Finance and health ministers to discuss health funding, but Carney doesn’t commit to extending bilaterals for mental health, home and community care as premiers say they’re facing ‘fiscal cliff’
After premiers urged Prime Minister Mark Carney to renew a series of bilateral health deals expiring next March and to maintain the Canada Health Transfer’s current five-per-cent rate, the prime minister said on July 23 that federal, provincial, and territorial health and finance ministers will discuss the issue though he did not commit to continue current levels of funding.
Saying in French that health care is under provincial and territorial jurisdiction, Carney (Nepean, Ont.) acknowledged there "will be a change" in existing deals.
"We need to work on it. We're talking here about the taxpayers' money. It's not money from the Canadian government. It's taxpayers' money. So, we have to look for improved productivity in health care. Then, when we have all of the information available, we have to make a decision as soon as possible," Carney said.
Carney was speaking alongside premiers after a first ministers’ meeting on July 23 in Charlottetown, P.E.I. This meeting followed the premiers’ annual summer gathering of the previous two days during which they emphasized the need to renew bilateral funding deals for rare disease drugs, mental health and substance use, and home and community care, which will all expire on March 31, 2027, in addition to other health agreements which have more time.
During the press conference, British Columbia Premier David Eby emphasized agreements should be reached quickly.
“From B.C.'s perspective, the fiscal cliff on health care is a very serious and urgent issue,” he said, referring to the pending funding drop.
“The commitment of the prime minister to sit down with us and engage through our ministers on this is crucial. My hope is that we can reach a solution quickly, put the health issue behind us, [and] have certainty for our own budgeting processes that are already getting underway across the country.”
Manitoba Premier Wab Kinew said, “We have to be able to make the investments to advance health care, take care of our seniors, [and] take care of our kids at the same time that we're standing up for our economy, that we're standing up for national unity.”
While health care earned a single sentence at the end of the first ministers’ joint statement released on July 23 (“First Ministers also discussed health care, and in the spirit of co-operative federalism, they will direct their ministers of health and finance to discuss longer-term funding and productivity in the sector”), it was the first item in the premiers’ communiqué on July 22.
The premiers are calling on Carney’s government to provide “certainty” for ongoing funding for services connected to mental health and substance use, home and community care, long-term care, pharmaceuticals, and drugs for rare diseases—all of which are the subjects of current bilateral deals negotiated by the previous Liberal government led by Justin Trudeau.
They also want Ottawa to maintain the existing five-per-cent annual increase—in place since 2023—to the Canada Health Transfer (CHT), as opposed to a return to the standard three-per-cent increase, which is expected to happen in 2028-29. The Trudeau government temporarily increased the CHT escalator in response to heightened health-care demands during the COVID-19 pandemic.
After health care, the communiqué lists the premiers’ requests on the economy, Arctic security, productivity and labour, and public safety.
In a demonstration of the high level of priority and agreement on the need for more health funding, a reporter’s question about the subject to the premiers during their July 22 press conference saw six of the 13 premiers chiming in with responses amid other questions about United States President Donald Trump’s newly announced 50-per-cent tariffs, pipelines, and potential separation referendums in Quebec and Alberta.
“We need a long-term commitment. There are federal agreements with all of the provinces which will expire in about—what is it—18 months or less. Many of our provinces are looking at a fiscal cliff in terms of funding our health-care systems,” said Prince Edward Island Premier and meeting host Rob Lantz on July 22. “So, [we] look forward to that conversation tomorrow with the prime minister.”
Initially put in place by the Trudeau government in 2017, agreements for mental health and substance use services (worth $5-billion) and home and community care (worth $6-billion) provided targeted funding over 10 years for these areas alone. This was a shift from typical federal health funding practices, including the CHT, which provides money to the provinces to spend as they see fit on health care more broadly.
Sarah Kennell, vice-president of policy at the Canadian Mental Health Association (CMHA), said she heard “loud and clear” from the premiers that they want to see more sustainable funding for mental health and substance use beyond the 2027 deadline.
Kennell was in Charlottetown with colleagues from other CMHA divisions to meet with premiers, and to discuss her organization’s support for a renewed deal.
