Federal health spending has outpaced provinces, analysis finds

Despite criticism from provincial premiers about insufficient federal contributions to health spending, an analysis of two decades of funding data reveals that federal transfers have generally increased more rapidly than provincial health budgets.

In 2023, federal health transfers reached $47.1 billion, marking a 212 percent increase from 2005, when transfers were $15.1 billion. In comparison, total spending by all 10 provinces grew from $86.2 billion in 2005 to $221.9 billion in 2023, 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. This analysis tracked annual spending since the 2004 federal-provincial health accord established under former Liberal Prime Minister Paul Martin.

The findings contrast sharply with the rhetoric surrounding federal and provincial health negotiations in recent years, particularly as health systems faced challenges in the wake of the COVID-19 pandemic.

Two years ago, a shortage of health workers led to emergency room closures and significant service backlogs nationwide, prompting premiers to call for increased federal support for health spending.

Former Manitoba Premier Heather Stefanson, following a meeting with other provincial leaders at the end of 2022, noted that while health spending was once evenly split, the federal contribution had gradually decreased over time.

Originally, in 1959, governments planned for health-care costs to be shared equally between Ottawa and provincial governments, before most provinces had medicare. However, the funding model underwent significant changes in the 1970s and has continued to evolve since.

Contrary to the suggestion by premiers that federal contributions have diminished over the past two decades, the data shows that federal transfers have actually grown at a slightly faster rate than provincial health spending since the Martin health accord in 2004.

In 2005-06, federal health transfers increased by 39 percent in one year, while provincial health spending grew by six percent.

Federal health-care spending surged during the COVID-19 pandemic due to specific transfers, but these additional funds ceased in 2022-23. By then, the federal share of total provincial health spending had increased only slightly to 21.2 percent.

Health Minister Mark Holland pointed out in a recent interview that this reality was not reflected in the calls for increased federal funding made by premiers following the pandemic.