Analysis Shows Federal Health Spending Exceeds Provinces

Despite criticism from provincial premiers regarding the federal government’s slow increase in health spending, data analysis spanning 20 years shows that federal transfers have consistently exceeded the growth in provincial health budgets.

In 2023, federal health transfers totaled $47.1 billion, marking a 212 percent increase from 2005 when transfers were $15.1 billion. Over the same period, total spending by all 10 provinces rose to $221.9 billion from $86.2 billion, a 158 percent increase.

The Canadian Press, in collaboration with Humber College StoryLab, gathered data on provincial health budgets and federal health transfers from 2004 to 2023 to monitor annual spending following the 2004 federal-provincial health accord initiated under former Liberal prime minister Paul Martin.

These findings contradict the heated rhetoric during federal and provincial health negotiations in recent years, particularly in the wake of the COVID-19 pandemic’s strain on health systems.

Two years ago, a shortage of health workers resulted in emergency room closures and extensive service backlogs nationwide, prompting premiers to demand increased federal contributions to health spending.

Former Manitoba premier Heather Stefanson noted after a meeting with provincial leaders in late 2022 that the federal share of health spending had gradually decreased over time despite an initial even split.

In 1959, governments originally planned to split health-care costs evenly between Ottawa and provincial governments before most provinces had medicare. However, the funding model changed significantly in the 1970s and has since undergone multiple revisions.

Contrary to claims of a decline in federal transfers over the past two decades, data indicates that federal transfers have grown marginally faster than provincial health spending post the Martin health accord in 2004.

In 2005-06, federal health transfers saw a 39 percent increase in one year, whereas provincial health spending grew by six percent.

This shift raised the federal share of total health spending from 17.5 percent to 20.7 percent.

During the COVID-19 pandemic, federal health-care spending surged due to specific transfers. However, these additional funds ceased in 2022-23, by which time the federal share of total provincial spending had only slightly increased to 21.2 percent.

This reality was not acknowledged during the premiers’ calls for increased federal funding post-pandemic, as Health Minister Mark Holland noted in a recent interview.

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Holland expressed willingness to enhance the transparency of health spending information to shift focus from debating dollar values to addressing critical health care issues.

The latest health agreements urge provinces to enhance national health data collection but do not specifically address tracking federal and provincial spending.

Despite varying rates of per capita spending growth among provinces, it is evident that health care spending in Canada is on the rise.

Per person, Canada’s health transfers increased six times faster than population growth, reaching $1,115 per person in 2023 compared to $427 per person in 2005.

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