Analysis reveals federal health funding grew faster than provincial budgets, challenging political claims
Despite criticism from provincial premiers over insufficient federal contributions to health spending, an analysis by The Canadian Press reveals a different trend.
In collaboration with Humber College StoryLab, the study shows that federal transfers have generally outpaced increases in provincial health budgets over the past 20 years.
In 2023, federal health transfers reached $47.1bn, representing a 212 percent rise from $15.1bn in 2005. Provincial spending increased to $221.9bn, up from $86.2bn during the same period, an increase of 158 percent.
This data challenges the narrative that has dominated federal and provincial health negotiations in recent years, particularly as health systems faced strains following the COVID-19 pandemic.
Two years ago, Canada experienced a shortage of health workers, leading to emergency room closures and service backlogs. In response, provincial premiers urged the federal government to increase its share of health spending.
Former Manitoba premier Heather Stefanson stated in 2022 that health spending used to be equally shared, but the federal contribution had diminished over time.
Initially, health-care costs were intended to be split evenly between Ottawa and the provinces, a model first envisioned in 1959. However, significant changes to the funding model began in the 1970s, and it has evolved numerous times since.
Contrary to the belief that federal contributions have decreased, the analysis shows federal transfers have grown at a slightly faster rate than provincial health spending since the 2004 federal-provincial health accord under Prime Minister Paul Martin.
In 2005-06, federal transfers surged 39 percent in one year, while provincial health spending rose by 6 percent. Consequently, the federal share of total health spending jumped to 20.7 percent from 17.5 percent.
Federal health spending peaked during the pandemic due to targeted transfers, but those funds ceased in 2022-23, leaving the federal share at 21.2 percent of total provincial spending.
Health Minister Mark Holland recently commented that this reality was not acknowledged by premiers when they pushed for increased federal funding post-pandemic.
The February 2023 health funding deal proposed by Prime Minister Justin Trudeau involved signing agreements with each province.
However, premiers, including Ontario Premier Doug Ford, expressed concerns about the sustainability of these offers, calling the agreements a “funding cliff” due to their expiration dates.
Haizhen Mou, a professor at the University of Saskatchewan, noted that the lack of transparency in health spending data creates challenges for accountability.
“They have certain expectations on the quality and quantity of health care they receive, however, they cannot hold either level of government accountable, because there's no clear division of responsibility,” said Mou.
Although the new health deals call for improved national health data collection, they do not specifically address tracking federal and provincial spending.
Holland stated he is open to finding ways to make health spending information more transparent, believing that such transparency could help focus discussions on meaningful health system reforms rather than financial debates.
Per capita, federal health transfers grew six times faster than population growth, rising to $1,115 per person in 2023 from $427 in 2005, though these figures are not adjusted for inflation.
Provincial spending per capita varied, with Newfoundland’s budget growing 19 times faster than its population, while Nova Scotia and Alberta’s spending increased at less than twice the population growth rate.
Humber College and The Canadian Press manually collected data from provincial public accounts and federal transfers to compile this analysis.
Territories were excluded from the study due to unverifiable health spending records, and the analysis did not account for equalization payments or tax point transfers.
