During the 2015 election and in the Minister of Health’s mandate letter, the Liberals made many significant promises, including:

  • Secure long-term funding for the provinces and territories as part of a new, multi-year Health Accord
  • Support for the delivery of more and better home care services, including in-home caregivers, financial supports for family care, and palliative care
  • Expanded mental health services
  • More affordable and accessible prescription drugs through bulk buying

Budget 2017 was extremely thin on health care issues, and Canadians can’t keep waiting for the Liberals to make real progress. Here’s a breakdown of the 2017/18 Federal Budget on health care:

The Health Accord and Long-Term Funding

The federal government failed to renegotiate a new health accord and instead negotiated separate bilateral deals with the provinces and territories. The deals agreed on a Canada Health Transfer (CHT) – the largest federal transfer of money to the provinces and territories – of $37.1 billion in 2017-18, with increases of a minimum 3 per cent per year or a three-year moving average of nominal GDP growth. In Budget 2017, the Liberal government portrays this as “long-term, predictable, and growing funding.” However, to put this into context, the 2004-2014 Health Accord, negotiated by the Martin government, provided a 6 per cent yearly increase (known as the escalator) for 10 years. Then in 2011, the Harper Conservatives decided to cut this annual increase to a minimum of 3 per cent once the Accord expired. Although the 6 per cent escalator was maintained beyond 2014 until a new Health Accord could be negotiated, Budget 2017 has now adopted the same cut in funding increases that was proposed by the Harper government. The impact of this reduced escalator in federal health care funding is of grave concern.

The Parliamentary Budget Officer and the Department of Finance, among others, point out that annual funding increases of 5.2 per cent per year is the minimum needed to maintain the current level of public health care services. Canada’s aging population, according to the Canadian Institute of Health Information, will raise health care costs by $2 billion per year. The CHT that has been proposed will simply not be enough, and it is anticipated that as health care needs start to outpace federal funding, provinces and territories will have to make some hard choices about trimming existing public health care services, or maintaining them at the expense of other public services that Canadians rely on.

Another gaping hole left by the lack of a cohesive Health Accord is that there is no longer a mechanism to enforce the Canada Health Act, and no funds have been allocated for this purpose. The Canada Health Transfer was supposed to come with conditions, so that if any principles of the Act were violated, financial support could be withdrawn.

Our health care system was designed to serve everyone equally. However, the federal government has neglected to enforce the Canada Health Act in the past, opening the door to violations such as extra billing by doctors and private clinics. In addition, there is currently no requirement that the CHT be spent on health care at all, as the money is funnelled into the general coffers of each province. A new health accord would have been an opportunity for the federal government to enforce the Canada Health Act and demand accountability for health care dollars transferred, thereby ensuring an equitable, universally accessible system nationwide.

Home Care and Mental Health

As negotiated in the bilateral deals, there is new money in the budget for home care and mental health, totalling $11 billion. The $6 billion for home care over ten years includes support for home and community care, palliative care, and informal care providers as per the Liberal mandate. Unlike the CHT, funds for home care and mental health are to come with an accountability framework that includes a detailed plan outlining how the funds will be spent, performance indicators, and mechanisms for annual public reporting.

The $5 billion commitment to home care and mental health over ten years is most welcome; but there is no requirement that this money be spent on the public health care system, as opposed to private services. Since the money is allocated for programs outside existing services, it should not be confused as a ‘top-up’ on the CHT described earlier. CUPE’s concern is that public money may very well be spent on for-profit services.

Prescription Drugs

Recognizing that the cost of prescription drugs per capita in Canada is the second highest in the world, the government has allocated $140 million over 5 years to improve access to prescription medications, lower drug prices, and support appropriate prescribing. The budget was short on details about what this all means, but in an interview with the CBC, Health Minister Jane Philpott described that her plan involves looking at a few regulatory changes and working with organizations on price review mechanisms to lower drug costs. When asked why not a universal drug plan, her response was that it would be “irresponsible” for a public drug plan to ask Canadians to publicly fund the current high cost of drugs, and that regulatory changes need to happen first. The timeline of such regulatory changes would delay the prospect of a national public drug plan well beyond the next federal election.

CUPE and other health advocates maintain that it has been proven in countries like New Zealand that a universal drug plan is the major catalyst needed to drive down the costs of prescription drugs. In fact, Canada is the only developed country in the world with a universal health care system that does not cover prescription drugs. The budget seems to be putting the cart before the horse, proposing what would amount to a slow start to tackling a rapidly growing problem.

The budget also commits $18.2 million per year for Health Canada, the Patented Medicine Prices Review Board, and the Canadian Agency for Drugs and Technologies in Health. These investments are consistent with some of the smaller changes we expect to see in drug pricing and appropriate prescribing.

Other Investments


The budget provides $108 million over four years for the Territories Health Investment Fund. This fund was introduced in 2014 and is provided in addition to the CHT to address unique challenges of the territories such as costly medical transport, mental health, addictions, and chronic disease management.

First Nations

The Liberals propose $270 million over 5 years for improvements and repairs to on-reserve health facilities as well as monies to address issues such as mental health, maternal and child health, chronic diseases, and a drug strategy. With over 271 nursing stations and health centres servicing First Nations communities, that would amount to just under $200,000 per facility, per year.

Data and Innovation

The government committed $15 million per year ongoing for Canadian Institute for Health Information, which gathers health data and reports on health system performance, as well as $51 million over 3 years for the Canadian Foundation for Healthcare Improvement starting 2019. There are no further details on the latter, and a promise that starts in 2019 suggests that the Liberals either assume, or are selling the idea, that they will be re-elected at that time to follow through on this initiative.


To address the increased dependency on in-home caregivers in our society, the 2017/18 Federal Budget proposes some improvements to the tax credit system for caregivers. It will allow some caregivers who previously did not qualify for tax credits to benefit, such as those who do not live with their family members. The budget also introduces a new EI benefit that gives eligible caregivers up to 15 weeks of benefits while they are temporarily away from work in order to care for a critically ill or injured family member.

What It All Means

Though the government included much more on health care in this year’s budget than last, it failed to deliver the bold, robust, nationally cohesive investment in health care that this country needs. This lack of a national vision is becoming an increasingly urgent concern. Proposing a Canada Health Transfer that falls short of what’s needed to maintain our public health care system will likely lead to cuts to services and quality of care, privatization that further increases the cost of health care, and an inability to respond to increased pressures on the public health care system. Those pressures include an aging population, a widening gap between the rich and the poor, and rising prices of prescription drugs that individuals and even workplace insurance plans soon won’t be able to afford. This federal budget is short on vision, but long on promises. Nearly every health care promise made in the 2017 federal budget is back-end loaded, extending beyond the next federal election when those funds are anything but guaranteed.

Not only does Canada need adequate funding for our public health care system, Canadians also need to agree on and plan for a national public drug plan, a national strategy for seniors and long term care and national oversight of the Canada Health Act to keep our system public, accessible, and equitable for all. These public solutions are both necessary and achievable, and the time is now – not some day in the imaginable future. It is a vision that CUPE and health advocates across the country will push for now and in future federal budgets.