NCPA - National Center for Policy Analysis


October 8, 2004

No country spends more than Canada to maintain a universal-access health care system. Yet most Canadians readily acknowledge that their health care system is failing. The solution, according to all of the parties in a recent federal election, is more spending.

Yet the current size and pace of health care spending by the provinces is remarkable, says researcher Nadeem Esmail:

  • Health care expenditures already consume an average of 36 percent of provincial program spending, 4 percentage points higher than 5 years ago.
  • On average, provincial program spending on health care has been increasing at a rate of more than 1.4 times that of total program spending.

This suggests that current growth rates in health care spending among the Canadian provinces are unsustainable and they will likely crowd out all other forms of spending in less than two decades if structural changes are not adopted, says Esmail.

Assuming that growth in total program spending will be about 3.5 percent (reflecting inflation and population growth) and holding real per capital provincial program spending constant, Esmail estimates that:

  • By 2021, Newfoundland will be the first province to spend all of its funds on health care, leaving nothing for other programs such as police, education and the judiciary.
  • All the 10 provinces will be spending their entire provincial budgets on nothing but health care by 2040.

Source: Nadeem Esmail, "Hitting the Health Care Wall," Fraser Forum, July 2004, Fraser Institute.


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