Alberta
Massive funding boosts kick off Alberta’s transition to fully comprehensive care
Dr. Paul Parks, president, Alberta Medical Association
Canada signs more than $1 billion bilateral agreement with Alberta to improve health care over three years
From: Health Canada
This investment will increase access to a primary health provider, reduce wait times for mental health services, and provide greater access to health data.
Canadians want and deserve a health care system that provides timely access to health services whenever and wherever they are needed. That is why the Government of Canada is investing over $200 billion over 10 years, which includes $25 billion for tailored bilateral agreements with provinces and territories, to support the Working Together to Improve Health Care for Canadians plan.
Today, the Honourable Mark Holland, Canada’s Minister of Health, and the Honourable Adriana LaGrange, Alberta Minister of Health, announced a bilateral agreement to invest $1.06 billion over the next three years, marking a crucial step in a 10-year plan for collaboration. This includes $285 million per year in new funding by the Government of Canada and continuing $70 million per year in previously-announced mental health and substance use funding, which will help accelerate efforts already underway in Alberta to improve health care access and services.
Through this federal funding, Alberta has a three year action plan to deliver improvements to its health care system by 2026, including:
- Increasing access to primary care providers for Albertans and reducing emergency department visits that could have been addressed by a family medicine office. This will be achieved by expanding team-based care and enhancing virtual care, and increasing the number of appointments available to patients.
- Funding community providers to increase diagnostic imaging capacity in the province, reducing wait times for CT scans and MRIs.
- Improving patient care by enhancing Albertans’ ability to access digital health services and their own health information by implementing e-referral services and accelerating the secure exchange of data across the health system.
- Expanding integrated services for youth mental health services in the province through school-based and community day programs, and offering more supports for youth with complex needs as they transition into adult services.
- Reducing median wait times for community mental health and substance use services by establishing new and improving existing treatment spaces, along with prioritizing culturally appropriate Indigenous community supports.
- Ensuring that First Nations and Métis people have access to high-quality, culturally safe care that meets their unique health needs. This will be achieved through dedicated funding for initiatives to enhance access to primary care in Indigenous communities, and funding for communities to develop health workforce capacity and infrastructure to improve the collection and use of health information and data.
- Improving access to health care for underserved Albertans, including through expanded community pilots that bring testing services to rural, remote and Indigenous communities, advancing French-language health services, and greater clinical care for women.
Progress on these initiatives and broader commitments will be measured against targets which Alberta will publicly report on annually.
Through this new agreement, Alberta will improve how health information is collected, shared, used and reported to Canadians; streamline foreign credential recognition for internationally educated health professionals; facilitate the mobility of key health professionals within Canada; and fulfill shared responsibilities to uphold the Canada Health Act to protect Canadians’ access to health care that is based on need, not the ability to pay.
Recognizing the significant disparities in Indigenous health outcomes, the Government of Canada and the Government of Alberta also commit to meaningfully engage and work together with Indigenous partners to support improved access to quality and culturally appropriate health care services. Alberta’s action plan is informed by continued engagement with its Indigenous partners and recent discussions involving the federal government. All orders of government will approach health decisions in their respective jurisdictions through a lens that promotes respect and reconciliation with Indigenous Peoples.
Alberta and the federal government will continue working together to improve access to health services and deliver tangible results to all residents across the province, including responding to the needs of Indigenous and other underserved and disadvantaged populations.
Quotes
“Our government is working together with provinces and territories to get Canadians the healthcare they need. This agreement is an important step in our collaboration with Alberta to take measurable actions to transform our health care system. The funding will help improve access to primary care and create better mental health services in Alberta. Together, we will continue working to achieve better health outcomes for all Canadians.”
The Honourable Mark Holland
Minister of Health of Canada
“Mental health is health, and through this agreement, we will be working with Alberta to integrate mental health and substance use care as a full and equal part of our universal health care system. This agreement will strengthen the capacity of family health providers, reduce substance use harms, and expand virtual care for youth to improve access to quality and timely mental health care and substance use supports. Together, we must ensure that all Canadians have access to supports and services for their mental health and well-being – when they need them, wherever they need them.”
