What happens if federal health transfers get age-adjusted

Canada's provinces have very different age structures and provincial governments with older populations want age-adjusted health transfer payments. Here's how the health-care pot of gold gets divided if they get their way.

Age matters when it comes to health costs, so some provinces want funding transfers to reflect that

Health ministers discussed moving to an aged-based formula for federal health transfers but could not reach a consensus at their meetings in Vancouver last week. (Darryl Dyck/Canadian Press)

Some provinces — like Quebec and British Columbia — would gain hundreds of millions of dollars, while others — like Alberta — would lose millions if federal health funding was allocated using an age-based formula rather than the current per capita calculation.

B.C. Health Minister Terry Lake says the per capita transfer puts provinces that have lots of seniors at a disadvantage, while benefiting the younger provinces. 

At a recent meeting in Vancouver, hosted by Lake, provincial and territorial health ministers discussed moving to an aged-based formula but could not reach a consensus.

"There are winners and losers when you have that kind of an argument," Lake told CBC News.

In 2012, the federal government changed the terms of the now-$36 billion Canada health transfer so that it is calculated based on population size.

The B.C. government was not happy with the changes, as it cost the province hundreds of millions of dollars, Lake says.

Age matters

Before Canadians celebrate their first birthday, government has spent about $11,000 on their health care. (Denis Sinyakov/Reuters)

Age matters when it comes to health-care expenditure.

In our first year, most of us cost the health care system about $11,000.

By the time we're just a few years older, the system hits its low point paying for our health care.

Then costs slowly increase until Canadians are in their 60s, when expenditures begin to skyrocket.

The numbers are from the Canadian Institute for Health Information, for 2013, the latest year available.

Per capita government health expenditures by age, Canada, 2013

According to the CIHI, "while Canadians age 65 and older account for about 15 per cent of the Canadian population, they consume more than 45 per cent of all public-sector health care dollars spent by provinces and territories."

Statistics Canada says that the age structure of the provinces and territories varies greatly. 

Taking age into account

Canadians 65 years and older make up 15 per cent of the country's population but consume more than 45 per cent of government health-care dollars, according to CIHI. (

So what happens if age were taken into account when determining health transfers?  

Using the numbers from the above graph for per capita health expenditures and 2013 population numbers from Statistics Canada, CBC News recalculated the Canada Health Transfer amounts to the provinces.

Quebec would have received $241 million more than it received for the 2014-15 fiscal year. New Brunswick would have pocketed 5.6 per cent more.

Alberta, the big winner when the government changed the formula in 2012, would be the big loser with an age-adjusted health transfer. The province's transfer would tumble $455 million, or 12.2 per cent.

The federal health transfer accounts for only about 22 per cent of government-funded health care, with the provinces pushing for an increase to 25 per cent.

Health transfers to the provinces, 2014-15, if age-adjusted

(We've left out the North because of the territories' low population and different expenditure patterns and issues.)

B.C. health funding considers age

B.C. Health Minister Terry Lake is flanked by his provincial and territorial counterparts during a news conference in Vancouver on Jan. 20, the first day of the ministers' conference. (Darryl Dyck/Canadian Press)

The B.C. government funds its regional health authorities based on a formula that takes age into account and "we think that's the equitable way to divide health care finances up, and we think the same should go for the federal government," Lake says.

He adds that while age is the biggest single influence on health-care costs, that's "not to say you couldn't take other things into account as well" in setting federal health transfer amounts.

His ministry also takes into consideration things like the incidence of various diseases, types of facilities and other factors. Younger regions in B.C. get fewer provincial health dollars on a per capita basis compared to regions with an older population.

Before the 2012 changes, the federal health transfer calculation was partially based on economic need.

(This sortable table has the numbers in dollars for the per capita Canada Health Transfer to the provinces and what the transfer would be if age-adjusted, as in the second graph above.)


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