The federal government’s recent decision to limit Canada Health Transfer increases to the rate of economic growth changes the long-term fiscal picture, the Parliamentary Budget Officer says in a new report. In short, it benefits Ottawa, but puts the provinces and territories in a bigger financial bind. Ottawa is keeping the existing six per cent escalator in Canada Health Transfer (CHT) payments until 2016-17 after which time they will be linked to nominal GDP growth. The report projects that the CHT will increase by 3.9 per cent a year on average over the 2017-18 to 2024-25 period while provincial-territorial health spending will increase by an average of 5.1 per cent. The loss in revenue will add to the financial burden of the provinces and territories, and the report says they will need to institute measures amounting to 2.4 per cent of GDP to raise revenue, reduce program spending, or both, in order to create sustainable financial conditions. Read the report here.