Making Medicare:  The History of Health Care in Canada, 1914-2007 Back to Timeline Back to Timeline
History: 1968-1978 CONFLICT AND COMPROMISE: CREATING THE MEDICAL CARE AC, 1958–1968 FROM COST CONTROL TO HEALTH PROMOTION: IMPLEMENTING MEDICARE, 19681978 SAVING THE SYSTEM: THE CANADA HEALTH ACT, THE OTTAWA CHARTER AND ACHIEVING HEALTH FOR ALL, 19781988



From Shared-Cost to Block Funding: Solving the Financial Problem?

In 1976, the federal government announced changes to the Federal–Provincial Fiscal Arrangements and Established Programs Financing Act that permitted it to use a combination of tax-point transfers and cash grants to create block funding rather than shared-cost funding for health and post-secondary education. The funding proposal contained an escalator clause tied to the growth of the gross national product, a revenue guarantee and a new grant of $20 per capita to help provinces introduce less expensive health services such as adult residential care, home care and ambulatory health services, while also expanding intermediate care in nursing homes and converting mental hospitals. In response to provincial complaints that the Hospital Insurance and Diagnostic Services Act reporting requirements had been too onerous, the new legislation, the 1977 Established Programs Financing Act, did not require more than information reporting. With the passage of this legislation and the downsizing of the Health Programs Branch of National Health and Welfare, Minister Lalonde concluded that he had achieved his first objective.

Photo: “Hey! @!*@! I paid for us to go up not down!” Ontario Medicare Coverage
“Hey! @!*@! I paid for us to go up not down!” Ontario Medicare Coverage

Roy Carless, cartoonist for the labour movement, shows Premier Bill Davis controlling medicare spending in Ontario circa 1976. The federal government was moving towards block funding and encouraging the provinces to introduce cheaper forms of health care, such as home care.
© Library and Archives Canada, Acc. No. 1987-042-591, e008440961. Artist: Roy Carless.



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    Date Created: March 31, 2010 | Last Updated: April 21, 2010