| Chapter 1: | Examining Provincial Variability |
standard and are made based on a single-estimate system. This equalization program includes a fiscal capacity cap to ensure that equalization payments do not raise a province’s total per capita fiscal capacity above that of any nonreceiving province. With the renewed equalization program, the 2007 federal budget indicated over $12.7 billion in fiscal year 2008, an increase of $1.5 billion over the previous fiscal year (Finance Canada 2007). For fiscal year 2011, the equalization budget further increased to about $14.4 billion (Finance Canada 2010).
The possibility of the withdrawal of federal funds is a mechanism used to secure compliance with the national requirements of the CHA. This is illustrated by the negotiations that took place between premier Ralph Klein of Alberta and his health minister, Shirley McClellan, in 1995 and the Liberal federal government over so-called facilities fees that were being charged to patients by a rapidly growing number of privately owned day-surgery clinics in Alberta. These clinics were charging patients for otherwise fully insured hospital services, particularly cataract surgeries, and the medicare-enrolled surgeons and anesthetists owning or working in these clinics were billing the public plan for their professional fees without the patients’ knowledge and performing the same procedures in hospitals at no cost to patients (Armstrong 2000). Ultimately, after being fined $3.6 million in 1996, Alberta agreed to eliminate facilities fees for medically necessary insured services (Bhatia and Coleman 2003; Choudry 2002). Federal withholding of revenue in response to a province’s allowing facilities fees also occurred in Manitoba, Newfoundland, and Nova Scotia; facility fees were subsequently dropped in Manitoba and Newfoundland but not in Nova Scotia, which loses some federal revenue as a result (Church and Smith 2006).
During the years of the Liberal Chrétien federal regime, beyond the rhetoric about privatization and sustainability, agreements between Alberta and the federal government were ultimately resolved through bargaining with respect to how much revenue Alberta would receive from the federal government. The current Conservative prime minister,