Budget 2001: “We won't fund your tax cuts,” Rock warns provinces

The advance billing cast the federal budget as balanced, in every sense of the word. It would keep the books in the black, while simultaneously placing pressing needs in areas like security, innovation and health care on an equal footing. But there was little doubt security measures were the marquee item Dec. 10 as Finance Minister Paul Martin tried to come to grips with economic life after Sept. 11 by presenting his first full budget in nearly 2 years.

Figure. The CMA's Haddad with reporters: “Ottawa could have done and should have done more.” Photo by: Steven Wharry

In the wake of Sept. 11, the ensuing war in Afghanistan and the global economic slowdown, grand plans for other investments were dramatically curtailed. The bulk of Martin's new money, $7.7 billion over 5 years, was funnelled into a comprehensive set of security measures.

These have a significant health component, with $513 million being set aside over 5 years for infrastructure related to the handling of chemical, biological, radiological and nuclear threats. Health Minister Allan Rock said the new money will be used to buy smallpox vaccine, train health workers and expand laboratory facilities.

Although security measures didn't entirely crowd out other priorities, they left little room for further increases in cash transfers for health care, federal officials said during the budget lock-up. However, the budget did reaffirm Ottawa's commitment to honour health care funding agreements reached with the provinces in September 2000.

CMA President Henry Haddad said that isn't good enough: “The federal government could have done and should have done more to address the problem of the crisis of access in health care.”

Missing from the budget, said Haddad, were measures such as the indexation of federal cash transfers and lifting of the cap on equalization payments for poorer provinces.

CMA Secretary General Bill Tholl said measures to address the renewal of the health care work force were also missing. “If this were a CMA report card, we'd give them an ‘A’ on the urgent and a ‘C’ on the important.”

Nor did the budget include “targeted funding to develop home, community or long-term-care programs,” noted Canadian Healthcare Association President Sharon Sholzberg-Gray. “There's still unfinished business as regards the health system.”

Rock argued that the Health Renewal Agreement signed in 2000 already provides annual increases in federal transfers. “We've escalated, very considerably,” he told reporters, while lashing out at the Ontario government for demanding more money. “They're threatening the elderly and the needy with cuts in home care and other essential services unless they get more money from the federal government. I tell you, they're holding the health care system ransom. Their demands are unreasonable. They've made choices to reduce their own revenues and now they expect us to pay for their tax cuts? Come on.”

With the federal budget being filtered through the prism of Liberal leadership ambitions, Rock emerged from the exercise with a pocketful of major victories, including a 15.4% hike in the budget of the Canadian Institutes of Health Research — more than twice what Industry Minister Brian Tobin could muster for sister granting councils in the natural and social sciences.

Rock also collected $95 million to cover operations at the Canadian Institute for Health Information for the next 4 years and $10 million for ongoing research at BC's Genome Sequence Centre.