What is the federal government’s role in health care?

Polls suggest that health care is the most important issue to Canadians in the upcoming federal election. 

However, in Canada, health care delivery is largely the responsibility of the provinces and territories. 

The 2004 Health Accord invested $41 billion of federal dollars in health. What were the outcomes of this federal investment in health?

History of the Federal Role in Health Care

The federal government has a defined constitutional role in health care. Its biggest role is through what is called its “spending power” whereby the federal government sets conditions for the transfer of funds to provincial and territorial governments. This is affected through fiscal transfers, known as the Canada Health Transfer (CHT), and through the Canada Health Act which sets out the principles that provincial health insurance plans must adhere to in order to receive federal transfers without penalty.

Historically, the federal government has applied a range of conditions to the health funding it transfers to the provinces, but it is also sensitive to arguments that health care is a provincial jurisdiction.

The CHT is the largest federal transfer of funds to the provinces and territories. In 2004, the federal government agreed to increase health care funding by 6% each year over the 10-year life of the Health Accord.  In 2013-14, the CHT will be over $30 billion.

2003/2004 Health Accord: Fix for a Generation?

The early 2000s was a period of intense focus on reforming Canada’s health care system. Roy Romanow, the former premier of Saskatchewan, was commissioned to report on ‘The Future of Health Care in Canada.’ Led by Senator Michael Kirby, the Senate also produced a report on the federal role in health care. The federal, provincial and territorial ministers of health met in 2003 and agreed to the ‘First Ministers Accord on Health Care Renewal’. They met again the following year and signed the 2004 Health Accord, which had a greater focus on wait times. Paul Martin, the Prime Minister at the time, called the Accord the ‘fix for a generation‘.

Antonia Maioni, a political scientist at McGill University explains that the Accord was referred to as a ‘fix’ because it “injected stable funding for health to the provinces and territories over a 10 year period and was a massive reinvestment in the health care system after years of cuts in the 1990s.” There has historically been no ten year cycle of federal funding for health, and Maioni notes that “the precedent involves a huge amount of money, and the problem now is whether or not the federal government can go back to the provinces and say ‘that was then, this is now’”

Wait Times and Access to Care

The Ministers of Health who signed the 2004 Health Accord agreed to establish medically acceptable benchmarks for waiting times in five clinical areas: radiation therapy for cancer, hip/knee replacement surgery, cataract surgery, cardiac bypass surgery and diagnostic imaging. However, no national benchmarks have been established for diagnostic imaging. While some progress has been made in reducing wait times across Canada, demand for health care services has increased, and the way in which wait times are measured and monitored across provinces varies, meaning it is difficult to paint a national picture of wait times.

Andre Juneau, a former senior official at Health Canada, argues that the federal government lacks strong levers to make provinces accountable for their wait time commitments. Juneau says “”I have always been skeptical of a federal role in actually improving wait times. It is a very difficult problem in the first place and the federal government has no capacity to monitor progress nor should it. We need another mechanism for this purpose,  such as CIHI (Canadian Institute of Health Information) or the Health Council of Canada.”

Primary Care

The 2003 Health Accord committed provinces and territories to provide 50% of their citizens with access to an appropriate health care provider 24 hours a day, 7 days a week. Inadequate monitoring means no one can definitely say whether this target has been met or not, but a recent international survey in which Canada ranked poorly suggests the target has been missed.

Home Care

The 2003 Health Accord also committed provinces to provide coverage for short-term acute home care in selected areas, such as immediately after hospital discharge. The Accord also committed to providing more comprehensive end of life home care. Again, progress has been inconsistent and public reporting of what has changed is limited.

National Catastrophic Drug Coverage

The 2003 Health Accord also committed to providing national “catastrophic drug coverage”, which would protect individuals from facing drug costs so high that their financial security would be threatened. Very little progress has been made on this commitment. Andre Juneau argues that the “the federal government should show some interest in catastrophic drug coverage”. However, he suggests that there is little political will to provide catastrophic drug coverage, and “the federal government has some levers regarding drugs, and there needs to be a serious discussion about what governments could do together, but don’t hold your breath.”

Did the 2003 and 2004 Health Accords provide a fix for a generation? Although the size of the CHT undoubtedly increased the volume of health care services the provinces and territories were able to provide, many argue that the Health Accord did little to fix the major health system concerns it aimed to tackle, including reducing wait times for key diagnostic procedures, as well as access to primary care, home care and catastrophic drug coverage.

The comments section is closed.

  • Jeremy Petch says:

    Perhaps the greatest impact the federal government could have on healthcare in Canada would be to address the social determinants of health at a national level. Social determinants such as housing, education, nutrition, and early childhood development all have profound effects on the health status of Canadians. When the social determinants of health are neglected, they manifest in our healthcare system in the form of acute and chronic conditions. The result is that we must often pay a great deal more to address these health conditions in hospitals than it would have cost to prevent them through a social determinants approach. In this sense, the social determinants of health, when not addressed, are hidden drivers of cost within the healthcare system.

    One federal agency, The Mental Health Commission, has begun to address one of the key determinants of mental health, housing, through its highly effective At Home/Chez Soi Project, currently operating in five cities across Canada. More federal agencies should follow this lead.

    Whether by coordinating and funding provincial programs, or by directing its own agencies to adopt a ‘health in every policy’ approach, the federal government could play a key role in addressing the social determinants across the country. Indeed, it is likely the single greatest step the government could take to improve the sustainability of the healthcare system.

  • Jeremy Petch says:

    Another excellent article.

    Earlier this week, members of the Canadian Association for Health Service and Policy Research were treated to a debate involving a strategist from the newly elected Conservative majority government. During that debate, this strategist raised the possibility of the Federal government moving towards a system of transferring funds to the provinces via ‘tax points’, rather than cash transfers. This would not be the first time a federal government would employ this mechanism (I believe it was done once in the 1970s). Unfortunately, the move is subtle and its implications are not obvious to most people, including many who are heavily involved in healthcare. It would be great to see Healthy Debate run an article on ‘tax points’ to clarify what they are, how they work, and what their advantages and disadvantages are. This would help readers prepare for what might otherwise be a very confusing and esoteric debate on public policy.

    Thank you and keep up the great work!

  • Ritika Goel says:

    Thanks for this article! I think there is very little information out there on the actual ‘role’ of the federal govt. This points out that leaders (eg. Harper) essentially implying healthcare is entirely a provincial responsibility and therefore requires no federal leadership or intervention is not acceptable.


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