The Harper government is routinely criticized for having made ”cuts” to health care transfers. This is a wholly misleading and, I argue, deeply problematic argument.
For starters, the idea that there have been or that there are projected to be cuts to health transfers has no basis in reality. The Harper government has maintained the federal contribution of health spending with 6 percent annual increases through the Canada Health Transfer, promising to do so until 2016-17, with subsequent increases pegged to a rolling three-year average of GDP growth (with a floor of at least 3 percent per year).
UBC economist Kevin Milligan responded to NDP leader Thomas Mulcair’s promise to ”reverse cuts” in transfers to provinces on Twitter this weekend with this graph showing the actual trend: federal transfers to provinces as a percentage of federal revenues are at historic highs.
In reality, the critics’ language of ”cuts” is premised on a gap between what they believe federal funding should be and what it is projected to be, irrespective of reality. The previous Liberal government reached a 10-year agreement with the provinces – the 2004 Health Accord – that would see the federal contribution to health care (through CHT) increase by 6 percent per year. So critics – incorrectly, in my view – adopt the 6 percent standard as somehow the baseline for what federal spending increases should continue to be in perpetuity (even though the 2004 Accord was literally described as a ”œfix” as opposed to something designed to set the new standard for health transfers forever).
As a result, based on the rather questionable counterfactual (imagine a parallel universe) in which the federal government continues to increase the CHT by 6 percent every year, we get the news media reporting $36 billion in ”federal cuts” to health care by the year 2024. Note the phrase ”federal cuts” is IN THE HEADLINE, despite the fact that the CHT was at $20.1 billion in 2006 when Harper took power, is $30.3 billion in 2014, and the most conservative projection would have it well over $40 billion in 2024.
I agree it is easier to say ”cuts” as opposed to ”reductions in annual increases over time,” but this is not mere nitpicking over semantics. The average Canadian knows very little about how the country’s health care funding actually works – using the term cuts is therefore intentionally misleading.
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None of this is to suggest there is not a legitimate debate to be had about what the ”appropriate” federal share of health spending ought to be. The Parliamentary Budget Office has forecasted annual increases in national health care costs at 5.1 percent, and some would argue the federal government should be obliged to maintain its share at that rate. This presumes, of course, that provinces have no control over the expansionary costs of the health care system.
No doubt a couple of key drivers place enormous pressures on the system – the demographics of an aging population and the costs in prescription drugs being key factors – but many structural reform ideas (some good, some bad) have been proposed to help alleviate the cost burdens. Arguments in favour of ”federal leadership in health care” often seem to amount to small-c conservative arguments to support the status quo, and indeed, from the provinces’ side of things, seem to consist of mostly whining about money.
Other, more specific criticisms also make fodder for legitimate policy debate. The Mowat Centre, for example, has focused a lot of its analysis at cross-provincial equity in the federal transfer system (from the perspective of Ontario’s treatment).
So while there is legitimate debate about all of these features of the funding burden, it is important to be accurate both in the work of policy analysis and in the use of rhetoric in political discourse. If we want to talk about baselines, a baseline condition for policy debates should be honesty and clarity rather than obfuscation or outright lying.