The federal government, the ten provinces, and the three territories have key roles to play in the health care system in Canada.
The federal government is responsible for:
The federal government provides direct health care services to certain population groups for which it is constitutionally responsible (First Nations and Inuit people).
The federal government also provides health services to eligible veterans, refugee protection claimants and inmates of federal penitentiaries. In addition, the federal government has responsibilities for health care for serving members of the Canadian Forces and the Royal Canadian Mounted Police.
The federal government provides funding through cash and tax transfers to the provinces and territories to help pay for health care services, but the actual delivery of services is a provincial/territorial responsibility.
Since 1977, federal contributions toward health care expenditures have been made through block funding. From 1996 to 2004, this block funding has been provided through cash and tax transfers under the Canada Health and Social Transfer (CHST). These transfers to the provincial and territorial governments are provided in support of health, post-secondary education and social services. The provincial and territorial governments are entitled to use CHST funding to meet their respective priorities, which differ throughout the country. Effective April 1, 2004, the Canada Health Transfer (CHT) and Canada Social Transfer (CST) improves transparency of federal funding to the provinces and territories.
Some provinces receive additional federal funding through Equalization payments. Equalization payments enable provincial governments to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.
In addition to the CHT and the CST, Canada's three territories receive additional federal support through Territorial Formula Financing to assist them in providing public services. The transfers are based on a formula that fills the gap between the expenditure requirements and the revenue-raising capacity of the territories.