Covid-19 to push Canada’s health care spending to record levels

Driven by the Covid-19 pandemic, health care spending in Canada is expected to reach a historic high of CAN$308 billion (US$247 billion) by the end of this year. The Ottawa-headquartered independent non-profit organization Canadian Institute for Health Information (CIHI) described this as a “new record” in total health spending for the country.

Driven by the Covid-19 pandemic, health care spending in Canada is expected to reach a historic high of CAN$308 billion (US$247 billion) by the end of this year, translating to CAN$580,000 every minute. The Ottawa-headquartered independent non-profit organization Canadian Institute for Health Information (CIHI) described this as a “new record” in total health spending for the country.

A health care worker administers the Pfizer/BioNTech coronavirus Covid-19 vaccine, which was authorised by Canada to be used for children aged 12 to 15, at Woodbine Racetrack pop-up vaccine clinic in Toronto, Ontario, Canada. (REUTERS)

“Covid-19 resulted in the single biggest increase in health spending we have ever seen in this country. An aging population and the continued pandemic will no doubt put more strain on our health systems and take up a larger proportion of government budgets. Challenges lie ahead, no doubt — but so do opportunities as improved technologies, pharmaceuticals and models of care can lead to better health outcomes for Canadians,” said CIHI president and CEO David O’Toole in a statement.

Health spending is expected to have increased by nearly 12% between 2019 and 2020, a rate of increase not witnessed in three decades. “This is triple the growth rate experienced from 2015 to 2019, which was steady at approximately 4% per year. This historic spending increase took place alongside a contraction in the economy, both due in part to the ongoing Covid-19 pandemic,” the CIHI statement noted.

Health care is in the public domain in Canada and accounts for about 40% of provincial and territorial budgets. Hospitals, drugs and physicians were the three highest areas of spending and, combined, were expected to represent over half the total outgo 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,” CIHI said.

So far at least 88% of eligible Canadians have received at least a dose of a Covid-19 jab, with nearly 84% now fully vaccinated.