Bill Morneau's 1st talks with provincial finance ministers centred on health funding

Even as Prime Minister Justin Trudeau meets with premiers on Monday to discuss climate change and Syrian refugees, provincial finance ministers are already building a federal-provincial agenda of their own. Top issue? Health care.

'It's probably the biggest issue for all of us,' Alberta NDP Finance Minister Joe Ceci said last week

Minister of Finance Bill Morneau will meet his provincial and territorial counterparts next month, with a busy agenda: Will there be another health accord? How will planned federal infastructure money roll out? What about the enhanced pensions the Liberals promised? (Adrian Wyld/Canadian Press)

Even as Prime Minister Justin Trudeau meets with premiers on Monday to discuss climate change and Syrian refugees, provincial finance ministers are already building a federal-provincial agenda of their own.

What's at the top of their list for a meeting with federal Finance Minister Bill Morneau expected next month? In a series of recent interviews with The Canadian Press, one provincial finance minister after another pointed to the need to figure out how to pay for health care.

"It's probably the biggest issue for all of us," Alberta NDP Finance Minister Joe Ceci said last week, before adding that health-care spending consumes about 40 per cent of the province's operational budget — easily the biggest chunk.

Federal and provincial finance ministers have been meeting regularly over the years, even though meetings at the highest level — between the premiers and the prime minister — were suspended for seven years by Stephen Harper. But the Liberal platform that propelled Trudeau to electoral victory in October has wide-ranging implications for many files in the provinces, and the finance ministers will have more than a few items to discuss.

The ministers say they hope to come away from the late December meeting with a better understanding of the election pledges. They'll be looking to Morneau to explain the implementation of Liberal promises such as infrastructure spending, taxation changes and public-pension enhancement.

But it's the federal promise of a new health-care accord that unites them, since there's nothing more central to fiscal health than figuring out a different way to control that sector's ever-increasing price tag.

"We're hoping the federal government will take a larger role in terms of paying health-care costs," said Manitoba NDP Finance Minister Greg Dewar, who added that health costs chew up 45 per cent of his province's budget.

"It's also one of the budgetary items that increases quicker, more rapidly, than the growth in our economy."

Last health accord expired

Ontario's Liberal Finance Minister Charles Sousa said all the provinces are under some stress when it comes to health care.

"Demographic changes are what they are and have to make some transformative changes to our health-care system in order to make us sustainable," Sousa, whose office appointed Morneau as a pension adviser in 2012, said in a recent interview in Ottawa.

The federal Liberals pledged to negotiate a new health accord and provide a fresh commitment for long-term funding. Federal Health Minister Jane Philpott has already begun exploratory talks with her provincial counterparts.

The former Conservative government allowed the previous health accord to expire. It was a 10-year, $41-billion agreement signed in 2004 under then-prime minister Paul Martin which guaranteed federal health transfer payments would increase annually by six per cent.

In 2011, the Tories decided unilaterally that the Canada Health Transfer would grow by six per cent a year until 2017-18. After that, health transfers will be tied to the rate of economic growth and inflation, but the annual rate of increase won't fall below three per cent.

The funding is not tied to any agreed upon policy objectives, leaving provinces and territories to solve issues on their own.

How will new infrastructure funding work?

Beyond health care, the finance ministers expect the meeting with Morneau to also focus on the Liberals' commitments to spend big on infrastructure.

The party pledged to provide billions of dollars worth of funding for the provinces, territories and municipalities for infrastructure projects such as public transit.

Ministers say they want to learn more about how that program will work.

"Probably one of their biggest planks was around infrastructure, so like many jurisdictions there are a lot of infrastructure opportunities (in Nova Scotia)," said Nova Scotia's Liberal Finance Minister Randy Delorey.

"It's well known that our economy has struggled the last few years, so we have to look with that lens when we're having discussions."

Delorey, who also serves as the province's environment minister, said he will have particular interest in the federal government's promised "green" infrastructure funding for projects like wastewater facilities.

The provinces, like Ottawa, expect infrastructure spending to boost the country's sluggish economy and create jobs.

In Manitoba, Dewar said the government has taken advantage of low interest rates to make large infrastructure investments of its own. He insisted the plan will make the province a leader in economic growth next year.

"I wanted to encourage him to fulfil his promise," Dewar said of the Liberals' infrastructure vow, which Morneau is partially responsible for.

The finance ministers interviewed also shared other issues they were hoping to discuss with Morneau at the meeting, which is expected the week of Dec. 21. Here are a few of them:

  • Ontario's Sousa wants to talk about the Trudeau government's vow to beef up pensions and how a Canada Pension Plan enhancement would fit with the Ontario Retirement Pension Plan. He also anticipates talks on the planned national co-operative securities regulator and the possible impacts of the Trans-Pacific Partnership treaty.
  • Alberta's Ceci hopes to discuss Ottawa's plans for social-housing investments and taxation. He says he wants to ensure any changes to the federal tax system won't affect the significant, lower-tax advantage Alberta has relative to other provinces.
  • Manitoba's Dewar says he not only wants Ottawa to give the provinces their "fair share" for health care, but also for education. He hopes to discuss the federal pension-enhancement plan as well.
  • Nova Scotia's Delorey says he also wants to learn more about federal taxation adjustments to make sure they don't have negative consequences for the province. He says his focus is getting Nova Scotia out of deficit on the road to "fiscal sustainability."


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