As budget season continues, two more provinces and territories released their budgets in late February 2020. In this second instalment of our budget round up, we look at the budgets for the Northwest Territories and Alberta. Read on to learn more about these territorial and provincial budgets and how they relate to Federal Retirees’ priorities.
Northwest Territories
Learn more about the Northwest Territories' 2020 budget.
Alberta
On February 27, 2020, Alberta’s United Conservative Party (UCP) government released its 2020 budget which forecasts $56.8 billion in spending and a deficit of $6.8 billion for the fiscal year. This equates to a $200 million reduction in debt, bringing the province’s total debt to $76.8 billion for 2020-21. The focal points of the budget are two sections titled “Blueprint for Jobs” and “A Fair Deal for Alberta”. While the details for these two budget pieces are limited, the government’s priorities are clear: getting people back to work and reigniting Alberta’s economy. This means less investments in other areas that are also hurting, including education and health care.
Health-care spending is set at $20.8 billion which amounts to a modest increase of $5 million, or 0.3 per cent, since the last budget. This includes continued funding of $100 million for a mental health and addiction strategy, $40 million to respond to the opioid crisis and $20 million for palliative care. Below, we outline the most significant components of the health-care budget as set out in the province’s fiscal plan.
Reducing surgical wait times through the Alberta Surgical Initiative
The provincial government is tackling surgical wait times with the introduction of the Alberta Surgical Initiative, a $500 million plan to shift some services to rural health facilities and independent clinics. $400 million will be spent on renovating rural facilities, such as adding new operating rooms and contracting out simpler surgeries. The remaining $100 million will fund capital projects for Alberta Health Services (AHS) run facilities. With this plan, the UCP government anticipates a doubling in the number of surgeries done in private clinics over the next three years. Currently, 15 per cent of surgeries are contracted out to private clinics, but by 2022-23, the province wants to increase that proportion to 30 per cent or about 90,000 surgeries per year. The government maintains this will reduce wait times, ensure surgeries are performed within the wait time guidelines set by medical specialists (on average, four months) and allow for an additional 80,000 procedures to be completed by 2022-23.
Physician compensation and development
About $5.4 billion or 25 per cent of the health-care budget is set to be spent on physician compensation and development. In February 2020, after failed negotiations with the Alberta Medical Association, the UCP government terminated its funding agreement with physicians, which was set to expire at the end of March. It imposed a new funding framework that will maintain physician funding at current levels and introduce 11 changes to physician fees and rules aimed at controlling the province’s rising health-care costs. The new funding framework goes into effect March 31.
It was expected that a new negotiated agreement would increase spending on physicians by about $2 billion. This money is now being spent on other health-care priorities. The UCP government maintains that the new framework strikes a balance between ensuring that Alberta’s doctors continue to be among the highest compensated doctors in the country, improving patient care and controlling increasing spending on physicians.
Alberta Health Services review
As announced in early February 2020, Ernst & Young completed a review of Alberta Health Services (AHS) and made several recommendations to reduce costs and improve system performance. The review identified opportunities to save Alberta taxpayers between $1.5 billion to $1.9 billion annually and the government committed to reinvesting these savings into the province’s health-care system. Health Minister Tyler Shandro stated that the government has accepted all the recommendations outlined in the report except those that suggest closing hospitals or consolidating urban trauma centres. AHS is in the process of developing an implementation plan, which is set to be delivered by May 13. While the plan is still under development, the government has earmarked $15.4 billion annually for AHS operations over the next three years.
On top of implementing the report’s recommendations, AHS will also be doing the following over the next three years: implementing the previously mentioned Alberta Surgical Initiative; completing implementation of its new clinical information system, Connect Care; and commissioning a new long-term care and designated supportive living spaces so patients do not find themselves in hospital beds longer than necessary.
Drugs and supplemental health benefits
Spending on the province’s various drug and supplemental health benefit programs will stay steady at $1.7 billion, with already announced and upcoming changes expected to offset the projected growth in spending for these programs in 2020-21. The budget reflects several previously announced changes to drug benefits in the province, targeted at addressing increasing drug costs and better aligning Alberta’s programs with those in other provinces. These changes, which move funding to clinically proven lower cost alternatives, include the Maximum Allowable Cost pricing policy expanded in November 2019 as well as the Biosimilar Initiative which will transition patients (excluding children and pregnant women) to biosimilars from high costs biologic medication by July 1. A biosimilar is a drug that is very similar to its originator biologic drug but is less expensive. Unlike generic drugs, which are copies of synthetic drugs, biosimilars are modeled after drugs that use living organisms as key ingredients.
