SOMBA K'E/YELLOWKNIFE
The territorial government has been told to expect smaller increases in health transfer payments from the federal government starting next year.
The Canada Health Transfer annual increase of six per cent will change as of April 1, according to the GNWT. For 2016-17, the territorial government received $44.1 million from the federal government to fund health care.
Spending on the Department of Health and Social Services is a quarter of the territory's budget, the largest of any department. The GNWT budgeted to spend $414 million on the department this fiscal year, down more than $10 million from the revised budget for the previous year.
Instead of constant six per cent increases, the feds will use a formula that ties increases to nominal gross domestic product. The increases won't fall below three per cent under the new formula.
The change means the rate of increases will drop but the territorial government will still be getting more money per year.
David Stewart, deputy minister of finance, said the lowered increases will put greater pressure on the health system to provide the same level of care that it does now.
"The challenge is that the demand for health expenditures with the aging population continues to grow. So when the federal funding was increasing six per cent annually, that helped in terms of managing that growth in terms of demand and expenditures on health services," Stewart said.
The deputy minister said the change was expected for some time as it was the position of the former federal government announced in 2011.
"Obviously there's interest in seeing that funding increase carry on but it isn't new," he said.
It was something accounted for in the GNWT's budget, he said.
However, the federal government recently notified provinces and territories the change would still occur.
Additional funding for a health accord was not clearly identified in the 2016 federal budget, noted GNWT Health and Social Service spokesperson Umesh Sutendra.
"The new federal government did not include a lot of new health-care funding as part of their platform or their budget," Kam Lake MLA Kieron Testart said, adding health-care funding agreements tend to be contentious as costs are always rising.
Testart was a candidate for the Liberal nomination before dropping out of the race to support Michael McLeod. He ended up running in the territorial election and winning the Kam Lake seat.
During the federal election, Liberal leader Justin Trudeau promised to begin negotiations on a new health accord that deals with the Canada Health Transfer but didn't commit to reinstating the annual six per cent increases.
