https://www.macleans.ca/news/canada/three-percent-health-transfer-increase-reasonable-says-analysis/
The provinces have been receiving an automatic six per cent increase since 2004, when they negotiated a 10-year health accord with the federal government.
In 2011, Stephen Harper’s Conservative government unilaterally announced that it would continue to pay the six per cent escalator only until 2016. As of 2017, the annual growth in the health transfer is to be tied to economic growth, with a guaranteed minimum of three per cent.
Although the Liberals denounced Harper’s unilateral action at the time, they’ve decided to stick with the three per cent annual increases.
At the time of the 2004 health accord, Decter says, there was a rationale for six per cent. And indeed, CIHI reports that provincial spending on health care ballooned by an annual average of 7.2 per cent between 1998 and 2010.
But by about 2008, Decter says it became clear that no province was going to continue to boost their health spending by as much as six per cent each year, even though they continued to reap the benefit of an automatic six per cent hike in the federal transfer.
“They didn’t spend it on health,” Decter says, noting that the unconditional federal transfer payment goes into each province’s general revenues and can be spent on anything they like, from tax cuts to paving roads.
What’s more, they didn’t spend it on the priority areas agreed upon in the 2004 accord: reducing surgical wait times, improving home care and primary care and reining in prescription drug costs.