Universal Access to Contraception and Diabetes Medications and Increased Access to Diabetes Devices and Supplies, Canada-Prince Edward Island Funding Agreement

Universal Access to Contraception and Diabetes Medications and Increased Access to Diabetes Devices and Supplies, Canada-Prince Edward Island Funding Agreement

Between: His Majesty the King in Right of Canada, as represented by the Minister of Health (hereinafter referred to as "Canada")

and: His Majesty the King in Right of the province of Prince Edward Island, as represented by the Minister of Health and Wellness (hereinafter referred to as "Prince Edward Island")

Canada and Prince Edward Island are also referred to as a "Party" or collectively as the "Parties".

Table of contents

• Preamble
• 1. Definitions
• 2. Objectives
• 3. Term of Agreement
• 4. Financial contribution and obligations
• 5. Communications
• 6. Dispute resolution
• 7. Amendments to the Agreement
• 8. General
• 9. Terminating the Agreement
• 10. Notice
• 11. Signing in counterpart
• Annex A – List of prescription drugs and related products
• Annex B – Fiscal year 2022-23 spending by the Government of Prince Edward Island on stream 1 and stream 2 product costs

Preamble

Whereas on October 10, 2024, the Pharmacare Act came into force, to guide efforts to improve, for all Canadians, the accessibility and affordability of prescription drugs and related products, and to support their appropriate use, in collaboration with the provinces, territories, Indigenous peoples and other partners and stakeholders, with the aim of continuing to work toward the implementation of national universal pharmacare;

Whereas pursuant to section 5 of the Pharmacare Act, the Government of Canada commits to maintaining long-term funding for provinces and territories to improve the accessibility and affordability of pharmaceutical products, primarily through agreements with their respective governments;

Whereas the Parties have agreed to targeted federal funding through an agreement, and pursuant to section 6 of the Pharmacare Act, the Minister of Health for Canada must make payments to Prince Edward Island to enable it to provide Universal, Single-payer, First-dollar coverage for a range of contraception and diabetes prescription drugs and related products, and additionally, pursuant to the purpose of the Act, to enable Prince Edward Island to improve coverage for diabetes devices and supplies;

Whereas the Minister of Health has the authority to enter into agreements with the provinces and territories, for the purpose of supporting activities provinces and territories will undertake to provide its Residents with Universal, Single-payer, First-dollar coverage for a range of contraception and diabetes prescription drugs and related products and to support Canadians' improved access to diabetes devices and supplies;

Whereas the Lieutenant Governor in Council authorized the Prince Edward Island Minister of Health and Wellness under the Executive Council Act, R.S.P.E.I. 1988, Cap. E-12 to enter into the Agreement with the Government of Canada under which Canada undertakes to provide funding toward costs incurred by Prince Edward Island to provide its Residents with Universal, Single-payer, First-dollar coverage for a range of contraception and diabetes prescription drugs and related products and to support improved access to diabetes devices and supplies;

Whereas Prince Edward Island has the primary responsibility for delivering health care services to its Residents, including coverage of pharmaceuticals; and supports diversity, equity, and the needs of underserved and/or disadvantaged populations, including, but not limited to First Nations, Inuit and Métis, official language minority communities, rural and remote communities, children, racialized communities (including Black Canadians), and 2SLGBTQI+;

Whereas notwithstanding anything in this Agreement, Residents of Prince Edward Island who are enrolled in a federal drug benefit plan operated by Indigenous Services Canada (Non-Insured Health Benefit Plan), the Canadian Armed Forces (Canadian Armed Forces Drug Benefit Program), Veterans Affairs Canada (Treatment Benefits Program), Correctional Service Canada (Essential Health Services Framework) or Immigration, Refugees and Citizenship Canada (Interim Federal Health Program) will continue to receive benefits, including for drugs identified in this Agreement, through those plans;

And whereas Prince Edward Island acknowledges the overall importance of meaningfully engaging and working with Indigenous organizations and governments responsible for the delivery of drug benefits to further support Universal, Single-payer, First-dollar coverage for a range of contraception and diabetes prescription drugs and related products and support access to diabetes devices and supplies;