The Honourable Ya’ara Saks
Minister of Mental Health and Addictions and Associate Minister of Health of Canada
“Alberta’s government is taking a serious look at the way health care is being delivered in our province. This is why we are refocusing our health care system to ensure Albertans have access to timely care, when and where they need it. This initial funding from the federal government is a good start and will support our shared health priorities of expanding access to primary care across the province and especially in our Indigenous communities, supporting our health care workers, improving access to quality mental health, and modernizing our health systems.”
The Honourable Adriana LaGrange
Minister of Health of Alberta
“Alberta’s government is supporting Albertans to improve their mental health and recover from the deadly disease of addiction as we build out the Alberta Recovery Model and refocus our provincial healthcare system. We are doing this by increasing access to CASA Mental Health Classrooms across the province, building more bed based mental health treatment capacity for youth, and improving access to mental health and addiction treatment services in communities. This initial funding from the federal government will offer some support to these made in Alberta initiatives as we build a better system of mental health and addiction care for Albertans.”
The Honourable Dan Williams
Minister of Mental Health and Addiction of Alberta
Quick facts
- The Working Together investment includes $25 billion for tailored bilateral agreements with provinces and territories, a guaranteed 5% Canada Health Transfer (CHT) increase for the next five years—amounting to $17.5 billion—and a one time CHT $2 billion top-up to address urgent needs of emergency rooms and paediatric hospitals delivered in June 2023. Combined, these investments provide provinces and territories the flexibility to address the unique needs of their populations and geography, and accelerate health care system improvements.
- Budget 2023 outlined the Government of Canada’s plan to invest over $200 billion over 10 years, including $46.2 billion in new funding for provinces and territories, to improve health care for Canadians. Within this funding, $25 billion is allocated through tailored bilateral agreements to address the unique needs of their populations and geography in four shared health priorities:
- expanding access to family health services, including in rural and remote areas;
- supporting health workers and reducing backlogs;
- increasing mental health and substance use support; and
- modernizing health care systems with health data and digital tools.
- All provinces and territories are already making considerable investments to advance progress in all four of these priority areas, and the new federal funding is complementing and expanding those efforts.
- As part of these bilateral agreements, provinces and territories are developing action plans that outline how funds will be spent and how progress will be measured to demonstrate to Canadians that improvements are occurring in Canada’s health care system. Alberta’s initial 3-year Action Plan can be found here.
- Budget 2017 committed $11 billion over 10 years in federal funding to provinces and territories to improve access to home and community care, and mental health and addictions services for Canadians. Bilateral agreements were signed with provinces and territories to access the first six years of funding. The final four years of funding for mental health and addictions are included in the new Working Together bilateral agreements.
- The Government is also working with provinces and territories to implement a second bilateral agreement focused on helping Canadians age with dignity close to home, with access to home care or care in a safe long-term care facility. This agreement will include the remaining $2.4 billion over four years to improve access to home and community care from Budget 2017; and the $3 billion over five years for long-term care from Budget 2021 to apply standards of care in long-term care facilities and help support workforce stability.
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From the Province of Alberta
This funding will be an essential transitional step to ensure doctors can continue to provide this care as we rapidly transition to a funding model that supports fully comprehensive care.”
Dr. Paul Parks, president, Alberta Medical Association
New funding to stabilize primary health careStabilization funding is coming soon as Alberta’s government continues working to improve primary health care across the province.  The government is pulling out all the stops to stabilize, strengthen and improve Alberta’s primary health care system. Additional funding of $200 million over two years will improve access to family physicians and help ensure primary health care is available for every Albertan when and where they need it. This funding is enabled through the new Canada-Alberta Health Funding Agreement with the federal government. The agreement represents a total of approximately $1.1 billion in additional health care funding over three years for shared priorities.
