Prime Minister Justin Trudeau announced Tuesday the federal government is prepared to increase health-care spending by an eye-popping $196.1 billion over the next decade — a cash injection Ottawa is pitching as a generational fix for an ailing system.
Of the $196.1 billion promised by the federal government for health care, $46.2 billion will be entirely new spending — funds that go above and beyond what was already budgeted for the years ahead.
To start, provinces and territories will get an unconditional $2 billion boost to the Canada Health Transfer (CHT) to address what the federal government calls “immediate pressure on the health-care system, especially in pediatric hospitals, emergency rooms and surgical and diagnostic backlogs.”
Trudeau’s proposal also includes a five per cent annual hike to the CHT for the next five years, with a built-in mechanism to permanently increase funding in the years after.
After the first five years, the CHT escalator will revert to a three per cent increase each year — but provinces and territories will be starting from a larger base after years of larger than normal increases.
Government data suggests this funding boost will increase the CHT by some 61 per cent over the next 10 years. That amounts to about $17.3 billion in new money for the provinces and territories to prop up a faltering system.
Trudeau is also pitching $25 billion over 10 years to advance what the government is calling “shared priorities.”
As part of ongoing health-care talks, the federal government has said it wants to sign bilateral deals with each province and territory to earmark money for the health-related issues that each jurisdiction cares about most.
But Ottawa is insisting that those new funds be directed at four priority areas: family health services, health workers and backlogs, mental health and substance use and a “modernized health system.”
This new $25 billion pool of funds is in addition to the $7.8 billion over five years the government already has earmarked for mental health, home and community care and long-term care.
Ottawa is also proposing $1.7 billion in new spending over the next five years to increase the wages of personal support workers (PSWs). There’s another $150 million over five years for the Territorial Health Investment Fund, to help the Northwest Territories, Nunavut and Yukon pay for some of the added costs that come with health care in the north.
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