Therefore, the Parties agree as follows:

1. Definitions

In this Agreement,

1.1. "Agreement" means this funding agreement and includes all annexes and any amendments made to this Agreement in accordance with section 7.;

1.2. "Diabetes Devices and Supplies" means those products identified by Prince Edward Island as those that people with diabetes require to manage their condition or administer their medication;

1.3. "Eligible Expenditures" means the costs described in section 4.8. of this Agreement that are incurred and paid by Prince Edward Island in carrying out the Initiative;

1.4. "First-dollar" refers to coverage where the products that are covered in Prince Edward Island and belong to the categories identified in Annex A are made available at no cost to the Resident at the point of sale, subject to the conditions of coverage noted in Annex A. Costs include, but are not limited to: deductibles, copays, premiums, pharmacy or dispensing fees, and wholesale or distribution costs as recognized by Prince Edward Island.

1.5. "Fiscal Year" means the twelve-month period beginning April 1st of any year and ending March 31st of the following year, and including parts thereof in the event that this Agreement commences after April 1st or expires or terminates before March 31st;

1.6. "Implementation Date" means the date upon which Universal, Single-payer, First-dollar coverage for the list of products that are covered in Prince Edward Island and belong to the categories identified in Annex A, is made available to Residents of Prince Edward Island;

1.7. "Initiative" means funding made available to Prince Edward Island for the activities under Stream 1 and Stream 2 of the Agreement;

1.8. "Resident" means, in relation to a province or territory, a person lawfully entitled to be or to remain in Canada who makes his/her home and is ordinarily present in the province or territory, but does not include a tourist, a transient or a visitor to the province or territory. For greater certainty, Residents of a province or territory who are enrolled in a federal drug benefit plan will continue to receive coverage of the products that are covered in Prince Edward Island and belong to the categories identified in Annex A from those plans;

1.9. "Savings" means the amount that Residents of Prince Edward Island would otherwise have paid out-of-pocket or through a third-party payer for Diabetes Devices and Supplies if they purchased them prior to this Initiative;

1.10. "Single-payer" refers to coverage where the cost of products identified that are covered in Prince Edward Island and belong to the categories identified in Annex A, are made available to Residents and are paid for entirely by the Government of Prince Edward Island;

1.11. "Universal" refers to coverage where the products that are covered in Prince Edward Island and belong to the categories identified in Annex A, are made available to all Residents of Prince Edward Island.

2. Objectives

2.1. The Parties agree that with financial support from Canada, Prince Edward Island will:

1. Stream 1: Provide Universal, Single-payer, First-dollar coverage for the list of products that are covered in Prince Edward Island and belong to the categories identified in Annex A;
2. Stream 2: Increase access to insulin pumps and blood glucose test strips by expanding eligibility for public coverage of these products and/or lowering co-pay amounts for eligible clients.

3. Term of Agreement

3.1. This Agreement will come into effect on the date the last party has signed and will end on March 31, 2029, unless terminated earlier in accordance with sections 4.7.c. or 9. of this Agreement.

3.2. This Agreement covers:

1. Eligible Expenditures incurred under sections 4.8.b., 4.8.c. and 4.8.d. from the date it comes into effect until March 31, 2029.
2. Eligible Expenditures incurred under sections 4.8.a. and 4.8.e. from the Implementation Date until March 31, 2029.

3.3. Prince Edward Island's Implementation Date will be May 1, 2025.

4. Financial contribution and obligations

4.1. Allocation to Prince Edward Island

4.1.1. Stream 1:

The maximum amounts to be transferred to Prince Edward Island over 4 years are:

• $6,795,833 in Fiscal Year 2025-26
• $7,404,416 in Fiscal Year 2026-27
• $7,404,416 in Fiscal Year 2027-28
• $7,404,416 in Fiscal Year 2028-29

4.1.2. Stream 2:

The amount of $1,188,243 is to be transferred to Prince Edward Island in Fiscal Year 2025-26.

