The Parkland Institute

For Immediate Release | June 25, 2009

Health care budget cuts are unnecessary

Numbers show spending on public health services no higher than in 1990

Parkland Institute

EDMONTON—The Alberta government’s plans for health care cuts cannot be justified by a lack of finances, according to a review of budgets and spending released today by the Parkland Institute.

“Hospital spending has not recovered from the cuts of the 1990s and yet they are being hit again. Those costs are not out of control and cuts are completely unjustified,” says Parkland Research Director Diana Gibson. “When taken as a percentage of GDP public health expenditures are actually lower today than they were in 1990.” The report, titled Crisis? What Crisis?, points out that determining affordability requires looking at the economy, not just the budget. .

The two fact sheets that accompany the report highlight the fact that this “crisis” is of the government’s own manufacturing. In ten years economic growth has averaged 4.2 % per year, but the government has deliberately shrunk the budget as a proportion of GDP. This gives the appearance of health spending rising, as a proportion of the budget, while it hasn’t increased relative to the economy.

Gibson says, “There is no fiscal necessity to cut health services, which are one of Albertans’ top priorities for their government.”

“This is the government that has saved almost none of the boom-time surpluses, has foregone $8 billion to $15 billion in tax revenue per year and has given away billions more in royalty breaks,” says Gibson. “The problem is not that health care is unaffordable, but rather that the government has chosen to be irresponsible with revenue collection and savings.”

“The public health care system has yet to fully recover from the 21% in cuts inflicted upon it between 1994 and 1996, and now the government wants to start cutting again,” points out researcher Greg Flanagan, author of the September 2008 report Sustainable Healthcare for Seniors from which much of the information in the fact sheets and backgrounder is drawn.

Gibson says that the Institute has chosen to release the backgrounder and accompanying fact sheets to ensure that Albertans have the information they need in order to fully assess the cuts to health care that will be announced next week. “Albertans need to know that this is not about affordability; this is about political choices guided by ideology, and it’s about irresponsible fiscal management.”

The Parkland Institute is a non-partisan public policy research institute in the Faculty of Arts at the University of Alberta.

Related research:

• Crisis? What Crisis? (Reports)

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