March 4, 2021 – Provincial and territorial government update on the COVID-19 pandemic
Here is an update on recent decisions and actions by provincial and territorial governments in connection with the COVID-19 pandemic.
Request for additional health funding
Provincial and territorial premiers unanimously reiterated their call on the Canadian government to immediately increase its contribution to the cost of healthcare systems across Canada from 22% to 35%.
As chair of the Council of the Federation, Québec Premier François Legault chaired a meeting to ask the government of Justin Trudeau to increase the Canada Health Transfer (CHT) contribution from $42 billion to $70 billion.
The chair of the Council of the Federation reiterated that financial projections indicate that the federal government will be able to quickly pay off the national debt incurred by the pandemic because the funds it committed were for a one-time expense. However, this is not the case for the provinces and territories, which are facing recurrent expenses. Moreover, health spending increases at a rate of 5% per year for the provinces, unlike other expenses that grow at a rate of about 3%.
“The provinces and territories are financing 78% of health expenses while the federal contribution is only 22%,” said Mr. Legault, pointing out that Quebecers pay 40% of their income taxes to the federal government.
According to the calculations of the provincial and territorial ministers, the federal government could absorb its $328.5 billion deficit over the next few years and end up with a $15 billion surplus for the 2035-2036 financial year. Inversely, over the same period, given growing health expenditures related to an ageing population, new technologies and the cost of medications, the provinces and territories will end up with a total deficit of $155 billion.
The provincial and territorial leaders stated that they have received tacit approval for their request from the opposition parties in Ottawa. When asked about this the day before the Speech from the Throne, Justin Trudeau’s minority government stated that this demand was premature and that the issues around the pandemic had to be resolved first.
Canadian self-sufficiency in medical products
The members of the Council of the Federation also want the country to be self-sufficient in the production of medical and personal protective equipment as well as in the production of medications and vaccines in order to be able to deal with any future pandemics.
“It’s too late for this one, but it’s important that we be self-sufficient in the event of a similar health crisis in the future,” said Mr. Legault.