Ottawa report casts doubt on Yukon’s health care deal

A new report from an Ottawa think-tank suggests that recent health-care deals signed by several provinces and territories, including the Yukon, will not provide enough federal funding to keep pace with increasing health-care costs.

A new report from an Ottawa think-tank suggests that recent health-care deals signed by several provinces and territories, including the Yukon, will not provide enough federal funding to keep pace with increasing health-care costs.

The study, published by the Institute of Fiscal Studies and Democracy, finds that health spending in Ontario should increase by 4.5 to five per cent a year after 2018. But the bilateral deals signed by provinces and territories in recent weeks only offer guaranteed annual increases of three per cent to the Canada health transfer payments.

Randall Bartlett, the institute’s chief economist, said the pinch will likely be felt more in smaller jurisdictions, because Ontario has a large population and low per-capita costs.

He said the Yukon was the “third-most expensive jurisdiction for health care on a per-capita basis” after the other territories, based on 2013 data.

“What’s been proposed by the federal government is going to be insufficient in Ontario over the long term,” Bartlett said. “The same is going to be true in every other province (and territory) as well.”

Bartlett’s data, obtained from the Canadian Institute for Health Information, shows that Yukon’s health expenditures increased by an average of 7.4 per cent each year between 2010 and 2016.

Last month, the Yukon government signed a health-care deal that will see it receive $6.2 million for home care and $5.2 million for mental health initiatives over the next 10 years. The federal transfer has been cut to an annual increase of three per cent or the rate of nominal GDP growth, whichever is higher. The transfer has increased by six per cent annually for the last several years, but that deal has expired.

“If current trends continue, basically the federal portion will be increasing at half the rate of the actual (territorial) costs,” Bartlett said.

On Feb. 9, Yukon Party health critic Patti McLeod told the News she’s worried about what the deal will mean for health care in the Yukon.

“Given that it costs even more to provide services in Yukon, it puts us in an even worse situation,” she said. “I think that Yukoners aren’t going to be very happy if we’re looking at some kind of cutback in the system.”

Premier Sandy Silver has previously argued that the increase in the health transfer from Ottawa is not the Yukon’s biggest concern. That’s because the health transfer is allocated on a per-capita basis, which means a change of a few percentage points doesn’t add up to a lot of money for a small population.

To illustrate: Bartlett’s data shows that the Yukon spent $283 million on health care in 2015-16. If that amount were to rise by 7.4 per cent — the average annual increase since 2010 — that would mean an additional $21 million in spending.

Conversely, the health transfer to the Yukon rose six per cent from $35 to $37 million between 2015-16 and 2016-17 — an increase of just $2 million.

Cutting the annual increase to three per cent means an additional $1 million in 2017-18, instead of $2 million.

Silver has argued that the Yukon has more of a stake in discussions about other funding sources, like the territorial health investment fund that provides money for Yukon’s medical travel program.

But Bartlett insisted the Yukon should be paying attention to the health transfer.

“I think it’s very important, and I don’t think they’re necessarily mutually exclusive things.”

McLeod suggested the Yukon’s Liberal government should try and renegotiate its health-care deal with Ottawa, but Bartlett said the territory may have to wait and hope that the remaining hold-out provinces — Quebec, Ontario, Manitoba, Alberta and B.C. — manage to negotiate a better deal.

The Yukon and the other jurisdictions are allowed to sign on to a better deal if the option arises.

In December, the federal government proposed a deal like the one the Yukon has signed to all the jurisdictions during meetings in Ottawa, but it was rejected. The provinces have demanded an annual transfer increase of 5.2 per cent.

Since then, the federal government has signed one-on-one deals with the territories and the less populous provinces.

Contact Maura Forrest at maura.forrest@yukon-news.com

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