Budget office says federal spending on health care going up faster than planned
Federal spending on health care and elderly benefits are set to rise at a faster clip over the next 12 months than previously planned under forecasts the parliamentary budget officer warns don't account for looming budget promises.
Health transfers are calculated to grow by at least three per cent each year, but the budget office says cash to provinces is set to rise by 4.8 per cent year-over-year. The $2.1 billion increase will bring federal spending on health care to $45.2 billion in the coming fiscal year that starts in April.
Budget officer Yves Giroux's report projected that annual federal spending on health care will reach $56.1 billion by 2027.
Provinces have been asking for billions more annually to pay for the provincially run systems that have been stretched by the COVID-19 pandemic and an aging population.
While the provinces argue they don't have the fiscal capacity to heap on billions more in spending because of the pandemic, an analysis released Thursday suggests the lower levels of government are in better financial shape.
The study from the Canadian Centre for Policy Alternatives estimates that six provinces will have a budget surplus this year or next, and could be in better shape if provinces choose to collect enough taxes to cover spending.
David Macdonald, a senior economist at the centre who wrote the report, says revenues roared back faster for provinces than expected, and federal coffers took on the bulk of pandemic-related expenditures.
He argues that if provinces use their surpluses to cut taxes, rather than invest in health care or long-term care, it could undermine their argument of the need for more federal spending in those areas.
"There's certainly a better case to be made, if you do take these surpluses and small deficits to reinvest in long-term care and health care, to then go to the federal government and say, 'Look, we're doing our part, time for you to do your part,"" Macdonald said.
"It's going to be a real question of how we spend the money, not that the money isn't there for a lot of provinces for the next couple years."
The pressure on the federal government to up spending on health care and long-term care comes from a variety of groups, including the Canadian Medical Association, the Canadian Federation of Students, the Canadian Federation of Nurses Unions, the Canadian Association for Long-Term Care and the College of Family Physicians Canada, based on budget submissions to the House of Commons finance committee.
"It's time the government offered health-care workers more than praise. They need to make the necessary investments in our health-care system so that heath-care workers and patients across the country have the support they deserve," NDP Leader Jagmeet Singh said in a statement Thursday.
The Liberals won't negotiate a change to the funding formula for health transfer until after the pandemic, but have suggested that any extra dollars would have strings attached and require provinces to meet outcomes or benchmarks for care.
A report released Thursday by the C.D. Howe Institute cautions against upping spending indiscriminately, saying that a 2006 transfer boost appears to have increased costs rather than improved services.
Report authors William Robson, Don Drummond and Alexandre Laurin argue the Liberals should use the coming budget to invest in growth-related measures and increase federal sales taxes to help pay off the hefty bill from the pandemic.
In the scenario the trio outlined, the budget would return to balance by 2025.
The federal bill for seniors' benefits is set to increase by $6.7 billion, or 10.9 per cent, from the previous fiscal year, partly because of high inflation rates to which the value of payments are pegged.
Total spending on the old age security program next year is projected to hit $68.3 billion and includes $740 million for a one-time payment to seniors who saw a clawback in benefits after they received emergency aid at the start of the pandemic.
Giroux projected that spending on old age security, which currently is responsible for $1 in every $7 dollars of federal spending, will hit $86.3 billion by 2027.
This report by The Canadian Press was first published March 10, 2022.
IN DEPTH
Jagmeet Singh pulls NDP out of deal with Trudeau Liberals, takes aim at Poilievre Conservatives
NDP Leader Jagmeet Singh has pulled his party out of the supply-and-confidence agreement that had been helping keep Prime Minister Justin Trudeau's minority Liberals in power.
'Not the result we wanted': Trudeau responds after surprise Conservative byelection win in Liberal stronghold
Conservative candidate Don Stewart winning the closely-watched Toronto-St. Paul's federal byelection, and delivering a stunning upset to Justin Trudeau's candidate Leslie Church in the long-time Liberal riding, has sent political shockwaves through both parties.
'We will go with the majority': Liberals slammed by opposition over proposal to delay next election
The federal Liberal government learned Friday it might have to retreat on a proposal within its electoral reform legislation to delay the next vote by one week, after all opposition parties came out to say they can't support it.
Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B
In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.
