The federal health minister says charging residents for abortions is a breach of the Health Act, and is threatening penalties if New Brunswick doesn't fall in line.

This comes after New Brunswick's only private abortion clinic, Clinic 554 in Fredericton, said it can't keep operating without provincial funding.

New Brunswick does not fund out-of-hospital abortions, something Prime Minister Justin Trudeau promised to fix during the last election.

Health Minister Patty Hajdu says charging residents out-of-pocket for services that are supposed to be insured means the province could lose some transfer payment funds. (Adrian Wyld/Canadian Press)

In the newest Canada Health Act Annual Report, Minister Patty Hajdu singled out New Brunswick and Ontario, where she says there are "persistent barriers" to abortion access.

She wrote letters to the provinces in July, alerting them that patient charges for surgical abortions would be considered extra-billing and user charges, and would result in reductions of health transfer payments.

Cole Davidson, spokesperson for Hajdu, said deductions could be seen by end of March if the issue isn't resolved.

New Brunswick's Progressive Conservative government has had the same response since Clinic 554 announced its closure: The province claims its position on abortions remains unchanged from that of the previous Liberal government, and that abortions are available in hospitals in New Brunswick.

As a response to a request for an interview, New Brunswick Health Department spokesperson Bruce Macfarlane said the province still believes it's meeting the requirements under the Canada Health Act.

At parliament Wednesday, Hajdu said she disagrees.

"Obviously there is an inequity in terms of access to services, and under their proposed regime women are not covered in very specific regions," she said.

"I've spoken with my counterpart Minister [Ted] Flemming and we'll continue those conversations but I've also advised him that we expect the province to come into compliance and ensure that there is an equity and access in particular around abortion."

Macfarlane said the province is working with the Federal government to address their concerns.

"We want to ensure the Federal Minister of Health has a full and accurate understanding of the services provided in New Brunswick."

Dr. Adrian Edgar, medical director of Clinic 554, says clinic staff have been 'desperately' trying to keep the doors open for months. (CBC)

Clinic 554 is the only private abortion clinic in the province, and the only place people can get abortions in Fredericton. The other options are two hospitals in Moncton — the Moncton Hospital and the Dr. Georges-L.-Dumont University Hospital Centre — and the Chaleur Regional Hospital in Bathurst.

Clinic 554 medical director Dr. Adrian Edgar said the clinic was opened in 2015, but it's not clear how much longer they can stay open. He said the lack of access for the past decade has already done its damage.

"It's already too late," he said. "It's been too late for a whole generation of women."

The clinic location on Brunswick Street has been for sale for months.

"We're just desperately month to month trying to, you know, get together enough funding so that we can try and keep the doors open," Edgar said. "But it's beyond what we can continue doing. That's absolutely obvious to us. And I think to the government as well."

People have the right to coverage in their community, in a clinic setting. - Valerie Edelman, Clinic 554 manager

Edgar said he has sent letters to the health minister showing how covering abortions in clinics can save the province money, because any procedure is more expensive in a hospital.

In a statement, Clinic 554 manager Valerie Edelman said they are pleased with Hajdu's report, adding Higgs and Flemming have been denying the existence of an abortion access problem "without even reviewing the facts presented to them."

She said the clinic hopes this report will convince Higgs and Flemming to "take this portfolio seriously."

"[The] province can't keep denying people coverage of abortions in our Fredericton clinic and telling them to go travel to a hospital in Moncton, or Halifax or take a pill when these three options are just not possible for everyone," she said.

"The Provincial Government still has an opportunity to protect our health transfers, and we hope they take the opportunity seriously."

The Blaine Higgs Progressive Conservative government believes it's compliant with the Health Act, but the federal health minister disagrees. (CBC)

It's not clear how much money would be withheld from transfer payments if the federal government decides to do so. But Edelman said in 2017 and 2018, approximately 200 patients were denied coverage for abortions at Clinic 554. Women who go to Clinic 554 for an abortion have to pay around $850.

Aside from providing abortion services, the clinic also served approximately 3,000 people who rely on the clinic as a family practice. The clinic specializes in transgender and LGBTQ care.

"People have the right to coverage in their community, in a clinic setting, plus turning people towards hospitals is costing taxpayers hundreds of thousands of dollars annually," Edelman said.

What are extra-billing and user charges?

According to the report, extra-billing is what insured patients pay when doctors and clinics charge for medical care privately. Similarly, a user charge is a fee patients have to pay to get insured health care services.

The federal government considers user charges and extra-billing as barriers to healthcare access, because if a service is insured, patients shouldn't have to pay out-of-pocket.

The Act says if there's extra-billing or user charges in a province, a mandatory dollar-for-dollar deduction will be taken out of health transfer charges. New Brunswick relies heavily on transfer charges to keep the healthcare system afloat.

In 2019 British Columbia lost $32-million in federal health-care transfer payments that were withheld by Ottawa as a penalty for extra-billing, the amount patients paid out-of-pocket in that province.

According to the Abortion Rights Coalition of Canada, in 2018 New Brunswick residents had 507 abortions, but that number does not include abortions done in Clinic 554 that year.