Federal fiscal blueprint dodges health concerns

Federal responsibilities

Moreover, Finance officials and the budget itself sent clear signals that the government does not view health infrastructure and human resource needs as falling within its purview.

Health-sector needs are more than adequately met by the scheduled 6% increase, to $24 billion, in federal payments to the provinces under the Canada Health Transfer “which, de facto, are the federal contribution to health infrastructure and human resources, even though that's not our responsibility,” one Finance official argued.

As a consequence, hospitals and other health care facilities are precluded from tapping any of the roughly $12 billion in new infrastructure programs that lie at the core of the government's economic stimulus package.

Pamela Fralick, president of the Canadian Healthcare Association and cochair of the Health Action Lobby, a coalition of 36 national health organizations, found it “troubling” that the government so clearly carved out a stance that it is not responsible for health infrastructure or human resources. “We're getting that message loud and clear. And that's very disappointing.”

Fralick said a similar measure of disinterestedness appears to apply to outlays for public health. She noted that while the government has repeatedly indicated over the past year that it would bolster funding for public health programming in areas such as food safety and drug oversight, the budget contains nothing to that effect. The budget does, however, contain a program that sets aside $250 million over 2 years to modernize food inspection labs and other federal facilities. But it suggests that priority will be given to the upgrade of labs “for which a realistic business plan is submitted for the transfer of the facility to a university, business or non-profit organization.”

Canadian Medical Association President Dr. Robert Ouellet lamented the absence of monies aimed at redressing the national shortage of physicians and other health professionals. “All the political parties, during the election campaign, promised something on that,” he notes. But he welcomed additional funding for electronic record keeping.

Health infrastructure

Without question, the $500-million outlay for the Canada Health Infoway is the single measure that could have the greatest impact on physicians and the health community. The previous $1.6 billion that the independent, nonprofit corporation had received was primarily aimed at large electronic systems such as drug and lab information networks within hospitals. But Finance officials said at least half of the new monies are intended for projects aimed at getting individual physicians to start keeping electronic health records for their patients.

“The goal is to have 50% of all Canadians with electronic health records by the end of 2010,” said one official. Although program details are sparse and must still be ironed out with the provinces, it is expected physicians will eventually receive some measure of direct financial aid to purchase electronic equipment or hire staff that would be necessary as part of any move toward electronic record keeping.

In a related measure, the budget introduced a temporary 100% Capital Cost Allowance Rate for computer hardware and systems software acquired before Feb. 1, 2011, for which physicians would be eligible. The move is projected to cost the government $340 million in the coming fiscal year and $355 million in 2010/11.

First Nations health

Federal officials also touted a $305-million, 2-year outlay to improve health outcomes for First Nations peoples as an indication that the health sector was not ignored in the budget.

The new monies are part of a broad, ongoing initiative that aims to have the provinces, rather than the federal government, provide health services for First Nations peoples living on reserves, including expanded availability of noninsured services such as dental care, eye care and prescription drugs.

Finance officials said no province has yet made a commitment to provide such services. But they argued that's primarily because negotiations haven't been completed on how such a shift in health care delivery will be financed. They also claimed that the provinces have expressed reluctance to become involved until existing health facilities on reserves are upgraded. To that end, the budget provides $135 million over 2 years to renovate health clinics and nurses' residences on reserves.

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Budget Highlights

Other health measures

Overall, federal spending will rise by $21.2 billion in 2009/10, to $258 billion, while the government will run a deficit of $33.7 billion. Within that lay a few other health-related measures, including:

Risk of research re-exodus raised

Perhaps the most telling indicator of the place of research in the 2009/10 federal budget, and the almost ad hoc nature of the blueprint, was the fact that days after the release of the economic plan, senior officials at Canada's 3 granting councils were still reeling in confusion.

The council budgets had taken a body blow, as Finance Minister Jim Flaherty's blueprint announced that the Canadian Institutes of Health Research (CIHR), the Natural Sciences and Engineering Research Council and the Social Sciences and Humanities Research Council would have $17.7 million trimmed from their base budget allocations this year, $43 million cut in fiscal 2010/11 and $87.2 million cut in 2011/12, as their contribution to the ongoing “Strategic Review” exercise that is aimed at realigning spending along lines of Conservative government priority.

Finance officials said during the background budget briefings that the cuts were aggregated, so the net effect will be a $147.9-million reduction in granting council budgets over 3 years. The officials said each council would provide details regarding the blow it must absorb.

But the councils say they haven't yet been informed of such details. It's even unclear, in their minds, whether the end result is an $87.7-million (with the third year total including previous year reductions) or a $147.9-million blow.

“Who knows?” says one senior council official, who spoke on condition of anonymity, as the agencies were ordered by the Prime Minister's Office to refuse media interviews on budgetary matters. “It's not at all clear what's going on. One minister tells us it's cumulative. Another says it isn't. I'm not even sure that the government knows.”

Even the share of the cuts that each council would have to absorb is unclear, although the expectation is that their budgets will be reduced by the same percentage. Currently, CIHR's base budget is $733.3 million. The Natural Sciences and Engineering Research Council's budget is $709 million, while that of the Social Sciences and Humanities Research Council is $249 million.

The councils expected that some clarity would be achieved at a scheduled meeting in mid-February, after CMAJ went to print. The councils also indicated that any decisions on specific program cuts they have to make as a result of the base budget reductions cannot be made until they know exactly what they're dealing with.

The lack of clarity and the budget's failure to bolster support for research grants left the scientific community fearing the ultimate outcome will be a reverse exodus of researchers to the United States, particularly after newly elected President Barack Obama recently unveiled an American economic stimulus package that funnels billions of dollars into science and research infrastructure.

Association of Universities and Colleges of Canada President Claire Morris and Canadian Association of University Teachers Executive-Director Jim Turk argued that researchers will inevitably look south for greener (read $) research pastures, as the council cuts will compress already declining success rates in grant competitions.

Ultimately, such cuts work to offset gains made over the past decade as a result of faculty recruitment programs such as Canada Research Chairs, they said.

There's a risk there will be a “flow” of researchers back to the United States “if we don't have the environment that produces the top-class facilities, the top-class people, and the money to do the research. That's kind of the question mark, whether there's a little imbalance there,” says Morris.

Turk says the so-called brain gain of the past decade could easily become a brain redrain. “For a lot of scientists, I think the attraction of the United States will be compelling.”

While direct research funding took a hit, Flaherty's fiscal blueprint was not entirely devoid of research-related measures, which included: