A new analysis on how medicare is financed in Canada suggests the federal government’s contribution to health-care spending over the past two decades has mostly outpaced what the provinces have spent.
It’s an interesting finding, given the perpetual complaints from provincial governments who claim Ottawa is not living up to its end of the bargain when it comes to paying for the country’s medical bills.
However, the analysis by The Canadian Press, in partnership with Humber College StoryLab, should be read with caution.
According to the findings, federal health transfers to the provinces increased by 212 per cent from 2005 to 2023. Total provincial spending on health care grew 158 per cent during that same period.
Percentages can be deceiving, though, when comparing substantially different values of money. Provincial governments spend more than four times what Ottawa contributes to medicare. So comparing percentage increases of each isn’t necessarily a useful measurement.
Also, provincial government accounting has changed dramatically over the past 20 years, moving from “core” to “summary” accounting. Provincial books now encompass all aspects of government revenues and expenditures, including from outside agencies and organizations that receive government funds. As a result, comparing provincial health-care funding today to what provinces spent 20 years ago is fraught with accounting pitfalls.
It’s probably more useful to look at more recent years to see how much the federal government has transferred to the provinces and what the provinces spent during that period.
In Manitoba, federal health transfers increased from $1.41 billion in 2018-19 to $1.641 billion in 2022-23. That’s a $231-million increase over four years. During the same period, Manitoba’s health-care spending grew from $6.663 billion to $8.107 billion, a $1.44-billion increase.
The province spent all of the additional federal cash and added $1.2 billion of its own (although that would include equalization payments, a federal transfer provinces can spend on anything they want).
The federal portion of total health-care spending in Manitoba during that period actually declined slightly from around 21 per cent to 20 per cent.
That number hasn’t changed much in recent years. In Manitoba, it was just under 20 per cent in 2015-16.
So while the percentage increase of federal health transfers may have outpaced the percentage increase of provincial health spending over the past 20 years, it’s not a terribly useful metric, especially when one considers the changes in accounting methodology during that period.
It’s important that the federal government makes a meaningful contribution to provincial health-care spending, especially since Ottawa — under the Canada Health Act — sets out the conditions under which provincial governments are eligible to receive that money.
However, what should be of greater concern to Canadians is how that money is spent and what value taxpayers are getting for it.
Canada’s medicare system is pretty good at ensuring patients in need of urgent care, such as heart attacks or emergency surgery, get the medical attention they need. The triage system ensures that, for the most part, people who need immediate care get it.
Where it doesn’t perform well is ensuring people who require less urgent care, like hip and knee replacement surgery or cataract surgery, get it in a timely fashion. Access to diagnostic services in Canada, such as MRIs and CT scans, often take months, which delays diagnosis and can contribute to more acute illness.
Canada suffers from a shortage of primary care doctors, particularly in rural and northern regions. And hospitals, which rely on block funding from provincial governments, operate in a perpetual state of crisis, driven in large part by chronic understaffing.
More money alone won’t solve those problems. There are structural deficiencies in Canada’s publicly-funded and government-administered health-care system that contribute to those problems.
For example, under the current funding model, there are few, if any, incentives for hospitals to improve their performance metrics.
In many cases, hospital administrators (although they would never say so publicly) would likely prefer that patients go elsewhere since in most cases — under Canada’s single-payer health-care system — they don’t get extra funding with each additional patient.
That’s in stark contrast to universal health-care systems in some other parts of the world, such as in Europe, where there is an incentive for hospitals to attract patients with private health insurance (including low-income patients whose private insurance is subsidized by the government).
Outcomes in many OECD countries with universal health care are superior to that of Canada’s in large part because they administer universal coverage differently.
Those are the debates and discussions Canada must have if it wants to significantly improve health-care outcomes.
Whether the federal government contributes 20 per cent or 25 per cent to Canada’s health-care system is, in the long run, of little consequence.
Tom Brodbeck
Columnist
Tom Brodbeck is a columnist with the Free Press and has over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.
Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.
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