Well, I just finished watching the federal health and finance ministers discuss the failed federal transfer health deal on the news. I suppose coming just a few days before Christmas, a dispute over federal health transfers can become a new sort of Canadian holiday tradition given it has happened before with the December 2011 unilateral transfer decision announced by the federal government.
The provinces are walking away from a deal that would have provided a 3.5 percent annual increase in the Canada Health Transfer as well as additional billions (11.5 billion over ten years) targeted for mental health and home care. The provinces are upset with the amount of the increase - less than what they say they need as well as the intrusion into provincial affairs by the money being pointed at mental health and home care.
I suppose this type of operatic performance by assorted provincial health ministers must make Prime Minister Justin Trudeau pine for the days of Harper approach to federal provincial relations. What is a federal government to do? I think given the failure of reaching a deal, the federal government should simply revert to what was supposed to kick in starting in 2017. That is, increases tied to the increase in nominal GDP subject to a floor increase of 3 percent. Indeed, the CBC reported Finance Minister Morneau has said just that- 3 percent as of April 1st 2017. This has been what the provinces have been expecting since 2011 and should not come as a surprise.
A more cynical observer of federal provincial relations might argue that this has turned out just like the federal government would have liked. Having the provinces walk away has allowed the federal government to say that they tried to give the provinces more while reverting to the smaller increases set under the Harper government.