Trends in health care spending
Over the last 45 years, health spending in Canada has continued to climb, and it currently represents approximately 40% of total provincial and territorial budgets. Historically, health spending grew alongside — and at times faster than — the economy. But COVID-19 caused a significant increase in spending due to the immediate need to scale up health systems to respond to the pandemic.
Hospitals, drugs and physicians remain the 3 highest areas of spending and, combined, are expected to represent over 50% of total health spending in Canada in 2021. But a new spending category, referred to as COVID-19 Response Funding, will make up about 7% — or $23 billion — of total health spending. This category includes costs for things like COVID-19 treatment, contact tracing and vaccinations.
In addition to pressures caused by the ongoing pandemic, Canada’s health care systems are also making adjustments to care for an increasingly aging population. While those age 65+ make up just 18% of the total population in Canada, they use approximately 45% of public-sector health care dollars.
- Total health spending in Canada is expected to reach $308 billion in 2021.
- Hospitals (25%), drugs (14%) and physicians (13%) are expected to continue to account for the largest shares of health spending in Canada in 2021.
- The new spending category COVID-19 Response Funding will make up about 7% of total health spending.
- Seniors represent the largest age group in terms of health care spending, at about 45% of total public health dollars (about $78 billion was spent on their care in 2019).
CIHI also released new information on public drug spending for 2020 that includes spending trends and the drugs that accounted for the highest costs in our health systems.