Here’s how much provinces have in surplus while demanding more federal health cash – National | 24CA News

As Canada’s premiers specific disappointment over Ottawa’s health-care funding provide, questions are being raised about why provinces are demanding extra federal money whereas sitting on tens of thousands and thousands of surplus {dollars} and different monetary positive aspects in their very own budgets.

The 13 premiers have signalled their intent to simply accept a brand new funding take care of Ottawa that may infuse $46.2 billion in new cash for well being care over the subsequent decade, however they’ve completed so reluctantly, saying the quantities on provide fall brief of what’s wanted. They have stated they’ll not afford to shoulder the rising burden of health-care prices on the present price.

They’ve been demanding what would have amounted to an annual $28-billion improve in funding from the federal authorities for well being care by the use of a structural change to the method of the Canada Health Transfer.

But whereas the premiers have been calling for Ottawa to pay extra, Prime Minister Justin Trudeau and his cupboard ministers have been firing again, pointing to the more and more rosy monetary conditions of the provinces.

Last week, Trudeau stated it’s time provinces and territories “step up” and use extra of their very own surplus price range {dollars} to assist health-care employees.

So, the place do the provinces and territories stand relating to their budgets and the way rather more cash have they got this yr?

Almost each province and territory skilled vital monetary positive aspects during the last yr, due partially to inflation driving up tax and pure useful resource revenues, their detailed monetary knowledge reveals.

As a consequence, greater than half of the provinces and territories now have surplus budgets — which implies they may absorb extra money than they plan to spend this yr.

Here’s a snapshot of every province and territories’ funds for 2022-23, as of November or December 2022, when most governments present updates to their working budgets of their fiscal updates. New Brunswick’s surplus quantity displays a more moderen replace of it’s funds, launched Wednesday.

• British Columbia – $5.7-billion surplus. Up from projected $706-million surplus. This is a $5-billion enchancment.
• Alberta – $12.3-billion surplus. Up from projected $511-million surplus. This is an $11.8-billion enchancment.
• Saskatchewan – $1.1-billion surplus. Up from projected $462-million deficit. This is a $1.6-billion enchancment
• Manitoba – $193-million deficit. Down from projected $548-million deficit. This is a $355-million enchancment.
• Ontario – $12.9-billion deficit. Down from a projected $19.9-billion deficit. This is a $7-billion enchancment.
• Quebec – $5.2-billion deficit. Down from projected $6.4-billion deficit. This is a $1.2-billion enchancment.
• New Brunswick – $826.2-million surplus. Up from projected $35.2-million surplus. This is a $709.2-million enchancment.
• Nova Scotia – $142.6-million deficit. Down from a projected $506.2-million deficit. This is a $363.6-million enchancment.
• Prince Edward Island – $94.8-million deficit. Up from projected $92.9-million deficit. This is a rise in spending of $1.9 million.
• Newfoundland and Labrador – $479-million surplus. Up from $351-million deficit. This is a $830-million enchancment.
• Yukon – $33-million surplus. Down from projected $39.5-million surplus. This a rise in spending of $6.5 million.
• Northwest Territories – $40-million surplus. Down from projected $131-million surplus. This is a rise in spending of $91 million
• Nunavut – $40-million surplus projected for 2022-23. This is up from $31-million deficit final yr.

In addition, final yr, each province and one territory additionally ended their yr with considerably greater positive aspects and in higher monetary positions than they’d projected — with audited monetary statements displaying them thousands and thousands and, in some circumstances, billions of {dollars} higher off than they anticipated to be by the top of the yr.

For instance, Alberta noticed a whopping $22.2-billion enchancment to its backside line by the top of the 2021-22 fiscal yr, going from a projected $18.2-billion deficit to a $3.9-billion surplus.

Ontario additionally went from having a big projected deficit to a small surplus by the top of the yr, as did British Columbia and Nova Scotia, whereas Prince Edward Island went from a small deficit to a big surplus in 2021-22.

Others both improved their deficits or surpluses considerably, except for the Northwest Territories.

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In response, many provincial governments have been utilizing these money windfalls to introduce new spending measures, together with focused tax breaks, elevated spending in issues like infrastructure and lots of have additionally despatched particular inflations funds to low- and modest-income residents.

But different unbudgeted spending and monetary measures have additionally emerged within the wake of surprising enhancements in provincial funds.

For instance, on Wednesday, in saying a fair greater surplus than anticipated, New Brunswick heralded the creation of a news $300-million “New Brunswick Advantage Savings Fund,” which is able to set this quantity apart to generate curiosity for use for varied as of but unidentified measures.

Also, final week, British Columbia introduced a brand new $1 billion fund for municipalities to “address their community’s unique infrastructure and amenities demands,” in accordance with a authorities press launch.

