Archived - Backgrounder on major transfer renewal

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Transfers Have Reached Record Levels

Since 2007, the Government has made significant investments in major transfers.

Long-term, fair and predictable transfer arrangements have ensured that major transfer support to provinces and territories in 2012-13 will reach a record level of $59 billion. As legislated, this support will continue to grow out to 2014-15:

  • The Canada Health Transfer (CHT) will continue to grow by six per cent a year.
  • The Canada Social Transfer (CST) will continue to grow by three per cent a year.
  • Equalization will continue to grow in line with the economy.
  • Territorial Formula Financing (TFF) will continue to grow in line with its legislated gap-filling formula.

This funding helps ensure that provincial and territorial governments can provide health care, education and other services for all Canadians.

Governments Are Working to Move Health Care Funding to a Balanced and Sustainable Path

Recent data from the Canadian Institute for Health Information shows that growth in provincial/territorial health costs averaged over seven per cent over the 2000 to 2010 period but is projected to decline to just over three per cent by 2011 based on provincial Main Estimates and budget forecasts.

Annual Growth in Provincial/ Territorial Government Sector Health Expenditures
Year Annual Growth in Provincial/ Territorial Government Sector Health Expenditures (%)
1995 0.1
1996 0.3
1997 4.2
1998 6.4
1999 7.2
2000 9.1
2001 7.7
2002 7.2
2003 7.9
2004 6.7
2005 7.2
2006 6.6
2007 7.2
2008 7.9
2009 6.3
2010 (f) 6.3
2011 (f) 3.2
Source: Canadian Institute for Health Information, 2011, National Health Expenditure Trends, 1975 to 2011,
Table B4.1 (f= forecast).

Making a Major New Investment in Health Care and Putting Transfers on a Long-Term, Sustainable Growth Track

The legislation governing all four major transfers expires at the end of 2013-14.

Our Government is committed to a publicly funded, universally accessible health care system that is there when you need it. Today, the Government announced a major new investment in health care that will see funding for health care continue to increase to record levels. Under the new investment, the Government will invest $178 billion in health care over five years.

The Government also recognizes the importance major transfers play within the federation, and is committed to growing these transfers on a balanced and sustainable path going forward.

The Government will not reduce transfers to provinces and territories to help balance the budget, and is committed to protecting transfer growth in 2014-15 and beyond while being fiscally responsible.

  • Funding for health care will continue to grow to record levels from $30 billion per year in 2013-14 to $38 billion per year in 2018-19:
    • The CHT will continue to grow at six per cent for an additional three years beyond 2013-14 (i.e., 2014-15, 2015-16 and 2016-17). 
    • Starting in 2017-18, the CHT will grow in line with a three-year moving average of nominal gross domestic product (GDP) growth, with funding guaranteed to increase by at least three per cent per year. Based on long-term trends, it would be expected to grow in the range of four per cent annually.
    • The CHT growth path will be legislated for 2014-15 and subsequent years.
  • The CST will continue to grow at three per cent annually.
    • The CST growth track will be legislated for 2014-15 and subsequent years.
  • The Government will commit to a review of both the CHT and CST in 10 years.
  • Equalization will continue to grow in line with the rate of growth of the economy, that is, nominal GDP.
  • TFF will remain on its sustainable growth path, growing according to its legislated formula.
    • Both the Equalization and TFF programs will be legislated for a five-year period out to 2018-19.

These measures will ensure that the integrity of the transfer system is maintained, by ensuring that it remains sustainable for all governments.

Chart illustrating annual Health and Social Transfer cash  amounts. For details, refer to the preceding paragraph.