Thank you, Chair.
Welcome to the committee.
My first question comes from your fiscal sustainability report last month that showed that the provinces and territories have a significant long-term fiscal gap, 1.9% of GDP, or around $36 billion in 2013. Much of the fiscal gap of the provinces is tied to demographics, the pressures of an aging population on health care, and other provincial programs.
Your report states that one of the main reasons for the federal fiscal surplus in the long term, which you estimate as being $24.8 billion in 2013, would be reforms to the Canada health transfer escalator. What would happen if the federal government reversed its recent changes to the Canada health transfer escalator and provided the provinces with greater financial support for health care? What would be the impact on the provincial situations?