OTTAWA – The federal government pulled billions of dollars off the negotiating table Monday after failing to reach a long-term health-care funding agreement with frustrated provincial and territorial health and finance ministers.
Ottawa attempted to sweeten its offer somewhat at midday in the face of withering criticism that it wasn’t bargaining in good faith, but the additional $3.5 billion over 10 years wasn’t enough to bridge the widening gap between the two sides.
“We were working today to have partners with the provinces and territories,” Finance Minister Bill Morneau told a news conference. “We were unsuccessful in that effort.”
Ottawa offered $11 billion over 10 years for home care and mental health, as well as $544 million over five years for prescription drug and “innovation” initiatives, on top of a 3.5 per cent annual increase in health transfers.
That offer is now off the table.
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Heading into the talks, Morneau warned that if no deal could be reached that federal support would revert back to what the Liberals have long said they would do: limit the annual increase in health transfers to three per cent, or nominal economic growth, and provide $3 billion for home care.
The annual transfer payment increase is poised to drop next April to three per cent a year – half the six per cent it has been since 2004.
“We were disappointed that the provinces and territories did not feel that they could accept this offer,” said federal Health Minister Jane Philpott.
Monday’s talks appeared doomed from the start, with the provinces accusing the Trudeau government of refusing to negotiate a new federal health-care funding framework, instead putting forward what they considered a lacklustre take-it-or-leave-it offer.
Quebec Health Minister Gaetan Barrette had threatened to walk out if the federal government didn’t put more money on the table.
In the end, it was Ottawa that was accused of shutting down the talks.
“Let’s be clear, we did not walk away from this meeting … It was the federal government that closed the meeting, ultimately,” said Ontario Finance Minister Charles Sousa.
“We are here to negotiate at the directive of the first ministers; by the prime minister himself, who invited the ministers of health to attend as well to find a solution. We didn’t have the opportunity here today to have that discussion.”
The federal government put forward a unilateral approach, Sousa added.
Earlier Monday, Philpott ducked questions about the concerns of the provinces, describing Ottawa’s earlier offer of mental health and home care cash as “historic” and “transformative.”
“They can’t continue to make ultimatums, to make threats,” said Manitoba Health Minister Kelvin Goertzen, who added that the provinces have long been demanding health-funding negotiations with Ottawa.
“For months, we’ve been begging for this.”
It was clear the federal government wasn’t offering much wiggle room.
Philpott appeared wilfully blind to the dissent, saying she was “absolutely delighted” with her government’s “substantial offers on the table” as she skated around questions about the provincial concerns.
“This is a transformative, historic offer – we’re changing the face of health care in this country,” she said. “I am certainly optimistic that the provinces and territories would not walk away from something like this.”
But walk away they did – although not before the meetings were over, which appeared a distinct possibility as the day began.
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P.E.I. Premier Wade MacLauchlan, speaking on behalf of the provincial and territorial interests, sounded a pragmatic and determined note as he acknowledged the failed talks and called for a first ministers meeting on health funding.
“We do not – and we all want to be very clear about this – view the end of today as the end of a path,” MacLauchlan said.
“We are on a path together, a path that we have travelled for 50 years, and on which we expect the federal government to be an active, supportive, engaged partner.
“We do not believe that as of the end of the day today that we are at an impasse. We have work to do.”
An analysis by provinces released Monday compared the potential outcomes of the status quo versus federal Morneau’s latest offer.
The data said that the status-quo scenario of annual increases of three per cent, or the average rate of nominal economic growth, in addition to $3 billion in targeted funding, would mean a total of $445.2 billion in federal health-care cash over the next decade.
It would also lower the federal share of funding in provincial health budgets to 20.2 per cent in 2026-27 from 22.9 per cent next year.
In comparison, the document said Morneau’s earlier $8-billion, 3.5 per cent offer would provide the provinces with total of $445.9 billion over the next decade.
Under that scenario, the share of federal funding would fall to 19.8 per cent in 2026-27 from 23.1 per cent in next year, the data noted.
Even with the 2015 Liberal platform’s pledge of $3 billion for home care, de Jong said he didn’t think his province would necessarily be better off. At the end of the day, he said it would essentially be “a wash.”
“It’s just an example of a federal government that says, ‘Here’s the solution and if you don’t like that’s too bad – it’s take it or leave it,”‘ he said.
“For me, for an issue of this importance, it’s ridiculous.”