Health Minister Marjorie Michel's (Papineau, Que.) office recently declined to comment on the deals' future, as reported by The Hill Times on July 20, saying funding is still available and governments don’t typically make decisions about the renewal of agreements until closer to their expiration date.
Kennell, who spoke to The Hill Times on July 22, said she understands there are still a few months before this fall's federal budget, and even more time until the bilaterals expire in 2027, but that long-term planning for programs and their affiliated jobs resulting from the funding require a signal sooner than later.
“I think we're all equally concerned at all levels of government around ensuring access to the care that [people] need when they need it, and so the earlier that we can get a signal from the federal government regarding an extension—and we're positive that it will come—the better. And so we just want to be aligned in terms of wanting to have that news out as soon as possible," she said.
Health lobbyists in P.E.I. for talks about funding, AI, and medicines
Charlottetown was a hub of political activity during the premiers’ July 21-23 meeting, with advocacy groups and lobbyists arriving for their chance to speak directly with premiers.
Canadian Nurses Association CEO Valerie Grdisa and Canadian Medical Association President Dr. Bolu Ogunyemi were there. They told The Hill Times that one of their messages to premiers was the importance of accountable spending of the CHT.
The provinces and territories do not have to account for how they spend their transfer, which goes into their general revenues, though they are required to report situations in which residents have been billed for health care services that are supposed to be publicly funded as stated by the Canada Health Act. It is up to Ottawa to decide whether it will deduct funding from a province or territory’s share of the CHT in response to situations of patient charges, which does frequently happen.
Ogunyemi told The Hill Times the CMA wants to “see real progress on health status [and] health indicators at the provincial and territorial level. So, I think that's reasonable accountability for the provinces and territories.”
Grdisa said the federal funding framework is at “that pivotal moment,” which requires more predictable support for provinces and territories, but needs “accountability requirements that are transparent, measurable, and aligned with the Canada Health Act."
When asked by The Hill Times how premiers—known for protecting their jurisdictional responsibility over health care—responded to this message, Grdisa said, “I think that the premiers are feeling that once the money is sent their way, it's their responsibility to allocate the funds appropriately. … Although I think there is still this kind of focus on the 13 separate and discrete jurisdictions, if you want to achieve labour mobility and to have internal trade and to have a high-performing economy, there has to be accountability and evaluation with those funds.”
A briefing note from the Canadian Nurses Association to the premiers advocated that they continue their work to fully leverage the skills of this country’s nurses, enhance labour mobility, and integrate internationally educated nurses, as well as the need to ensure the workforce’s input is considered as governments consider regulatory frameworks for the use of artificial intelligence in health care.
Grdisa noted that during one meeting with a premier—whom she did not name—she asked what their challenges are, and they responded, “Pretty much everything in your briefing note.”
Ogunyemi said the CMA is also advocating about the importance of “strictly adhering” to the Canada Health Act.
This message was shared by groups including the Canadian Health Coalition and Canadian Federation of Nurses Unions, whose members participated in a rally opposing Alberta’s Bill 11.
The bill allows physicians who perform elective surgeries to work in both the private and public health care systems. While private health care is available in Canada, other provinces require physicians to choose whether they will work through their jurisdiction’s public health care system or bill patients directly for services.
In a press release, the groups said Bill 11 “is a direct violation of the Canada Health Act, and if left unchallenged in Alberta, it will spread province by province.”
Innovative Medicines CEO Bettina Hamelin, who had just arrived in Charlottetown when she spoke to The Hill Times, said her message to premiers was going to be about the importance of improving access to patented medicines and the impact it has on their economies.
She referred to a 2025 study by Frank R. Lichtenberg, an associate professor of business at Columbia University, which found that sustained investment in innovative medicines reduced hospital stays in Canada by 55 per cent in 2022, saving close to $80-billion in hospital costs.
“Our premiers, who are preoccupied with the cost of health care, by providing access to innovative medicines, can greatly impact the cost of the system, keeping patients out of the hospital, ensure that they leave the hospitals faster—all the things that save dollars to the health-care system,” Hamelin said.
tsanci@hilltimes.com
The Hill Times