42nd Annual Premiers’ Conference

VICTORIA, August 2, 2001 -- Premiers have agreed to lead in restructuring a sustainable health care system. Premiers discussed the common challenge of providing high quality public health care services within the revenue available to each province and territory, and resolved to work co-operatively to address the problem. As Chair of the Annual Premiers' Conference, Premier Campbell of British Columbia will initiate this process, which will culminate with a special meeting of the Premiers in mid-January, 2002 aimed at advancing an inter-provincial/territorial action plan for better managing health costs.

Premiers acknowledged that the challenge of coping with rapidly rising costs has been compounded by a growing demand for health services that has outstripped the rate of revenue growth from economic growth and from federal transfer payments. This fiscal imbalance suggests two issues: a revenue problem and a cost-management challenge.

Premiers invited the Prime Minister to join with them in following through on his commitment to achieve adequate and sustainable fiscal arrangements over the immediate to medium term, including:

   
• Immediate removal of the equalization ceiling;
   
• Immediate work on the development of a strengthened and fairer equalization program formula, including as one possible alternative, a ten-province standard that recognizes the volatility around resource revenues, and comprehensive revenue coverage;
   
• Restoration of federal health funding through the CHST to at least 18% and introduction of an appropriate escalator; and
   
• Work on other CHST measures, including tax-point transfers as one possible alternative to the current CHST cash transfer.

Premiers directed that their Finance Ministers to engage in preparatory work in anticipation of discussions with the federal government on these issues. (Addressing Fiscal Imbalance - Report of Provincial and Territorial Finance Ministers)

Premiers pointed out that the current health care system was designed some 40 years ago on the understanding that it would be cost-shared on a 50-50 basis between the federal government and the provincial/territorial governments. The proportion of federal contributions for provincial/territorial health care services has declined significantly over the past 25 years. All Premiers agree that this revenue problem needs to be addressed through enhanced federal transfer payments.

Premiers also acknowledged that even with much needed revenue enhancements, the current health care system is simply not sustainable without fundamental changes. It is the provinces/territories that are responsible for the provision of health care services, and as such, they are responsible for managing health care costs. All provinces/territories are currently grappling with this challenge and each province/territory is developing its own strategy for providing health services and improving health within the funding available to them.

It was agreed that all provinces/territories will work together to identify and share information, ideas and best practices for managing health care in a concerted effort to tackle this challenge in the months and years ahead.

Premiers concluded that this must be undertaken promptly so as to provide meaningful input into the Commission on the Future of Health Care in Canada, and to ensure that the Royal Commission's report adequately reflects the challenges and opportunities for renewing health care services that the provinces/territories have identified and intend to pursue.

Premiers decided that they will focus their energy and resources on developing constructive approaches to the following four key areas of health services:

   
1. Pharmaceutical management
   
2. Determination of the scope of practice amongst health professions
   
3. Continuing care
   
4. Human Resources Management

Premiers concluded that provinces and territories should utilise a common approach for approval of coverage for new drugs, for determination of cost-benefit of new drugs, and appropriate utilization and cost-benefits of drugs, and in the determination of the scope of practice amongst health professions.

Premiers also identified the need to find more effective and efficient means for enhancing long term care services, in view of the common challenges associated with each province's and territory's ageing population.

Premiers agreed that there must be better planning and inter-provincial co-operation in training and recruiting health professionals to ensure that there is an adequate level of health care professionals available in all provinces and territories.

Another area of health care cost management is research into the prevalence of fetal alcohol syndrome in Canada. It can reasonably be extrapolated that each Canadian baby with F.A.S. costs the health care system in excess of $1 million per child. Premiers call upon Canada to undertake research into the prevalence of F.A.S. in Canada. Provinces and territories will continue their co-operative approaches into early childhood development initiatives, such as the Prairie Northern Partnership and adopt best practices.

Finally, the Premiers have asked the federal government to report back on progress for early childhood development and primary care and health services in aboriginal communities.

* noting that Quebec does not participate in early childhood development programs

Tables attached

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