'One of the greatest': Former prime minister Brian Mulroney commemorated at state funeral
Prominent Canadians, political leaders, and family members remembered former prime minister and Progressive Conservative titan Brian Mulroney as an ambitious and compassionate nation-builder at his state funeral on Saturday.
Opinion
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
opinion Don Martin: The doctor Trudeau dumped has a prescription for better health care
Political columnist Don Martin sat down with former federal health minister Jane Philpott, who's on a crusade to help fix Canada's broken health care system, and who declined to take any shots at the prime minister who dumped her from caucus.
opinion Don Martin: Trudeau's seeking shelter from the housing storm he helped create
While Justin Trudeau's recent housing announcements are generally drawing praise from experts, political columnist Don Martin argues there shouldn’t be any standing ovations for a prime minister who helped caused the problem in the first place.
opinion Don Martin: Poilievre has the field to himself as he races across the country to big crowds
It came to pass on Thursday evening that the confidentially predictable failure of the Official Opposition non-confidence motion went down with 204 Liberal, BQ and NDP nays to 116 Conservative yeas. But forcing Canada into a federal election campaign was never the point.
opinion Don Martin: How a beer break may have doomed the carbon tax hike
When the Liberal government chopped a planned beer excise tax hike to two per cent from 4.5 per cent and froze future increases until after the next election, says political columnist Don Martin, it almost guaranteed a similar carbon tax move in the offing.
CTVNews.ca Top Stories
Some Republicans distance themselves from Trump's attack on Harris as 'mentally disabled'
Republicans on Sunday sought to distance themselves from Donald Trump's latest insults of Democratic nominee Kamala Harris during a rambling weekend rally in Wisconsin in which he called her 'mentally disabled.'
Two and a half years after losing her best friend and first love to suicide, Brooke Ford shared her story of grief and resilience at the CMHA Windsor-Essex Suicide Awareness Walk.
Bloc pension demands at odds with Liberal political strategy, economic plans
The government has just weeks to decide if it will meet the $16-billion demand from the Bloc Québécois to stave off an election for a few more months, but the stipulation may be at odds with the political and fiscal plans of the Liberals.
An Ottawa driver has been charged with stunt driving after being caught going 154 km/h on Highway 417, according to the Ontario Provincial Police (OPP).
'LibraryTok' can be a comfort during challenging times for librarians — and their fans
While libraries might be stereotyped by some as boring or outdated, they’ve become popular digital destinations for young viewers on TikTok.
‘It's very unfair’: International students face uncertain future in Canada after rule change
Migrant groups are pushing the federal government to reverse its cap on international study permits and tightening post-graduate work permit qualifications, claiming it will leave many students 'in limbo.'
Sima Sistani, who embraced Ozempic, is out as CEO of WeightWatchers
WeightWatchers CEO Sima Sistani, who pushed the company into embracing weight-loss drugs, is leaving the position after a two-and-a-half year stint.
opinion How to make the most out of your TFSA
The Tax-Free Savings Account can be a powerful savings tool and investment vehicle. Financial contributor Christopher Liew explains how they work and how to take full advantage of them so you can reach your financial goals faster.
What is open and closed this National Day for Truth and Reconciliation
This Monday, Sept. 30 is the National Day for Truth and Reconciliation (NDTR), a federal statutory holiday and day of remembrance for the Indigenous children who never came home from Canadian residential schools, as well as those who survived them.
Local Spotlight
A tale about a taxicab hauling gold and sinking through the ice on Larder Lake, Ont., in December 1937 has captivated a man from that town for decades.
When a group of B.C. filmmakers set out on a small fishing boat near Powell River last week, they hoped to capture some video for a documentary on humpback whales. What happened next blew their minds.
A pizza chain in Edmonton claims to have the world's largest deliverable pizza.
Sarah McLachlan is returning to her hometown of Halifax in November.
Wayne MacKay is still playing basketball twice at Mount Allison University at 87 years old.
A man from a small rural Alberta town is making music that makes people laugh.
An Indigenous artist has a buyer-beware warning ahead of Sept. 30, the National Day for Truth and Reconciliation.
Police are looking to the public for help after thieves broke into a Lethbridge ice creamery, stealing from the store.
An ordinary day on the job delivering mail in East Elmwood quickly turned dramatic for Canada Post letter carrier Jared Plourde. A woman on his route was calling out in distress.