4.2. Payments

Canada's contribution will be paid as follows:

4.2.1. Stream 1:

For Fiscal Year 2025-26, Prince Edward Island will receive an initial payment equal to 50% of the annual amount determined in section 4.1.1. on or about May 1, 2025, and a second payment equal to the balance of Canada's contribution to Prince Edward Island on or about November 15, 2025.

For each subsequent Fiscal Year, Prince Edward Island will receive semi-annual payments. The first payment will be paid on or about April 15 and will equal 50% of the annual amount determined in section 4.1.1. The second payment will be paid on or about November 15 and will equal the balance of Canada's contribution to Prince Edward Island for the given Fiscal Year.

4.2.2. Stream 2:

Prince Edward Island will receive the full amount identified in section 4.1.2. as a one-time payment on or about November 15, 2025, or, within fifteen (15) business days of the Implementation Date, whichever is later.

4.3. Adjustment

Notwithstanding any other provisions of this Agreement, Canada may withhold or reduce any payments to Prince Edward Island pursuant to this Agreement, as follows, in the event that:

1. Prince Edward Island has failed to make Universal, Single-payer, First-dollar coverage for the list of products that are covered in Prince Edward Island and belong to the categories identified in Annex A available to its Residents for any period following the Implementation Date: for each day this occurs, Canada will withhold or reduce an equal daily share of Stream 1 funding;
2. Prince Edward Island's 2022-23 Stream 1 spending reported in Annex B is greater than the amount reported under section 4.9.1.c.i.: Canada will withhold or reduce an amount equivalent to the difference between these two amounts, not exceeding the amount of funding received from Canada spent by Prince Edward Island on product costs (4.9.1.b.i.) in the Fiscal Year;
3. Prince Edward Island's 2022-23 Stream 2 spending reported in Annex B is greater than the amount reported under section 4.9.1.c.ii.: Canada will withhold or reduce an amount equivalent to the difference between these two amounts, not exceeding the amount of funding received from Canada spent by Prince Edward Island on product costs (4.9.1.b.iii.) in the Fiscal Year;
4. Prince Edward Island has not submitted reports in accordance with the requirements set out in sections 4.9. and 4.10.

4.4. Overpayments

In the event payments made exceed the amount to which Prince Edward Island is entitled under this Agreement, the amount of the excess is a debt due to Canada and, unless otherwise agreed to in writing by the Parties, Prince Edward Island shall repay the amount within sixty (60) calendar days of written notice from Canada.

4.5. Retaining funds

4.5.1. Stream 1:

1. For Fiscal Years 2025-26, 2026-27, and 2027-28, Prince Edward Island may retain and carry forward to the next Fiscal Year the amount of up to 10% of the contribution paid to Prince Edward Island for a Fiscal Year (4.1.1.) that is in excess of the amount of funding received from Canada that Prince Edward Island spent on Eligible Expenditures for Stream 1 during the Fiscal Year (4.9.1.b.i. and ii.).
2. Any request by Prince Edward Island to retain and carry forward an amount exceeding 10% for any given Fiscal Year will be subject to Canada's approval, which will be evidenced in writing, at the Assistant Deputy Minister level.

4.5.2. Stream 2:

1. For Fiscal Year 2025-26, upon request, Prince Edward Island may retain and carry forward to the next Fiscal Year the amount of up to 75% of the contribution paid to Prince Edward Island as per section 4.1.2.
2. For Fiscal Year 2026-27, upon request, Prince Edward Island may retain and carry forward to the next Fiscal Year the amount of up to 50% of the contribution paid to Prince Edward Island as per section 4.1.2.
3. For Fiscal Year 2027-28, upon request, Prince Edward Island may retain and carry forward to the next Fiscal Year the amount of up to 25% of the contribution paid to Prince Edward Island as per section 4.1.2.
4. Any request by Prince Edward Island to retain and carry forward the amounts outlined in sections 4.5.2.a., b. or c., or a larger amount, will be subject to Canada's approval, which will be evidenced in writing by the designated official, at the Assistant Deputy Minister level.

