Nova Scotia Premier Darrell Dexter is rejecting the federal government's position that its new health-care funding plan isn't negotiable.

"Absolutely it's negotiable," he said in an interview on Tuesday.

Dexter said it's "profoundly disappointing" that Finance Minister Jim Flaherty issued what amounted to an ultimatum on health funding on Monday at a meeting of finance ministers in Victoria.

Federal Finance Minister Jim Flaherty speaks to journalists before the provincial, territorial and federal finance ministers meeting in Victoria on Monday. He surprised the finance ministers by announcing that after 2017, federal health care funding will no longer increase by six per cent annually. (Geoff Howe/Canadian Press)Flaherty announced that current six per cent annual increases will stay in place through 2017, but by 2018 the increases will drop and be tied to the rate of nominal GDP, which is the measure of economic growth including inflation.

Dexter said the federal Conservative government knows the premiers are scheduled to meet in the new year to develop a position on health funding.

The NDP premier said the decision will hurt smaller provinces like Nova Scotia.

"It will essentially divide the country into wealthier provinces that have a better ability to provide health care and those with lesser ability to be able to provide the same services," he added.

Dexter also said there will be another federal election to fight before any changes would take place.

Ultimatum 'frustrating': Wall

Saskatchewan Premier Brad Wall said the federal government's ultimatum on health funding is frustrating.

Wall said the six per cent extension is not as long as the province wanted.

But he also thinks there could be other opportunities to get more money from Ottawa for innovations to improve patient care.

Wall said that cash should be recognized over and above health transfer payments.

Six provinces described the meeting with Flaherty on Monday as unprecedented and one-sided.

The majority of provincial and territorial leaders said the deal amounted to a take-it-or-leave-it offer that was slapped on the table without any chance of discussion.

"We were expecting to discuss how we were going to discuss federal transfers," Quebec Finance Minister Raymond Bachand said after the meeting.

Ontario Finance Minister Dwight Duncan called Flaherty's offer a lump of coal and said Monday he also expected to be involved in health-funding negotiations that addressed the formula, but that wasn't the case.

"We thought we'd come and hear that sort of thing again, and then get an invitation to work together on these things, recognizing the challenges that all of us face."

Tuesday he went a step further.

"We will let the people of Ontario know this represents a significant withdrawal of the federal presence from the delivery of health care, which affects every hospital, every front-line service, over the next 16 years," said Duncan.

"It'll lead to a reduction in the quality of health care across the country."

Duncan said the unilateral action by Ottawa seemed to mark the end of the provincial and federal governments working together as they did for the last health accord in 2004 to target wait times.

"We think there's a real opportunity for governments to work together to save money," he said. "I just think the key is to work together … so I think there's been a huge missed opportunity here."

But in a letter to her provincial and territorial counterparts Tuesday, federal Health Minister Leona Aglukkaq called Flaherty's funding plan "balanced and sustainable" and said it would allow the two levels of government to focus talks on health-care reform rather than financing.

"This investment also provides the opportunity to put the divisive issue of funding behind us to allow us all to focus on the real issue — how to improve the system so you can ensure timely access to health care when needed," Aglukkaq said in the letter.

The letter suggests federal, provincial and territorial officials start working on "an approach to measuring and reporting performance across health systems using common metrics," and adds Aglukkaq has instructed her officials to work with their provincial and territorial counterparts to propose "next steps."

Provinces split

Finance ministers from Manitoba, Prince Edward Island, Newfoundland and Labrador and Nova Scotia also blasted the new transfer arrangement after the meeting.

Flaherty said the new health-spending investments amounts to $178 billion over five years.

B.C. Finance Minister Kevin Falcon said he's happy with the five-year plan.

"From B.C.'s perspective, we think certainty is good thing," he said.

Others were visibly angry.

"I do not want to stand back quietly," said Manitoba's Stan Struthers.

"I'm open to any discussion on any angle in terms of the whole ball of wax of transfers — equalization, health, social transfers. I'm open to speaking with the minister on any of that. We didn't have that. This was very unilateral."

On Tuesday, New Brunswick's finance minister said the federal government is missing an opportunity to have provinces work together and ensure health care is delivered equitably across the country.

Blaine Higgs said the new plan will result in lower funding for his province in the future.

The current situation where rich provinces hire doctors away from others is not in the spirit of the national health program, Higgs said.

With files from CBC News