In addition, final yr, forward of the provincial election in Ontario, Premier Doug Ford introduced he was scrapping driver’s licence renewal charges at a price of round $1 billion.

And in November, the New Brunswick authorities introduced a program that may scale back authorities revenues by $70 million for a tax reduce that gives the best advantages to those that earn between about $142,500 and $162,000 a yr — a wage that’s about 4 occasions greater than the median Canadian revenue of $39,500, in accordance with 2020 Statistics Canada knowledge.

Trudeau referred to as this out throughout a November go to to New Brunswick on a day well being talks between provincial and territorial well being ministers in Vancouver ended with no consensus whereas the premiers re-issued their calls for for extra federal cash.

“I think citizens of provinces that see provincial governments saying that they don’t have any more money to invest in health care and therefore they need money from the federal government, while at the same time they turn around and give tax breaks to the wealthiest — those citizens can ask themselves some questions,” Trudeau instructed reporters in N.B. on Nov. 8, 2022.

Some of those extra “discretionary” spending measures do increase questions at a time when the health-care system is dealing with vital pressures, says Mahmood Nanji, a fellow on the Lawrence National Centre for Policy and Management with Ivey Business School at Western University.

“I think all provinces want to be perceived as being good fiscal managers… and a corollary to that also is the fact that when you have some surpluses or you have additional fiscal flexibility… it allows you to do other things, particularly programs you can get some credit for,” he stated, pointing to the Ontario authorities’s elimination of licence charges.

“One can make the argument about whether that billion dollars should have been spent on health care as opposed to on giving somebody who owns a Land Rover a break.”

This “prickly” backwards and forwards over whose job it’s to fund well being care and the way a lot they make investments isn’t new, says Gerald Baier, affiliate professor of political science on the University of British Columbia.

But when provinces are making tax cuts or rising spending in different areas, it does present they may very well be investing extra of their very own provincial revenues into well being care — a actuality that doubtless performed a job within the fast, albeit reluctant, acceptance of Ottawa’s funding provide by the premiers, he stated.

“Provinces still have quite a bit of fiscal room right now, and so I think it put them in a weaker bargaining position, perhaps, because I think they were trying to make the case to the Canadian public that the federal government wasn’t paying its fair share.”

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But whereas most provinces and territories are doing higher financially, a few of this money windfall is short-term, as it’s linked to inflation, Baier famous.

“This extra money is probably a blip and it’s not something you can look at and expect to have in five or 10 years,” he stated.

That’s why, on condition that health-care prices usually outpace inflation, a long-term funding deal is a brilliant choice to make sure sustainability in the way in which well being programs and staffing ranges are funded and maintained, he stated.

However, quite a lot of provincial premiers are headed to elections within the subsequent yr, which may be enjoying a consider why they don’t seem to be keen to speculate extra of their probably short-term surpluses into the “money pit” that’s the health-care system, Baier added.

“You can put $1 billion into almost any province’s health-care system and not notice it much in terms of benefits,” he stated.

“So, I think the temptation for a lot of premiers, especially if they’re facing an election, is to find more direct benefits, even though some investment in the health-care system could deal with some of the things that are really motivating people.”

But with well being care now taking on 50 per cent or extra of provincial budgets, there’s solely a lot fiscal capability that provinces have relating to rising their share of well being investments whereas additionally dealing with greater calls for in lots of different areas, stated Nanji, who was additionally a former affiliate deputy minister of finance within the Ontario authorities.

He additionally famous that the deal being provided by the federal authorities is critical, regardless of the lukewarm reception it has obtained from premiers.

“There’s a lot of new money in here, more so than any previous administration has provided over the last few decades since, in fact, Paul Martin created this notion of creating 10-year agreements.”

Ottawa’s proposed monetary package deal consists of quite a lot of parts, together with $25 billion in new cash for 10-year bilateral offers to be negotiated with the provinces and a $17-billion improve to the annual Canada Health Transfer, which incorporates an “escalator,” or assured minimal improve, of 5 per cent over 5 years — up from the present three-per-cent escalator.

“It’s a much higher escalator than what the Harper administration provided, so there’s a lot of money here,” Nanji stated.

“And as the prime minister has said, and I think other observers and experts have said, money’s not going to solve the problem here. We’ve got a number of big challenges.”

Ultimately, relating to provinces pulling their monetary weight in well being spending, the actual query shall be whether or not they may proceed investing on the identical price when new federal billions begin rolling in, Nanji added.

They may very well be tempted to divert a few of the cash they’ve already been investing and exchange it with the brand new federal cash, he stated.

“I know that it was certainly one of the things that the federal government had indicated is that, by virtue of this new deal, they didn’t want the provinces actually to  actually reduce their contribution. So let’s hope that the provinces don’t do that.”