OTTAWA – New Brunswick’s decision Thursday to strike a separate health funding deal with the Trudeau government has weakened the premiers’ bargaining position and hardened Ottawa’s resolve to rebuff attempts to extract billions more from federal coffers.
Premier Brian Gallant’s move to accept a bilateral deal for New Brunswick splintered the united front provincial and territorial governments had adopted Monday when they walked away from a federal offer to increase health transfer payments by 3.5 per cent annually and fork out another $11.5 billion over 10 years in targeted funding, primarily for home care and mental health.
Federal Health Minister Jane Philpott confirmed she and Finance Minister Bill Morneau are having discussions with other provinces — officials say up to four or five more — about striking similar bilateral deals.
“We’ve made it clear to our counterparts that we are open for business and happy to have ongoing discussions with those who are interested,” she said in an interview.
British Columbia Health minister Terry Lake scoffed at the idea that other provinces might follow New Brunswick’s lead, accusing the feds of trying to “divide and conquer” provincial and territorial governments.
“When I hear them say they’ve got four or five other provinces on side, I don’t believe it,” he said. “It’s a strategy, I think, to try and break up the unanimity that provinces and territories demonstrated on Monday.”
B.C. is “not going to negotiate a side deal,” Lake added.
But Saskatchewan Premier Brad Wall echoed the federal suggestion that other provinces are looking to cut their own separate deals and said he understands why they might choose to do that.
“We knew that the federal government was in discussion with some provinces,” he said in an interview.
“I think there might be other provinces that might decide to, in their own interests … go ahead and come to an agreement with the federal government.”
Wall frankly acknowledged that Gallant’s move has weakened the bargaining position of other provinces, which are still hoping to pressure the feds into increasing the annual health transfer at a rate of at least 5.2 per cent each year.
“I guess it’s not as good as it was yesterday when we were united,” Wall said.
“That would be the sort of straightforward, honest answer to that question. It would be better if everyone was together on this. But I understand what provinces are doing. We want to do what’s best for Saskatchewan as well. Sometimes that’s as part of a multilateral negotiation and sometimes that’s a one-to-one bilateral negotiation.”
Other provinces were not so sanguine.
Manitoba Health Minister Kelvin Goertzen tweeted that if his province accepted the same deal as New Brunswick, it would mean “a loss of $1 billion in health care funding over 10 years.”
Under the bilateral deal, New Brunswick’s share of the annual health transfer will increase by three per cent a year or nominal economic growth, whichever is higher. With projected growth, Gallant predicted the deal will mean a 4.1 per cent annual increase for his province — better than the flat 3.5 per cent offered Monday.
New Brunswick will also get $230 million over 10 years in targeted funding for home care and mental health services. That funding represents the province’s share of the $11.5 billion the federal government offered all the provinces on Monday.
Should any other province strike a more lucrative deal, New Brunswick will be able to adopt those terms as well.
That prompted Quebec Health Minister Gaetan Barrette to tweet that New Brunswick is choosing to accept that the federal share of health funding will drop to 20 per cent from 23.3 per cent while relying “on other provinces to fight for a better deal.”
Ontario Finance Minister Charles Sousa said it’s “inappropriate” for the federal government to be rushing before Christmas to cut “side deals” with some provinces, rather than trying to seriously negotiate a national deal that’s in all Canadians’ best interests.
Those provinces that are being tempted into side deals “are looking at a proposal by the federal government that suggests to them, ‘Don’t worry, you’ll always get the better deal so agree to this and we’ll make sure that you get money,'” Sousa said.
“It’s not right, right? It seems inappropriate to be dealing and negotiating on a national solution by going around providing regional agreements that it’s hard to say no to.”
With files from Jennifer Graham in Regina, Dirk Meissner in Victoria, Andy Blatchford in Ottawa