4.5.3. All retained funds as per sections 4.5.1. and 4.5.2. are subject to monitoring and reporting to Canada on the management and spending of the funds carried forward.

4.6. Underspending

One hundred and twenty (120) calendar days before March 31 for any given Fiscal Year, Prince Edward Island shall inform Canada in writing of any potential underspending with regard to Stream 1 and/or Stream 2. Prince Edward Island shall indicate:

1. Stream 1: the difference between the Fiscal Year contribution from Canada provided under section 4.1.1. and the sum of federal funding to be spent in the Fiscal Year on Stream 1 product costs and other Eligible Expenditures (4.9.1.b.i. + 4.9.1.b.ii.);
2. Stream 2: the difference between the contribution from Canada provided under section 4.1.2. and the cumulative sum of federal funding to be spent on Stream 2 product costs and other Eligible Expenditures (4.9.1.b.iii. + 4.9.1.b.iv.).

4.7. Funding subject to appropriation and Initiative funding authorities

1. Notwithstanding any other provision of this Agreement, the amount of funding to be provided to Prince Edward Island pursuant to this Agreement is subject to there being an appropriation of funds by the Parliament of Canada for the Fiscal Year in which any commitment would come due for payment.
2. In the event that authorities for the Initiative are amended or terminated, or if funding levels are reduced or cancelled by the Parliament of Canada for any Fiscal Year in which a payment is to be made under this Agreement, Canada may reduce or terminate any further payments to be made under this Agreement.
3. Where funding under this Agreement is to be reduced or terminated, Canada shall provide Prince Edward Island with at least one hundred and twenty (120) calendar days written notice of the reduction or termination and shall reimburse Prince Edward Island for any Eligible Expenditures incurred up to the date upon which the reduction/termination is to take effect.

4.8. Eligible Expenditures

Prince Edward Island will use funding under this Agreement only for Eligible Expenditures that support the objectives of the Initiative and are directly related to the activities set out herein. Eligible Expenditures include:

1. Product costs – including:
   1. Stream 1:
      Costs paid by Prince Edward Island on behalf of its Residents for the products that are covered in Prince Edward Island and belong to the categories identified in Annex A, inclusive of the product cost, any applicable markups, and any associated dispensing fees as recognized by Prince Edward Island's public plan;
   2. Stream 2:
      Costs paid by Prince Edward Island on behalf of its Residents for the Diabetes Devices and Supplies outlined in 2.1.b., inclusive of the product cost, any applicable markups, and any associated dispensing fees as recognized by Prince Edward Island's public plan;
2. Costs related to implementing changes to or creating new public coverage plans (e.g., planning, administrative, and communication activities) for the purpose of delivering the commitments in this Agreement;
3. Operating costs related to delivering the commitments in this Agreement, including: salaries and benefits, contractual personnel, honoraria, training and professional development, travel and accommodation, materials and supplies, equipment, and rent and utilities;
4. Information technology and related investments related to delivering the commitments in this Agreement, including enhancement of data collection, analysis, and sharing capacity; and
5. Costs related to activities associated with evaluation and reporting obligations on the commitments in this Agreement.

4.9. Reporting on expenditures

Beginning in Fiscal Year 2026-27, as a condition of annual funding under this Agreement, by October 1 of each Fiscal Year, Prince Edward Island agrees to provide Canada with an attested financial statement as outlined in section 4.9.1., in respect of the preceding Fiscal Year.

4.9.1. The financial statement shall show:

1. The total amount of funding received from Canada under this Agreement during the Fiscal Year;
2. The total amount of funding received from Canada spent during the Fiscal Year by Prince Edward Island on behalf of its Residents on:
   

   Stream 1:

   • i. Product costs (4.8.a.i.);
   • ii. Eligible Expenditures related to 4.8.a.i., as per sections 4.8.b. to 4.8.e.

