Canada pledges C$46.2 billion in new funding to fix strained healthcare system

By Ismail Shakil and Anna Mehler Paperny

OTTAWA/TORONTO (Reuters) -Canada's federal government will provide an additional C$46.2 billion ($34.4 billion) in new funding for the country's public healthcare system over 10 years, it said on Tuesday following a meeting with its provincial and territorial counterparts to hammer out a deal to fix the overburdened system.

Canada's public healthcare systems have been under strain thanks in part to the pandemic and staffing shortages that have left hospitals stretched to the breaking point.

For years the provincial governments, which are responsible for healthcare delivery, have asked Ottawa to increase its contribution to health spending. The federal government, for its part, said it wanted new money to come with conditions.

Provincial premiers told reporters they had to digest the proposal but were underwhelmed by the dollar amount. Manitoba Premier Heather Stefanson said they were "a little disappointed."

"What we see this as, is a starting point. It's a down payment on further discussion," said Ontario Premier Doug Ford.

Long a source of pride, Canada's publicly funded healthcare system has been strained by the pandemic and staff shortages.

Some of the new funds promised Tuesday are unconditional; others are earmarked for certain priority areas. The federal government is asking the provinces to commit to better data gathering and sharing in order to access the increased funds.

But the proposal, which seeks to use bilateral agreements to target priority areas such as primary care and mental health, suggests the federal government has more ability to dictate health spending than they do, said Sara Allin, an assistant professor at the University of Toronto's Institute of Health Policy, Management and Evaluation.

"It just sounds so much more prescriptive than the federal government actually can be."

A cash infusion could help Canada's healthcare, Allin said. But the real problem is one of governance.

"How do we manage the system? How do we hold the different actors accountable?"

The additional C$46.2 billion in funding unveiled Tuesday is part of a larger C$196.1 billion package in increased health funding over a decade.

"Canadians deserve better health care and we need immediate actions to address current and future challenges," Health Minister Jean-Yves Duclos said in a statement.

The deal needs signoff from the provinces, which have previously pushed back against the federal government's conditions.

Tuesday's meeting in Ottawa could result in an agreement over a general outline of healthcare funding, but the federal government and the provinces have cautioned not to expect finalized deals on Tuesday.

Tuesday's package includes C$25 billion over 10 years to be hammered out in bilateral agreements to target shared health priorities in the fields of family health services, healthcare workers and backlogs, mental health and substance use, and "a modernized healthcare system."

The Canada Health Act governs the country's publicly funded healthcare system, which is meant to offer Canadians equitable access to medical care based on their needs, not their ability to pay.

($1 = 1.3414 Canadian dollars)

(Reporting by Steve Scherer and Ismail Shakil in Ottawa and Anna Mehler Paperny in Toronto; Editing by Sandra Maler, Aurora Ellis and Jonathan Oatis)