Organizations across Canada are raising concerns about whether federal funding for health programs such as pharmacare, mental health and palliative care will continue.
Recently, more than 60 organizations wrote federal Minister of Health Marjorie Michel urging the government to stay committed to pharmacare.
“It is unacceptable that, just as some Canadians have started to benefit from Pharmacare Act funding, this government is signalling its intention to let that funding lapse,” the March letter reads.
April’s spring economic update has only increased those concerns.
The statement projects a decrease in funding for health agreements with the provinces and territories, beginning in the 2027-2028 fiscal year.
Advocates for palliative care, mental health and rare diseases are concerned these projected decreases mean current funding agreements, set to expire in 2027, will not be renewed.
Cuts to government spending “has everything to do with the fact they need to fund defence,” said David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives think tank.
In November, the federal budget projected the government would spend $82 billion in new defence commitments over the next five years.
Ian Lee, a professor in the Sprott School of Business at Carleton University, says the spring economic update continues to show the “rupture” between Prime Minister Mark Carney’s priorities and those of former prime minister Justin Trudeau.
Lee says he expects to see steady cuts to social programs in future years, but they “won’t be radical [or] overnight.”
Pharmacare
The Trudeau government hailed the announcement of pharmacare in 2024 as a major achievement.
However, so far, only B.C., Manitoba, P.E.I. and the Yukon have signed pharmacare agreements, and those agreements primarily cover insulin and contraception. These agreements are set to expire in 2029.
The spring economic update projects a decrease in federal health transfers beginning in 2028-2029. That year, Ottawa is projected to transfer $2.5 billion, down from $3.1 billion in 2027-2028 and $4.3 billion in 2026-2027.
Federal health transfers are used to fund health care that is not considered essential under the Canada Health Act. These health transfers are used for pharmacare, but also for other types of health care, including mental health and rare diseases.
In a statement to Canadian Affairs, Alexandre Bergeron, spokesperson to the minister of health, said the government is committed to “honouring existing pharmacare agreements.”
“The previous government offered all provinces and territories the opportunity to negotiate pharmacare agreements,” the statement says. “We are tracking those agreements that have already been done to see how [the program] works.”
Lee, at Carleton University, says he thinks the slated reduction in health-care funding could indicate the government is considering limiting who is eligible for pharmacare.
“I am not suggesting they’re going to get rid of it at all. I don’t believe they will,” he said.
“But what it does suggest, I believe, is that they are going to continually reduce the eligibility of these programs to ensure that low-income and people of modest incomes are the only ones that benefit.”
Mental health
Advocates say decreased health spending could also impact programs that support mental health, palliative care and rare diseases.
Numerous agreements between the federal government and the provinces and territories are set to expire next year.
These include a 10-year agreement to support mental health care and addiction treatments; a six-year agreement to fund various palliative care programs; and three-year agreements that were part of Canada’s first national strategy for rare diseases.
“This is a really critical time,” said Marion Cooper, president of the Canadian Mental Health Association, an organization that supports mental health programs across the country.
Mental health care needs to be considered as Ottawa plans its next budget, she says.
“[The funding] has been used in many provinces to really strengthen access to mental health and substance use [and] addictions care, so we know it’s really critical funding,” she said.
Over the past ten years, the federal government has provided $5 billion to provinces and territories to invest in mental health care and addiction treatment. The funding is used differently across the country, says Cooper, and not all the progress is easy to track.
In 2023, the federal government allocated an additional $25 billion over 10 years across four shared health priorities, one of which is mental health and addictions care.
A 2024 report found that, on average, provinces and territories only spent 15 per cent of this funding on mental health care.
There needs to be better reporting on how provinces and territories use the funding, Cooper says.
While Cooper hopes the funding is renewed, she ultimately wants mental health care to be covered as part of Canada’s universal health-care system.
“The public is really demanding access to mental health care,” she said.
Rare diseases
Also set to expire next year is funding for provinces and territories to buy medications for rare diseases.
The funding was part of Canada’s first National Strategy for Drugs for Rare Diseases. Each province and territory signed its own agreement with Ottawa outlining the funding amount and which medications it would cover. In total, Ottawa pledged up to $1.4 billion for drugs for rare diseases.
“The fund has been tremendously valuable because it has let the provinces know that rare diseases and support for rare diseases is critically important,” said Durhane Wong-Rieger, president and CEO of the Canadian Organization for Rare Disorders, an advocacy group.
The funding has meant that people can get drugs faster, she says.
Provinces and territories are required to report to Health Canada each year about how the funding is used.
In a statement to Canadian Affairs, Health Canada said it is “reviewing early results, lessons learned, and potential next steps to support continued improvements in access to drugs for rare diseases for Canadians.”
Lee says he thinks that, in the future, Ottawa may opt for more funding agreements based on specific needs, like rare diseases or mental health. The agreements allow Ottawa to say it is responding to specific concerns, he says.
Palliative care
Palliative care advocates are also worried about a potential end to funding for palliative care research and education projects.
In 2018, the federal government created a framework that described how to improve palliative care. In 2021, Ottawa committed just over $29 million over six years to support programs related to palliative care.
Organizations that received funding say it has helped them, but that much more work is needed to ensure everyone in Canada can access palliative care when they need it.
“Canada has made progress, but the framework has not been fully realized in the lives of every patient [and] family who needs palliative care,” said Jeff Moat, CEO of Pallium Canada, a palliative care education charity. Pallium Canada used the federal funding to provide online training in palliative care to health-care professionals across the country.
A coalition of palliative care organizations is asking for the government to invest another $29 million for implementing the palliative care framework. This time, they would like the money distributed over four years.
“Continuing to invest in palliative care is a good investment when our population is aging and health-care costs are growing,” said Daniel Nowoselski, advocacy manager of hospice and palliative care for the Canadian Cancer Society.
In a statement to Canadian Affairs, Health Canada said the federal government will continue to work on improving palliative care. But it did not commit to any additional funding.
Much of the palliative framework funding went to non-profit organizations. While organizations need to consider how to become financially sustainable, the government still has a role to play, Nowoselski says.
“Some of these programs are health-care programs,” he said. That means there is an “expectation” that the government will be involved in funding them, he said.
