March 10, 2000
Provincial Treasurer Stockwell Day questioned the Federal Health Minister today for making false claims that Ottawa funds 33 per cent of Canada's healthcare costs. Day said the numbers speak for themselves. The Canada Health and Social Transfer to Alberta for 1999-2000 is about $1.2 billion, while expenses in health, post secondary education, and social services are expected to be nearly $8 billion, so their contribution is less than 15 per cent. "If Mr. Rock can get 33 per cent out of that, it's a good thing he's not a finance minister," the Provincial Treasurer said. Day said the Federal Government appears to be playing games with numbers, including a 23-year-old tax transfer as part of its current funding. Prior to 1977, the federal government paid 50 per cent of all provincial costs for hospital, medical and post secondary education expenses. But in 1977, Ottawa pushed the provinces to get out of that arrangement by cutting the cash transfer in half and offering "tax points" in return. Essentially, Ottawa cut it's personal and corporate income tax rates, allowing the provinces to raise their rates by the same amount. The cash transfer was to grow with the Canadian economy and the tax room was made part of provincial revenues. In 1981, Ottawa changed the rules, linking the "tax points" and the cash transfer. It subsequently capped the "total entitlement" allowing the tax points to reduce Ottawa's cash obligation to the provinces. And in 1994, the Feds struck again, cutting transfers $18.7 billion to $12.5 billion. In 1999-2000 the transfer was just $14.5 billion. "Mr. Rock is basing numbers on a deal signed in 1977," Day said, "a deal that Ottawa has moved away from a number of times." - 30 - For further information, please contact:
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| Shannon Larkins Director of Communications Alberta Treasury (780) 427-5364 |
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