Freeland says health care costs and fiscal responsibility must be balanced at meeting of provincial and territorial finance ministers

Freeland says health care costs and fiscal responsibility must be balanced at meeting of provincial and territorial finance ministers

  • Post category:Economy

Canada’s finance ministers must act collectively to address health care and competitiveness concerns while meeting fiscal responsibilities in times of high inflation, said Treasury Secretary and Deputy Prime Minister Chrystia Freeland in his opening remarks on Friday before a day of talks with his provincial and territorial counterparts. .

The in-person talks come just days before Prime Minister Justin Trudeau welcomes the premiers to Ottawa on Tuesday for a first ministerial meeting focused on the future of health care spending.

In her opening address to the other finance ministers before the start of the closed-door discussions, Ms. Freeland outlined the priorities for the meeting.

“Even as we face great and important challenges today, even though we recognize that we have to live in the moment when it comes to building this clean economy, creating these Canadian jobs, when it’s t is about building support for our health system, we recognize that we are doing this at a time of real budget constraints,” she said. “Financial responsibility is also important. So I think we’re going to have a lot to say to each other.

The finance ministers dined Thursday night in downtown Toronto at the famed Terroni Italian restaurant group in the Summerhill neighborhood.

Friday’s more formal closed-door discussions will include a briefing from Bank of Canada Governor Tiff Macklem. Freeland’s comments suggest other issues will include how Canadian policies can compete with the massive new green energy stimulus enacted in the United States last year as part of the Energy Reduction Act. inflation.

A Canadian policy will require close coordination between Ottawa and the provinces in areas such as project permits and incentives for clean energy projects and the manufacture of zero-emission vehicles.

“We represented all major political parties in Canada at this table,” Ms. Freeland said Friday morning. “And I know there are a lot of things we disagree on. But I also know that we agree on a lot of things. And at the end of the day, we all have the same job, which is to work for Canadians. »

Although no healthcare deal is expected on Friday, Friday’s healthcare talks between finance ministers will be a key precursor to Tuesday’s first ministerial meeting.

Federal ministers have said the goal is for Ottawa and the provinces to reach a general agreement on health transfers in early February, followed by more specific individual transfer agreements that focus on the specific needs of each province. and territory. Federal ministers said the goal was for all agreements to be finalized before the release of the 2023 federal and state budgets.

Manitoba’s new Treasury Secretary Cliff Cullen told reporters during his first week in office before Friday’s meeting that his administration was working to address the province’s labor shortages and boost the economy. The job vacancy rate in the province rose to 5.1 per cent in the third quarter of 2022, up one percentage point from the same period last year.

“We want to make sure we educate and qualify Manitobans for the jobs that are here today and will be here tomorrow, and we’re seeking federal government support to do that,” he said.

Mr. Cullen said he also wanted to hear from Ms. Freeland about her government’s plans to help the provinces meet health challenges.

The nation’s finance ministers meet at the Munk School of Global Affairs and Public Policy on the University of Toronto campus in Ms. Freeland’s constituency of University-Rosedale. It is the first in-person meeting between ministers since the COVID-19 pandemic, and Ms Freeland greeted her counterparts with hugs and handshakes ahead of her opening speech.

The Canada Health Transfer (CHT) is paid equally per capita to the provinces and territories. Its overall size is currently growing every year in line with a three-year moving average of nominal GDP growth. It is also ensured that the annual increases will not be less than three percent. Since nominal GDP is a measure that takes inflation into account, the recent price increase has the effect of generating above-average increases in the CRT under the current formula.

The CHT is expected to reach $49.4 billion in 2023-24, an increase of more than 9% from the $45.2 billion in payments forecast for the current fiscal year 2022-23.

The CHT is just one of many transfer flows from Ottawa to the provinces that are expected to total $94.6 billion in 2023-24. Other categories include $23.9 billion for offsets and $16.4 billion for Canadian social transfers.

For several years, premiers have been pushing Ottawa to increase its share of total government health care costs from 22% to 35%.

Premiers estimated in a 2021 report that this would mean an increase in the size of the annual CHT of more than $27 billion per year, plus an annual increase of 5%.

Federal ministers pushed back on the premiers’ numbers, saying the premiers do not recognize a 1977 deal in which Ottawa and the provinces traded some tax room so the provinces would have more direct tax revenue for health care .

In a recently published book, former Liberal Treasury Secretary Bill Monreau discussed the strengths and weaknesses of the last federal-provincial health care accord reached in 2017.

“We need to recognize that ever-rising health care costs are unsustainable,” he wrote. “Constant calls from provinces and territories for more federal money are not a solution.”

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