© Copyright 2006 Rogers Publishing Ltd. The following article first appeared in the April 2005 edition of BENEFITS CANADA magazine.
It’s spring. Canadians can finally see above the snow banks. It’s a season of change—time to paint the living room, time to plan that special summer trip.

Although federal Finance Minister Ralph Goodale didn’t make any surprise announcements in the 2005 budget that have a major impact on employersponsored health benefits plans, many consultants feel positive the federal government is moving in the right direction. Goodale added $805 million in healthcare funding to be implemented over five years, in addition to the First Ministers’ $41.3 billion deal reached last September.

“My budget delivered on those commitments,” said Goodale in a post-budget speech to a luncheon sponsored by the Association of Financial Professionals in Toronto. “We have negotiated a new agreement with all of the premiers…and the budget has promised money through the Canada Health Transfer and through equalization. Over ten years, it will total an incremental $75 billion.”

The consensus among benefits consultants is that the government’s additional funding is moving in the right direction, with more money allocated to seniors and the medical expense tax credit. “I think the additional measures that came in this budget will be welcomed by employers,” said Marg French, principal with Mercer Human Resource Consulting in Toronto.

Senior benefits consultant Tim Clarke, at Hewitt Associates in Toronto, stressed that plan sponsors will not see any immediate savings from this budget. “Anything that might be done to deal with chronic diseases, shorter waiting lists—any effect that would have on employer plans—is sort of a ripple effect down the road,” said Clarke. He added this budget reiterated the First Ministers’ healthcare agreement, but didn’t give specific information on catastrophic drug coverage. “If employers were expecting to see anything concrete on a topic like that, it didn’t come out of the budget.”

Rick Holinshead, senior vice-president of Aon Consulting in Toronto, believes the healthcare funding announced in the budget is a good start in helping solve bigger issues for employers in the long-term: “Every journey begins with a first step. The budget recognizes the fact that we do have to take corrective action.”

“I think there was no major surprise in the budget,” said Francois Poirer, actuary and senior consultant at Watson Wyatt Worldwide in Toronto. “Funding and shifting of costs to employer-sponsored health programs will remain critical issues. It would take much more money than they’ve committed to— but I think it’s a first step towards the right direction.”


Federal Finance Minister Ralph Goodale extended the medical expense tax credit to include medicinal marijuana and other traditional therapies. “That is one area where this is a small change…most employers design eligibility for their spending accounts based on what’s allowed under the Income Tax Act,” said Tim Clarke, senior benefits consultant at Hewitt Associates in Toronto. “They’re adjudicated by the insurance carriers, so the employer won’t receive any financial or administrative burden on their part.”

Seniors’ issues were recognized in Canada’s latest federal budget. Goodale announced funding for seniors’ programs, including healthcare, income security, retirement savings and caregiver assistance.

“It appears there is recognition at the federal level of the fact that we are an aging population,” said Rick Holinshead, senior vice-president at Aon Consulting in Toronto. “Until some of these initiatives kick in, the caregiver tax credit is recognition—some relief on the tax side.”

Seventy-five million dollars, over five years, will go towards encouraging foreign-trained doctors to obtain their Canadian accreditation. “I think in the long run, it should have a positive impact,” said Francois Poirier, actuary and senior consultant at Watson Wyatt in Toronto. “If more doctors are there, they’re going to be able to spend more time with their patients, better diagnose them, and provide more cost-effective treatment. Down the line, both individuals and employers will be saving on that.” Right now, one in six Canadians is without a doctor.

Chandra Price

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