Canadian Health Ministers Convene to Address Potential 'Fiscal Cliff' in Federal Funding
Provincial and territorial health ministers are meeting to discuss the expiration of targeted federal health funding agreements, warning of a potential fiscal cliff. Key concerns include the end of $4.8 billion for home care and mental health services in 2027 and reduced growth rates for the Canada Health Transfer after 2027-28.
Health ministers from across Canada are scheduled to meet on Tuesday to address growing concerns that provincial health systems are heading toward a "fiscal cliff" if federal funding agreements are not renewed. The emergency meeting comes as provinces and territories raise alarms about the federal budget forecasting an end to certain targeted health care funding streams after March 2027.
Ontario Health Minister Sylvia Jones stated that it appears the federal government is walking away from a portion of the Canada Health Transfer. She emphasized that the sunsetting of bilateral funding agreements next year will have a real impact on patients receiving programming supported by federal funds. Jones also noted that the federal government has paused all negotiations regarding the expansion of the pharmacare program. Currently, only Manitoba, British Columbia, Prince Edward Island, and Yukon have signed on to initial pharmacare agreements that provide contraceptives and certain diabetes medications at no cost.
The core of the dispute lies in specific funding packages pledged in the 2023 federal budget, which totaled $200 billion over 10 years. Among these commitments, $4.8 billion was set aside for improvements to home care, community care, and mental health and addiction services, with this funding set to end in 2027. Additionally, a $3 billion package intended to improve long-term care safety is scheduled to sunset in 2026, while $1.7 billion allocated for personal support worker wages will be paid out by 2028.
Beyond the targeted agreements, there are concerns about the broader Canada Health Transfer. Last year’s federal budget outlines a planned reduction in the growth of the transfer after March 2028. The Canada Health Transfer is guaranteed to grow by at least five per cent per year until fiscal year 2027-28, after which it returns to a minimum growth rate of three per cent per year. In a joint statement following a July meeting of the Council of the Federation, premiers said they need the health transfer to continue growing at a rate of five per cent per year.
Following Prime Minister Mark Carney’s first budget release last November, health advocacy groups warned that the Liberals highlighted the end of funding agreements as part of their plan to control spending. However, a spokesperson for Federal Health Minister Marjorie Michel indicated that she is prepared to talk with counterparts about building a strong and sustainable public health care system at a meeting next month. Alexandre Bergeron, a spokesperson for Michel, noted that deputy ministers of finance and health were directed to work together on long-term health funding following the first ministers meeting in July.
The federal government is set to release its budget later this fall, adding urgency to the discussions among provincial and territorial leaders.