Federal-provincial health accord funnels $500 million into CFI for research hospitals

The Canada Foundation for Innovation (CFI) is the surprise beneficiary of the First Ministers Accord on Health Renewal with $500 million in new funding to be directed towards research hospitals. The announcement — buried in the backgrounder of a February 5 press release — came with no details. But it’s almost certainly part of a larger trend in today’s Budget of using arm’s length foundations to deliver healthcare funding with money from the year-end surplus.

“We’re thrilled and surprised. It’s good for research in Canada and a great vote of confidence in CFI and the institutions out there,” says Carmen Charette, CFI’s senior VP, adding that it appears to be a pre-Budget announcement. “It will be one-shot money (and) there will be changes to our funding agreement. The institutions are interested in knowing what this means”

At the CFI’s annual general meeting and dinner early last week, no mention was made of the new funding, in stark contrast to previous awards that were announced with great fanfare and attended by senior politicians. It was almost certainly a topic of discussion at the CFI’s board meeting the following day, which included observers from both Industry Canada and the Finance department.

As in the past the CFI secretary will be given the authority to negotiate with the federal government on the terms and conditions attached to the new funding. Since its formation in 1997, the federal government has invested $3.65 billion in the CFI, radically transforming Canada’s research landscape. All awards are made through a competitive, peer-reviewed process and usually represent 40% of the value of successful projects.

LATEST REPORTS DON’T MENTION CFI

Last year saw the release of two major reports on health care reform. Roy Romanow’s Commission on the Future of Health Care in Canada released its Building on Values report in November. It was preceded the previous month by the sixth installment of The Health of Canadians report by the Standing Senate Committee on Social Affairs, Science and Technology (R$, November 4/02) Neither report contained recommendations for boosting CFI funding for research hospitals.

The new CFI funding is part of a $2.6-billion commitment towards equipment, infrastructure and information technology. The federal-provincial health accord stipulates that diagnostic and other medical equipment will receive $1.6 billion in new funding.

It also provides $600 million for “health information technology for electronic health records, telehealth and information infrastructure”, but once again no details were provided. The Romanow report did recommend that Canada Health Infoway should be responsible for developing a pan-Canadian electronic health network to produce a personal electronic health record for each citizen.

BUDGET TO CLARIFY FUNDING

Further information on the new funding will be forthcoming in today’s federal Budget. The CFI has traditionally been financed with year-end money that would otherwise be directed towards reducing the deficit, a practice that has drawn fire from the Auditor General’s office. It has criticized the government for investing year end funds in arm’s length groups like the CFI and Genome Canada and has suggested that such organizations be placed under the Auditor General’s authority to ensure adequate scrutiny.

The rationale for allocating new money specifically for research hospitals makes sense, given the high cost of health-related research and the high demand for new equipment. Past CFI competitions have seen about half the value of awards go to medical-related projects, prompting some critics to suggest it was established primarily for the powerful medical research community.

The latest competition attracted about 920 notices of intent, and Charette says that the value of health requests represent a majority of the total.

“About 60% of the $2.6 billion in requests are health while 35% to 40% of the applications are actually health-related,” she says.

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