OTTAWA - The cat set among the pigeons, Finance Minister Jim Flaherty is preparing a low-calorie version of health funding and pension reform during Sunday's supper with his provincial counterparts.

Earlier in the week, a leak out of Ottawa had provinces in a tizzy with speculation the federal government wanted to limit future growth in health care transfers to economic growth -- and non-inflation adjusted growth at that.

The rumour lasted as long as it took to do the math -- Ottawa is currently committed to increasing health transfers at six per cent a year until 2016, while real gross domestic product is estimated to rise at about two per cent -- a bridge too far even in tough times.

Provincial sources say the federal government has since let it be known that the objective is to link transfers to nominal, inflation adjusted growth, which is estimated to be in the neighbourhood of 4.5 per cent.

A past quote from Prime Minister Stephen Harper distributed by federal officials suggests the linkage sought may be with government revenues, slated to grow at about five per cent.

Officials from four provinces told The Canadian Press that they are united in insisting the new accord, which takes effect after 2014, should continue with the current six-per-cent escalator.

Asked about the issue Friday, the prime minister was non-committal. He noted health transfers under his watch have climbed from $19 billion to $27 billion a year.

"We will honour the health accord and we will ensure that there are increases into the future that are sustainable and that work to sustain the health care system that we're all going to depend on," he said.

Ottawa has also told the provinces it wants to move toward an allocation based "equal per-capita" funding, a long-standing demand by have-provinces such as Alberta that claim they are short-shrifted under the current formula.

Ironically, health care is not officially on the agenda for the meetings, which are to begin with a Sunday night supper and continue with formal sessions Monday.

But the trial balloons over Parliament Hill earlier in the week ensured that will be topic number one both at the dinner and conference table. Despite the confusion, Ottawa has let it be known it wants to move away from fixed increases to a system that more closely mirrors the funds it has to spend.

Meanwhile, provinces, which have seen increasing portions of their budgets swallowed up by the insatiable demands of the health care system, will be battling tooth and nail to ensure they have a stable and predictable cash-flow from Ottawa.

Last year's number one item -- pension reform -- promises to take a back seat in Victoria now that Flaherty has rejected the request of the majority of provinces for an expansion of the Canadian Pension Plan. Instead, Ottawa has put a voluntary savings vehicle known as registered pooled pension plans on the table in its stead.

Expansion of the CPP will likely be re-proposed Monday, particularly by Ontario, but most provinces expect the main discussion will focus on the new vehicle, designed for small firms that can't afford to offer their workers pensions plans.

Quebec says it wants the plans made mandatory on firms with over 10 workers, and some provinces are considering making participation by employees mandatory as well.

In a letter to the government, the Canadian Federation of Independent Business asks the ministers not to revive the CPP proposal and to give the voluntary pooled plans a chance.

Dan Kelly, head of legislative affairs for the business lobby, said in an interview that he believes many firms will in fact contribute to the plans, as proposed, because they want to hang on to workers.

A new wrinkle revealed to stakeholders this week -- absenting contributions to the pooled plans from employment insurance, CPP and workman's compensation charges -- is an added inducement to employers, he said. Those premiums can add as much as 20 per cent to the contributions employers agree to make, Kelly said.

"About 85 per cent of small employers offer zero retirement savings plans to their workers now," he said. "There's a lot of interest in the pooled plans because employees want a pension plan and small employers need to compete to keep their talent."