The Yukon government will be looking to trim the cost of health-care spending over the next five years.
That’s because, starting in 2016, the growth of health transfers from Ottawa will slow down, the federal government announced on Monday.
In recent years, these annual allotments have grown by six per cent. But starting in 2016, these transfers will be pegged to the growth of the economy, with a floor set at three per cent.
What remains unclear is whether the Yukon will continue to receive a special top-up fund, currently worth $8 million annually, to help offset the cost of providing health care in the territory.
Premier Darrell Pasloski met with Finance Minister Jim Flaherty in Victoria on Tuesday, after the new funding formula was announced, to push for a continuation of this fund.
But he hasn’t yet received any clear commitment, if local radio reports are any indication. (Pasloski was unavailable for comment before press time.)
The Yukon receives more than $800 million in federal transfers annually, noted Yukon MP Ryan Leef, shortly after Ottawa’s health-care spending announcement.
Leef suggested the territory may have to do more with less when it comes to health funds.
More efforts aimed at making Yukoners healthier could save money, he said.
“For example, we have tremendous health costs around drug and alcohol issues in the Yukon,” said Leef in a telephone interview Tuesday.
“We’re committed to a publicly funded and universally accessible health-care system. But we obviously need to do that in a balanced and sustainable way,” he said. “In our current economic situation, committing to six per cent growth would probably be a little unrealistic.”
Health and Social Services is the Yukon’s biggest department, accounting for nearly 30 per cent of the territory’s total expenses. That’s a slightly smaller piece of the pie than health care gets in a few provinces, but in the Yukon it’s growing fast. Health expenses grew by nearly 50 per cent over the past five years.
As the territory’s population ages, these costs are only expected to grow. As a result, by 2018, the Yukon could face an annual revenue shortfall of as much as $250 million, according to the 2008 Yukon Health Care Review.
The department constantly overshoots its budget every year, even after being topped-up midyear with supplementary spending bills. It overspent its budget by $1.4 million in 2008-09 and by $3.7 million in 2009-10.
One way for the territory to bring health costs in line would be to reinstate premiums. But those fees were deeply unpopular when Yukoners had to pay them previously.
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