EnterpriseHealth Checkup: Federal Fall Economic Statement
Affordability Issues Leave Little Oxygen for Health Care
This afternoon Finance Minister Chrystia Freeland released the federal government’s 2023 Fall Economic Statement. Like the Ontario Fall Economic Statement, the document was presented as a fiscal update rather than a comprehensive “mini-budget” that became the norm throughout the COVID-19 pandemic. Minister Freeland outlined the government’s approach to navigate Canada’s tough economic climate and address key priorities, including affordability and housing.
Context is critical
Today’s fiscal update comes at a challenging time politically for the Liberals as recent polling shows the Liberals trailing the Conservatives, increasing concerns about the political direction of the Liberal Party of Canada, and a growing sentiment that many Canadians are under more financial pressure now than before the pandemic. To that end, the document is tightly focused on key measures intended to convey that the federal government is attuned to the economic and affordability concerns of Canadians. At the same time, the government’s responsiveness to cost-of-living challenges is limited by the need to show fiscal restraint in a period of global economic uncertainty.
What this means for the health sector
Given the fiscal and economic context, it’s hardly surprising that there was little to no mention of any new health spending. Aligned with the government’s affordability focus, the government intends to exempt psychotherapist and counselling therapist services from the GST/HST. The document also outlines further measures to support the mobility of health care workers between provinces.
The lack of focus on health can also be attributed to the Liberal government’s ongoing negotiations with provinces and territories as they work to finalize bilateral agreements on shared health care priorities. All signs seem to point to the agreements in principle largely quieting the federal government’s provincial counterparts, who have now moved on from their never-ending call for an increase to the Canada Health Transfer.
While expected due to political preconditioning by both the Liberals and the NDP, noticeably absent from the Fall Economic Statement was any mention of a national pharmacare program. The Supply and Confidence agreement between the Liberals and the NDP committed the federal government to pass a Canada Pharmacare Act by the end of 2023. As negotiations continue, it is almost certain that Parliament will rise for the winter recess without legislation having been passed. The question now becomes: will such an Act even be introduced before MPs leave Ottawa? And will the governing agreement between the Liberals and the NDP fall apart if the Liberals fail to meet conditions of the deal?
Even with the goodies announced today, don’t expect the opposition Conservatives to change their narrative as they continue to charge that the Liberals are responsible for the dire financial straits many Canadians face.
By framing the Fall Economic Statement as a responsible fiscal plan that invests in “what Canadians need right now,” the government is seeking to demonstrate progress on priorities such as building homes and making life more affordable. As a result, additional spending, including in health care, will be constrained.
With the next election no later than 2025, only time will tell if Canadians believe the Liberals have chosen the correct path.