I don't see anything unreasonable in this: the plan ties increases with inflation and economic growth (i.e the cost of living) so while this may not be an ever increasing strain on gov't resources, it is definately not a cut. It is a stabilization at the current level of funding instead of increasing it to a point where it is unsustainable.
Two tier health care will not fly in Canada until people have a radical attitude adjustment in how they view private providers... and with the example of the US system so dominant (with all its weaknesses), those in favour of the status quo have an easy sell.
As for sin taxes, they are already in place. The cost of production and transportation (and margins) on alcohol are about 20-30% of the sticker price: its 70-80% tax already. Tobacco is also high. The only thing left would be to tax junk food, which is getting into some pretty grey areas once you start challenging the nutritional composition of food; if we go down this road, we can expect to see the McDonalds adn Wendy's of the world raising court challenges, and going after less-than-optimum health choices in the grocery store, such as Mac & Cheese, ramen-style noodles, canned soups and many pre-package dinners.