No doubt the B.C. government and other provinces are still basking in the after-glow of the Trudeau government's big spending budget that sends potentially billion of new dollars their way, but there was one glaring omission in that budget that has yet to be addressed.
That would be the federal government's share of spending in the most expensive part of all government departments: health care.
Next year, in 2017/18, federal health transfers to the provinces will increase by less than three per cent. That is about half the size of the annual increase that provinces have enjoyed for the last 10 years or so.
This change was initiated by the former Harper government, which arbitrarily decided to tie annual funding increases for health care to the increase in the gross domestic product (which rarely exceeds three per cent).
The difference in percentages may seem small, but because provincial health-care systems are so vast and so expensive, the gap between a three per cent lift and a six per cent hike can equal hundreds of millions of dollars.
The latest federal budget gives no sign of departing from the new rules set down by the previous federal government.
Now, the Trudeau government has pledged to negotiate a new health accord with the provinces, but has provided no clues about what shape it is going to take or whether it will even revisit the notion of tying increases to health care funding to economic growth rates.
It's conceivable the federal government may want to make any additional increase to be made available only with some strings attached. For example, it may insist on any additional money go into something like home care, which was a major plank in the federal Liberal election platform (but which did not materialize in this budget).
It's also possible the federal government may continue to bend the curve on its share of health-care spending, something that began in earnest during the federal Liberal governments of the 1990s. Ottawa's current share of public health-care spending sits at about 22 per cent but is projected to decline further to just 18 per cent within the next 10 years.
In any event, some tough bargaining may lie ahead for the provinces. They may take some solace in the fact that the Trudeau regime shows no hesitation when it comes to spending gobs of money, and the deficit be damned.
Of special concern to B.C. and to the Atlantic provinces is how federal spending on health care will be allocated. The current rules, called the Canada Health Transfer, distribute the money on a per-capita basis.
That seems fair until one realizes is that not all people incur the same health costs at the same rate. The vast majority of any individual's use of the health-care system occurs before the age of five and, in particular, after the age of 70 and onwards.
According to the Canadian Institute for Health Information, an always reliable body, the average annual health-care costs for Canadians under the age of 65 is about $2,500 (even this number is skewed high because infant care costs far more than anyone else in that age bracket).
But as we age, our annual health-care costs increase rapidly: almost $12,000 annually for those older than 65, and close to $20,000 a year for those over 80.
B.C. and the Atlantic provinces have the oldest populations by far, so they will pay a disproportionately high penalty in this new arrangement. For all of B.C.'s attractiveness for retirement, its appeal may lessen if the health-care system is compromised for those retirees.
The Canadian Medical Association has suggested amending the CHT to include a "top-up" that reflects shifting demographics among the provinces. One estimate is that would cost between $1.5 billion and $2 billion a year, with the top-up increasing as the population ages.
Time for those new health accord talks to begin in earnest, or else all those smiles over the federal budget will turn to frowns in no time. Building transit lines and green infrastructure is one thing, but providing good, timely health care is something far more precious.
Keith Baldrey is chief political reporter for Global B.C.
