The federal Liberals have introduced legislation to provide $7.2 billion to cash-strapped provinces, territories and municipalities, with more than half slated for immediate health-care needs.

Finance Minister Chrystia Freeland says COVID-19 has placed extreme pressure on health-care systems across the country and Canadians need help urgently.

Freeland told a news conference Thursday that $4 billion in new money, to flow through the Canada Health Transfer, will help ensure health systems do not buckle under the continued strain of the pandemic.

The bill also proposes $1 billion to support the rollout of COVID-19 vaccination programs.

"We know that to fully revitalize Canada's economy, Canadians must be vaccinated," Freeland said. "Vaccine campaigns are accelerating. And that is such a good thing. But we need to vaccinate even more Canadians even more quickly."

The legislation would provide an added $2.2 billion for municipalities and First Nations communities through the federal gas-tax fund, to be renamed the Canada Community-Building Fund.

The Federation of Canadian Municipalities welcomed the extra cash as an important step toward a strong, community-rooted recovery.

“Right now, in some communities, that may mean fixing a bridge to keep commuters safe and to support local commerce," said federation president Garth Frizzell, a city councillor in Prince George, B.C.

"In others, it may mean upgrading a recreational facility to keep people healthy and connected — or energy-retrofitting one to save money and reduce emissions. Or it could mean improving critical water and wastewater infrastructure to protect the local environment.”

The federal Liberals have promised $7.2 billion to cash-strapped provinces, territories and municipalities, with more than half slated for immediate health-care needs. #CDNPoli #HealthCare

The planned spending is a down payment on programs that will be more fully outlined in the federal budget next month, Freeland said.

Canada’s premiers also welcomed the prospect of more money to help with extraordinary expenses, but reiterated their call for Ottawa to increase its share of health costs to 35 per cent from 22 per cent, and to maintain this over time.

Such an increase would mean a $28-billion boost to the Canada Health Transfer in the next fiscal year.

"Short-term funding, while useful, does not, however, enable provinces and territories to address the long-term health care needs of Canadians," the premiers said in a statement.

Added Quebec Premier François Legault, chairman of the premiers' council: "We can continue to manage the pandemic while addressing the future sustainability of our health care systems."

The Canadian Medical Association said COVID-19 has stretched health care in Canada beyond its limits, adding the funding would help fill gaps that have only grown since the pandemic was declared a year ago.

"As we continue to grapple with the challenges posed by the pandemic, dialogue needs to continue between federal and provincial and territorial governments to reach longer-term funding arrangements," said Dr. Ann Collins, the association's president.

This report by The Canadian Press was first published March 25, 2021.