Federal Transfers to Provinces/Territories

The federal government provides funding through cash and tax transfers to the provinces and territories to help pay for health care services, but the actual delivery of services is a provincial/territorial responsibility.

Since 1977, federal contributions toward health care expenditures have been made through block funding. From 1996 to 2004, this block funding has been provided through cash and tax transfers under the Canada Health and Social Transfer (CHST). These transfers to the provincial and territorial governments are provided in support of health, post-secondary education and social services. The provincial and territorial governments are entitled to use CHST funding to meet their respective priorities, which differ throughout the country. Effective April 1, 2004, the Canada Health Transfer (CHT) and Canada Social Transfer (CST) improves transparency of federal funding to the provinces and territories.

Some provinces receive additional federal funding through Equalization payments. Equalization payments enable provincial governments to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

In addition to the CHT and the CST, Canada's three territories receive additional federal support through Territorial Formula Financing to assist them in providing public services. The transfers are based on a formula that fills the gap between the expenditure requirements and the revenue-raising capacity of the territories.

Related Information:

Canada. Department of Finance. Transfer Payments to Provinces