Stabilization funding is an important transitional measure identified through work under the memorandum of understanding (MOU) between the minister of health and the Alberta Medical Association (AMA), signed earlier this fall. The AMA has been advocating for family physicians and rural generalists through its work under the MOU. Alberta’s government will continue to engage with the AMA as it works to develop a new, sustainable physician comprehensive care model, which will also dictate how this additional funding will be distributed. In addition to work between the government and the AMA, the Comprehensive Care Task Force will, in the new year, provide a first draft of recommendations that will include additional short-term stabilization actions to help family doctors continue to practise comprehensive care and bridge the gap until a new physician comprehensive care model is developed. These short-term actions will:
Alberta’s government is committed to finalizing a sustainable physician comprehensive care model that will address the concerns of family physicians and rural generalists and ensure Albertans can access the care they need.
Other recently announced supports for primary health care include:
Related information |
By Kris Sims
The Canadian Taxpayers Federation is applauding the Alberta government for giving Albertans a huge income tax cut in Budget 2025, but is strongly warning against its dive into debt by running a deficit.
“Premier Danielle Smith keeping her promise to cut Alberta’s income tax is great news, because it means huge savings for most working families,” said Kris Sims, CTF Alberta Director. “Families are fighting to afford basics right now, and if they can save more than $1,500 per year thanks to this big tax cut, that would cover a month’s rent or more than a month’s worth of groceries.”
Finance Minister Nate Horner announced, effective this fiscal year, Alberta will drop its lowest income tax rate to eight per cent, down from 10 per cent, for the first $60,000 of earnings.
The government estimates this income tax cut will save the average Alberta worker about $750 per year, or more than $1,500 per year for a two-person working family.
Albertans earning less than $60,000 a year will see a 20 per cent reduction to their annual provincial income tax bill.
The budget also contained some bad news.
The province is running a $5.2 billion deficit in 2025-26 and the government is planning to keep running deficits for two more years.
Total spending has gone up from $73.1 billion from last budget to $79.3 billion this year, an increase of 8.4 per cent.
“If the government had frozen spending at last year’s budget level, the province could have a $1 billion surplus and still cut the income tax,” said Sims. “The debt is going up over the next few years, but we caught a lucky break with interest rates dropping this past year, so we aren’t paying as much in interest payments on the debt.”
The province’s debt is now estimated to be $82.8 billion for 2025-26.
Interest payments on the provincial debt are costing taxpayers about $2.9 billion, about a 12 per cent decrease from last year.
The government has just tabled its budget in the Legislature.
We were invited to the government’s advance briefing, which gave us a few hours to review the documents, ask questions, and analyze the numbers before the official release.
Now that the embargo has been lifted, we can share our thoughts with you.
However, this is just our preliminary analysis – we’ll have a more in-depth breakdown for you next week.
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The 2025/26 Budget is a projection for the next year – what the government expects will happen from April 1st, 2025 to March 31st, 2026.
It represents the government’s best estimate of future revenue and its plan for expenditures.
In the budget (and in this email) this type of figure is referred to as a Budget figure.
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The actual final figures won’t be known until the 2025/26 Annual Report is released in the middle of next year.
Of course, as we’ve seen in the past, things don’t always go according to plan.
In the budget (and in this email) this type of figure is referred to as an Actual figure.
Importantly, this means that the 2024/25 Annual Report isn’t ready yet, either.
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Therefore, in the meantime, the Q3 2025/26 Fiscal Update, which has figures up to December 31st, 2024, provides a forecast for the 2024/25 year.
The government looks at the actual results three quarters of the way through the previous year, and uses those figures to get the most accurate forecast on what will be the final result in the annual report, to help with estimating the 2025-26 year.
In the budget (and in this email) this type of figure is referred to as a Forecast figure.
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Accurately estimating, and tracking these three types of figures is a key part of good budgeting.
Sometimes, the economy performs better than expected, oil prices could be higher than initially forecast, or more revenue may come in from other sources.
But, other times, there’s a recession or a drop in oil prices, leading to lower-than-expected revenue.
