What is the Health Accord and what's at stake in Monday's talks?

Finance and health ministers are meeting in Ottawa today, trying to reach an agreement on federal funding to the provinces. But the two sides remain far apart on the level of cash needed for a new Health Accord.

Federal agreement was designed to cut wait times, provide stable funding to provinces and territories

Minister of Finance Bill Morneau makes his way to meet with provincial counterparts at the Finance Ministers meeting in Ottawa, Monday December 19, 2016. (Adrian Wyld/The Canadian Press)

Finance and health ministers are meeting in Ottawa today, trying to reach an agreement on federal funding to the provinces. But the two sides remain far apart on the level of cash needed for a new Health Accord.

At issue is the level of transfers and whether some of the money should be targeted for certain priorities like home care and mental health services after the extended 10-year health accord expires. 

What is the Health Accord?

The 2004 Health Accord is a legal agreement between the federal and provincial and territorial governments brought in by former prime minister Paul Martin.

At the time, he called it a "fix for a generation" that promised to reduce wait times and improve patient care with a $41 billion injection over a decade.

After deep cuts through the 1990s, the goal was to provide stable funding through a 10-year spending plan that boosted federal transfers by six per cent each year.

It also recommitted to the principles of the Canada Health Act: public administration, comprehensiveness, universality, portability and accessibility.

What are provinces pushing for now?

In 2011, the Conservatives extended the six per cent "escalator" to April 1, 2017, but said the transfer would be reduced after that date, either to annual minimum rise of three per cent, or an increase matched to the rate of GDP growth, whichever is higher.

Reeling with rising costs and an aging population, the provinces want the Liberal government to restore funding levels, but Health Minister Jane Philpott and Finance Minister Bill Morneau have insisted any increases will be tied to targeted programs such as mental health and home care.

Earlier this week, Ontario proposed a new 10-year federal funding plan that would up transfers to the provinces by 5.2 per cent a year.

What dollars are in dispute?

In 2015-16, the federal government earmarked $34 billion for the Canada Health Transfer. This represents about 23 per cent of provincial/territorial government health spending and is the largest major federal transfer.

This climbed to $36.1 billion this fiscal year, and is set to increase to $40.9 billion by 2019-2020.

Annual allocations are made on an equal per capita basis.

For any given year, the CHT cash is divided by population, and each province and territory is allocated its share according to its own population.

Did Accord fix system failures?

The Wait Time Alliance has found that progress has been made in the five areas identified in the Health Accord (cardiac care, cancer care, diagnostic imaging, joint replacement and sight restoration), but wait times for care other medical procedures and treatments is spotty across the country, according to its 2015 report.

The alliance report also found much discrepancy among provinces and that timely access is often still affected by where you live and how old you are.

Can feds pull back cash?

If a province or territory is found to be extra-billing or imposing user charges, the federal government can deduct payments from the CHT.

Non-compliance with the principles or conditions of the Canada Health Act can also lead to penalties.

Disagreements between the provinces and the federal government can be resolved through a dispute avoidance and resolution process that was formalized in the 2004 Health Accord.

What did Justin Trudeau promise?

The 2015 Liberal campaign promise was to provide "collaborative federal leadership" to negotiate a new Health Accord, and to make home care more available, prescription drugs more affordable and mental health care more accessible.

The party also pledged an immediate investment of $3 billion over four years to improve home care services.

Trudeau did not make any commitment to restore the six per cent annual funding increase.