The latest health expenditure release from the Canadian Institute for Health Information (CIHI) projects that Canada will spend $433 billion on health in 2026, up 4.8 percent from the previous year.
asserted
Canada → project → 2026
This brings the health expenditure-to-GDP ratio to 12.8 percent.
asserted
This → bring → percent
Coming on the heels of nominal increases ranging from 5.2 to 8.5 percent over the 2023–2025 period, this suggests that a new era of spending increases may be underway, signalling increased investments in health system capacity and care delivery.
uncertain
era → come → capacity
After accounting for population growth and inflation, real per capita total health spending in 2026 is expected to rise 2.3 percent, while real per capita provincial government health spending is projected to rise 3.2 percent.
asserted
spending → account → capita
At the same time, the numbers for 2026, while impressive, come on the heels of more erratic performance in 2025, especially with respect to provincial government health spending.
asserted
numbers → come → spending
Figure 1 plots real per capita provincial government health spending for the provinces and Canada as a whole (including the territories) for 2025 and 2026, ranked by 2026 growth.
asserted
Figure → plot → growth
At the upper end, Newfoundland and Labrador, Prince Edward Island, and Ontario saw the largest increases at 9.2, 7.9, and 5.0 percent, respectively.
asserted
Newfoundland → see → increases
Ontario, Quebec, and Saskatchewan saw real per capita provincial government health spending decline in 2025.
asserted
Ontario → see → 2025
Indeed, it declined nationally by 0.1 percent.
asserted
it → decline → percent
The pronounced rebound is also apparent when real per capita provincial government expenditures are examined by broad category, as illustrated in Figure 2.
asserted
expenditures → examine → Figure
The categories of hospitals, other professionals, drugs, public health, and administration all saw outright declines, while the remaining categories were anemic.
asserted
categories → see → declines
The current year is expected to see robust recoveries in just about everything except for administration and capital, with the largest increases being physicians and other health professionals.
asserted
increases → expect → administration
What’s driving the increases
The key question is what’s driving the increases given the perennial concerns about the sustainability of health spending.
asserted
what → drive → spending
The usual long-term drivers are, of course, aging populations, growing populations, access to and number of physicians, and technological advances, which are reinforced by the backlog of surgeries and procedures caused by cost inflation and the pandemic.
asserted
which → age → inflation
However, while much of the long-term inexorable rise in spending has been tied to the aging of the population given the health spending life cycle and the growing proportion of population over age 65, a curious feature is that, despite an ever-growing elderly population share and the 6 percent federal transfer growth escalator, provincial government spending growth was especially muted in the decade leading up to the pandemic.
asserted
growth → tie → pandemic
Figure 3 explores the role of age as a factor in health spending by plotting real per capita provincial government health spending by age category for two years: 2004 and 2024.
asserted
Figure → explore → years
The curves are U-shaped.
asserted
curves → shape → ?
Real per capita spending is highest for those under age 1 and those aged 75 years and over.
asserted
spending → age → age
Per capita spending rises gradually from the 1–4 age category to the 60–64 age category and then more dramatically after the 65–69 age bracket.
asserted
spending → rise → bracket
Moreover, the curve has shifted upwards over time.
asserted
curve → shift → time
It should be noted that in 2004, 12.9 percent of the population was aged 65 years and older, and by 2024, this had grown to 19 percent.
asserted
this → note → percent
In 2005, 45.1 percent of provincial-territorial government health spending was for those aged 65 years and over.
asserted
percent → age → those
By 2024, it had grown to 47.5 percent, confirming that an aging population is associated with more health spending.
asserted
population → grow → spending
However, another interesting trend can be seen in the curves from Figure 3: the upward shift in per capita spending over the 20-year period is more noticeable for the age categories under 70–74.
asserted
shift → see → 70–74
Indeed, if one plots the percent growth in real per capita spending between 2004 and 2024 by age category, as illustrated in Figure 4, one sees that some of the largest increases in per capita spending are for those under 20 years of age.
asserted
some → plot → age
Between 2005 and 2024, real per capita spending for the 65–69 age group grew just under 8 percent, while for those aged 70–74 it grew just under 1 percent.
asserted
it → grow → percent
The categories between 75–89 years saw real per capita provincial government health spending decline anywhere from 1–8 percent.
asserted
spending → see → years
Explaining the numbers
This suggests that the demographic drivers of provincial government health spending are operating on two levels when it comes to population age distribution.
uncertain
it → explain → distribution
First, an increase in the proportion of the population aged 65 years and over is resulting in an increase in total health spending because of the sheer increase in the elderly, given that health spending does rise with age.
asserted
spending → age → age
However, when it comes to spending per person, the larger increases are for younger demographics.
asserted
increases → come → demographics
Compared to 20 years ago, health spending growth is greater for those under the age of 65 than for those over the age of 65, in real per capita terms.
asserted
growth → compare → terms
The long-term decline in real per capita spending growth rates for the elderly by provincial government health systems can result from any number of factors, including the fact that provincial health ministries have become more aggressive with cost control.
asserted
ministries → result → control
But that doesn’t account for everything.
asserted
that → account → everything
This is also likely the healthiest generation of seniors in history, with many quite active and relatively fit well into their 70s and 80s, which might be a factor in the moderation of their health spending needs.
uncertain
which → fit → needs
Some might point to the onset of MAID in 2016 as a reason for the decline in per capita spending amongst seniors, but the evidence on this is premature and uncertain.
uncertain
evidence → point → this
On the other hand, given the constant issues with accessibility to health services and the large numbers of people still without family physicians, it’s possible that as both the general population and the physician stock age, a disproportionate number of seniors are losing access to gatekeeper family physicians, thereby affecting expenditures.
asserted
number → give → expenditures
In any event, the recent increases come after a relatively long pre-pandemic period of moderate per capita spending growth, with the moderation driven primarily by slower spending growth for older demographics.
asserted
moderation → come → demographics
While an aging population per se has driven up total health spending because of the Baby Boom population bulge, the per-person spending increases have been more pronounced in the below-65 demographic.
asserted
increases → age → demographic
The evidence suggests that moving forward, the mantra that the elderly are responsible for rising health spending needs to be more nuanced.
uncertain
elderly → suggest → spending
Canada’s health spending is projected to reach $433 billion by 2026, marking a 4.8 percent increase from the previous year.
asserted
spending → project → increase
…and 4 more, not listed.
The Aporia
