Canada Health Transfer

Canada Health Transfer

The Canada Health Transfer (CHT) is the Canadian government's transfer payment programme in support of the health systems of the provinces and territories of Canada. It was made independent from the Canada Health and Social Transfer programme on April 1, 2004 to allow for greater accountability and transparency for federal health funding.

Overview

Unlike Equalization payments, which are unconditional, the CHT is a block transfer; the funds must be used by provinces and territories for the purposes of "maintaining the national criteria" for publicly provided health care in Canada (as set out in the "Canada Health Act").

The CHT is made up of a cash transfer and tax transfer. In 2006-07, CHT cash transfer payments from the federal government to the provinces and territories were $20.1 billion. Annual cash levels are set in legislation up to the 2013-14 fiscal year as a result of the September 2004 Health Accord between the federal government and the provinces/territories.

While the CHT is allocated on an equal per capita basis, the CHT cash component is not because it takes into account the value of provincial/territorial tax points. The value of a tax point represents the amount of revenue that is generated by one percentage point of a particular tax (in the case of the CHT and the CST, the personal income tax or the corporate income tax). Since provinces do not have identical economies and, therefore, have unequal capacity to raise tax revenues, a tax point is worth more in a wealthy province than in a poorer province.

Currently Alberta and Ontario, the two provinces with the highest revenue raising ability, receive lower per capita CHT cash payments than the other provinces.

See also

External links

* [http://www.fin.gc.ca/FEDPROV/chte.html Department of Finance Canada - Description of Canada Health Transfer programme]

References


Wikimedia Foundation. 2010.

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