(Bloomberg) -- Canadian Prime Minister Justin Trudeau’s government and the New Democratic Party have reached a deal to move closer to a national medication coverage program, which will ensure the governing Liberals remain in power with the NDP’s support.

Trudeau and NDP Leader Jagmeet Singh struck an agreement in 2022 that promised the NDP’s support for the Liberals on confidence votes in Parliament, in exchange for progress on social-welfare programs including so-called “pharmacare.”

But while Trudeau’s government has met a number of the commitments, including starting a national dental-care program, it has been locked in negotiations with the NDP over the size and scope of the drug-coverage plan.

Singh said on BNN Bloomberg Television the two parties have reached an agreement on draft legislation that will take steps toward a national pharmacare program and it will be introduced before a March 1 deadline.

The legislation will also pledge new coverage for contraception and diabetes treatment in the near term, Singh said.

However, the legislation is not expected to have specific funding attached, either for the near-term birth control and diabetes medication coverage or the future national drug coverage program, said a person familiar with the NDP.

The person said the federal budget may set out broad spending commitments for the contraception and diabetes coverage, but there will need to be negotiations with provinces, which are primarily responsible for health care in Canada. 

Singh said he’s confident the government will be able to strike deals with provinces, as it did to share the costs of government-subsidized child care.

“We’ll push for that to happen as soon as possible,” Singh said. 

He added that the coverage will be similar to British Columbia’s system, where all forms of prescription birth control are already covered. People will be able to walk into a pharmacy with their prescription and walk out with their contraception or diabetes medication without payment, he said.

“I look at this as an investment that’s going to bring down inflation. We look at the cost of medication, that’s something that’s very costly,” he said. “This is going to help save some money.”

A spokesperson for Health Minister Mark Holland did not immediately respond to a request for comment.

In a statement, the Canadian Chamber of Commerce called the announcement “concerning,” and said a single-payer universal system would be “a complicated and costly solution.”

It pointed to a recent report that estimated public sector spending under such a plan would reach C$38.9 billion ($28.8 billion) annually, though there would also be economy-wide savings in total spending on drugs.

“A majority of Canadians are already covered by employer-sponsored drug insurance plans that give them faster access to more medicines than what a single-payer system would provide,” the Chamber said. “Plus, public systems typically offer less access to new drugs that would be accessible under private plans.”

The overall deal to ensure NDP support for the Liberals in Parliament is set to expire in June 2025. That deal required the Liberals to commit to a “universal national pharmacare program.” 

The new agreement meets that requirement, said the person familiar with the NDP, adding that the program is expected to be single-payer.

Finance Minister Chrystia Freeland has said she intends to restrain spending in the upcoming budget. Her fall budget update projected a C$38 billion deficit for this year.

Canada is the only Group of Seven country that provides universal health care without universal prescription-drug coverage.

(Adds reaction from Chamber of Commerce.)

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