Download Manitoba Department of Finance Submission to the

Manitoba Department of Finance
Presentation to the Commission
on the Future of Health Care in Canada
Greg Selinger
Minister of Finance
Winnipeg - March 6, 2002
Overview
• Sustainability of health care must be considered
in the context of the Canadian federation itself
and the fiscal arrangements that underpin it
• The fiscal imbalance existing between the two
orders of government is addressed mainly
through the CHST mechanism
• Sustainability of health and other programs
hinges on achieving an effective balance
Spending/Financing Developments
• Health care’s share of provincial budgets
increased over the 1990s
• Key factors:
– provincial decision to reinvest in Health Care in
response to public concerns that access and quality
was deteriorating
– federal cuts in CHST - crowding out other areas
Net Change in Program Spending by Source of Funding, 1994/95 to 1997/98
($ billions)
5
Change in Provincial Own-Source Spending
4
Change in Federal CHST cash Funding
Net Change in Spending
3
2
1
0
-1
-2
-3
-4
Health Care
Other Programs
Crowding-Out
• Health Care demands have been met at the
expense of other needs -- education, justice,
social services, infrastructure and economic
development
• Not a viable long-term solution since these form
the base upon which we maintain and afford our
health care system
Health as a Share of Manitoba's Budget, Baseline Projection to 2020/21
55%
50%
45%
40%
35%
30%
1990/91
1995/96
2000/01
2005/06
2010/11
2015/16
2020/21
Not just a Long-term Issue
• Sustainability has a more immediate dimension
• Provinces are facing a large and immediate cash
crunch as well as difficult choices, while …
• The December Fiscal Monitor points to $10 b
surplus for the federal government in 2001/02
• Health as a percentage of GDP is expected to
set new high water marks over the medium term
Health Expenditure as a Percentage of GDP, by Component
12
Forecast
Private Sector
Other Public
10
Net Provincial
Federal Cash
8
6
4
2
0
1981
1986
1991
1996
2001p
2006f
CHST
• Federal funding for provincial social programs
has been eroded since the inception of EPF
through a series of unilateral federal changes to
the funding formula
• CHST cash as a share of provincial social
program funding averaged about 18% in the first
half of the 1990’s, fell to 11% by 1998/99
• The current level of 14% is forecast to fall to 13%
Federal Cash Transfers as a Share of Total Provincial/Territorial
Government Spending on Major Social Programs
25%
20%
15%
10%
5%
0%
1985/86
1990/91
1995/96
2000/01
2005/06f
CHST
• Manitoba favours a durable CHST-based solution to
the problem of funding health care
• Options like the recent proliferation of federal “tiedfunding” schemes should be avoided since
– ongoing provincial funding commitments are not
matched by federal government,
– they discriminate against provinces with lower fiscal
capacity, and
– they fail to reflect provincial priorities.
CHST and Federalism
• Need to adopt a more cooperative than unilateral
model to restore confidence in partnership
• Current CHST funding levels are arbitrary
– not based on actual costs
– not based on ability to pay (revenue capacity)
– not based on a negotiated or agreed to “share”
• Federal/provincial cooperation and decisionmaking to sustain CPP is a better model
Conclusion
• The task we face is not just to balance our own
books, but to do it in a way that does not
compromise our long-term economic potential
and the provision of important public services
• Our single-payer publicly administered health
care system confers a cost advantage that must
be preserved
Conclusion
• There is probably enough fiscal capacity in
government - writ large - to manage the cost
pressures over the next decade, if we plan well
• The challenge is federal government needs to
become more fully engaged in funding health
care through the CHST to address both the
immediate cost pressures and the larger ones
that loom in the coming decades