Health Care in Canada – the role of federal and provincial governments

The organization of Canada's publicly funded health care system is largely determined by the Canadian Constitution, in which roles and responsibilities are divided between the federal, and provincial and territorial governments. The provincial and territorial governments have most of the responsibility for delivering health and other social services. Only provincial governments have the power to pass laws governing the financing and delivery of health services to the majority of Canadians. This is one reason it is so important that health professionals have a strong provincial association to advocate for and position the profession to best serve the needs of the people of the province. 

The federal government is responsible for some delivery of services for certain groups of people, for example first nations and veterans. Essentially, Canada's health care system is a group of socialized health insurance plans that provides coverage to all Canadian citizens. It is publicly funded and administered on a provincial or territorial basis, within guidelines set by the federal government.

The Canada Health Act is federal legislation that sets out a list of criteria that must be met by the provinces if they are to receive annual federal monies. The Canada Health Act includes the requirements that all provincial systems be publicly administered, comprehensive, universal, portable, and accessible.  While there is some detail within in the act of services to be funded by the publicly funded system, there is no specific mention of occupational therapy, rehabilitation, mental health services or home care.  When these services are provided within a provincial healthcare system, they are provided at the direction of the province.

More information about Canada’s public healthcare system 

In addition to the publicly funded health care system, Ontarians have access to health care services funded by:

Who pays for health care?

 Publicly funded health care is financed with general revenue raised through federal, provincial and territorial taxation, such as personal and corporate taxes, sales taxes, payroll levies and other revenue. Provinces may also charge a health premium on their residents to help pay for publicly funded health care services (Ontario does so), but non-payment of a premium must not limit access to medically necessary health services.

Provincial governments are responsible for setting budgets for health care spending and management of their health care system and related services that affect broad determinants of health.  The federal government is permitted to spend money in the area of health care, either through fiscal transfers to the provinces or directly to individuals and groups. The federal government supports provincial health care systems through transfer payments and uses this money to influence provincial policy-making in the area of health care. It provides money to the provinces if they implement programs and policies that are consistent with federal objectives.

Conversely, if a province institutes policies that directly contravene federal goals, the federal government can choose to withdraw its financial support.  Ontario’s provincial health budget represents just under 40% of the total provincial budget.  Local Health Integration Networks (LHINs) receive funding allocations from the Ministry of Health and Long-Term Care and are responsible for funding allocation to health service provider organizations (hospitals, CCACs, long-term care homes, etc.) at the regional level.  This is intended to allow for regional differences based on needs.  Understanding the important role LHINs play in identifying both needs for services and for funding, it is important to ensure that LHINs are well informed of important information relating to the issues and priorities of one’s profession and the clients to be served.

WSIB coverage is funded through employer payed premiums.  Auto Insurance Coverage is funded through premiums of the provincially mandated mandatory auto insurance that all drivers must carry.

How does Health Policy develop in Ontario?

Health services delivery is largely directed by provincial laws and the provincial budget.  Laws start out as ideas….ideas for change.  These may be proposed by the government (party with most elected representatives) or a private member (an elected member of provincial parliament (MPP)) and they are introduced into the legislature of all elected representatives.Ideas for change generally arise from a need to solve a problem, to save money or to serve more people or as a means to improve quality, quantity or the experience of health care. 

To this end, advocacy organizations such as professional associations may influence MPPs and bureaucrats (the non-elected staff of the government), identifying issues that need to be addressed or solutions or innovations that can improve service delivery and outcomes.  This is why it is important for members of associations to keep their organizations apprised of issues and opportunities that they see and experience.  Working together members and association leadership can make a difference!

When an idea is introduced into the legislature it is called a “Bill”.  A bill proceeds through a process of review, debate and decision-making before it is voted upon.  If passed a bill becomes a law or has a future date set at which point it will become a law. Learn more about how a bill becomes a law in Ontario.  Throughout the legislative process, advocacy organizations can have impact. Bills can be defeated or passed or they can be amended prior to passing.  Strong advocacy organizations are informing key stakeholders and MPPs of their issues throughout the process in an effort to support a better outcome.

Not all health system policy change requires legislation to direct change, regulation changes can happen at the level of a Ministry.  Annual provincial budgets may announce and enable new programs or services or changes to those existing.  Increasingly governments conduct public consultations on major policy issues in order to gather public opinion, priorities and needs.  Active participation in such processes is an important opportunity for advocacy organizations and their members.  Such consultations may result in the development of long range strategies that will guide policy evolution and budget allocation over a period of years.