Changes were announced to the Seniors Drug Program in early 2020, with coverage for spouses and dependents under age 65 ending as of March 1. The budget also confirms that income testing will be introduced later this year for higher-income individuals, as was floated in the UCP’s 2019 budget late last year. Overall, $72 million is being cut from this program, which is seeing a reduction from $589.6 million in 2019-20 to $517.4 million in 2020-21. The health minister’s spokesperson Tara Jago stated that “removing non-seniors from the drug plan, using lower cost but equally effective drugs, and introducing an income-tested deductible for high-income beneficiaries – are necessary steps. Requiring seniors with higher incomes to pay a deductible brings Alberta in line with other provinces. Low-income seniors will continue to pay nothing.”
Other programs aimed specifically at older Albertans will also see changes. Funding for the Special Needs Assistance for Seniors program, which provides financial assistance to help older Alberta with low income afford the cost of health and personal supports like diabetic supplies and CPAP machines, is being reduced to “focus on the most essential supports,” as per budget documents. The province is expecting to save between $8.2 million in 2020-21 through these cuts. Changes will also be made to the Alberta Seniors Benefit next year, with eligibility criteria for new applicants set to change. While details remain to be seen, current recipients will not be impacted. The government will contact Albertans currently enrolled in the program to ensure they are aware their benefits will not change. No changes will be made to the Seniors Home Adaptation and Repair Program (SHARP) or the Seniors Property Tax Deferral Program. The UCP government says these changes are necessary to ensure that these programs can meet increasing demands given the rising number of older Albertans.
Mental health and addictions
The 2020 budget builds on the commitments to mental health and addictions made in the previous budget. $100 million is earmarked for the province’s Mental Health and Addiction Strategy. Another $40 million will go toward responding to the opioid crisis. The government is also providing funding for up to 4,000 other publicly funded residential addiction and mental health treatment spaces as well as to provide increased patient access to addiction therapists and counsellors at opioid dependency clinics.
Capital investments in health care
In addition to the capital investments being made through the Alberta Surgical Initiative, the budget outlines several capital investments related to health care. The UCP government is prioritizing ongoing capital projects like the state-of-the-art Calgary Cancer Centre, the newly named Gene Zwozdesky Centre at Norwood in Edmonton and the Grande Prairie Regional Hospital, scheduled to open in 2021. The budget also includes funding for major new infrastructure initiatives like the redevelopment of the Peter Lougheed Centre emergency department, a mental health care unit and a laboratory in Calgary. The province will also spend $15 million to provide Edmonton and northern Alberta with critical laboratory equipment upgrades.
A new program, the Rural Health Facilities Revitalization Program, will be launched to provide infrastructure upgrades across rural Alberta. The budget also allocates funding for the long-awaited Red Deer Regional Hospital Centre Renewal Project, which will improve access to critical life-saving services for central Albertans, including expanded cardiac care.
Finally, $164 million over the next three years will go toward bringing back a new and improved version of the Alberta Supportive Living Initiative (ASLI), which was first introduced by the former Progressive Conservative government and cancelled by the NDP. The program provides capital grants to private businesses to build continuing care facilities.
Reaction to the budget
The opposition reacted swiftly and loudly to the UCP’s 2020 budget. Opposition leader Rachel Notley focused in on the cuts to seniors’ benefits, calling the budget a “raw deal” for older Albertans. “What we’re going to see is massive costs downloaded onto seniors or, in some cases, many seniors who simply can’t afford to take the drugs that their doctors prescribe that allow them to maintain a good quality of life … that allows them to stay out of hospitals,” said Notley. “It is penny wise, pound foolish and cruel.”
The NDP critic for seniors and housing, Lori Sigurdson, noted the cuts will create hardships for older Albertans. “It’s so clear that this UCP government doesn’t care about seniors but they’re making elite corporations the priority,” she said. “They live on fixed incomes sometimes, so they’re going to have to reach in their pockets more for the things they need.”
David Shepherd, NDP health critic, is concerned about the government’s plan to shift resources to private clinics. “It is a shell game,” he said. “They are shuffling money around. They are taking money out of primary care, taking money out of community care, taking money out of seniors’ drug benefits, they’re taking money out of acute care in hospitals and they’re going to shuffle it over to these private facilities.”