FIRST MINISTERS AGREE
ON 2003 FIRST MINISTERS ACCORD ON HEALTH CARE RENEWAL

February 5, 2003
Ottawa, Ontario 

Prime Minister Jean Chrétien, the Provincial Premiers and Territorial Leaders today reached an historic agreement with an action plan for change to renew and sustain public health care for Canadians.

"Together, we are taking a big step forward to strengthen our health care system to better serve the needs of Canadians. The 2003 First Ministers’ Accord on Health Care Renewal invests in change and makes the health care system more accountable to our citizens," said Prime Minister Chrétien.

"Health care is the single most important priority of Canadians. Canadians want renewal for this generation and for generations to come. This Accord sets out an Action Plan that will ensure all Canadians have timely access to quality health care on the basis of need and not ability to pay. For its part, the Government of Canada is making significant investments which will translate into $17.3 billion in increased federal support for health over the next three years and rising to $34.8 billion over five years. The new investments agreed upon today build on the health care agreement of September 2000. We have also made our health care system more accountable through the creation of a Health Council that will report regularly to Canadians on the quality of their health care system," added the Prime Minister.

New investments in a Health Reform Fund will support primary health care, home care, and catastrophic drug coverage. In addition, funding will support diagnostic and medical equipment, and information technology such as electronic health records and telehealth services. New funding will also be provided to help relieve immediate pressures on our health care system.

The Government of Canada will increase funding to address the health of Aboriginal people and work with other governments and Aboriginal leaders to close the gap in health status between Aboriginal and non-Aboriginal Canadians through better integration of services.

First Ministers reaffirm the importance of the Equalization program in ensuring that all provinces have the ability to provide comparable levels of public services at comparable levels of taxation.

In order to strengthen the Equalization program, and in light of improved federal fiscal circumstances, the Prime Minister has agreed to permanently remove the Equalization ceiling on a going-forward basis.

The Accord reflects the ideas of Canadians who contributed to the health care renewal debate through consultations on various federal and provincial reports. The excellent reports produced by the Honourable Roy Romanow, Senator Kirby, Messrs. Mazankowski, Clair and Fyke were instrumental in guiding governments to this historic outcome.

"Canadians have told us that they want to see where their health care dollars are being spent and that their money is buying real change. My colleagues and I are committed to strengthening our health care and ensuring it is more accountable to the citizens who fund it," concluded the Prime Minister.

2003 FIRST MINISTERS HEALTH ACCORD 

To meet its commitments under the 2003 First Ministers Health Accord, the government of Canada will provide a $17.3 billion increase in health care funding over the next three years, which will rise to $34.8 billion over five years. We will:

• create a 5-year $16 billion Health Reform Fund targeted to primary health care, home care and catastrophic drug coverage;
• create a new Canada Health Transfer (CHT) by April 1, 2004 to enhance transparency and accountability and ensure predictable annual increases in health transfers. Subject to a review of progress toward achieving the agreed upon reforms and following the First Ministers Meeting, the Health Reform Fund will be rolled into the CHT by March 31, 2008;
• Immediately invest $2.5 billion in the CHST to relieve existing pressures;
• establish a $1.5 billion Diagnostic/Medical Equipment Fund to improve access to publicly funded diagnostic services;
• provide an additional $600 million to continue development of secure electronic patient records, which are vital to quality care and patient safety;
• provide $500 million for research hospitals through the Canada Foundation for Innovation (CFI).
• The federal government is prepared to put up to an additional $2 billion into health for the provinces at the end of fiscal year 2003-04 if the Minister of Finance determines during the month of January that there will be a sufficient surplus above the normal contingency reserve to permit such an investment.
• The Federal government will extend transfers for 2007-08 and provide an additional $1.8 billion in new money. As a result, transfers will increase by $9.5 billion over the next five years.

Further initiatives

The Accord also supports initiatives to advance patient safety, health human resources, technology assessment, innovation and research, and healthy living.

Accountability

Annual reporting to Canadians will be facilitated by the creation of a Health Council made up of Canadians, representatives of both orders of government and experts. Their work will enable Canadians to assess health system performance and the pace of implementation of the Accord. To improve reporting, the Accord contains clear objectives and a commitment to achieving comparable indicators on health system performance.

Working toward change

This Accord marks a turning point in our efforts to renew health care for the 21^st century. Change will take time. The Accord builds on and accelerates the work agreed to in September 2000 and the important reforms all governments have already made to improve the quality, accessibility and sustainability of the public health care system.

Today, we have taken an important step to strengthen and renew our health care system and help Canadians maintain and protect their health.

BACKGROUNDER

FEDERAL HEALTH INVESTMENTS

Total increases to the CHST, including scheduled increases and the extension to 2007-08, will be $9.5 billion over the next five years. In addition, the federal government will add an immediate infusion of $2.5 billion for health to be drawn by the provinces as they require. This means that transfers available for health will increase by $12 billion over the next 5 years.

To increase accountability and transparency, the federal government commits to create a separate Canada Health Transfer (CHT) within the year which will include the notional health component of the CHST and will provide predictable annual increases in 2008 and beyond.

In addition, the federal government will invest $16 billion in a five-year reform fund for primary health care, home care and catastrophic drugs. The fund will start with $1.0 billion in 2003-04 and rise to $5.5 billion by 2007-08. The fund will be provided as a transfer to the provinces and territories. Progress towards achieving the agreed-upon reforms will be reviewed by First Ministers by March 2008. The funding provided through the Health Reform Fund will then be integrated into the Canada Health Transfer.

Transfers will increase by $32.7 billion in the 2008-09 to 2010-11 period.

The federal government will also establish a $1.5 billion diagnostic/medical equipment fund, will invest $600 million in health information technology for electronic health records, telehealth and information infrastructure and will provide $500 million for research hospitals through the Canada Foundation for Innovation (CFI).

Further, the federal government will invest $1.6 billion over five years in direct health accord initiatives, including patient safety, Canadian Coordinating Office for Health Technology Assessment (CCHOTA), Employment Insurance (EI) compassionate care, GST rebate for health institutions, a national immunization strategy, and governance and accountability.

In addition, the federal government will fund $1.3 billion over the next five years in a series of federal health priorities to be set out in the Budget.

Finally, the federal government is committing $1.3 billion to the improvement of Aboriginal health, the details to be worked out in consultation with Aboriginal peoples.

Summary of Increases in Federal Investments for Health

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