Canada's premiers and territorial leaders say they will work to establish a pan-Canadian purchasing alliance to bulk-buy prescription drugs, medical supplies and equipment.

From left to right, Quebec Premier Jean Charest, New Brunswick Premier Shawn Graham, British Columbia Premier Gordon Campbell and Saskatchewan Premier Brad Wall sit down for the morning session of the annual Council of the Federation meeting in Winnipeg on Friday. (John Woods/Canadian Press)At the close of the annual summer meeting of the Council of the Federation on Friday in Winnipeg, Manitoba Premier Greg Selinger said provinces must continue to find innovative ways to offer health-care services to Canadians in the "most cost-effective fashion possible."

Selinger, who hosted the two-day meeting, said the premiers have directed their health and finance ministers to put the plan together.

He also said the leaders talked briefly about the federal government's move to scrap the mandatory long-form census, but added "there was no consensus on the census."

Ontario Premier Dalton McGuinty said the plan would give the provinces more leverage with the federal government to get more money for health care.

"If we can work together to reduce the cost of our drugs, that frees up more money for us to spend inside the health-care system in a way that directly affects patient care," he said.

Charest sees 'good faith' in funding accord talks

Quebec Premier Jean Charest said the comments of a spokesman for federal Finance Minister Jim Flaherty in Friday's Globe and Mail offered some "precision" that the minister never tied health-care funding to GDP growth.

Flaherty had been quoted as saying Thursday that provinces "are going to have to look at their budgets and figure out ways of providing health-care services without rampant growth."

"It's not about reducing spending on health care," Flaherty was quoted as saying in the New Brunswick Telegraph-Journal. "It's about controlling the rate of growth so that health care doesn't run away from the level of real GDP growth in the provinces."

The comment prompted Charest, who had called the rising cost of health care the "elephant in the room" at the conference, to lash out at the finance minister, saying it was "not sufficient" if he intended to fund health care only according to GDP growth.

But on Friday, Charest told reporters he believes all parties are acting in good faith to reach an agreement to replace the federal health-care funding accord, which is set to expire in 2014.

"The increased cost of health care is relevant to the fact that the population is growing older and the costs we have in Canada reflect what exists everywhere else in the world, and so I expect us to make decisions that reflect what the real needs of Canadians are," he said.

"It will be tough, no doubt about that, but we expect we'll arrive at the right results in a spirit of partnership with the federal government."