Peterson defends the size of Nunavut’s health budget

Finance Minister Keith Peterson defended the way his government funds the Department of Health, which usually requires supplementary appropriations at the end of each year to match its actual spending. (FILE PHOTO)

Nunavut Finance Minister Keith Peterson defended his proposed 3.5 per cent increase in health spending for the Government of Nunavut’s 2017-18 budget, warning Nunavut MLAs Feb. 27 that blank cheques to the health department could lead to exponential costs that “would consume all the money.”

Peterson’s comments were directed at Iqaluit-Niaqunnguu MLA Pat Angnakak, who questioned how the health department’s $353 million budget for the upcoming fiscal year was calculated given that the department always needs extra money at the end of the year in supplementary appropriations.

“It’s in all of our interests to have the health department find ways to be more efficient and effective in their budgeting process or business cases that leaves more resources… for other departments and capital projects across Nunavut,” Peterson responded.

As for additional federal help, Peterson says a botched unified front by provincial and territorial ministers—who last December attempted to renegotiate an expiring Canada-wide health funding agreement—contributed to this year’s modest spending increase on health care.

Territorial and provincial finance and health ministers met their federal counterpart in Ottawa last December to renew the 2004 Canada Health Transfer deal.

The accord’s current six per-cent-a-year rate of increase is set to end this April.

Amendments first proposed by the Conservative government will reduce that rate of increase to either a minimum three per cent per annum in the upcoming year, or a rate of increase that matches the rate of growth in Canada’s gross domestic product—whichever rate proves higher in a given year.

The provinces and territories asked for a 5.2 per cent increase per year for each jurisdiction, but were unsuccessful.

“Unfortunately, our arguments fell on deaf ears,” Peterson said.

Afterwards, Ottawa worked out bilateral deals, starting with New Brunswick, Newfoundland and Labrador, and Nova Scotia, followed by the three territories early in January.

“In fact, one province caved in within a couple hours after we stood in front of the national meeting and said we’re very united,” he said.

“One was two or three hours, a couple fell a few days later.”

All three territories signed with Ottawa in mid-January, leaving Ontario, Quebec, Manitoba and Alberta as the sole provinces remaining at the bargaining table.

The Nunavut CHT agreement gives the territory only about $1.1 million a year over the next 10 years: about $500,000 a year more for mental health and about $600,000 a year more for home care.

The bulk of Nunavut’s health budget flows through the territorial financing formula, or TFF.

But Angnakak asked Peterson if the federal government has been pursuing a “divide and conquer” strategy when it comes to health care funding.

“It’s not a new strategy, its an old strategy,” Peterson replied, adding that while he was “unhappy” with the outcome of the negotiations, his peers presented “what I thought was a fair, well thought out business case that the provinces and territories could provide health care to our citizens.”

“The other rule, the golden rule: he or she who has the gold, rules,” Peterson said, referring to Ottawa’s take-it-or-leave-it offer of a 3.5 per cent annual funding increase, along with $11.5 billion earmarked over 10 years for specific areas such as home care and mental health promised by Trudeau on the campaign trail in 2015.

Peterson added that Nunavut’s agreement with Ottawa includes a clause allowing the territory to upgrade the deal if another jurisdiction negotiates a better one.

“I’m hopeful in the federal budget that the federal minister will see fit to help the three territories out with some additional funding, but we’ll see,” he said.

The federal finance minister, Bill Morneau, is expected to unveil his 2017-18 federal budget in the House of Commons sometime in March.

During his own budget address Feb. 22, Peterson said Nunavut’s finance department is about to start talks with Ottawa on a new TFF.

But the deal will not be as generous as it has been over the past five years, when the TFF increased by five per cent a year. In future years, the annual rate of increase in the TFF will fall to about three per cent, Peterson said in his budget speech.

Those negotiations follow a funding glitch in December 2015, which created a nasty surprise: a $34 million shortfall for Nunavut in its 2016-17 budget, which was later resolved.

“They’re aware of our concerns. We hope that when we do renew the new agreement, they will take into consideration certain factors that apply elsewhere in Canada but not Nunavut,” Peterson said.