On the spending side, governments sometimes find savings, keeping expenses lower than planned.
Alternatively, unexpected costs, disasters, or just governments being governments can also drive spending higher than budgeted.
The best way to manage this uncertainty is:
- Be conservative in estimating revenue.
- Only plan to spend what is reasonably expected to come in.
- Stick to that spending plan to avoid overspending.
By following these principles, the risk of an unexpected deficit is minimized.
And if revenue exceeds expectations or expenses come in lower, the surplus can be used to pay down debt or be returned to taxpayers.
On these three measures, this year’s budget gets a mixed grade.
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On the first point, the government has indeed made some pretty conservative estimates of revenue – including assuming an oil price several dollars below where it currently stands, and well below the previous year’s predictions.
The government has also assumed there will be some significant (though not catastrophic) effects from a potential trade war.
If oil prices end up higher, or Canada avoids a trade war with the US, then revenue could be significantly higher than planned.
Interestingly, this year’s budget looks very different depending on whether you compare it to last year’s budget, or the latest forecast.
This year’s budget revenue is $6.6 billion lower than what actually happened in last year’s forecast revenue.
But, this year’s budget revenue is actually $600 million higher than what was expected to happen in last year’s budget revenue.
In other words, if you compare this year’s budget to what the government expected to happen last year, revenue is up a small amount, but when you compare this year’s budget to what actually happened last year, revenue is down a lot.
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On the second point, unfortunately, the government doesn’t score so well.
Expenses are up quite a bit, even though revenue is expected to drop.
According to some measurements, expenditures are increasing slower than the combined rate of population growth and inflation – which is the goal the government set for itself in 2023.
But, when other expenses like contingencies for emergencies are included, or when expenses are measured in other ways, spending is increasing faster than that benchmark.
This year’s budget expenses are $4.4 billion higher than what was actually spent in last year’s forecast expenses.
But, this year’s budget expenses are $6.1 billion higher than what was expected to happen in last year’s budget expenses.
Perhaps the bigger question is why is expenditure increasing at all when revenue is expected to drop?
If there’s less money coming in, the government should really be using this as an opportunity to reduce overall expenditures.
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On the third point, we will – of course – have to wait and see what the final accounts look like next year!
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Before we wrap up this initial analysis, there’s one aspect of the budget that is likely to receive significant attention, and that is a tax cut.
Originally planned to be phased in over the next few years, a tax cut will now be back-dated to January 1st of this year.
Previously, any income below about $150,000 was subject to a 10% provincial tax, while incomes above $150,000 attract higher and higher tax rates of 12%, 13%, 14%, and 15% as incomes increase.
Under the new tax plan, incomes under $60,000 would only be taxed at 8%, with incomes between $60,000 and $150,000 still paying 10%, and incomes above $150,000 still paying 12%, 13%, 14%, and 15%, as before.
Some commentators are likely to question the wisdom of a tax cut that reduces revenue when the budget is going to be in deficit.
But, the reality is that this tax cut doesn’t actually cost much.
We’ll have the exact figures for you by next week, but suffice to say that it’s a pretty small portion of the overall deficit, and there’s a deficit because spending is up a lot, not because of a small tax cut.
In general, lower taxes are good, but we would have preferred the government work towards a lower, flatter tax instead.
The Alberta Advantage was built on Alberta’s unique flat tax system where everyone paid the same low flat tax (not the same amount, the same percentage!) and so wasn’t punished for succeeding.
Alberta needs a plan to get back to a low flat tax, and we will continue to advocate for this at the Alberta Institute.
Maybe we can do better than just returning to the old 10% flat tax, though?
Maybe we should aim for a flat tax of 8%, instead?
That’s it for today’s quick initial analysis.
In next week’s analysis, we’ll break down the pros and cons of these decisions and outline where we might have taken a different approach.
In the meantime, if you appreciate our work and want to support more of this kind of independent analysis of Alberta’s finances, please consider making a donation here:
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