Deputy PM warns of economic ‘uncertainty’ as provinces try to hammer out a deal on health funding

Headed into a meeting next week seeking $28 billion more in health funding from the federal government, provinces were cautioned that high inflation and interest rates are making for “uncertainty” in a global economic slowdown.

The tempering of expectations from Deputy Prime Minister and Finance Minister Chrystia Freeland came Friday after a day of talks with provincial and territorial finance ministers at the University of Toronto.

“We do need to behave with real fiscal responsibility even as we do need to make these two big investments,” Freeland told a news conference, referring to efforts to reach a health deal and lure investment in clean technology to fight climate change.

Premier Doug Ford and other provincial and territorial leaders are joining Prime Minister Justin Trudeau in Ottawa on Tuesday to continue hammering out a deal with increased health funding after weeks of behind-the-scenes efforts by officials.

They are pushing Trudeau to fund 35 per cent of costs as the country’s health care system emerges strained from the COVID-19 pandemic, struggling with long wait lists and staff shortages.

The provinces say the feds contribute 22 per cent now, although Ottawa disputes that, arguing the proportion is closer to one-third because of tax points previously transferred to the provinces.

Mindful of the Trudeau Liberals’ election promise to boost health-care funding, Freeland said “we will honour those commitments” but noted no dollar figures or percentages were revealed at the meeting held at the U of T’s Munk School of Global Affairs and Public Policy.

“We’re all going to leave that to the prime minister and the first ministers,” she added. “I do think it was useful for me to be open and transparent about the fiscal constraints.”

She also signalled there will be more money in the upcoming federal budget for clean technology and urged provinces to follow suit in the “global race to build the clean economy of the 21st century.”

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Ontario Finance Minister Peter Bethlenfalvy said the health deal needs to be sustainable on a long-term basis “so we don’t have to keep doing this,” meaning repeated negotiations.

“We’re really close to getting something done,” he told reporters.

In a sign of a crack among the provinces, finance ministers from Quebec and Alberta said they are opposed to any strings attached to federal money designating how it must be spent and on what.

While Ford has signalled Ontario is willing to accept such conditions, Alberta Finance Minister Travis Toews noted health care is under provincial jurisdiction and each province has its own priorities.

“These funds should be coming without strings.”

Quebec Finance Minister Eric Girard agreed and said a federal proposal is long overdue, three years after the provinces began asking.

“It’s time to see the numbers and to start talking about the numbers and the parameters of the numbers,” he added.

Sources, speaking confidentially to discuss internal deliberations, have told the Star that the Trudeau government is willing to do separate, bilateral funding deals with provinces on areas of shared priorities.

Rob Ferguson is a Toronto-based reporter covering Ontario politics for the Star. Follow him on Twitter: @robferguson1

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