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Harper leaves himself room to rein in health transfers

Stephen Harper is offering soothing-sounding reassurances about health care transfers to the provinces, promising he wouldn't reduce them from current levels if re-elected.

The Conservative Leader's pledge, however, still leaves him wiggle room to scale back the growth rate in these annual payments from Ottawa's cash strapped coffers.

It's the first time the Conservative Leader has broached the topic in 13 days of campaigning, and it was in answer to a question from journalists.

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Mr. Harper took pains to distance himself from former Bank of Canada governor David Dodge's new warning that Canada is suffering from "chronic health-care spending disease."

Mr. Dodge co-authored a new report warning this week that universal health care is unsustainable and will need sharp cuts, tax hikes, or a combination of measures in order to be salvaged.

If his party wins the May 2 election, Mr. Harper will likely be responsible for re-negotiating a new health accord with the provinces that will set transfer rates for the years ahead.

For years Ottawa's health transfer to the provinces has been increasing at 6 per cent annually. Canada's provinces and territories are concerned about what might happen when current deals on health care, social spending and equalization expire in 2013-14.

The Conservative Leader shied away from Mr. Dodge's klaxon warning on spiraling health care costs, suggesting he doesn't think radical restraint is necessary.

Instead he cautioned against alarmist talk that prescribed big changes.

"I think we should be very cautious when we're saying things like that about the Canadian health care system," he said.

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"We have a universal system of health insurance in this country. It is not without its problems, but it ensures that Canadians can get access to the health care system whether they have the ability to pay for services or not when they need medical treatment."

It would be tremendously risky for any Canadian politician to run a federal campaign saying the universal health care system was due for a big belt tightening or drastic curbs.

Back in the 2000 election the Canadian Alliance – a predecessor party to Mr. Harper's Conservatives – came under heavy fire for remarks by MPs who said their party would back the development of two-tier health care with a universal public system supplemented by private clinics.

On Thursday, Mr. Harper said he would not scale back payments to the provinces in the years ahead.

"We're not going to cut their transfers ... our approach is to work with the provinces and not to try and dictate to the provinces."

This pledge still leaves the Tory Leader margin of maneuver to keep transfers steady or reduce the rate of growth in these payments from 6 per cent to something less.

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"We want to work cooperatively with the provinces to make the system work better but we're not about to throw the baby out with the bathwater."

NDP Leader Jack Layton, who has spent much of the past week explaining his plans for health care, responded to Mr. Harper's assurances by saying he does not trust the Conservative Leader to handle the negotiations with the provinces. "He has been remarkably silent about this issue."

The Conservatives favour privatization, "we all know that," the NDP Leader said during a campaign stop in Nanaimo, B.C.

"I am very worried about what would happen if Stephen Harper were in charge of negotiating the next round [of health-care talks] with the provinces because I don't hear from him a commitment to build our health-care system the way it's got to be built with an aging population that we have here in Canada, and with some of the cost issues that we're facing."

Michael Ignatieff agreed. Calling health care the "sleeper issue" of the election, the Liberal Leader said Mr. Harper's priorities will not allow him money to play with to negotiate a deal.

The Harper government's budget forecasts show they expect health transfers to the provinces will continue to grow by 6 per cent for two years beyond the looming 2013-14 accord.

Yet the Tories have not made this a commitment.

Federal Finance Department officials told reporters last October – at the release of the government's fiscal update – that the assumption of continuing increases of six per cent was only for planning purposes and was not in fact a government commitment.

Nonetheless, the assumption means the Conservatives believe they could balance the books by 2015-16 while still maintaining transfers at that rate. Conversely, setting the increase at a lower rate of growth would help Ottawa balance the books ahead of schedule.

With reports from Gloria Galloway and Jane Taber

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About the Author
Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

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