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Finance ministers to push Morneau for health care, stabilization funds at meeting

Federal finance minister meets with provincial counterparts
WATCH: Federal finance Minister meets with provincial counterparts

Provincial finance ministers appeared divided into two camps going into a Tuesday meeting in Ottawa with federal Finance Minister Bill Morneau, who indicated that few concrete decisions would be made at the gathering.

Ministers from Alberta and Newfoundland and Labrador declared the need to expand the fiscal stabilization program as their top priority in talks with the federal finance minister.

Morneau says they’ll analyze proposal over possible changes to financial stabilization program
Morneau says they’ll analyze proposal over possible changes to financial stabilization program

“We believe that the fiscal stabilization program needs fundamental change in order to deliver on its purposes,” Travis Toews, the Alberta finance minister, declared on his way into the meeting.

“Our No. 1 priority is to request that the caps be lifted.”

Morneau, other ministers not looking yet at ad hoc payments for agriculture industry
Morneau, other ministers not looking yet at ad hoc payments for agriculture industry

The fiscal stabilization program is easier to change than the more complex equalization program, and amendments could be worth billions to provinces whose finances have been hit by low oil prices.

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READ MORE: Morneau’s fiscal update shows Canada’s deficit increased by billions for next 2 years

The stabilization program provides financial assistance to provinces facing a year-over-year decline in its non-resource revenues, but the money available to eligible provinces is capped at just $60 per resident.

Toews said those rules left Alberta to pretty much fend for itself when it was facing a budget deficit resulting from cratering oil prices.

Alberta ‘really, really needs’ funds from fiscal stabilization program: Toews
Alberta ‘really, really needs’ funds from fiscal stabilization program: Toews

Prior to attending a working dinner Monday evening with his provincial and territorial counterparts, Morneau acknowledged the program, which has not changed since 1995, needs some adjustments to how stabilization payments are calculated.

“The calculations are antiquated and no longer reflect the priorities of provinces, especially resource-producing provinces,” said Newfoundland and Labrador Finance Minister Tom Osborne.

READ MORE: Equalization sparks western anger; 1 economist says that anger is a political tool

Meanwhile finance ministers from some other provinces, including Manitoba, Prince Edward Island and Quebec, said increasing federal transfers for health care was their most pressing concern.

“I know from talking to my colleagues, and I know from talking to Minister Morneau, that health care is a key priority of this government and additional support from the federal government is going to be critical to doing that,” said Ontario Finance Minister Rod Phillips.

For his part, Morneau said it came as no surprise that the provinces would be requesting more funding at their meeting. He suggested, however, that the Trudeau government would not be making any near-term commitments to additional spending on the stabilization program.

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“I think it’s important for us to listen to the issues that we hear today and to take that back, and consider how we can look at the program in a way to make sure it continues to be effective,” Morneau told reporters.

Morneau says they will consider calls by provinces to change health transfers
Morneau says they will consider calls by provinces to change health transfers

None of those going into the meeting Tuesday morning expressed strong concerns about the federal government’s ballooning budget deficits, saying they believe Ottawa has more room to manoeuvre.

Figures released Monday showed the federal deficit is slated to hit $26.6 billion this fiscal year, up from last spring’s projection of $19.8 billion.

Billions added to federal budget deficit
Billions added to federal budget deficit