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Bilateral Health Agreements between

the Federal and Provincial/Territorial

Governments in Canada
G.P. Marchildon, IHPME, University of Toronto, November 30, 2016

Current impasse and rationale for bilateral health
History of use
Extracting policy lessons
Desirability of instrument
Fiscal and and political sustainability

Canada Health Transfer (CHT) and
escalator: from 6% to 3% in 2017
Election promise of real change
$3 billion to improve home care

F/P/T health ministers meeting

on Oct. 18, 2016
Federal Minister of Health (Jane
Philpott) rejected provincial
demand to address CHT first
Would not delay or stop
implementation of 3% escalator
Wants to transfer $3 billion
through conditional instrument

Why Bilateral Health Transfer Agreements?

Increase accountability to
federal government
Gain visibility: otherwise $3
billion gets lost in CHT
Keep role of CHT separate
from a special purpose nonMedicare transfer
Inject a higher degree of
Time-limited funding: not
an entitlement (opt in)

History of Health Transfers in Canada

Conditionality of health transfer agreements

No bilateral health
transfer agreements

Bilateral health
transfer agreements


Established Programs Financing

Canada Health and Social Transfer
Health Reform Fund (2003-2008)
Wait Times Reduction Fund and
Transfer (2004-2014)
Canada Health Transfer (2004

Medical Care Act transfers (19661977)

Primary Health Care Transition

Fund agreements (2000-2006)
Patient Wait Times Guarantee
Trust fund memoranda of
understanding (2007-2010)

National Health Grants (19481961)

Hospital Insurance and Diagnostic
Services Act agreements (19571977)

Extracting Policy Lessons

Difficult to draw definite conclusions on four transfer
regimes based on healthcare outcomes
None were rigorously evaluated with this in mind
Change in sector and other confounding variables

But can say a little more about strengths and

weaknesses based on process criteria
Accountability to Government of Canada (and taxpayers)
Conditionality in terms of achieving pan-Canadian objectives
Flexibility in terms of facilitating, and learning from, potentially useful
health system innovation at the P/T level

Two Choices for Bilateral Health Transfer Agreements

Degree of Conditionality
Past and Future
bilateral health
transfer agreements


Primary Health Care Transition

Fund agreements (2000-2006)
Patient Wait Times Guarantee
Trust fund memoranda of
understanding (2007-2010)

Future Bilateral health transfer

agreement (scenario 1)

National Health Grants (19481961)

Hospital Insurance and Diagnostic
Services Act agreements (19571977)
Future Bilateral health transfer
agreement (scenario 2)

Bilateral agreements create an
accountability relationship
between orders of government
But hardly the end of the story
Practical utility of bilateral
agreement depends on:
Nature and degree of oversight
Enforceable sanctions
Clarity and effectiveness of dispute
resolution provisions in event of noncompliance by either party
Amount of information sharing and
transparency afforded the parties
through the agreement

No entitlement: entirely
separate from CHA
Formal opting in through
Framework set by federal

$ envelope
Maximum years
Rigorous (independent)
evaluation from beginning

Details of how will be done

(set by P/Ts) in agreement

Federalism as a Laboratory of Natural Experiments
Within terms of conditional
framework, agreement can
be tailored to:
Individual P/T priorities,
pressures and policy ambitions
Need to evaluate impact of
different approaches (access,
quality, cost effectiveness,
patient responsiveness, etc.)

Benefit: respectful of P/T

role and capacity
Cost: time, capacity and
focus (opportunity cost)


Fiscal Feasibility
Marginal amount relative to
Canada Health Transfer (CHT)
Far less expensive than the
alternative (>3% CHT escalator)
Fiscally neutral whether done by:
Time-limited CHT top-up
Special purpose transfer or trust
without bilateral agreements
Special purpose transfer or trust
accompanied by bilateral agreements

May actually be less expensive

due to possibility of not all P/T
governments opting in


Political Feasibility
P/T arguments and
expectations re: CHT
Log-rolling in other policy
domains (e.g. environment)
P/T desire for money
Primary Health Care
Transition Fund
Canada Health Infoway


Bilateral agreement approach can work in defined areas:
Reforms that are carefully limited (e.g. medically necessary home care
or home care for specified complex conditions)
Innovations that individuals P/Ts willing to invest in but could act as
demonstration effects

What is the likelihood?

Federal governments political firmness
Federal governments own policy ambitions (e.g. desire to facilitate
bold P/T policy experimentation) and fit with instrument
Extent of federal governments desire for greater accountability
A coalition of willing provincial and territorial governments emerges
after First Ministers Meeting.