OTTAWA A new report from a federal spending watchdog concludes the Conservative governments changes to health funding will ultimately download billions of dollars in medical costs annually to the provinces, something premiers and opposition parties say will erode public health care and provincial finances.

The office of the Parliamentary Budget Officer released a report Thursday highlighting the extent to which provincial governments will increasingly struggle to balance their books and pay for health care in the coming years, partly due to the federal Conservative governments decision to trim the growth in health transfers to the provinces.

The Harper governments reforms over the past year to the Canada Health Transfer and Old Age Security, along with its ongoing savings in operating spending, mean the federal governments finances are sustainable over the long term, the report says. The Canada and Quebec pension plans are also in good shape over the long run, it says.

But these changes especially slicing the growth in health transfers in the coming years will leave the provinces with a significant fiscal gap that will force them to either increase taxes or cut programs, the report says.

They (federal government) totally transferred the problem to the provinces, Parliamentary Budget Officer Kevin Page said Thursday in an interview.

If I were a province, Id be under significant stress, he said. People are going to start asking questions: Have the feds ante-ed up enough to support a national health-care program?

Indeed, the countrys premiers warned in a recent report that the new federal health accord will gut nearly $36 billion in funding from the provinces over the 10-year deal, compared to the current arrangements, and will erode public health services to all Canadians.

Nova Scotia Premier Darrell Dexter, the current chairman of the Council of the Federation of premiers, said Thursday that provinces will struggle to pay for health care with the funding changes announced by Ottawa late last year.

This will bring the federal share of health-care costs to less than 20 per cent, compared to about 50 per cent originally,Dexter said in a statement to Postmedia News.

In many parts of the country, including Nova Scotia, there is an aging population, which is going to substantially increase the cost of health care.These costs will consume an increasing share of provincial budgets.

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Changes to federal health spending will hit provincial governments hard, budget officer says