In 1995, EPF was replaced by a block grant called the Canada Health and Social Transfer. The tax point transfers were 13.5% of federal personal income tax and 1% of federal corporate income tax. EPF was made up of roughly equal parts cash and tax point transfer. In 1977, the Established Program Financing (EPF) block transfer was introduced to replace the cost-sharing grants for healthcare and post-secondary education. The provinces and territories that received the federal health transfers agreed to comply with four core principles: public administration, comprehensiveness, universality, and portability (a fifth principle, accessibility, was introduced by the Canada Health Act in 1984).
The federal Medical Care Act of 1966 offered cost-sharing to all provincial governments that agreed to extend universal coverage to physician services. The Hospital Insurance and Diagnostic Services Act of 1957 guaranteed all provincial governments 50-50 cost sharing if they adopted universal hospital coverage under a set of national standards. To encourage the creation of a nationwide Medicare program, the federal government offered cost-sharing grants to provinces beginning in the 1950s and 60s (Béland et al., 2017). This policy brief will summarize the history of CHT, review current challenges to CHT, and discuss possible policy solutions and areas for further study. The Canada Health Transfer (CHT) is the largest federal transfer, totalling $42 billion in 2020-21.
Provincial and territorial budgets need help, but federal-provincial fiscal arrangement in healthcare have undergone few changes since 2015. Even before the COVID-19 pandemic, the sustainability of health expenditures was under increasing pressure from an aging population. Comprising between 30-50% of annual provincial budgets, healthcare is the largest single expenditure for provinces and territories. Haizhen Mou, Professor, Johnson Shoyama Graduate School of Public Policy, University of Saskatchewanįunding health expenditures is a major source of tension in the Canadian federation.
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