Canada’s Health Care Spending

By the numbers

The Canadian Institute for Health Information tracks Canada’s health care spending year by year. The National Health Expenditure Trends report details how much of Canada’s GDP is spent on health care, where the money goes, and how spending varies across the country. The report also provides comparative data of Canada and its OECD counterparts.

Chris Kuchiak is the Manager of Health Expenditures at the Canadian Institute for Health Information. He will guide us through Canada’s health care spending.

Currently, Canada is experiencing a spending slowdown when it comes to health care. Health spending has decreased on average by 0.6 per cent each year since 2001. The trends are comparable to decreases during the mid-1990s. According to the Canadian Institute for Health Information (CIHI) this decrease reflects Canada’s “modest economic growth and fiscal restraints as governments focus on balancing budgetary deficits.” 

“When we look at how much Canada spends relative to the size of the economy, in fact, health care takes up almost 11 per cent of our Gross Domestic Product. – Chris Kuchiak

“We’re actually seeing a slowdown in the growth of spending on hospitals, drugs and physicians,” states Kuchiak. There are different factors that are contributing to the slow growth. For example, when you look at hospitals and physicians, there are controlling labor costs. “Whereas with pharmaceuticals,” explains Kuchiak, “we’re seeing a ‘holding the line’ on prices of drugs and new drugs on the market. That’s keeping a dampening effect on the expenditure growth.”

But just how much does Canada spend on health care each year?

Source: Canadian Institute for Health Information

When it comes to health care spending, Canada ranks well among fellow OECD countries. The following information is from the OECD Health Statistics report. 2013 is the most recent available year for data.

In terms of hospital costs, the “big driver” is people, says Kuchiak. “Health care is a labor intensive sector, provided by people.” Currently there are higher volumes of patients being seen in  hospitals. “We’re also seeing the severity of the injury or cases being seen at the hospitals, which take more resources and time to treat.”

Policy makers are currently faced with a challenge to find the right balance between hospital physicians and primary healthcare providers. There is a benefit for every Canadian to have a general practitioner or a family doctor so that they could potentially be kept out of hospital. “Which will result in less costs for the health care system,” explains Kuchiak.

Where do Canada’s health care dollars go?

Source: Canadian Institute for Health Information 

As we know, health care falls under provincial jurisdiction. There are variations in spending across Canada. “There are a number of reasons why we see variations in spending across the country, certainly the different age and demographics, the health status of populations, will differ,” explains Kuchiak.

Not only does health care spending vary by geographical area, but it also varies by age. Health expenditure is also different depending on the age of the individual. According to the CIHI, health care spending per person is highest for those individuals 80 and older.

Spending on seniors


Source: Canadian Institute for Health Information.

That being said, population aging is a modest driver of increasing health care costs, the institute says.

Population aging is said to only increase health care costs by 0.9 per cent each year. According to the National Expenditure Trends report, population aging has yet to dramatically influence health care spending. However, Canada has not yet seen a rapidly aging population like the one that is expected to occur in the coming years.


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