B.C. Health Minister Kevin Falcon said health funding reductions will mean administrative changes, not service cuts. (B.C. Electronic Hansard)

An estimated 90 agencies that have contracts with the Vancouver Coastal Health Region are being told to reduce costs, but provincial Health Minister Kevin Falcon says the reductions will not mean a cut in services.

Falcon told the legislature Tuesday that his ministry is making changes in order to provide better service for those individuals coping with both mental health and addiction issues.

But what the government referred to as "changes," the opposition simply called "cuts."

"Dozens of agencies have got letters this week cutting substantially their funding," said B.C. NDP health critic Adrian Dix.

Community agencies in the Vancouver Coastal Health Authority — the largest in the province — are the latest to be told of changes to funding, and some of the agencies have had contracts cancelled.

'No fat left to cut,' opposition says

An internal memo from the executive director of one agency, Coast Mental Health in Vancouver, said the reductions are "staggering" and "incomprehensible."

The minister said the health authority was carrying out his ministry's instructions.

"What Vancouver Coastal is doing is absolutely correct. They are saying to contract service providers that we are not going to fund administration and overhead costs beyond 10 per cent," Falcon told the House.

The opposition argued that there's no fat left to cut.

"Essentially what the minister is explaining in the house is, 'there are a whole bunch of people we're not going to care for anymore, and we're going to save money that way,'" said Dix.

Falcon said the changes are to apply to administrative costs, not services.