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Health transfers: Provinces get their money, but problem is far from resolved

Montreal, March 10, 2017 – After a months-long wrestling match, Quebec, Ontario, and Alberta have all reached agreements with the federal government in terms of health care funding. The fact that Ottawa has decided to respect Quebec’s autonomy, if not that of the other provinces, is good news. However, the deeper problem remains.

“Health care is an area of provincial jurisdiction, and Ottawa has no place imposing its priorities or dictating the manner in which allocated funds must be spent,” observes Germain Belzile, Senior Associate Researcher at the MEI. “But even Quebec’s ‘asymmetrical’ agreement does nothing to resolve the fundamental problem.”

The first thing Ottawa should do to improve health care is withdraw from this area of provincial jurisdiction. Each province could then decide for itself the best ways to provide services to its population, which would avoid a crisis each time this kind of agreement must be renegotiated.

“The provinces are in the best position to adopt the most appropriate health practices thanks to their proximity to their populations,” argues Mr. Belzile. “The federal government should free up the fiscal space that it occupies on this issue, and the provinces can manage the sums involved as they see fit. Such decentralization would make political decision-makers more accountable to voters, and provinces would no longer be able to blame Ottawa for their failings, which is the best way to encourage change.”

The Canada Health Transfer has risen by 50% in a decade, reaching $35 billion this year. In other words, the sums paid out by Ottawa have risen faster than provinces’ and territories’ total health spending. It is not the injection of billions of dollars that will improve access to care. The health care system needs an overhaul.

“Do you have easier access to a doctor? Is your emergency room wait shorter? Unfortunately not,” concludes Jasmin Guénette, Vice President of the MEI. “We have to give more latitude to nurses and pharmacists, set up performance indicators, reform the funding of hospitals so that the money finally follows the patient, allow the private sector to provide more treatments covered by public health plans, and so forth. Unless we adopt these kinds of measures, we’re just throwing more money into a bottomless pit.”

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

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For further information: Interview requests: Pascale Déry, Senior Advisor, Communications, Department of Current Affairs, MEI / Tel.: 514-273-0969 ext. 2233 / Cell.: 514-502-6757 / Email: pdery@iedm.org

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