FEDERAL GOVERNMENT TRANSFERS TO PROVINCES AND PROGRAM SPENDING – ANALYSIS AND COMMENTARYAuthor: Paul Young, CPA, CGADate: November 2016

HEALTHCARE TRANSFERS

TRUDEAU / TRANSFERS

Federal and provincial health ministers emerged from a day of tense talks in Toronto still at odds over the federal government's planned cut to the annual increase in federal funding for health care.

Next year the Canada Health Transfer, the amount of money the federal government gives the provinces each year to pay for health care, will stop increasing by six per cent and instead will only increase by three per cent. 

Quebec Health Minister Gaétan Barrette said the single "concrete" takeaway from the meeting is that the federal government is cutting health-care funding and forcing the provinces and territories to make tough choices.

"For today we know there will be a cut of $60 billion of funding from the federal government over the next 10 years," Barrette said.  

"That means all provinces and territories must make difficult choices because we are being asked to do more with less. And on top of that we are being told what to do. So I don't think this is the end of the story.

http://thechronicleherald.ca/canada/1407726-baloney-meter-is-the-federal-government-cutting-health-transfers-to-provinces or http://www.cbc.ca/news/politics/canada-health-funding-philpott-provincial-ministers-1.3810576

COMMENTS BY ONTARIO / HOSKINS

Healthcare Waste Hoskins comments “"So to put that in context," Hoskins said, "Ontario stands to gain in home and

community care [with] the $3-billion commitment made by the federal government, to the tune of probably $250 million next year, roughly, but we will lose approximately $400 million if the federal government goes through with their position that the [health transfer] will be limited to three per cent. He also said many of the ministers took offence at Philpott's suggestion that federal funds earmarked for health care went into general revenues without certainty it was being spent on health services.”

Comments Auditor-General eHealth -

https://www.thestar.com/news/queenspark/2016/10/13/liberals-scramble-to-get-ehealth-appraised-before-ag-weighs-in.html “A 2009 auditor general’s report found $1 billion had been spent on eHealth and its predecessor with little to show for it at that point in time. Then in 2012, the legislative watchdog found that $24.4 million was spent on an electronic registry of diabetes patients that was unceremoniously scrapped before it was up and running.

LHINs - http://ochuleftwords.blogspot.ca/2015/12/37-health-care-findings-by-auditor.html So, Where is the Minister of Health on delivery of Healthcare dollars

http://www.cbc.ca/news/politics/canada-health-funding-philpott-provincial-ministers-1.3810576

HEALTHCARE

TRUDEAU / TRANSFERS

Federal and provincial health ministers emerged from a day of tense talks in Toronto still at odds over the federal government's planned cut to the annual increase in federal funding for health care.

Next year the Canada Health Transfer, the amount of money the federal government gives the provinces each year to pay for health care, will stop increasing by six per cent and instead will only increase by three per cent. 

Quebec Health Minister Gaétan Barrette said the single "concrete" takeaway from the meeting is that the federal government is cutting health-care funding and forcing the provinces and territories to make tough choices.

"For today we know there will be a cut of $60 billion of funding from the federal government over the next 10 years," Barrette said.  

"That means all provinces and territories must make difficult choices because we are being asked to do more with less. And on top of that we are being told what to do. So I don't think this is the end of the story.

http://thechronicleherald.ca/canada/1407726-baloney-meter-is-the-federal-government-cutting-health-transfers-to-provinces or http://www.cbc.ca/news/politics/canada-health-funding-philpott-provincial-ministers-1.3810576

COMMENTS BY ONTARIO / HOSKINS

Healthcare Waste Hoskins comments “"So to put that in context," Hoskins said, "Ontario stands to gain in home and

community care [with] the $3-billion commitment made by the federal government, to the tune of probably $250 million next year, roughly, but we will lose approximately $400 million if the federal government goes through with their position that the [health transfer] will be limited to three per cent. He also said many of the ministers took offence at Philpott's suggestion that federal funds earmarked for health care went into general revenues without certainty it was being spent on health services.”

