Mr. Speaker, I am pleased to speak to this motion. It gives me an opportunity to set the record straight on the federal government's share of Canada's health care funding.
It was announced in the 2000 budget that the government strengthened for the fourth consecutive time the cash transfers to provinces and territories through the Canada health and social transfer.
On February 28, 2000, the federal government announced a $2.5 billion increase to the CHST for provinces and territories to use over four years for health care and post-secondary education. Let us not forget that $2.5 billion increase flows from an investment made through the 1999 budget, an $11.5 billion increase in funding over five years specifically for health care.
The Canada health and social transfer provides support in the form of both cash and tax points to the provinces and territories for health care, post-secondary education, social services and assistance programs. The Canada health and social transfer is block funding. It gives provinces and territories the flexibility to allocate payments and to choose priorities of their own among social programs.
In the year 2000-01 the Canada health and social transfer will reach a new high of $30.8 billion. Of this amount, $15.3 billion will be in the form of a tax transfer and $15.5 billion will be in the form of cash.
Transferred tax points are not easy to understand, but they do form a fundamental part of the federal contribution to establish programs in both health and post-secondary education. This is how we have been transferring money to the provinces since 1970.
The tax transfer occurred in 1977 when the federal government agreed with provincial and territorial governments to reduce its personal and corporate income tax rates, allowing them to raise their tax rates by the same amount. As a result, revenue that would have flowed to the federal government to be redistributed began to flow directly to provincial and territorial governments. It continues to flow in line with the growth of the Canadian economy.
Provinces and territories maintain the flexibility on when they draw down the $2.5 billion. They can draw upon it to meet the most pressing needs in health care and in universities. At any time over the course of the four years they may do what they see fit. It is anticipated that the increase of $2.5 billion to the Canada health and social transfer will be drawn down by provinces and territories in a somewhat gradual manner.
What does all this really mean? The bottom line is that the federal government spends in excess of 34 cents of every public health care dollar spent by governments in Canada. That is clearly more than the 7 cents or the 11 cents that some provinces and the opposition are claiming the federal government spends.
Let us review the facts. It is projected that governments will spend $64 billion on public health care in the year 2000-01. The federal government will transfer $30.8 billion through the CHST to provinces and territories. Based on the historical allocation this will translate to $18.5 billion for health care in the year 2000-01. In addition, the federal government spends over $3 billion directly each year on aboriginal health care and health services for the armed forces and the RCMP.
Federal direct funding combined with the $18.5 billion means that about $22 billion of next year's projected $64 billion public health care expenditure, or 34 cents for every dollar spent, will be financed by the Government of Canada.
If we factor in the $9.5 billion the federal government will transfer to the less prosperous provinces and territories to invest in health care and other priorities, total federal transfers in the year 2000-01 will be over $40 billion. All told, federal spending on health is at least 34 cents of every dollar spent.
The federal government recognizes the need to ensure that health care continues to meet the needs of Canadians well into the future. However, additional money is not the only solution. In a word, our health care system requires innovation. We must find new ways of responding to the health needs of Canadians. With this in mind, the federal government remains committed to the five principles embodied in the Canada Health Act: public administration, comprehensiveness, universality, portability and accessibility.
Governments at the federal, provincial and territorial levels cannot afford to spend their limited resources on health care ineffectively. This is why the federal government is strongly committed to partnership. It is through these efforts at reform and renewal that our health care system will carry Canadians well into this century.
Many premiers have stated that in their view there is a need to reshape Canada's health care system and make necessary changes to ensure that it is sustainable over time. The Government of Canada welcomes their view. It is their leadership on this subject and our determination to work with them that will give us the vision that is required for health care.
Both federal and provincial governments recognize that over the longer term future decisions about investments in health care must be based on a plan that responds to the desire of Canadians for a more integrated approach to health care. New resources in the future must be based on the shared objective of meeting the needs of Canadians for quality health care.
The federal government is the first to say that innovation in itself will not sustain public health care unless it is supported by adequate funding and a comprehensive plan of action. Let me emphasize, as the Prime Minister and the Minister of Finance have said before me. If more money is needed to ensure an accessible and sustainable high quality health care system in the 21st century, the Government of Canada will contribute its share toward long term financing based on this comprehensive plan.
We agree that the status quo is not an option, but we will not go down the path of the Canadian Alliance. We will not go where it would take the country. The Minister of Health has shown that he is ready, willing and able to work with his provincial and territorial counterparts to achieve the kind of vision that will result in sustainable, renewed public health care for all Canadians. The minister met with provincial ministers in March. He has spoken with many in recent days and will continue to teleconference. As a matter of fact he is teleconferencing with all provincial health ministers tomorrow.
The government continues to work co-operatively. Canadians are tired of having different politicians at the multiple levels of government point fingers at each other. They are interested in a spirit of co-operation in achieving something that will make all Canadians proud and serve our needs as we are an aging population. That is the kind of health care system that the government is prepared to support and defend. We are showing leadership and we will continue.
