Endless spending increases will not fix Canada’s health-care system

By Mackenzie Moir & Jake Fuss of The Fraser Institute.

"In February 2023, the federal government announced the money they send to the provinces for health care would increase, yet again. Despite being billed as a fix for health care, these spending increases will not actually provide any relief for Canadian patients.

The Canada Health Transfer (CHT), the main federal financial tool for funding provincial health care, has increased from $34.0 billion in 2015/16 to $52.1 billion this year (2024/25), a 53.1 per cent increase in about a decade. Moreover, the federal government has committed to increases in the transfer at a guaranteed 5 per cent until 2027/28.

This latest increase in the CHT, however, is only one part of the $46.2 billion in new money being doled out over the next 10 years. More than half (roughly $25 billion) is currently being given to provinces who’ve signed up to work towards a number of “shared priorities” with Ottawa, such as mental health and substance abuse.

Clearly, the federal government has decided to substantially increase health-care spending in more than one way. But will it produce results?

These periodic “fixes” occasionally championed by Ottawa every few years are nothing new. And unfortunately, the data show that longstanding problems, including long waits for medical care and doctor shortages, will persist even though Canada is certainly no slouch when compared to its peers on health-care spending.

A recent study found that, when adjusted for differences in age (because older populations tend to spend more on health care), Canada’s health-care system ranked as the most expensive (as a share of the economy) among 30 universal health-care countries. And despite these relatively high levels of spending, Canada continues to lag behind its peers on key indicators of performance.

For example, Canada had some of the fewest physicians (ranked 28th of 30 countries), hospital beds (ranked 23rd of 29) and diagnostic technology such as MRIs (ranking 25th of 29 countries) and CT scanners (ranking 26th out of 30 countries) compared to other high-income countries with universal health care.

It also ranked at or near the bottom on measures such as same-day medical appointments, how easy it is to find afterhours care, and the timeliness of specialist appointments and surgical care.

And wait times have been getting worse. Just last year Canada recorded the longest ever delay for non-emergency care at 27.7 weeks, a 198 per cent increase from the 9.3 week wait experienced in 1993 (the first year national estimates were published).

But it’s not just the health-care system that’s in shambles, despite our high spending. Our federal finances are, too. Years of substantial increases in federal spending have strained the country’s finances. The Trudeau government’s latest budget projects a deficit of $39.8 billion this year, with more spent on debt interest ($54.1 billion) than on what the federal government gives to the provinces for health care.

Again, these periodic injections of federal funds to the provinces to supposedly fix health care are nothing new. Ottawa has relied on this strategy in the past and wait times have grown longer over the last three decades. Endless increases in spending will not fix our health-care system."