Federal health spending without accountability

The 2004 Health Accord agreed to a total transfer of $41 billion of federal money to the provinces and territories for health care over a ten year period. This transfer ends in 2014 when the accord expires.

The legacy of the Health Accord is mixed. There have been improvements in wait times for some operations and diagnostic tests, but no progress in developing a national plan for pharmaceutical coverage, and virtually no reporting about how the federal investment was used and what it achieved.

What are some lessons learned from the Health Accord about the federal role in health care that Canadians should be aware of when heading to the polls on May 2?

Last week, Part 1 of this series covered whether the 2003/2004 Health Accord provided the ‘fix for a generation’. This week we are asking about the legacy of the Health Accord, and what the federal government can and should commit to in the next round of negotiations with the provinces and territories.

As part of the Health Accord, the federal government committed to a $5.5 billion total fund over 10 years for reducing wait times, and a $16 billion for primary care, home care and catastrophic drug coverage. The 2003 Health Accord committed to publicly report on the progress of the main areas of the Accord. However this commitment was softened in the 2004 Health Accord, which contained a statement that nothing in the Health Accord takes away the jurisdiction of provincial and territorial governments over the delivery of health care.

Little Accountability for Federal Health Dollars

The Health Council of Canada was established in 2003 to act as a public watchdog to monitor the progress of the Health Accord commitments. Cathy Fooks, who served as the first Executive Director of the Health Council of Canada, says that the Council ”was not as independent as it needed to be to do the job that it set out to do.” Moreover, the type of information that the council was supposed to measure and report on was not readily available. Danielle Martin, a family doctor and past Council member says “the Council didn’t have the capacity to do what it was meant to do. No one can force provinces to give up information, and much of the data we needed was information that the provinces did not even have”. While the Health Council of Canada still exists, its main focus is on providing policy reports and describing best practices which can lead to health care reform, rather than measuring and monitoring annually on the 2003/2004 Health Accord goals.

The 2004 Accord did not include any mechanism for holding the provinces accountable for how the federal transfers are spent. Some may argue that this is appropriate in our political system – the federal government’s role in health care funding is to simply collect taxes and transfer funds to the provinces and territories, subject to the conditions outlined in the Canada Health Act. After all, a province like New Brunswick has different health care priorities than Ontario, and who knows those priorities better than the local region? On the other hand, many Canadians find it troubling that health care standards differ so much from one province to another. For example, certain expensive prescription drugs are paid for by some provincial governments but not others. The issue of the federal government’s role in ensuring similar access and quality of health care across the country has not been an area of focus of any of the federal parties in this election.

What does the future hold, and what should you ask the federal parties during this election?

If the CHT is to be more than a simple transfer of federal funds to the provinces and territories, the federal party leaders must indicate what their health care priorities are, what improvements in health care they expect the CHT will lead to, what new accountability measures they will implement, and how they will ensure that the provinces and territories will comply.

Jeff Turnbull, president of the Canadian Medical Association argues that Canadians need to speak out now and press political leaders for a plan and vision to create a health care system that delivers better value. Turnbull says that today’s health care system still has “huge inefficiencies, silos, lacks patient-centredness and integration, and has no overarching vision for the direction it should go.” Turnbull says that transforming the system will require a willingness to “tackle issues of meaningful change in health rather than throw money at the health care system.” Turnbull suggests that a transformed system of care would align to national standards, set by Canadians from across the country, and could include major changes such as expanding the scope of traditional Medicare from hospital-based care to long-term care and home care, to meet the changing health care needs of the population.

In the campaign leading up to the May 2 election, the Liberal, Conservative and NDP leaders have all committed to an annual six percent increase in the CHT after 2014, although they have all been unclear about how long they will continue to increase funds at this rate. Mark Stabile, director of the School of Public Policy & Governance at the University of Toronto questions whether annual 6% increases are feasible in the current economic climate. Stabile says that “a serious conversation needs to happen about where this money will come from, and that it’s impossible to maintain the 6% funding increase without raising federal revenues through taxes.”

This table outlines the increases to the CHT based upon the Health Accord.









Despite claims that health care is a provincial matter, the presence of federal legislation and the large sums of money transferred from the federal government to the provinces and territories clearly illustrates that there is a federal role in Canadian health care. With the Health Accord set to expire in 2014, possibly during the life of the parliament that is elected on May 2, now is the time for federal leaders to make their positions on health care clear. How much will they increase health care transfers by, for how long, and what will they demand in return?

The comments section is closed.

  • Jeremy Petch says:

    Probably the biggest missed opportunity with the 2003/2004 accords was that the funds provided to the provinces were not targeted towards improving quality of care and efficiency. At the time of the accords, the provinces were under enormous strain from cuts in federal funding made in the early 90s aimed at reducing the federal deficit. As a result, most of the federal funding under the accords went to plugging holes and putting out fires (shortening wait lists being the most obvious example). While the accords didn’t provide a ‘fix for a generation’, I do think they were successful in addressing the crises that faced many of the provinces in 2003. As a result, we are now in a much better position to target some of the federal spending on healthcare towards improving quality and efficiency across the country.

