Evidence of meeting #61 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was transfer.
A recording is available from Parliament.
4:50 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I thought it was around 2.1% or 1.8%.
I thought it was one of the Atlantic provinces, actually.
4:50 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
You might be referring to New Brunswick in the 2011-12 year.
4:50 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Yes.
Actually, the increase to 6% is quite a dramatic increase compared to the provinces and what they project.
Now, could you table the chart for provincial budget estimates for health care expenditures and the increased estimate that they put? Could you table that to the committee for us?
4:50 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
From provincial budgets?
4:50 p.m.
Conservative
4:50 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
No, no, just the collation.
4:50 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
—but the projected increase of health care spending.
Finally, is it fair to say...? I mean, I've had an opportunity to ask questions of the PBO officer in relation to this. Isn't it true that when he was doing his projections on estimated health care increases, he didn't look at any of the provincial budgets at all, so his projections were based on trends rather than on actuals?
4:50 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
Given the timing of when he did the report, if my memory serves, I don't believe he would have had access.
4:50 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
If memory serves, I don't think he would have had access to that prior to the budget season.
4:55 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Yes, exactly, because many of the budgets weren't out yet. In fact his estimates were based on trends rather than actual projected budgets of the provinces, so they wouldn't be accurate.
4:55 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
That's right.
4:55 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I think that's my only other question.
Thank you very much.
4:55 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you very much.
I am fascinated by this series of questions. So I'm going to continue in the same vein.
A few provinces have put limits on their health spending. Did the provinces impose those limits on themselves before or after the federal government's announcement that it would limit transfers to 6% for three years and 3% after that?
4:55 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
The provinces all issued their budgets early this calendar year. The announcement was made in December 2011.
4:55 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
So the federal government's announcement was made before the provinces decided to set their own ceilings locally.
4:55 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
That's in reference to the 2012-13 budget cycle. However, provinces have been taking steps in this area. For at least the last couple of budget cycles, that I'm aware of, there have been initiatives put in. I don't have a table that documents those, but off the top of my head I know that Ontario and Quebec made reference in their 2010 budgets about the magnitude of health spending as a proportion of the total, and they were making measures at that time.
The reason I point that out is because the projection that was included in the press release in December 2011, which was based on CIHI data, shows the impact of those measures in a lower projected...I believe it was 3.2%.
4:55 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I understand what you are telling me. I know that the provinces are also aware of the high costs of health, which are growing far faster than GDP in general. The fact nevertheless remains that, even though the provinces acknowledged the need to cut their spending, they did not think to make such deep cuts to their budgets. We are talking about quite significant structural changes for them to be able to reduce their health spending. Their reaction in setting a ceiling came after the federal government's decision to limit transfer increases to 6%, and to 3% thereafter. The provinces adjusted. The federal government didn't adjust to the provinces. It was the reverse. The provinces adjusted to the federal government's decision. Chronologically speaking, it seems to me the relationship is clear.
4:55 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
Well, yes. Chronologically there were provincial budgets that contained measures in the health care field.
4:55 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I want to get to that aspect. If it had been easy for the provinces to reduce health spending by establishing a ceiling, they would already have done that. However, there are costs associated with that in terms of services offered. I find it hard to understand how a province like Quebec, for example, can significantly reduce its spending without services suffering in one way or another. We can say that it cut growth in its health spending by half. However, whether it be the number of guaranteed services or the budgets allocated to the hospitals or other institutions, costs will be associated with that, in the form of financial costs or lesser coverage offered by the provincial system.
4:55 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
The result of this bill is to put in legislation the growth and the continued growing federal contribution in health to the provinces and territories. It's using a formula that, as the minister stated, is the best measure of government revenues so it represents a sustainable formula for the federal government.
4:55 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
The government's measure takes into account the government's capacity to pay, but not necessarily the needs of the provinces to maintain the same level of service or funding for their hospitals as was previously the case. The provinces have to adjust.
In 2004, and before that, when there were negotiations, the projected costs to offer the same services, taking into account those frightening costs, were considered. That is no longer the case in this budget. We are looking at the budgetary aspect related to GDP; that's it. The provinces have to adjust accordingly.
5 p.m.
Chief, Federal-Provincial Relations Division, CHT/CST and Northern Policy, Department of Finance
I would simply add that what the announcement has done and what the formula will do is provide certainty about the federal contribution for the long term.
