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Politics Insider Holdout provinces say Ottawa double-crossed them on health care

The current battle over health-care funding between the federal Liberal government and the provinces – most of them, anyway – sounds very much like the fight that took place when the Conservative government of the day in 2011 announced a reduction to the annual increases of the Canada Health Transfer.

There is one chief difference: The federal Liberals, then in opposition, were aligned with the provinces in attacking the Conservatives' 3-per-cent funding cap. The anger that is directed at Ottawa now is as much about the dollars as it is about the Liberals' failure to meet expectations to strike a new accord.

Liberal MP Judy Foote, Minister of Public Services, was one of the Liberal critics of the Conservative plan, telling the House in 2015: "It is not right that throughout our country, we are seeing reduced health-care funding to the provinces by nearly $36-billion in the name of financial prudence and austerity."

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Just weeks before the election in October, 2015, Liberal Leader Justin Trudeau promised to negotiate a new health-care accord: "The provinces have done an extraordinary job of stepping up in the absence of all federal leadership, but it's time we had a federal government and a prime minister committed to re-engaging to address health-care concerns," he told The Globe and Mail.

Now that Mr. Trudeau's government is seeking to impose a deal that is not much different than the Conservative plan, the provinces that are holding out for more money say they have been double-crossed.

Under the 2004 Health Accord, the provinces were promised a 6-per-cent annual lift in the federal health transfer. That pact expires in the spring, and most of the provinces insist that anything less than a 5.2-per-cent annual increase would amount to federal offloading of health-care costs.

But the Trudeau government, as it drafts its March budget, has declared the cupboard bare.

It says the provinces will have to make do with the funding offer it put on the table in December – a 3.5-per-cent annual increase in the health transfer, plus $11.5-billion over the next decade targeted for home care and mental health.

The provinces and territories from British Columbia to Quebec maintain that is not enough to sustain their health-care systems. New Brunswick, Nova Scotia and Newfoundland and Labrador broke ranks and signed their own health agreements with Ottawa, leaving the provinces and territories that represent about 90 per cent of the Canadian population on the outside. And so far, Ottawa has demonstrated little interest in coming back to the table.

B.C. Health Minister Terry Lake was not holding back in a recent interview about his disappointment. In the span of a few minutes, he labelled the federal Liberals' approach disingenuous, sneaky and arbitrary. "What is shocking about this to me," he added, "is that they said they would have a different approach. But this is 'take it or leave it,' divide and conquer, bait and switch."

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The Manitoba government wrote a letter on Jan. 3 on behalf of the holdouts that demanded a first ministers' conference to renegotiate the health accord. In an interview, Manitoba Health Minister Kelvin Goertzen expressed his anger about the way he and his counterparts across the country were summoned to Ottawa before Christmas for what they expected would be negotiations. Instead, they were informed of the new terms.

"They could have e-mailed that to us," he said.

Crushing expectations is a tough business.

"The new Prime Minister said there would be real negotiations to come to an agreement on a new health accord. That has not happened," Mr. Goertzen said. "I was extremely disappointed with the 'take it or leave it' offer from the federal government that would take billions of dollars out of health care in Manitoba."

However, the provinces cannot do much more than complain about the federal government's decision to embrace financial prudence. The Liberals now face a far larger deficit than projected. Although the gap between Ottawa's offer and the provinces' request is less than two percentage points, the dollars involved are substantial, given that this year's Canada Health Transfer is worth just over $36-billion.

In Alberta, Finance Minister Joe Ceci struck a more conciliatory tone, and continued to press for more talks. "We remain committed to working with the federal government on a funding agreement that sustains public health care and meets the needs of all Albertans."

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British Columbia, by contrast, has taken off the gloves. "If they want to be arbitrary and make unilateral decisions, that's their prerogative," Mr. Lake said. "This is not a good deal for Canadians or for Canadian health care."

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