Canada - World Health Organization Regional Office for Europe

72
Health systems in transition Canada
3.3.2 Collection
The dominant sources of funding are the general revenue funds of F/P/T
governments. The bulk of provincial revenues is derived from individual
income taxes, consumption taxes, corporation taxes and, at least in the case of
resource-rich jurisdictions, resource royalties or taxes.
These general tax revenues are supplemented by health premiums in three
provinces. In British Columbia, health premiums come in the form of a poll
tax on individuals ($64 per year in 2012) and families ($116 for a family of two
and $121 for a family of three or more in 2012), while in Ontario and Quebec
they take the form of a surtax that is collected through a progressive income
tax system. 1
In both cases, premiums are only notionally earmarked for health spending
and in fact flow into the general revenue funds of the provincial governments
and thus are treated as part of general taxation. It should also be noted that
health services cannot be denied on the basis of non-payment of premiums,
and the provinces must rely on other remedies to enforce their collection.
Health premiums raise less than 20% of what is expended by the provincial
governments on health each year (McDonnell & McDonnell, 2005). A health
premium in Alberta was eliminated in 2009, after a Task Force on Health
Care Funding and Revenue Generation concluded that the premiums collected
amounted to less than 13% of provincial health revenue needs (Alberta Health
and wellness, 2002).
3.3.3 Pooling of funds and health system transfers
Budgetary allocations for health expenditures are made at three main levels in
Canada: (1) the federal government (2) the provincial and territorial governments
and (3) RHAs. At the federal and provincial levels, budgetary allocations are
decided in cabinet and then reviewed and passed in the respective legislative
chambers.
RHAs do not collect taxes but they allocate the funds they receive from
ministries of health based on what they perceive to be the health demands of
the populations they serve and the health care organizations and providers
they fund. In the past, provincial RHA allocation formulas were used as a tool
of health system reform – specifically to encourage more activity in upstream
primary care and public health from downstream acute care. However, at least
in most cases, these funding allocation formulas do not appear to have achieved
1 At the time of writing, the government of Quebec announced its intention to repeal its health surtax.