Social Policy in Ontario

The predictable consequence to the gaps in our health funding? Private spending keeps growing faster than public

Posted on August 18, 2026 in Health Policy Context

Source: TheStar.com — Authors: Danyaal Raza

TheStar.com – Opinion
Aug. 17, 2026.   By Danyaal Raza, Contributor

Every budget cycle, we hear the same warning: public health-care spending is unsustainable, and governments can’t afford to invest more. It’s a convenient narrative for politicians looking to freeze or even cut public expenditure.

It’s also not supported by data. In fact, it gets the diagnosis backward.

In four of the past five years, private health-care spending has grown faster than public. And going back to 1988, the starting point for data from the Canadian Institute for Health Information, private spending has outgrown public spending in 25 of the past 38 years.

Canadians spend 11.2 per cent of GDP on health care in total. Of that, about 70 per cent is public spending and 30 per cent private, making Canada an outlier among its peers. In Germany, France, the United Kingdom, the Netherlands and Norway, more than 80 per cent of total health-care spending is public. The corollary holds, too: private spending is meaningfully higher in Canada.

Compared with Europeans, individual Canadians are expected to absorb a much larger portion of the cost of their own care. The false “unsustainable public spending” narrative obscures where the growth pressure really sits — and who has to bear it.

It’s worth being specific about where all this private spending goes. Three categories — prescription drugs, dental services and long-term care — have topped the list in Canada every year since 2014, amid the economic and social shocks of the COVID-19 pandemic, the housing crisis and wild inflationary swings.

The consistency is telling. These are not marginal or unpredictable spending categories; they represent structural gaps in our public health coverage, as old as medicare itself. The Canada Health Act, which guarantees public coverage for hospital and physician services, says nothing about the other categories. They exist outside the public system’s core commitments, where private spending, either out-of-pocket or via job-linked insurance, has become entrenched.

To its credit, Ottawa has begun to respond, albeit in fragments rather than with a coherent strategy. Take the Canadian Dental Care Plan for example: within one year of implementation, more than four million Canadians had been approved for coverage, and two million had already received care. Yet it’s not a universal program in which all Canadians receive shared benefits, making it more vulnerable to cuts or even cancellation. And it does little to advance the goal of innovative delivery reform — for example, scaling up the role of dental hygienists.

Nevertheless, it’s a genuine expansion of public coverage.

On long-term care, the federal government has been quieter. Bilateral “Aging With Dignity“ agreements have earmarked funding for home, community and long-term care, allowing for valuable investments in capacity, staff wages and infrastructure. But public coverage to directly displace household spending is nowhere to be found.

There is also a straightforward efficiency case to be made here: the single largest private-spending category in Canada is prescription drugs. We remain the only high-income country in the world whose universal healthcare system lacks a universal drug plan.

This fragmentation carries with it significant costs, including duplicated administration across thousands of private insurers, weaker collective bargaining power over drug prices and coverage gaps that push some patients toward hospitalization when they can’t afford medication.

A genuinely universal single-payer pharmacare system — not narrow bilateral agreements, signed by a handful of provinces so far, that cover only two drug categories — would cost less than the current system, even without accounting for the human cost of forgone medication.

This is not an argument for unlimited public spending. In a world of finite resources and other social priorities, some fundamental to human health, that would be neither achievable nor desirable.

Yet the notion that our health-care system is at risk because governments are spending too much is misleading in a country where seniors cover the cost of long-term care beds, parents pay out of pocket for their children’s dental work and patients spend too much on the medications they need to be healthy.

Dr. Danyaal Raza is an associate professor at the University of Toronto and a family doctor at St. Michael’s Hospital.|

https://www.thestar.com/opinion/contributors/when-politicians-tell-us-health-care-spending-is-unsustainable-they-never-seem-to-mention-this/article_be01e8c6-1416-4bca-bfc4-af24ed08fb85.html

Tags: budget, featured, Health, ideology, jurisdiction, participation, pharmaceutical, standard of living

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