Health care funding talks turn hostile amid walkout threats

There was no deal in sight Monday as the federal government sat down with the provinces to try to hash out a long-term agreement on the future of health-care funding in Canada.

Ottawa offering 3.5% annual increase plus $8B over 10 years for mental health and home care

Quebec Health Minister Gaetan Barrette tells reporters Monday his province will walk away from talks between federal and provincial finance and health ministers in Ottawa if the federal government's health funding proposal doesn't change. (Adrian Wyld/Canadian Press)

The gloves have come off as provincial and federal ministers square off in Ottawa for another round of what has deteriorated into a bitter clash over long-term health funding.

The provinces are accusing the Trudeau government of refusing to negotiate a new federal health-care funding framework, instead putting forward a lacklustre take-it-or-leave-it offer.

Quebec Health Minister Gaétan Barrette said his province plans to walk out of the meetings if the federal government doesn't put more money on the table.

"This is not a negotiation process; this is an ultimatum," Barrette said before the day-long talks between federal and provincial finance and health ministers got underway.

"We cannot resolve that over a one day period ... and we will walk away if the proposal doesn't change."

The provinces say Ottawa's most recent proposal is a step back from the previous Harper government's plan.

But the federal Liberals don't appear ready to budge from an offer that would fix health-care increases at 3.5 per cent per year — up from three per cent — and add in about $8 billion over 10 years for home care and mental health.

On the way in to Monday's meeting, federal Health Minister Jane Philpott said the government is offering to invest billions in targeted funding for home care and mental health.

She said there are 500,000 Canadians who are not able to go to work because they are mentally ill, while more than 15 per cent of patients in hospital beds are occupied by people who could actually be at home or in the community.

"The kind of money we're putting on the table today for the provinces and territories means that we will able to close that gap entirely [in those specific areas]. This is a historical, transformative offer," she said. "We know the Canada Health Transfer is the biggest it's ever been."

But the federal offer would mean a decline in the quality of care across Canada, said Barrette, who remains hopeful that the federal finance minister will find his way to a better offer.

All of the provincial heath ministers are in agreement that the current deal is insufficient, said Kelvin Goertzen, Manitoba's health minister, surrounded by his counterparts from the other provinces and territories just before the meeting started.

He said it was "completely ridiculous" for Philpott to call the deal "transformative."

"If Minister Philpott is calling this is a transformative proposal, she's right. She'll be transforming the system and for the worse," Barrette added. "Maybe Bill Morneau will have an epiphany this afternoon. At this point, I don't see any light."

Provincial health ministers said Monday morning they won't accept threats and ultimatums from the federal government, ahead of a meeting on health care funding in Ottawa. They called the federal government's latest offer as "ridiculous." (CBC)

British Columbia Finance Minister Michael de Jong was asked if his province would also walk out of the talks. "We'll see," he said.

"I don't want to over-dramatize this, but I think we are at a point of departure, potentially, for the federal government where we will see to what degree that notion of collaboration and co-operation is real or something else."

Talks dogged by acrimony

Without a deal, the health-transfer arrangement would likely revert to the Harper plan of at least three per cent a year, but provinces would also be looking to Ottawa to make good on an election promise to add $3 billion for home care.

Provinces say that framework punches a hole in their budgets and leaves them without the ability to innovate and modernize their health care systems.

Talks have been acrimonious from the get-go. Several provinces wondered out loud late last week whether it was worth the trek to Ottawa for the meeting; Barrette has been tweeting aggressively at Morneau to be more generous.

A Sunday dinner meeting at Rideau Gate on the grounds of the Governor General's residence yielded no compromise, leaving provincial ministers bitter and critical of what they described as an inadequate, take-it-or-leave-it offer from the Trudeau government.

Finance Minister Bill Morneau was being accused by the provinces of issuing an 'ultimatum' on federal health care transfers. (Adrian Wyld/The Canadian Press)

Morneau said late Sunday that he hoped the provinces would have an open mind heading into the discussions. His Monday news release emphasized other subjects on the agenda — the state of the economy, infrastructure and retirement income.

Health ministers from across the country were to join the finance ministers during a special afternoon session. When asked Sunday about his expectations for Monday, de Jong gave a short reply: "Intense discussions."

Morneau said Sunday that the federal government wants to ensure that the talks lead to measurable outcomes "that will make a real difference for Canadians," particularly in mental health and home care.

'Clever proposal' a disappointment, B.C. says

Morneau has also said that the federal government would put a "significant" amount of money into those areas over a period longer than five years.

Barrette and de Jong said Morneau proposed a firm 3.5 per cent annual increase in transfers as well as another $8 billion over 10 years for specific areas such as home care and mental health. Ottawa is also talking about investing $1 billion into home-care infrastructure over four years, Barrette said.

The money is back-end loaded, with more of it to be transferred in later years rather than right away.

De Jong says the offer could mean even less money for provinces over the next decade, compared to the existing Liberal plan: invest $3 billion over four years into home care and allow the six per cent annual increase in transfers fall to either three per cent or an average of nominal economic growth — whichever is higher.

The federal government's own projections predict that nominal growth will average above 3.5 per cent over the next decade, de Jong noted.

"A clever proposal but not one that really addresses the pressures and a disappointment for us."

Even with the 2015 Liberal platform's pledge of $3 billion for home care, de Jong said he didn't think his province would necessarily be better off.

He also voiced concerns about the way he says the offer was delivered.

"The take-it-or-leave-it attitude that seems to be emanating from the Prime Minister's Office on this is not productive, it's certainly not collaborative, and really not acceptable."

Barrette said if the provinces accept Morneau's offer then the federal share of health funding will actually decrease from about 23 per cent right now to possibly less than 20 per cent.

An analysis by provinces released Monday compared the potential outcomes of the status quo versus Morneau's latest offer.

The data said that the status-quo scenario of annual increases of three per cent, or the average rate of nominal economic growth, in addition to $3 billion in targeted funding, would mean a total of $445.2 billion in federal health-care cash over the next decade.

It would also lower the federal share of funding in provincial health budgets to 20.2 per cent in 2026-27 from 22.9 per cent next year.

In comparison, the document said Morneau's offer of a firm 3.5 per cent annual increase and $8 billion over 10 years would provide the provinces with total of $445.9 billion over the next decade.

Under that scenario, the share of federal funding would fall to 19.8 per cent in 2026-27 from 23.1 per cent in next year, the data noted.

With files from the CBC's John Paul Tasker