Federal spending on health care and elderly benefits are set to rise at a faster clip over the next 12 months than previously planned under forecasts the parliamentary budget officer warns don't account for looming budget promises.
Health transfers are calculated to grow by at least three per cent each year, but the budget office says cash to provinces is set to rise by 4.8 per cent year-over-year. The $2.1 billion increase will bring federal spending on health care to $45.2 billion in the coming fiscal year that starts in April.
While the provinces argue they don't have the fiscal capacity to heap on billions more in spending because of the pandemic, an analysis released Thursday suggests the lower levels of government are in better financial shape. He argues that if provinces use their surpluses to cut taxes, rather than invest in health care or long-term care, it could undermine their argument of the need for more federal spending in those areas.
The pressure on the federal government to up spending on health care and long-term care comes from a variety of groups, including the Canadian Medical Association, the Canadian Federation of Students, the Canadian Federation of Nurses Unions, the Canadian Association for Long-Term Care and the College of Family Physicians Canada, based on budget submissions to the House of Commons finance committee.
A report released Thursday by the C.D. Howe Institute cautions against upping spending indiscriminately, saying that a 2006 transfer boost appears to have increased costs rather than improved services.
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