Ontario and the federal government have reached a 10-year deal in principle on health care, paving the way for both sides to iron out the details of how the new money will be spent.

Health Minister Sylvia Jones said the province accepted the deal on Wednesday after the two sides agreed to add reviews into the deal to ensure long-term sustainability.

"As Ontario continues to invest at record levels in our publicly funded system, this additional funding will bolster Ontario's investments in health care as we implement our plan for connected and convenient care," Jones wrote in a statement Thursday.

"We look forward to working with our federal counterparts to reach common ground on ensuring there is sustainable federal health-care funding for generations to come. Ontarians deserve no less."

Canada’s premiers agreed earlier this month to accept Ottawa’s offer of more than $46 billion to augment the Canada Health Transfer.

On Thursday, Prime Minister Justin Trudeau said the federal government had also agreed to health-care deals in principle with all four Atlantic provinces. Trudeau said the development was "great news."

"I've signed memorandums of understandings to start the negotiations right now on how we're going to deliver these better outcomes for Canadians," Trudeau said in Halifax.

The premiers have said they were disappointed with the deal, but would take any new money on the table. Ontario Premier Doug Ford has said the deal was a good "down payment."

Since 2020, the premiers have been asking Ottawa to increase the annual health transfers to cover 35 per cent of provincial health budgets, up from the current 22 per cent. To get there, the premiers said they wanted an immediate increase of $28 billion a year, and then an additional five per cent annually after that.

Ontario, federal government reach agreement in principle on health care. #CDNPoli #ONPoli #HealthCare

The federal government is working out separate bilateral deals with the provinces and territories to address needs specific to each jurisdiction.

Ottawa said the deal with Ontario includes $8.4 billion in new money plus $776 million in a one-time top up to address "urgent needs, especially in pediatric hospitals and emergency rooms, and long wait times for surgeries."

"Today’s agreement in principle with Ontario is an opportunity to continue our collaboration and improve the experience of health workers and those they care for," federal Health Minister Jean-Yves Duclos wrote in a statement.

"It will modernize our health-care system, improve access to family health services and mental-health services, reduce surgical backlogs and support health workers. Better quality of care means helping Canadians live longer, healthier lives."

The money comes after several difficult years for hospitals across Ontario. COVID-19 forced them to cancel surgeries in an attempt to deal with a flood of sick patients that overwhelmed emergency departments and intensive care units.

The province said there are more than 200,000 surgeries in its backlog.

In the fall, young children inundated Ontario's four children's hospitals with particularly harsh strains of influenza and respiratory syncytial virus. Those hospitals, too, had to cancel surgeries in order to redeploy staff to emergency departments and ICUs.

There are nearly 12,000 children who need surgeries, the majority of whom have waited longer than the clinically determined benchmark.

The agreement in principle now allows for further discussions on how the new money will be spent. The province said those talks are expected to last several weeks as they negotiate the details before the deal is finalized.

Finance Minister Peter Bethlenfalvy said Thursday the province is committed to spending the new money on health care.

"We will spend the health-care money because the number one priority is to make sure that not only do we have the investments ... but we need to make sure that it's sustainable for the future," Bethlenfalvy said.

The priority areas outlined in the deal include mental health, primary care, increasing the number of health-care workers and addressing surgical backlogs.

Ontario also agreed to upgrade its health data collection to better show how the system is performing as well as annual reporting of specific indicators.

"Work will now begin on a bilateral agreement based on an initial three-year action plan that will detail targets, timelines and additional common indicators related to shared health priorities in each jurisdiction," the federal government said in a statement.

Ottawa said it will work with Ontario to "streamline foreign credential recognition for internationally educated health professionals and advance labour mobility for key health professionals."

The country's premiers had said further discussions were needed with Ottawa to establish long-term predictability and stability in health care.

Last week, Ford proposed reviews be built into the deal.

The federal government quickly agreed to a formal review process to look at bilateral funding deals the provinces made with Ottawa in 2017 to upgrade mental health and home care programs. The two sides also agreed to a similar process to review the new deal.

In a letter last week to the Ontario health minister, Duclos said the province's bilateral agreement would include working toward certain health indicators, agreeing to provide "equity of access'' for underserved groups and upholding the Canada Health Act to strengthen the public health system.

- with files from Morgan Lowrie in Montreal.

This report by The Canadian Press was first published Feb. 23, 2023.

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