Finance Committee on May 28th, 2013

[The Chair, Conservative, James Rajotte]

On clause 125?

[Scott Brison, Liberal, Kings—Hants, NS]

Yes. Well, broadly in this area.

[The Chair, Conservative, James Rajotte]

Okay. Which clause do you want me to stop at?

[Scott Brison, Liberal, Kings—Hants, NS]

Well, I'd like to.... It applies to the whole....

[The Chair, Conservative, James Rajotte]

It applies to the whole section?

[Scott Brison, Liberal, Kings—Hants, NS]

Yes.

[The Chair, Conservative, James Rajotte]

Okay. Let's have a general discussion, then, on clauses 110 to 125.

Is that okay? Okay.

We'll hear from Mr. Brison on this.

[Scott Brison, Liberal, Kings—Hants, NS]

Just for clarification, the decision to reduce the CHT escalator in future years from 6% to the greater of 3% or GDP growth was implemented in Bill C-45, was it not?

[The Chair, Conservative, James Rajotte]

Mr. McGirr is going to respond.

[Tom McGirr, Chief, Equalization and Policy Development, Department of Finance]

Thank you.

My understanding is that the government took the decision to limit the escalator last year, but this year all we're doing is confirming the mechanism and how the escalator is going to be calculated.

[Scott Brison, Liberal, Kings—Hants, NS]

Okay. So in Bill C-60 this is simply a clarification.

[Tom McGirr]

Exactly.

[Scott Brison, Liberal, Kings—Hants, NS]

Okay. That's fine.

[The Chair, Conservative, James Rajotte]

Next, Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Our concern, of course, is that when you link the Canada health transfer to the GDP, you're creating uncertainty for the provinces. We've heard concerns expressed by provincial finance ministers and others who are concerned about growing health care costs and gradually diminishing increases in the health care transfer. We've heard real concerns about what that's going to mean for the services Canadians receive down the road and also the crunch that's going to mean for provincial budgets down the road, because this is of course the biggest expenditure in most provincial budgets.

I know the decision on this was in the last budget, but this linking to the GDP is part of that decision. It's included in this budget. I want to again express our concern about this.

[The Chair, Conservative, James Rajotte]

Thank you.

We have Ms. Glover on this point.

[Shelly Glover, Conservative, Saint Boniface, MB]

I want to reassure the provinces once again that we enjoy working with them.

The public is viewing that we have seen a trend, unfortunately, with many of the provinces not even using a growth indicator similar to the federal government's. In fact, the federal government has been increasing spending in the area of health by 6% every year.

In 2012, when we look at the provinces and territories, their increased growth was only 3.8%. In fact, in my home province of Manitoba, where we have an NDP government, increased health care spending by only 1.7%, when the federal government was giving them 6% increases every year. This coming year, according to their budget, they will spend only 4.5% in growth, while also charging extra for PST.

I have to say that I would like to see the provinces do their fair share. On this side of the House, we are providing more than our fair share, but we can only spend what is made, which is why it will go eventually to match what the economy is bringing in. That is fiscal responsibility. That is leadership. That is what is required to protect our children and our grandchildren from further and further debt in the future.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

Ms. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Mr. Chair.

I certainly know that the provinces have been very pleased with the escalator that has been there for a number of years. They will have the certainty because they not only know that it could be nominal GDP, but they know it's a minimum of 3%.

Certainly, as we looked at the intended provincial spending by provinces...and actually the federal government is doing a great job in terms of really supporting...and certainly the provinces are not growing their health care expenditures at the rate at which we've actually been increasing transfers to them.

Again, it was good to hear the acknowledgement that it is an increase, because sometimes that wording has not always been clear. Certainly, the certainty is there for them, and it's absolutely a minimum of 3% or nominal GDP.

[The Chair, Conservative, James Rajotte]

Thank you, Mrs. Glover.

Monsieur Côté, Mr. Jean, and Monsieur Caron.

Go ahead, Mr. Côté.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Clearly, what is hidden in our discussion is the long-term shortfall that even goes back to Liberal governments. Mr. Chair, you are aware that the initial agreement on health transfers was that greater participation from the feds was intended. That is a problem that the government refuses to deal with. At the moment, the discussions we are getting into now are quite pointless because of the planned increases. The provinces are far from being comfortable, given the particular situation each finds itself in. Take Quebec as one example: more than a third of Quebeckers have no family doctor. That is a symptom of a far deeper problem, actually.

There is another way of looking at it. Of course, when you restrict growth that way and impose an agreement on the provinces, it also restricts their ability to deliver certain services. When we looked into the matter of GST and HST exemption, we also saw each of the provinces establishing their priorities, but also as a function of their ability to offer the services.

So, unfortunately, the government's proposal simply does not solve the problem.

[The Chair, Conservative, James Rajotte]

Thank you, Monsieur Côté.

Mr. Jean, please.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

I just want to mention that, first of all, as Mr. Côté said, we cannot be responsible for previous Liberal governments stripping social transfers to the provinces. However, I think what I would like to say, and I think Mr. Caron would agree, is that there can't be any better thing to link transfers to than the GDP, than the growth of the economy and how the economy is doing, whether it be enlarging or reducing.

What is a better indicator of what you should do in your future than the economy itself? It's a rhetorical question, so it's not really a question. It's just to say that there are a lot of different options, but I think Finance, in doing this, in this linkage, is using the best possible methodology by which to carry forward.

I know in Fort McMurray, for instance, 60% to 70% of the people don't have general practitioner doctors. We do have an issue with our health care system, and the federal government is doing its part, as Ms. McLeod said.

I think to link it directly to the gross domestic product is probably the best thing we can possibly do in the circumstances.

[The Chair, Conservative, James Rajotte]

Thank you.

Go ahead, Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I just wanted to express my disagreement with the arguments that the government has been using. The decision to reduce the increase in health transfers to the provinces was made without consultation. Previously, there was consultation. It is wrong to say that the government speaks to the provinces regularly in order to secure their agreement, because, in this case, that was not done. Provinces found out at the same time as opposition members of Parliament and the media that the government had decided to reduce the growth of transfers by half. We do not expect to see consultations anymore. The government acted without consulting.

Consultations would have been important. If the government had been in any doubt about the decreasing growth in health costs compared to previous years, when historically, it was greater than the growth of the GDP, it would have been interesting to have been able to consult the provinces to find out why. The government did no research and held no consultations to find out that information. This is something, perhaps a trend, that could be changed in the future. At that point, the provinces will be faced with a deficit in transfers in comparison with what was provided before.

In this particular case, the government is showing that it does not understand and that it does not want to understand the provinces' reality, and that is why we are going to vote against this proposal.