Brian Gallant is sworn-in as New Brunswick’s 33rd premier in Fredericton on Oct. 7, 2014. Gallant announced Thursday morning that his province had reached a 10-year health-care funding agreement that is similar to what Ottawa has been offering but will be tied to the growth in national GDP and will increase if another province or territory strikes a better deal.Andrew Vaughan/The Canadian Press
New Brunswick has broken ranks with the other provinces and territories to strike a bilateral agreement on health funding with Ottawa, a move that angered other provincial ministers who had rejected what the federal government put on the table earlier this week.
Premier Brian Gallant announced Thursday morning that his province had reached a 10-year agreement that is similar to what Ottawa has been offering but will be tied to the growth in national GDP and will increase if another province or territory strikes a better deal.
The arrangement with New Brunswick marks a crack in the united stand adopted by the provinces and territories in rebuffing a cut to the annual increase in the Canada Health Transfer. The federal Liberals have adopted a plan put in place by the former Conservative government to halve the increase in the transfer to 3 per cent from 6 per cent, where it has been since 2004, but sweetened the offer with promises of additional funding for home care and mental-health programs.
Ontario Finance Minister Charles Sousa said the fact that Ottawa is willing to strike bilateral deals with individual province could create "a patchwork" system of health care across Canada.
But Jane Philpott, the federal Health Minister, said the agreement was good news for the people of New Brunswick and it would not surprise her to see other provinces and territories following suit.
"I have had a few further conversations with some of my counterparts since Monday and I think they've wanted to clarify a few details and I think we'll see what the next few days bring," Dr. Philpott said in an interview with The Globe and Mail.
The deal would give New Brunswick an additional investment of $230-million for home care and mental health over 10 years, and would keep the increase to the Canada Health Transfer at 3 per cent.
Statistics Canada reported that New Brunswick was the province with the highest proportion of people 65 or older, as of July, 2015.
The federal government made an offer Monday afternoon that would have provided $11.5-billion over 10 years for mental health and home care, as well as a new health-transfer formula that would fix the rate of annual increases at 3.5 per cent for the next five years, without allowing for increases to the growth in GDP.
Provinces rejected the deal as insufficient to meet growing health-care needs and said the offer would actually see the federal share of health spending decline over time.
Mr. Gallant said the clause that allows the New Brunswick agreement to improve if another province or territory can negotiate better terms was crucial. And, he said, if the other 12 provinces and territories want to continue to try to wring more favourable numbers out of Ottawa, he will join them in that effort.
But "we were getting to the wire, as you know. We all have budgets to put in place including the federal government," Mr. Gallant told a news conference. "We were putting in proposals as a province that we thought would help the whole country right up until the last minute. The proposal was just skimmed over, unfortunately."
Mr. Sousa said New Brunswick is not really being offered much new money for home care and mental-health care as part of the federal package.
Ontario has calculated that it will spend about $29-billion over the next five years on home care and mental health, and that the federal government is offering to pay the province about $1.9-billion of that, or about 7 per cent of the costs of those two programs.
The important thing is to strike a national agreement that will last a decade, Mr. Sousa said.
"The evidence indicates that we are going to have more challenges and more spending on home care and mental-health programming, the changing demographics, the pressure on health care over the next number of years is going to be higher," he said. "Many minister colleagues are calling me and saying we are going to stay firm to assure that we provide a national solution."
Jean-Marc Fournier, Quebec's minister for Canadian relations, took to Twitter to criticize the New Brunswick agreement. "New Brunswick is counting on the other provinces to insist on better participation of the federal government in public funding of health," he wrote.
Mr. Fournier said Quebec, Ontario and the other provinces are seeking federal funding of 25 per cent. "Now at 23 per cent, the federal government wants to reduce to 20 per cent."
B.C. Health Minister Terry Lake was also clearly frustrated with New Brunswick. Dr. Lake said he's confident the other provinces and territories won't follow New Brunswick's lead and sign their own agreements directly with Ottawa.
"We all agreed in Ottawa that this was not a good deal for Canadians, so I'm disappointed to see the take-it-or-leave-it and then divide-and-conquer attitude on the part of the federal government," Dr. Lake said in an interview Thursday. "I don't think it's helpful at all and it flies in the face of the new approach that was promised by Prime Minister [Justin] Trudeau."
With reports from James Keller in Vancouver and Ingrid Peritz in Montreal