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Ontario needs to make more health cuts to meet its targets: watchdog

Last Updated Jan 10, 2017 at 7:11 pm EDT

Health spending in Ontario will need to be chopped further if the Liberal government wants to meet its goal of returning the next budget to balance, a provincial watchdog says.

The government has limited growth in the health sector over the past few years to about two per cent, largely through freezing hospitals’ base operating funding and cutting payments to doctors.

But for the government to keep growth in its health budget to its target of 1.7 per cent over the next three years, it will need to find further savings, according to a report from the financial accountability office.

The government is set to be over this fiscal year’s target by $400 million, rising to $900 million next year and $1.5 billion in 2018-19, the report found.

“Because the health sector is the single largest component of provincial spending, managing the rate of growth in health sector expense is a critical part of the province’s plan to return the budget to balance in 2017-18,” said Peter Harrison, the office’s chief financial analyst.

Health was at nearly $52 billion in the 2016-17 budget, accounting for 39 per cent of all government spending.

Over the last four years, as the government worked toward its goal of eliminating the deficit by 2017-18, growth in health expenditures averaged 2.4 per cent, well below the average annual growth of 6.8 per cent in the previous decade, said Harrison.

The report comes as Ontario and nine other provinces and territories urge the federal government to pony up more in health transfers than the proposed increase of 3.5 per cent per year.

Premier Kathleen Wynne said the report highlights what she and other premiers have been saying, that without new funding, they’re unable to balance the competing priorities of the health system, particularly as mental-health and home-care needs grow.

“(The 3.5 per cent) is just not adequate,” she said. “It’s not possible for us to meet all the competing needs, that’s what the financial accountability office is highlighting and I think it’s very important to have those objective voices to confirm what we’ve been saying in the national context.”

If the province does receive additional funding from the federal government, the FAO’s conclusions would change, Harrison said.

NDP critic John Vanthof said the Liberals have already made deep cuts in health care to the point that there is no fat left in the system to trim.

“The government has to recognize that and I think they’re playing a dangerous game here with the health-care system,” he said. “They’re playing a bit of Russian roulette, hoping that they make it to the next election and I don’t think we can afford to do that.”

Progressive Conservative critic Jeff Yurek said the health budget is being balanced on the backs of patients and health-care providers.

“This report shows that the high quality health care and level of service that the people of Ontario need and deserve will become increasingly impossible to provide,” he said.

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