Is Nunavut health care underfunded?

For Nunavut’s much-maligned Department of Health and Social Services, the story never changes.

At the beginning of each fiscal year, MLAs vote to give the department a certain amount of money.

And by the end of each fiscal year, the department almost always needs even more.

You can observe a good example of this at the current sitting of the Nunavut legislature, at which Finance Minister Keith Peterson tabled a package of money bills asking MLAs to vote nearly $30 million in extra spending for the health and social services department.

One bill would give the department $16.6 million more this fiscal year, which ends March 31, 2010. Another bill would give the department an extra $12 million to pay costs run up last fiscal year, which ended March 31, 2009. Yet another money bill would give the department $1 million for the 2007-08 fiscal year.

Since 1999, Nunavut MLAs have passed such supplementary spending bills on a regular basis nearly every year. Most often, it’s to give extra money to the health department.

This is why, a couple of years ago, MLAs in the last assembly asked Auditor General Sheila Fraser to conduct a special audit of that department.

Fraser’s staff then produced a report, tabled this past April, that turned up numerous examples of financial management incompetence — similar to those found in most other Government of Nunavut departments.

Her staff found the department lacked the capacity to pay its bills on time. One supplier of pharmaceutical products even stopped doing business with the GN for this reason. And the auditor general’s office also found the department does a lousy job of collecting money owed to it by others. As of March 31, 2008, the department’s creditors owed about $5.6 million in uncollected bills, $2.5 million of which were over a year old.

Like so many things that have gone wrong with the GN over the years, this occurs because of severe understaffing. “During our visit to Iqaluit, no staff member was working on collections at the Department of Finance. Some of the positions identified for this collection work have remained vacant for many months,” Fraser said in her report.

These, and other issues, represent grave problems that the territorial government must correct.

But they’re irrelevant to the big question: does the health department get enough money in the first place?

The auditor general’s April 2009 report does shed some light on this question.

That’s this one: “The budget does not reflect the Department’s anticipated expenditures.” This means, Fraser said in her report, that the department budgets money for one stated purpose, then spends the same money on another purpose by the end of the year.

“In our view, the 2007–08 annual budgeting process did not produce an accurate picture of the resources the Department needed to provide health and social services to Nunavummiut,” Fraser said.

The biggest example of this, she said, is the department’s use of unspent salary money.

At the beginning of each year, the department pretends that it will be fully staffed. In reality, more than one in three of those jobs will lie empty. Those unspent salary dollars represent many millions of dollars worth of windfall revenue for the government.

In 2007-08 for example, the health and social services department took $21 million in unused salary money and spent it on other purposes, most of which it did not adequately budget for in the first place

So consider this question: if this department were ever fully staffed, what kinds of deficits would it run up every year?

The obvious inference is that if the health department benefits from more than $20 million annually in unspent salary money, and still needs more money to get by, then it must be seriously underfunded.

This year, with supplementary funding added to the total, the health department will spend more than $280 million. That’s roughly 27 to 28 per cent of the GN’s total projected spending.

This may look like a lot of money. But consider that many other jurisdictions in Canada spend much more proportionately.

The Ontario provincial government, for example, is close to spending 50 per cent of its budget every year on health care. Total health care spending in Canada is up to $180 billion a year, representing 11 per cent of the value of all goods and services produced in the country. The demand for health care expenditures in Canada is outstripping growth in government revenues in every province and territory.

In Nunavut, if you subtract the $35 million a year that the department spends on social services, total spending on health alone drops to about $245 million this year. Even taking the territory’s tiny population of 31,000 into account, this is a modest amount.

MLAs, from time to time, ask questions about why the health and social services department usually overshoots its budget.

But they rarely ask the big question: does the department get the resources it needs to provide health and social services to Nunavut residents? If not, then why? JB