Canada’s politicians are at odds over spending on the strained healthcare system

Canada’s federal and provincial governments’ nearly two-year battle over the need for new spending on the country’s universal health care system will drag on into next year and could further erode confidence in the already strained system.

The healthcare system, which faced challenges prior to the pandemic, has since been strained further as severe labor shortages led to the temporary closure of emergency rooms.

Provincial and territorial leaders who manage health services want more money — known as health transfers — from Ottawa to bolster the strained system, but the government is pushing back.

With no agreement reached this year, the healthcare system is likely to be at the center of the political debate in 2023.

The government of Liberal Prime Minister Justin Trudeau wants to seal an agreement next year, according to a spokesman in the office of German Health Minister Jean-Yves Duclos.

The provinces want the proportion of healthcare costs covered by federal transfers to increase to 35% from the current 22% and maintain that level over time. The federal government states that it is already covering 35% of the expenditure with a number of measures.

Ottawa is offering more money, though it hasn’t said how much, but on the condition that spending meets specific targets, including backlogs, health worker support and data collection. The provinces say they retain authority over how the money is spent.

“If I sent people all the money they need into the provinces, there’s no guarantee that … people would wait less time in the hospitals,” Trudeau said Tuesday in an interview with the CBC program The End of year.

“One of the only leverages I have is to say, ‘I’m not giving you this money without strings attached,'” he said.

According to an Ipsos Canada survey, about half of Canadians surveyed last month said they were satisfied with health services over the past year, up from 66% in 2021 and 68% in 2020.

People are also increasingly concerned about the sustainability of universal health coverage, with 57% saying they believe the current rate of spending is unsustainable, up from 52% last year, Ipsos said.

“Canadians are very pessimistic about our ability to sustain current spending levels,” said Sebastien Dellaire, senior vice president at Ipsos Canada.

Canada has the fourth lowest number of funded acute care beds per capita among Organization for Economic Co-operation and Development countries with 38 members.

While higher spending could bring improvements, it won’t solve the most important problem: a rapidly aging population.

As the baby boomer generation ages, healthcare costs will skyrocket, according to the Canadian Institute for Health Information (CIHI), a government-funded research organization.

The average spending for someone 80 or older is seven times that for someone under 64, CIHI said, noting that public spending per person increased 36% from 2011 to 2020.

In 2021, about 861,000 of Canada’s nearly 39 million residents were aged 85 or older, according to Statistics Canada. This number is expected to rise steadily to over 2.7 million by 2050.

“This is a federal-provincial tug-of-war over who is going to pay for a failing health care system,” said Nadeem Esmail, senior fellow at the right-wing think tank Fraser Institute.

© Thomson Reuters 2022.

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