    What is really striking looking across the country is the enormous wealth of innovation that has sprung up in every province over the past ten years. Unfortunately, these innovations are often isolated – they rarely spread beyond the region in which they were developed. Enormous opportunities to improve cost effectiveness, access and quality of care continue to be missed because provinces rarely communicate about their innovations. Even when these best practices are promulgated by organizations like CHSRF and the HCC, many provinces have proven reluctant to implement ideas from elsewhere, preferring ‘homemade’ solutions, even when these solutions are prove less successful. The federal government, lacking the regional pride/chauvinism that plagues so many provinces, is in a unique position to drive inter-provincial uptake of best practices. This should be a chief goal of any 2014 health accord. How might this be accomplished?

    Achieving sustainability requires the continued implementation of innovation. While such implementation requires significant investment, as the business adages goes, “you have to spend money to make money,” or in the case of public systems, “you have to spend money to save money.” System transformation is both difficult and expensive, and provinces often lack either the financial or human resources capacity to enact regularly identify and enact such change. The federal government is uniquely positioned to provide the provinces with the resources they need to implement the innovative practices that can improve quality of care for Canadian while making the system truly sustainable.

    %featured%I would suggest that the federal and provincial governments should agree to found a new national organization whose mandate is to facilitate the uptake of proven healthcare innovations across the country.%featured% This organization would be responsible for distributing a portion of new federal health transfer payments, in the form of grants to cover the costs of implementing best practices. The organization would be responsible for evaluating innovative practices and programs across the country in order to identifying key best practices to be replicated. Hospitals, health authorities, and LHINs could all apply to this organization for the funds necessary to implement those best practices that would address issues in their own jurisdictions. The organization would be responsible for monitoring progress of projects it funds. This organization might also house a group of experts in change management, who could work with each jurisdiction to facilitate effective and efficient implementation. The organization could also provide funds for program evaluation of novel innovations to gauge whether they are best practices that should be replicated elsewhere.

    This approach has a number of advantages. Since it would be a granting system, rather than a straight transfer with conditions, participation would be voluntary, thus preserving provincial autonomy over healthcare that is guaranteed under the constitution. It would, however, allow the federal government to ensure accountability for money spent, without having to impose conditions, which have proved to be barriers to effective federal/provincial cooperation in the past. It allows each jurisdiction to identify and implement only those innovations that will be of greatest benefit to them. It also ensures that federal money would be directed at system improvements that feed into the long-term sustainability of Medicare, which should be a priority for any responsible government.

    Canada is rich with regional innovations. The solutions to many of our problems have already been found, and are now just waiting to be picked up around the country. This proposal would not solve the problem of sustainability, but it would, I think, offer an important piece of the puzzle.

  • Ritika says:

    I think this is something that needs to be agreed upon when the Accord is discussed. Just as in 2004, wait times were made an issue (although technically so were other things, as mentioned in your article, which never got done like catastrophic drug coverage), private clinics and the slippery slope into private pay needs to be made an issue and written down as an express reason for which money can be held back. Perhaps the issue is also the details with which this can be enacted – Perhaps there should be regular checks every 1y to see the progress and whether or not there has been action on the part of the provinces against clinics breaking the CHA. On those annual checks there should be a penalty in place if the provinces don’t do their job. The elephant in the room of course is that the current government has NO interest in doing any of this, as Harper has clearly stated an interest in experimenting with privatization of health care. So, first step, remove the Harper Conservatives from power! Step 2 – hold the new govt accountable to hold the provinces accountable. Tough work ahead!

  • Ritika says:

    One of the major issues that is not being raised is that of private, for-profit delivery creeping up all over the place in Canada and not being shut down by the Federal Govt. The role of the Federal Govt, as is so eloquently laid in this article, is to hold provinces accountable for appropriately using the dollars in the health transfer. However, the provinces are supposed to uphold the Canada Health Act, which is being contravened by multiple facilities that are charging patients for medically necessary services. The most famous example ofcourse is Brian Day’s Cambie Clinic in BC which is currently in a lawsuit, but openly declares that they charge patients for hip/knee replacements. Harper very clearly stated that he is committed to public financing, but thinks provinces can experiment with delivery, but here’s the problem – Private (for-profit) delivery and private financing (patients pay out-of-pocket or through insurance) go hand in hand! And it’s time the Feds did what they are mandated to do and prevented it.

    • Karen Born says:

      Thanks for your comment Ritika. What do you think are some of the most effective ways that the federal government can hold provinces accountable for upholding the Canada Health Act?

    • Jeremy Petch says:

      While Brian Day’s clinic is clearly problematic and will hopefully either close its doors or change its ways (unlikely, given Day’s personal crusade for private financing), some of these comments imply that private, for profit delivery of health care contravenes the Canada Health Act. Nothing could be further from the truth. Medicare in Canada was founded on the principle of private delivery of care, financed publicly. Since medicare’s inception, nearly every physician in Canada has operated as a private entrepreneur, who bills the public system for services rendered. Family physicians provide care in their offices, which are privately owned, for-profit enterprises. What is prohibited in English Canada is the operation of private insurance (either for-profit OR not-for-profit) for services that are publicly financed. Given that tens of thousands of physicians in Canada over the past 50 years have delivered care privately and for-profit, without resorting to user fees or private financing, it is simply untrue to claim that private delivery and private funding go hand in hand.


These are pieces commissioned by the Healthy Debate editorial team.

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