under the 2000 and 2003 health accords, this funding will assist provinces and territories in improving access to publicly funded diagnostic services by providing funding for new equipment and the related specialized staff training that is required to operate this new equipment.

The $500 million more than fulfills the government's commitment that additional revenues from the goods and services tax as a result of the spike in gasoline taxes would be redirected toward further investments in medical equipment on a one time basis.

As a result of these commitments, total federal cash transfers in support of health are scheduled to rise to $30.5 billion in the years 2013-14 from $16.3 billion in 2004-05. The bulk of this new funding is being provided through the Canada health transfer, which will grow by 6% annually from its new base of $19 billion in 2005-06 to nearly $30.3 billion in the year 2014. This represents a significant and continuing federal investment in the Canadian health care system.

In addition, all funding will be distributed to provinces and territories on an equal per capita basis in order to ensure equal support for all Canadians regardless of their place of residence.

The new federal support of $41 billion for 10 years builds on previous federal investments in provincial and territorial health care achieved under the 2000 agreement on health and the 2003 first ministers accord on health renewal.

In September 2000 first ministers agreed to an action plan for health care renewal. In support of the first ministers agreement for health, the federal government invested an additional $23.4 billion through the Canada health and social transfer to accelerate and broaden health renewal and reform.

Drawing on the 2000 framework supporting reform and renewal, in February 2003 the first ministers accord on health care renewal set out a plan for reforms to improve access to quality health care for Canadians. Building on the significant investments in 2000, the federal government provided $36.8 billion in support of the initiatives outlined in the 2003 accord.

In addition to increased federal financial support, the first ministers also agreed in the 2003 accord that the sustained renewal of Canada's health care system required structural change. That is why they agreed to restructure the Canada health and social transfer into two separate transfers: the Canada health transfer and the Canada social transfer.

The Canada health transfer was designed to provide growing and predictable support for health. It also improves the transparency and accountability of the Government of Canada's support for health. And through the new CST, provinces and territories have continued flexibility to allocate federal funding for post-secondary education, social assistance and social services, including child care programs, according to their respective priorities.

In addition, these transfers meet the recommendation in the Romanow report for the creation of a dedicated cash transfer for health.

These measures contained in the 2000 and 2003 accords provide a predictable, sustainable and growing long term funding and planning framework for transfers to the provinces and territories in support of health care.

The new funding of $41 billion in the 10 year plan builds on the significant federal investments in health care in the 2000 and 2003 accords. This new funding confirms the government's commitment to making major reinvestments in health a clear priority for Canadians.

Improving our health care system is not just about money. It is about results. All orders of government remain committed to an action plan that achieves results. As such, first ministers recognize that making health care sustainable and able to adapt to the ever-changing needs of Canadians will take time, sustained commitment and adequate resources.

Under the 10 year plan, the governments agreed to report to their residents on health system performance, including the elements outlined in the communiqué of September 16, 2004. In fulfillment of its commitment to Canadians, recognizing that it has authorized significant new expenditures of Canadian taxpayers' money, Bill C-39 includes a provision for parliamentary review of progress in implementing the 10 year plan.

As the hon. members know, at the first ministers meeting this past October, the Government of Canada announced fundamental changes to Canada's equalization program and territorial financing formula. These changes will bring stability, predictability and growth to the overall level of funding for these programs.

Bill C-24, currently before Parliament and just reintroduced into Parliament from the finance committee as of this morning, sets out a new $33 billion framework for equalization and territorial formula financing. When combined with the $41 billion health accord, these investments will total a cumulative increase of $74 billion in new money transferred from the federal government to the provinces and territories over the next 10 years. This illustrates the government's commitment to ensuring that all provinces and all territories can offer the best possible services to their citizens.

In summary, Canadians have told their governments, year after year, to work together to ensure that our health system will be there for them and their children. Governments have responded.

On September 16, 2004, all the first ministers signed the 10 year plan to strengthen health care. As stated in the Speech from the Throne of October 5, 2004, “the Plan sets out a clear commitment, shared by all provinces and territories to achieve tangible results--results for patients”.

The 10 year plan provides $41 billion in new federal funding in support of these commitments. This is new funding that goes directly to provinces and territories in support of health care services that Canadians need.

The funding strengthens core support for health care and the principles of the Canada Health Act through increases to the Canada health transfer. It helps provinces and territories reduce wait times through the targeted wait times reduction transfer, and it provides additional funding for diagnostic and medical equipment.

The federal government has confirmed its commitment to health care reform and renewal through the tabling of this legislation to implement the funding commitments of the 10 year plan and provide growing and predictable transfer support for provinces and territories.

The $41 billion in increased federal investment represents the firm commitment of the Government of Canada toward ensuring the sustainability of the health care system and that all Canadians have access to essential health services when they need them.

Hon. members can no doubt appreciate the importance of passing the bill in a timely fashion so that provinces and territories can have access to the 2004-05 funding and begin to plan for future programs. I therefore urge all hon. members to support the speedy passage of the bill.

[Stephen Owen, Liberal, for the Minister of Finance]

moved that Bill C-39, an act to amend the Federal-Provincial Fiscal Arrangements Act and to enact an act respecting the provision of funding for diagnostic and medical equipment, be read the second time and referred to a committee.

[Ralph Goodale, Liberal, Minister of Finance]

moved for leave to introduce Bill C-39, an act to amend the Federal-Provincial Fiscal Arrangements Act and to enact an act respecting the provision of funding for diagnostic and medical equipment.

(Motions deemed adopted, bill read the first time and printed)