Skip to main content

Harper health care cuts: $8.2 billion less for Ontario

The Ontario government says the unilateral federal decision to limit the growth of the Canada Health Transfer will cost Ontario $8.2 billion -- $550 for every individual in Ontario.

The Ontario Fall Economic Outlook indicates that 59% of the Ontario  health care funding increase this year comes from the annual increase in funding from the federal government via the Canada Health Transfer (CHT). 

The federal transfer increase accounts for $752 million out of a total provincial health care increase of $1.272 billion. (Another $181 million comes from the increase in the Employer Health Tax revenue, with not much coming from other Ontario based revenue sources, like income or corporate tax.) 

The share of new funding paid for by new federal CHT funding is up from 56% in 2012-13 and 25% in 2011-12.  Federal CHT funding now provides 24.7% of Ontario provincial government health care funding.

Unfortunately, the federal government has unilaterally announced plans to reduce its increases for health care funding.  Given the role those increases are playing for health care in Ontario, this is significant.  

If this year was under the planned federal CHT funding model, Ontario would be out $340 million. As the federal cuts compound every year, the losses will increase every year. 

Interestingly, the Ontario Fall Economic Outlook did have a chapter on “The need for a committed federal partner” that says this about the federal CHT changes.

Investing in Healthy Ontarians
The unilateral federal decision to limit the growth of the Canada Health Transfer will have a significant impact on Ontario’s delivery of quality public services. Instead of maintaining the Canada Health Transfer growth rate at six per cent, the transfer is now expected to increase at the rate of nominal economic growth, starting in 2017–18.
This federal action will remove $8.2 billion from health care in Ontario by 2023–24, when the transfer will be up for renewal. This cumulative impact would be equivalent to reducing federal funding of health care by an estimated $550 for every Ontarian by 2023.....
It is increasingly apparent that federal fiscal arrangements are neither fair nor sufficient to address the needs of Ontarians. Among provinces, Ontario is fifth in ability to raise revenues from its residents. However, Ontario falls to last after federal transfers — including the Canada Health Transfer, Canada Social Transfer and Equalization — are taken into account because the outdated system of fiscal arrangements is out of line with current economic realities 
It’s good to see the Ontario government at least raise the federal government's unilateral cut to the CHT, but the Ontario government has a long list of complaints about the federal government and it is far from certain federal health care cuts are much of a priority for the Ontario government (although, at least it does seem that improvements in the Canadian Pension Plan are a priority).

CUPE, community based health coalitions, the Council of Canadians, and others are campaigning for a renewed federal Health Accord that maintains the current federal healthcare funding role.

Success is quite possible -- the Conservatives quickly backed off  on their immediate plans to cut the CHT when it briefly became an issue in the last election.  But our case for more federal health care funding for provincial governments is not helped if those governments do little more than go through the motions.

Projected Deficit: For years we have seen marked reductions in the deficit estimates, often in-year.  But there was no significant reduction in the Fall Outlook: it remains at $11.7 billion for 2013-14.  

Perhaps the Liberals are saving such announcement for the next Budget – when their fight for survival will hit fever pitch. 

But real growth in Ontario is anemic: it is now projected at 1.3% .  The Budget had projected 1.5%.  Moreover, the 2012 Budget projected 2.2% real growth 2013.   

As well, inflation is lower than projected (1.1% versus a Budget projection of 1.5%).  As a result "nominal growth" (i.e. real growth and inflation, the key drivers of government revenue) is only 2.5%, rather than the 3% projected in the Budget. 

Next year growth and inflation are projected to be higher, with 3.8% nominal growth.  But even this is dialed down from the Budget projection of 4.1%.    


  1. We have included your post in our 'Around the Blogs' section at

  2. This comment has been removed by a blog administrator.


Post a Comment

Popular posts from this blog

Public sector employment in Ontario is far below the rest of Canada

The suggestion that Ontario has a deficit because its public sector is too large does not bear scrutiny. Consider the following. 

Public sector employment has fallen in the last three quarters in Ontario.  Since 2011, public sector employment has been pretty flat, with employment up less than 4 tenths of one percent in the first half of 2015 compared with the first half of 2011.

This contrasts with public sector employment outside of Ontario which has gone up pretty consistently and is now 4.7% higher than it was in the first half of 2011.

Private sector employment has also gone up consistently over that period. In Ontario, it has increased 4.3% since the first half of 2011, while in Canada as a whole it has increased 4.9%.

As a result, public sector employment in Ontario is now shrinking as a percentage of the private sector workforce.  In contrast, in the rest of Canada, it is increasing. Moreover, public sector employment is muchhigher in the rest of Canada than in Ontario.  Indeed as…

The long series of failures of private clinics in Ontario

For many years, OCHU/CUPE has been concerned the Ontario government would transfer public hospital surgeries, procedures and diagnostic tests to private clinics. CUPE began campaigning in earnest against this possibility in the spring of 2007 with a tour of the province by former British Health Secretary, Frank Dobson, who talked about the disastrous British experience with private surgical clinics.

The door opened years ago with the introduction of fee-for-service hospital funding (sometimes called Quality Based Funding). Then in the fall of 2013 the government announced regulatory changes to facilitate this privatization. The government announced Request for Proposals for the summer of 2014 to expand the role of "Independent Health Facilities" (IHFs). 

With mass campaigns to stop the private clinic expansion by the Ontario Health Coalition the process slowed.  

But it seems the provincial Liberal government continues to push the idea.  Following a recent second OCHU tour wi…

Hospital worker sick leave: too much or too little?

Ontario hospital workers are muchless absent due to illness or disability than hospital workers Canada-wide.  In 2014, Ontario hospital workers were absent 10.2 days due to illness or disability, 2.9 days less than the Canada wide average – i.e. 22% less.  In fact, Ontario hospital workers have had consistently fewer sick days for years.

This is also true if absences due to family or personal responsibilities are included.
Statistics Canada data for the last fifteen years for Canada and Ontario are reported in the chart below, showing Ontario hospital workers are consistently off work less.
Assuming, Ontario accounts for about 38% of the Canada-wide hospital workforce, these figures suggest that the days lost due to illness of injury in Canada excluding Ontario are about 13.6 days per year ([13.6 x 0.68] + [10.2 x 0.38] = 13.1).

In other words, hospital workers in the rest of Canada are absent from work due to illness or disability 1/3 more than Ontario hospital workers. 

In fact, Canad…