Canada’s healthcare spending is expected to reach a record $433 billion in 2026, marking the highest level in the country’s history, according to a new report by the Canadian Institute for Health Information (CIHI).
The report, titled National Health Expenditure Trends, 2026, released on November 10, projects that total healthcare spending will increase by 4.8 per cent this year. Per-person healthcare expenditure is expected to reach approximately $10,398.
The figures highlight the growing financial demands on Canada’s healthcare system, including hospitals, physician services, prescription drugs and other medical care.
According to CIHI, rising healthcare costs are being driven by population growth, an increasing number of older Canadians, inflation and growing demand for medical services.
Healthcare Spending Reaches a New Record
Canada’s total healthcare expenditure stood at approximately $393 billion in 2024 and was estimated to rise to around $413 billion in 2025.
The figure is now projected to reach $433 billion in 2026.
The annual growth rate has gradually slowed, although spending continues to increase:
- 2024: 8.5 per cent growth
- 2025: 5.2 per cent growth
- 2026: 4.8 per cent projected growth
Despite the slower pace of increase, healthcare spending is still expected to grow faster than Canada’s overall economic output.
The projected per-person expenditure of $10,398 represents the average amount spent on healthcare for every Canadian, rather than an amount paid directly by each individual.
Healthcare Spending to Account for 12.8% of GDP
CIHI estimates that healthcare expenditure will represent approximately 12.8 per cent of Canada’s gross domestic product (GDP) in 2026.
The report projects overall economic growth of 4.1 per cent, compared with the expected 4.8 per cent increase in healthcare spending.
This means healthcare costs are continuing to rise faster than the broader economy, highlighting the growing importance of the sector in Canada’s public finances.
Government and Private Sector Share of Healthcare Costs
Healthcare in Canada is funded through a combination of public and private sources.
According to the report, public funding is expected to account for approximately 71.4 per cent of total healthcare spending in 2026, while the private sector will contribute the remaining 28.6 per cent.
Public expenditure includes funding from federal, provincial and territorial governments, along with other public institutions.
Private spending includes payments made through private health insurance plans and direct out-of-pocket expenses paid by individuals.
Hospitals Expected to Receive the Largest Share
Hospitals remain the biggest area of healthcare expenditure in Canada.
CIHI estimates that approximately 25.6 per cent of total healthcare spending in 2026 will go towards hospital services. Hospital expenditure is projected to increase by 5.1 per cent during the year.
Major cost factors include healthcare workers’ salaries, nursing services, hospital administration, patient care and other medical operations.
The report also notes that some pandemic-related staffing expenses, including the use of agency workers, overtime and sick-leave costs, have declined. However, these expenses remain above pre-pandemic levels.
Spending on Doctors and Prescription Drugs
Physician services and prescription medications also account for substantial portions of Canada’s healthcare budget.
In 2026, physician services are expected to represent approximately 14.1 per cent of total healthcare expenditure, while drugs are projected to account for around 12.7 per cent.
Spending on physician services is forecast to increase by 8.3 per cent in 2026, up from 5.6 per cent in 2025.
The increase reflects growing demand for medical consultations, treatment and physician services across the country.
Artificial Intelligence and Technology Could Shape Healthcare’s Future
Modern technology, digital healthcare services and artificial intelligence are increasingly being considered important parts of Canada’s healthcare future.
Potential applications include improving the management of patient medical records, supporting diagnostic processes, making hospital administration more efficient and reducing pressure on healthcare professionals.
Artificial intelligence could also help analyse medical information and streamline administrative tasks.
However, the extent to which these technologies improve healthcare delivery will depend on how effectively they are introduced into the medical system.
Healthcare Spending Varies Across Canadian Provinces
Healthcare expenditure is not evenly distributed across Canada’s provinces. Differences in population age, geography, access to medical services and the cost of delivering care in remote communities all influence spending.
CIHI’s 2026 estimates indicate the following per-person healthcare expenditures:
- Nova Scotia: $12,777
- Newfoundland and Labrador: $12,710
- Prince Edward Island: $12,617
- Alberta: $10,426
- Quebec: $9,895
- Ontario: $9,838
Nova Scotia is expected to record the highest per-person healthcare expenditure among the provinces listed, while Ontario and Quebec are projected to have lower figures.
How Canada Compares Internationally
Canada also ranks among the countries spending a significant share of their economies on healthcare.
According to CIHI’s international comparisons for 2024, healthcare expenditure represented 11.5 per cent of Canada’s GDP, compared with an average of 9.3 per cent across 38 OECD countries.
The figures for selected countries were:
- United States: 17.2 per cent
- Germany: 12.2 per cent
- France: 11.3 per cent
- Sweden: 11.2 per cent
- United Kingdom: 11.1 per cent
The comparison places Canada’s healthcare spending above the OECD average, although below the United States and Germany in terms of the share of GDP.
2026 Marks an Important Financial Year for Canada’s Healthcare System
The projected $433 billion in total spending, combined with per-person expenditure of $10,398 and a 12.8 per cent share of GDP, demonstrates the growing financial importance of healthcare in Canada.
In the coming years, the system will face the challenge of meeting rising demand while managing costs, addressing the needs of an ageing population and ensuring sufficient healthcare staffing.
The ability to use technology effectively and improve the delivery of medical services will also be important as Canada works to maintain the sustainability of its healthcare system.