   Stream 2:

   • i. Product costs (4.8.a.ii.);
   • ii. Eligible Expenditures related to 4.8.a.ii., as per sections 4.8.b. to 4.8.e.
3. The total amount of funding from sources other than Canada spent during the Fiscal Year by Prince Edward Island on behalf of its Residents on:
   

   Stream 1:

   • i. Product costs (4.8.a.i.);

   Stream 2:

   • ii. Product costs (4.8.a.ii.).
4. If applicable, the amount of any funding carried forward under section 4.5.

4.10. Reporting on results

Beginning in Fiscal Year 2026-27, as a condition of annual funding under this Agreement, by October 1 of each Fiscal Year, Prince Edward Island agrees to report to Canada the amount of Savings delivered to Prince Edward Island Residents as a result of the measures taken to improve access to Diabetes Devices and Supplies under this Agreement (per section 2.1.b.), in respect of the preceding Fiscal Year.

4.11. Audit

Prince Edward Island will ensure that expenditure information presented in the annual financial statement is, in accordance with Prince Edward Island's standard accounting practices, complete and accurate.

4.12. Evaluation

Responsibility for evaluating the Initiative rests with Prince Edward Island in accordance with its own evaluation policies and practices.

5. Communications

5.1. The Parties agree on the importance of communicating with the public about the objectives of this Agreement in an open, transparent, effective, and proactive manner through appropriate public information activities. The Parties agree to coordinate their efforts on public communications related to this Agreement to ensure consistency in messaging.

5.2. The Parties will each receive the appropriate credit and visibility when investments financed through this Agreement are announced to the public.

5.3. In the spirit of transparency and open government, Prince Edward Island and Canada will make this Agreement, including any amendments, and subject to section 9.4., publicly available on a Government of Canada website.

5.4. With regard to Universal, Single-payer, First-dollar coverage for the list of products that are covered in Prince Edward Island and belong to the categories identified in Annex A, no later than Prince Edward Island's Implementation Date, Prince Edward Island commits to publish on its website which prescription drugs and related products are included under the coverage and how Residents can access the coverage.

5.5. With regard to increasing access to Diabetes Devices and Supplies outlined in section 2.1.b., no later than Prince Edward Island's receipt of the one-time payment for Stream 2 defined in section 4.2.2., Prince Edward Island commits to publish on its website how the Stream 2 funding outlined in section 4.1.2. will be used to increase access to Diabetes Devices and Supplies for its Residents.

5.6. Canada, with prior notice to Prince Edward Island, may incorporate all or any part or parts of the data and information in sections 4.9. and 4.10., or any parts of evaluation and audit reports made public by Prince Edward Island into any report that Canada may prepare for its own purposes, including any reports to the Parliament of Canada or reports that may be made public.

5.7. The Parties reserve the right to conduct public communications, announcements, events, outreach and promotional activities with regard to this Agreement, and, where feasible, to give ten (10) business days advance notice and advance copies of public communications related to this Agreement, and results of the investments of this Agreement.

6. Dispute resolution

6.1. The Parties are committed to working together and avoiding disputes through government-to-government information exchange, advance notice, early consultation, and discussion, clarification, and resolution of issues, as they arise.

6.2. If at any time either Party is of the opinion that the other Party has failed to comply with any of its obligations or undertakings under this Agreement or is in breach of any term or condition of this Agreement, that Party may notify the other party in writing of the failure or breach. Upon such notice, the Parties will endeavour to resolve the issue and dispute bilaterally through their designated officials, at the Assistant Deputy Minister level.

6.3. If a dispute cannot be resolved by the designated officials, at the Assistant Deputy Minister level, then the dispute will be referred to the Deputy Ministers of the Parties responsible for health, and if it cannot be resolved by them, then the respective Ministers of Canada and Prince Edward Island, most responsible for health, shall endeavour to resolve the dispute.

7. Amendments to the Agreement

7.1. The main text of this Agreement may be amended at any time by mutual consent of the Parties. Any amendments shall be in writing and signed, in the case of Canada, by Canada's Minister of Health, and in the case of Prince Edward Island, by Prince Edward Island's Minister of Health and Wellness.

