🇨🇦 Canada Is Spending More on Health Care. So Why Does It Feel Worse?

By Dean Brown.

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Canada's health-care debate usually ends in one of two places.

Governments aren't spending enough.

Or:

We're pouring money into a broken system.

After going through the numbers, neither explanation really holds up on its own.

Canada was expected to spend almost $399 billion on health care in 2025.

That's $9,626 per Canadian and 12.7% of the economy.

The better question isn't whether we're spending more.

We are.

It's:

Why isn't that spending turning into easier access?

Hospitals account for roughly 26% of Canadian health spending.

Physicians take another 13.8%.

Drugs account for 13.3%.

Together, those three areas consume more than half of the entire health-care bill.

And a growing budget doesn't automatically mean more capacity.

Wages rise.

Drugs become more expensive.

Equipment costs more.

Buildings cost more to maintain.

So some of the increase simply pays for yesterday's level of care at today's prices.

Meanwhile, demand keeps rising.

Canada's population grew rapidly in 2023 and 2024, while more than 8 million Canadians are now 65 or older.

Older Canadians generally require substantially more health care and often have several conditions requiring different parts of the system simultaneously.

About 5.7 million Canadian adults lacked a regular provider in 2024.

Canada does have more family doctors than it did a decade ago.

The problem is that physician growth hasn't kept up with population and demand.

And each doctor's time is increasingly valuable.

Family physicians report spending a median 20% of their week on administrative work.

That's an important number.

If Canada could give even part of that time back to clinicians, we'd create additional patient capacity without training a single new doctor.

That doesn't eliminate the doctor shortage.

But it tells you why simply adding doctors without changing how they work won't completely solve it.

If someone doesn't have reliable primary care, they are more likely to rely on walk-ins or emergency departments.

Then another bottleneck appears.

Canadian hospitals increased staffing by about 24% between 2014 and 2023, while population increased roughly 13%.

But beds increased only around 4%.

And about 16.9% of hospital days outside Quebec were occupied by patients classified as Alternate Level of Care.

Those are often people who no longer need acute hospital treatment but are waiting for:

long-term care,

rehabilitation,

or home-care support.

So a long-term-care shortage becomes a hospital shortage.

The hospital shortage becomes an ER shortage.

And suddenly the person sitting in an emergency department for 20 hours thinks the problem is the emergency department.

The actual bottleneck may be several steps away.

Here's the comparison I think matters most.

Using standardized OECD data:

That's the contradiction.

Canada spends above average.

But some of the resources that determine how quickly someone gets care remain well below average.

One nuance: Canada actually has slightly more nurses per capita than the OECD average.

So saying Canada simply has a national nursing shortage doesn't capture the problem either.

Distribution, retention, burnout and where those nurses work matter.

Canada performed considerably more hip replacements, knee replacements and diagnostic scans in 2024 than in 2019.

Yet several waits remained worse.

For example, 26% more hip replacements were performed, but the percentage completed within six months fell from 75% to 68%.

Again, demand moved faster than capacity.

That's something I think politicians often miss when they announce:

“We performed a record number of surgeries.”

That's useful.

But the real outcome is whether the waiting list got shorter.

Canada performs poorly on access.

But once Canadians actually receive care, several clinical outcomes compare reasonably well internationally.

Thirty-day mortality after a heart attack, for example, was 4.5% in Canada compared with 6.5% across the OECD.

That doesn't make long waits acceptable.

It tells us something more specific:

Canada's biggest weakness may be getting people into the system rather than the quality of everything that happens once they get there.

This is where I think the political debate becomes too simplistic.

Canada already uses substantial private delivery.

Family doctors generally operate as private contractors.

Many hospitals are private non-profits.

Provinces can contract privately operated clinics to provide publicly insured procedures.

So:

private delivery

is not the same thing as:

private payment.

Could more private delivery help?

Yes, if it creates additional capacity.

If a new surgical centre adds operating rooms, equipment, hours and staff, that's real capacity.

But if it simply hires the nurses, surgeons and anesthesiologists away from the hospital down the street, the country may have mostly moved the same workers between buildings.

That's why ownership alone doesn't solve the problem.

There is evidence people with additional private coverage can receive faster access to some care.

But evidence also suggests a parallel system can pull scarce workers away from public care.

So I wouldn't accept either extreme:

“Any private involvement destroys Medicare.”

Canada already uses private providers extensively.

Or:

“Let people pay and the waiting lists disappear.”

Changing who writes the cheque doesn't create another doctor.

The real constraint remains capacity.

Other countries don't offer one magic answer

This part surprised me too.

Countries with better access don't all use the same model.

The Netherlands relies heavily on regulated private insurance.

Germany uses social insurance.

The United Kingdom is more government-run than Canada in many ways.

Australia mixes universal Medicare with a substantial private sector.

So the lesson isn't simply:

public versus private.

Better-performing systems tend to have some combination of:

strong primary care,

enough workers,

enough physical capacity,

and better patient flow.

That's a much less politically satisfying answer.

But it's probably closer to reality.

In some places, yes.

It's hard to look at Canada's relatively low numbers of doctors, beds, diagnostic equipment and long-term-care workers and conclude no additional spending is required.

But another broad cheque to the current system isn't enough.

I think governments need to become much more specific about what the next dollar actually buys.

Don't tell me:

Tell me:

How many people get a family doctor?

How many new diagnostic scans can be performed?

How many hospital beds become usable?

How many ALC patients can finally leave acute care?

How much does the surgical wait fall?

Those are outcomes.

The spending announcement is just an input.

After going through the evidence, I'd focus on five things.

Use doctors, nurse practitioners, pharmacists, nurses and other professionals together instead of requiring a physician to handle every interaction.

Giving doctors even part of that 20% of their week back could create meaningful capacity quickly.

Train more people, make provincial licensing easier to move between jurisdictions, and improve recognition of qualified internationally trained workers.

More long-term care, rehabilitation and home support can free expensive hospital beds and improve ER flow upstream.

More diagnostic equipment, operating capacity and beds can help, but only if Canada also has enough workers to operate them.

I don't think any one of these fixes the system by itself.

That's precisely the point.

Canada doesn't appear to have one health-care problem.

It has several bottlenecks feeding into each other.

I don't think Canada is cheaping out on health care.

We spend above the OECD average.

But we're not converting enough of that spending into timely access.

Some of that is because the system genuinely needs additional capacity.

Some comes from demographics and inflation.

And some looks like organization.

The distinction matters because simply spending more without addressing the bottlenecks could leave us with an even larger bill and the same frustration.

So if I were judging governments on health care, I wouldn't start with:

How much did the budget increase?

I'd start with:

Did more Canadians actually get care sooner?

That's the number that ultimately matters.

Primary care: Does the number of Canadians without a regular provider start falling?

Hospital flow: Can provinces reduce the share of beds occupied by patients waiting for another level of care?

Wait times: If procedure volumes keep rising but waits don't improve, demand and system organization are still outrunning capacity.

If governments had another $10 billion for health care, where would you put it?

Primary care, hospitals, long-term care or diagnostic/surgical capacity?

Hit reply and tell me why.

Until Tomorrow,

Dean