Winnipeg Free Press - ONLINE EDITION

Restore Canada Health Transfer purpose

  • Print

The new Parliamentary Budget Officer, Jean-Denis Frechette recently announced that Ottawa’s reform of the Canada Health Transfer (CHT) and spending cuts make federal finances sustainable for the long-term — but possibly at the expense of the provinces. Capping the CHT to the rate of economic growth, it appears, will make provincial finances less sustainable.

But this is only one aspect of CHT reform that could negatively impact the provinces. The second, less visible CHT reform — the change to a pure per capita funding formula — will have an even more negative impact on the ability of most provinces to finance necessary health care.

In the federal budget of 2007, the Harper government announced that the CHT would be allocated on a strict equal per capita basis beginning in 2014. What this means is that each province will receive a CHT amount according to the size of its population, regardless of the income, demographic, geographic or other conditions of the province. This is significantly different from the current formula which allocates CHT based on both the population share and the income level of the provinces.

Although the new CHT formula seems balanced and fair on the surface, it will, in fact, make it much more difficult for some provinces to afford necessary health services given their unavoidably higher cost structures for medicare. Less populous provinces with relatively larger and more isolated rural and remote populations, for example, have to spend more to deliver a similar basket of services relative to more densely populated provinces. Similarly, provinces with a larger proportion of older residents also face higher health care costs.

The ‘Big Three’ federal transfers of monies to the provinces presently — the CHT, the Canada Social Transfer (CST), and Equalization — were established to fulfill the national objective of ensuring that core health and social services are made available to all Canadians, an objective that we have entrenched in the Charter of Rights and Freedoms. In theory, the CHT should uphold the five criteria of the Canada Health Act: public administration, comprehensiveness, universality, portability and accessibility of health services – thereby encouraging a sense of common citizenship even if there are differences in how medicare is managed and delivered across the provinces.

When combined with a lack of desire to enforce even the minimal criteria under the Canada Health Act, the new formula is money for nothing. In fact, the new formula will take money away from most provinces while delivering an enormous windfall to Alberta.

Based on estimates for 2014-15, Alberta will receive $954 million more under the new formula than under the current formula — $235 for every man, woman and child in the province.

Every other province will lose money as follows: Ontario, $335 million; British Columbia, $272 million; Quebec, $196 million; Newfoundland, $54 million; Manitoba, $31 million; Saskatchewan, $26 million; Nova Scotia, $23 million; New Brunswick, $18 million; and Prince Edward Island, $3 million.

In other words, the government of Alberta is the only winner — a reward perhaps for already running the most expensive provincial health system in Canada?

To remedy this, we propose an alternative formula that adjusts for two health care cost drivers over which provincial governments have no control: demographic aging and geographic dispersion. Those provinces and territories with both a more highly dispersed and an older population would receive more CHT. Think about Labrador as well as the northern and rural areas of Manitoba and Saskatchewan. Those provinces with either an extremely young demographic (Alberta) or a highly urbanized population (Ontario) would receive less.

Altering the CHT in this way would assist provinces facing unavoidably higher health costs to continue to provide medicare services of roughly comparable quality under the five criteria of the Canada Health Act. In other words, the CHT would again serve a national policy purpose, not automatically dish out money based blindly on a population count.

Canadians want to know that their citizenship means something more than being the resident of an individual province. They want to know that they will have access to needed medical services without financial barriers wherever they live in the country. It is time to revisit the original purpose of the CHT.



Gregory P. Marchildon is an expert advisor with, and along with Haizhen Mou, teaches in the Johnson-Shoyama Graduate School of Public Policy, an interdisciplinary centre for public policy research, teaching and executive training at the Universities of Regina and Saskatchewan.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


MTS Centre a Winnipeg whiteout as NHL playoffs return after 19 years

View more like this

Photo Store Gallery

  • STDUP ‚Äì Beautiful West End  begins it's summer of bloom with boulevard s, front yards  and even back lane gardens ,  coming alive with flowers , daisies and poppies  dress up a backyard lane on Camden St near Wolseley Ave  KEN GIGLIOTTI  / WINNIPEG FREE PRESS  /  June 26 2012
  • A one day old piglet glances up from his morning feeding at Cedar Lane Farm near Altona.    Standup photo Ruth Bonneville Winnipeg Free Press

View More Gallery Photos


Do you think the Jets will win Game 4 on Wednesday?

View Results

View Related Story

Ads by Google