7.2. Annexes to this Agreement may be amended at any time by mutual consent of the Parties. Any amendments to the Annexes shall be in writing and signed by both Parties' designated officials, as denoted in Section 11.

8. General

8.1. Governing laws

This Agreement shall be governed by, interpreted and enforced in accordance with the laws in force in Prince Edward Island and the laws of Canada applicable therein.

8.2. Entire Agreement

This Agreement, including its preamble and annexes, sets forth the entire Agreement between the Parties with respect to its subject matter and supersedes and cancels all prior agreements, understandings, negotiations and discussions, both oral and written, between the Parties with respect to the Initiative.

8.3. Members of Parliament

No member of the House of Commons or Senate or of the Legislature of Prince Edward Island shall be admitted to any share or part of this Agreement or to any benefit arising from it that is not otherwise available to the general public.

8.4. Personal and confidential information

The Parties shall comply with applicable laws, contractual obligations, and policies pertaining to privacy and confidentiality in dealing with information and records related to the Initiative.

8.5. Official languages

Prince Edward Island agrees to consider how they can support Canada's official languages and the needs of official language minority communities in the implementation of this Agreement.

8.6. Diverse populations

Prince Edward Island agrees to consider how they can support diverse populations based on identity factors such as sex, gender, age, disability, Indigeneity, sexual orientation, ethnicity, religion and more in the implementation of this Agreement.

9. Terminating the Agreement

9.1. Either Party may terminate this Agreement at any time if the terms of this Agreement are breached by the other Party by giving at least six (6) months written notice of its intention to terminate.

9.2. As of the effective date of termination of this Agreement, Canada shall have no obligation to make any further payments.

9.3. All obligations under this Agreement shall expressly, or by their nature, survive termination or expiration of this Agreement until, and unless, they are fulfilled, or by their nature expire.

10. Notice

Communications, including reporting and any notice, information, document, request or other communication, shall be in writing and sent to the coordinates below. Communications that are delivered in person shall be deemed to have been received upon delivery; communications transmitted by facsimile or by e-mail shall be deemed to have been received one (1) business day after having been sent; and communications that are sent by mail shall be deemed to have been received eight (8) business days after being mailed.

Any notice to Canada shall be addressed to:

Assistant Deputy Minister, Health Policy Branch
Health Canada
70 Colombine Driveway, Tunney's Pasture
Brooke Claxton Building
Ottawa, Ontario 
K1A 0K9
Email: hpb.assistant.deputy.minister-dgps.sous-ministre.adjointes@hc-sc.gc.ca

Any notice to the Prince Edward Island shall be addressed to:

Assistant Deputy Minister, Community Health and Policy Branch
Department of Health and Wellness
P.O. Box 2000
Charlottetown, Prince Edward Island
C1A 7N8
Email: kjrayner@gov.pe.ca
Telephone: 902-368-4079

11. Signing in counterpart

This Agreement may be signed in counterparts and each counterpart shall constitute an original document; these counterparts taken together shall constitute one and the same Agreement.

In witness whereof, this Agreement is duly executed by the authorized representatives of the Parties.

Signed on behalf of Canada by the Minister of Health at Ottawa, Ontario, this 7^th day of March, 2025.

The Honourable Mark Holland, Minister of Health

In witness whereof, this Agreement is duly executed by the authorized representatives of the Parties.

Signed on behalf of Prince Edward Island by the Minister of Health and Wellness at Charlottetown, Prince Edward Island, this 5^th day of March, 2025.

The Honourable Mark McLane, Minister of Health and Wellness

Annex A – List of prescription drugs and related products for which Prince Edward Island will provide universal, single-payer, first-dollar coverage

Annex B – Fiscal year 2022-23 spending by the Government of Prince Edward Island on stream 1 and stream 2 product costs

Stream 1

For the prescription drugs and related products included in Annex A, indicate the amount of Fiscal Year 2022-23 spending by the Government of Prince Edward Island:

Stream 2

For the Diabetes Devices and Supplies outlined in section 2.1.b., indicate the amount of Fiscal Year 2022-23 spending by the Government of Prince Edward Island: