New Brunswick criticizes Flaherty's health proposal

Finance Minister Blaine Higgs is criticizing the federal government's health-funding proposal that was released on Monday.

Blaine Higgs said the federal proposal would hurt smaller provinces

Federal Finance Minister Jim Flaherty, right, speaks to Bank of Canada governor Mark Carney prior to to a provincial, territorial and federal finance ministers meeting in Victoria Monday. (Geoff Howe/Canadian Press) (Geoff Howe/Canadian Press)

The federal government’s new health-care funding plan will place heavier burdens on small provinces, according to Finance Minister Blaine Higgs.

Federal Finance Minister Jim Flaherty announced on Monday at a meeting in Victoria that health transfers will be tied to economic growth starting in 2017.

Several provinces have already blasted the federal government for the move.

Higgs also said the proposed move is unacceptable to the New Brunswick government.

"We understand that the federal government is trying to rein in health care spending. Our government is faced with similar challenges, and we are addressing them through the government renewal process," Higgs said.

"But by tying health care dollars to GDP, the federal government is making the burden even heavier for smaller provinces with declining and aging populations."

The New Brunswick government has already asked the Department of Health to limit its new revenue demands to three per cent.

Hopeful for a different deal

Higgs also dismissed a report in a national newspaper that New Brunswick didn’t speak out against the federal government on Monday because the provincial government feared "retribution."

Higgs said that's not true. He said the other provincial finance ministers organized a media scrum with reporters after he'd already left for the airport.

Higgs said he’s hopeful the federal government will reconsider its plan.

The federal plan would have Ottawa guarantee six per cent health-care funding increases until the 2016-17 fiscal year.

After then, the annual increase will be tied to nominal GDP, but is guaranteed to be at least three per cent.

Nominal GDP is the monetary value of all goods and services produced within the country annually, including inflation. If nominal GDP rises four per cent and inflation is two per cent, the economy's real GDP growth is two per cent.

The current agreement, which guarantees six per cent a year increases, expires in 2014, and the provinces wanted that to continue.