Silence surrounds health-care problems

You can tell a government program is in trouble when politicians don't want to talk about it. Right now, health care, once Canada's most popular program, is enveloped in silence.

Health care has big financial problems. A federal government promise to give the provinces $41 billion over 10 years for heath care ends in 2014, just the time when Ottawa will be thick in the fight against debt. Ottawa is projected to head $170 billion deeper into debt by 2014-15, exasperated by a structural or permanent deficit that will require $18 billion in annual spending cuts or tax increases to eliminate.

It will be tempting to take a slice out of health care. Prime Minister Stephen Harper says he is not planning significant cuts in transfers to the provinces -- not, at least, along the lines of the "deep cuts in program transfers we saw by the previous (Liberal) government."

But the health-care agreement is an odd animal. In it, Ottawa promises to increase spending by six per cent a year. Toronto-Dominion Bank chief economist Don Drummond told the Globe and Mail, "If you're the federal government and in 2013 you're still going to be in this belt-tightening era, would you be happy extending the accord at six per cent (spending) growth?"

Silence, so far, from both government and the opposition Liberals.

The timing is inauspicious for another reason: Canada, says the Heart and Stroke Foundation, is facing "a perfect storm" of cardiovascular disease. Younger adults are at a increased risk of the early onset of heart disease, just when the huge baby boom generation is approaching their senior years.

This, says the foundation, will place an unprecedented burden on our cardiovascular care system that already costs us $22 billion a year in direct and indirect expenses. Younger adults (the Nintendo generation) are starting to develop risk factors for heart disease that once only showed up in middle age and beyond.

Provinces are already spending 40 to 50 per cent of their budgets on heath care. Nearly all the spending is focused on people who are sick. Stephen Samis, the Heart and Stroke Foundation's director of health policy, says, "we have to start to focus on things that will keep us healthy and out of the health-care system."

In an attempt to save money, some provinces, including Manitoba, Ontario and Nova Scotia, have temporarily closed emergency departments. In response, the Canadian Association of Emergency Physicians says there should be new standards including the length of time it takes to get to an ER.

Harper says the provinces will have to tighten their belts as well as Ottawa. Federal stimulus funds end on March 31, 2011. The Bank of Canada may hike interest rates this spring or summer. In its March 4 budget, Ottawa will set out its plans to slay the deficit in five years, mostly by chopping programs.

Ontario expects a $24.7-billion deficit this fiscal year, caused mostly by failing corporate revenue. British Columbia last fall forecast a $2.8-billion deficit this fiscal year; Saskatchewan is running an operational deficit. Early last year, Manitoba trumpeted a net income of $43 million; now, it faces a nearly $600-million deficit.

The province's education minister, Nancy Allan, says the increased funding of $31.3 million for school operating grants is less than last year's $53.1 million. At that time, almost half of Manitoba's school boards defied the government's urging and raised school taxes. The province pumps about $1.093 billion into an education system that costs a total of $1.82 billion.

Ottawa and the provinces aren't the only ones who have financial problems. Last month's RBC Canadian consumer outlook index says 58 per cent of consumers are concerned about their debt loads. Interest rates will go up in the next six months, say 68 per cent of those surveyed. Any tax increase to help pay for health care -- or anything else -- is going to make these people very unhappy.

So, that leaves us precisely here: Health care is a neat program, but who is going to pay for it?

Tom Ford is managing editor of The Issues Network.

Republished from the Winnipeg Free Press print edition February 8, 2010 A12