Canada is on track to spend slightly more on health care in 2023 than last year, but overall trends show spending will continue to slow following the COVID-19 pandemic, a new report by the Canadian Institute for Health Information (CIHI) shows.
The report released Thursday predicts that the country will spend $344 billion on health care this year, which is $9 billion more, or a 2.8 per cent increase, from 2022.
This year’s growth is small compared to the surge in spending during the peak of the pandemic, which saw a growth of 13.2 per cent in 2020 and 7.8 per cent in 2021. The rate in 2022 was 1.5 per cent.
Ontario is expected to spend about $126 billion on health care this year, which represents about $8,250 per person in the province, while it is $23,652 in Nunavut, the report said.
Growth in spending ranged from lows of 0.4 per cent in Quebec and 0.7 per cent in Ontario to highs of 7.7 per cent in Prince Edward Island and 9.8 per cent in Nunavut. Yukon saw the sole decrease in growth of 0.3 per cent.
Chris Kuchciak, manager of health expenditures at the CIHI, says the new numbers show that the health–care system is moving towards more modest “pre-COVID growth rates” that averaged 4.3 per cent per year between 2015 and 2019.
However, despite the slowdown, investment in the health-care system will gradually rise to meet demands from the industry and Canadians, he says.
“What we’ve seen historically is that health spending continues to grow … relative to income in our economy. And Canadians have identified health care as a high priority,” Kuchciak told Global News.
“We’re seeing conditions for higher growth, so higher need due to an aging population and larger growth in the population as well. We’re also seeing investments in the health system where the Canada health transfers are scheduled to grow at a higher pace in the coming years,” he said.
'Pressure building' to increase health spending
Seventy per cent of the $344 billion is paid for from “government sources,” Kuchciak says, and about 30 per cent from “private sources such as out-of-pocket or private insurance or reimbursement.”
However, in a news release, CIHI notes that the growth in health spending has not kept up with rising inflation and populations in 2022 and 2023.
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“Staffing shortages in hospitals, the increased need for both hospital and physician services, contract renewals in an environment of persistently high inflation and population aging may be key drivers of health spending in the coming years,” says Ann Chapman, director of spending and primary care at CIHI, in the release.
Hospitals, physicians and drugs represent more than 50 per cent of total health spending in Canada in 2023, which is likely due to an effort to clear surgical backlogs and wait times caused by the pandemic, the release says.
Half of Canadians also do not have a primary care physician or have difficulty securing a timely appointment with their current one, a survey released in August by the Angus Reid Institute and the Canadian Medical Association (CMA) says.
Steven Lewis, adjunct professor of health policy at Simon Fraser University, says the government will need to be “creative” when it comes to meeting demands from the health-care industry.
“I think there’s a lot of pressure building to increase health spending in future years,” Lewis told Global News.
“The workforce isn’t happy. … They feel burned out. So something’s got to give here. We’ve had calls for major reform for decades, and maybe now is the moment that we can finally start moving on some of these things,” he said.
In February, the federal government offered the provinces and territories a health funding deal worth $196.1 billion over 10 years, including $46.2 billion in new money.
The Canada Health Transfer was a key priority in the proposed financial package, which is meant to be used to relieve significant strains being experienced in pediatric hospitals and emergency rooms, and long wait times for surgeries.
However, the premiers said the plan appeared to offer less money than they were looking for, especially in the first year of the proposed deal.
Prime Minister Justin Trudeau stressed at the time that provinces and territories will have flexibility to negotiate how much of the federal money will go to certain priorities, and that those legislatures will have to step up with their own money as well.
“Canadians are proud of our universal public health-care system, but we all have to recognize it hasn’t been delivering at the level that Canadians would expect,” Trudeau told reporters in February.
“That’s why sitting down with the provinces, working collaboratively, investing significantly in priority areas is going to move us forward in the right way.”
Looking ahead, Lewis cautions to not place too much emphasis on numerical trends when it comes to predicting changes in the health-care system.
“Don’t extrapolate any current trends out of many years. They’re always wrong. There are always new pressures, always new circumstances, both intrinsic to health care and externally in the general economy, in provincial situations and so forth,” he said.
“I don’t think we could have predicted 2020 and 2021.”
— with files from Teresa Wright and The Canadian Press
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