Population Aging and Per Capita Cash Payments under the Canada Health Transfer

Federal-provincial discussions on health care financing have paid little attention to the equity aspects of a formula that allocates total federal contributions among provinces on an equal per capita basis.  This paper shows that this allocation formula is unfavourable to a smaller province with a projected rate of population aging faster than the national average.  It also shows that the fiscal implications are quite substantial.  Finally, the paper indicates that the proposed transfer of spending responsibilities for drugs to the federal government would reduce the growth rate of provincial health care spending but would not address the issues arising from differential rates of population aging among provinces.

ISBN – 1-55832-117-3