Comments Auditor-General eHealth -

https://www.thestar.com/news/queenspark/2016/10/13/liberals-scramble-to-get-ehealth-appraised-before-ag-weighs-in.html “A 2009 auditor general’s report found $1 billion had been spent on eHealth and its predecessor with little to show for it at that point in time. Then in 2012, the legislative watchdog found that $24.4 million was spent on an electronic registry of diabetes patients that was unceremoniously scrapped before it was up and running.

LHINs - http://ochuleftwords.blogspot.ca/2015/12/37-health-care-findings-by-auditor.html So, Where is the Minister of Health on delivery of Healthcare dollars

http://www.cbc.ca/news/politics/canada-health-funding-philpott-provincial-ministers-1.3810576

HEALTHCARE

EDUCATION

2009-2010

2009-2010

2009-2010

2009-2010

PROGRAM SPENDING

POST STIMULUS TRENDS

POST STIMULUS TRENDS

DEFICITS AND SPENDING TRENDS

STATEMENT OF OPERATIONS

STATEMENT OF OPERATIONS / KEY RATIOS

EQUALIZATION

EQUALIZATIONSource: Government of Canada

• Equalization entitlements are determined by measuring provinces' ability to raise revenues – known as "fiscal capacity". Before any adjustments, a province's per capita Equalization entitlement is equal to the amount by which its fiscal capacity is below the average fiscal capacity of all provinces – known as the "10 province standard".

• Provinces get the greater of the amount they would receive by fully excluding natural resource revenues, or by excluding 50 per cent of natural resource revenues. 

• Equalization is adjusted to ensure fairness among provinces while continuing to provide a net fiscal benefit to receiving provinces from their resources equivalent to half of their per capita resource revenues.

• Equalization is also adjusted to keep the total program payout growing in line with the economy.  The growth path is based on a three-year moving average of gross domestic product (GDP) growth. This helps to ensure stability and predictability while still being responsive to economic growth. The program also maintains the benefits of the Atlantic Accords for Nova Scotia and Newfoundland and Labrador.  In 2007, the two provinces were given the choice to continue to operate under the previous Equalization system or to permanently opt into the new program at any point prior to the expiry of the offshore accords.  Having chosen the new program, Nova Scotia benefits from a guarantee that it will do at least as well, on a cumulative basis, as it would have under the formula agreed to at the time the Accord was signed.  Newfoundland and Labrador no longer qualifies for Equalization.

EQUALIZATION COMMENTS

• Finance Minister Cathy Bennett said Thursday she is disappointed Quebec asked the federal government to not extend a loan guarantee for her province’s Muskrat Falls hydroelectric project. Bennett says Quebec just announced it would post a surplus of $2.2 billion in the 2015-16 fiscal year while receiving $10 billion in equalization payments. Bennett told reporters Newfoundland and Labrador will face a $1.6-billion shortfall this fiscal year and is scheduled to receive nothing in equalization. http://www.thetelegram.com/Business/2016-10-27/article-4673603/Newfoundland-and-Labrador-reminds-Quebec-about-Canadian-values-on-hydro-project/1

• Quote “A toast to Bernard Hancock of Fort McMurray (an oil rig worker who spoke on Parliament Hill). Good on you! You said it better than the politicians and even the energy sector. You delivered where it should count – Parliament. Do we have a confederation or not? In Montreal and the East, refineries (40 per cent) live on blood oil from the Gulf states and Venezuela. Tankers are fine on the East Coast and St. Lawrence. You’d rather have that than a pipeline and Western Canadian oil. That’s really safe! OK, fine. From now on for every year of delay on the Energy East pipeline, the West cancels a year of transfer equalization payments. Prime Minister Trudeau, you decide. Do we have a confederation or not?” Source – http://lethbridgeherald.com/commentary/letters-to-the-editor/2016/10/18/do-we-have-a-confederation-or-not/

INFRASTRUCTURE SPENDING

GAS TAX FUND

BUILD CANADA FUND

FEDERAL GOVERNMENT SPENDING ON INFRASTRUCTURE

FEDERAL GOVERNMENT SPENDING ON INFRASTRUCTURE

FEDERAL GOVERNMENT SPENDING ON INFRASTRUCTURE