Budget signals lower increases to health transfers, end of funding deals
- Sarah Ritchie
- 7 days ago
- 1 min read
Sarah Ritchie, The Canadian Press
Published: November 11, 2025 at 5:36 AM EST
OTTAWA — The federal budget signals there is no room for the premiers to negotiate for more health-care funding in coming years, one economist says, as the Ontario government calls for that to change.
The Canada Health Transfer is projected to be $54.7 billion in 2025-26 and is set to grow by five per cent per year until 2028.
After that, the budget sets out a plan for the increases, known as the escalator, to be a minimum of three per cent annually, based on a rolling three-year average of nominal GDP growth.
“It looks like the signal from the budget is that health transfers, social transfers, equalizations — those things are not going to change. There’s no room for negotiation,” said Mostafa Askari, chief economist at the University of Ottawa’s Institute of Fiscal Studies and Democracy.
Askari said that’s because the government’s main fiscal target is to balance the operating budget, which includes health transfers, within three years.
The Canadian Union of Public Employees’ budget analysis said that means the overall share of federal funding going toward provincial and territorial health budgets will decrease in the next five years.
“Inflation and an aging population will mean that the real cost of maintaining service levels will be higher than nominal GDP increases,” the analysis said.
