After a decline in 2022 followed by an increase in 2023, total healthcare spending in Canada surged by 5.7% in 2024 and is projected to reach $372 billion, or $9,054 per capita, according to estimates from the Canadian Institute for Health Information (CIHI) in a report published on Nov. 7. 

From 2011 to 2019, healthcare spending grew at an average annual rate of 3.9%. The 5.7% increase recorded this year surpasses the economic growth rate for 2024 (3.7%) and is reminiscent of the 2008–2010 period when healthcare spending grew by an average of 5.9% annually. 

This rising cost trend is expected to persist, particularly due to the recent rapid population growth, CIHI predicts. 

Public-private breakdown 

According to CIHI, most healthcare services in Canada in 2024 will be publicly funded (71%), with the remaining 29% covered by the private sector. This 29% is distributed as follows: 

  • 14.6% borne by patients; 
  • 11.9% covered by private insurers; 
  • 2.5% from other sources. 

The organization indicates that total private sector healthcare expenditures are expected to rise by 6.2% in 2023 and 6.1% in 2024. 

The growing demand for private services could continue, driven by prescription medications, dental and vision care, and home care services. 

Hospital expenditures top the list 

In Canada, the largest share of healthcare spending goes to hospitals, medications, and physician services. 

Hospital expenditures, CIHI's report notes, represent the largest share of healthcare costs. These expenditures are expected to grow by 6.1% and account for 26% of total healthcare spending in 2024. 

Employee compensation is the largest expense for Canadian hospitals, averaging about two-thirds of total hospital expenditures. 

In 2022–2023, overall employee compensation reached $45 billion, a 6.7% increase year over year. 

Physician-related expenditures 

Expenditures related to physicians jumped by 8.7% in 2022 and 7.5% in 2023, partly due to the rebound in demand after the pandemic. They will account for 13% of total healthcare spending in 2024 and are expected to increase by 4.4% that year. 

According to another CIHI report entitled Physicians in Canada, 2023, the number of physicians continues to grow nationwide. Consequently, sustained growth in demand for their services is expected. 

"Both of these will contribute to a rise in physician expenditures in the future," the Institute states. 

Medication-related expenditures 

Medication-related expenditures are expected to grow by 3.8% in 2024, but these increases are lower than those for hospitals and physicians. Generic drugs play a role in moderating costs. 

"Substitution of generic for brand name drugs continues to have a dampening effect on drug spending growth," the organization notes. 

However, it warns that newly developed specialty drugs could become a more significant cost driver in the future. For example, new medications for treating diabetes and obesity have been key contributors to rising expenditures. 

Per capita spending by province 

CIHI's figures reveal significant disparities in per capita spending across Canada's provinces and territories. Spending is lowest in Ontario and Quebec and highest in Nunavut, as illustrated in the following chart: 

International Comparisons 

Among the 38 countries in the Organisation for Economic Co-operation and Development (OECD) in 2022, the most recent year for which comparable data is available, healthcare spending in Canada stood at CAD $8,119 per person, ranking among the highest. It was behind Sweden (CAD $8,314) and France (CAD $8,212) but ahead of Australia (CAD $8,073) and New Zealand (CAD $7,463).