Canadians are ready for health-care reform—Australia shows the way

Australia offers real-world examples of how public/private partnerships can be successfully integrated in a universal health-care framework. Not only does Australia prove it can be done without sacrificing universal coverage for all, Australia spends less money (as a share of its economy) than Canada and enjoys more timely medical care.

Canada’s health-care system is crumbling. Long wait times, hallway health care and burned-out staff are now the norm. Unsurprisingly, a new poll finds that the majority of Canadians (73 per cent) say the system needs major reform.

As noted in a recent editorial in the Globe and Mail, we can learn key lessons from Australia.

There are significant similarities between the two countries with respect to culture, the economy and even geographic characteristics. Both countries also share the goal of ensuring universal health coverage. However, Australia outperforms Canada on several key health-care performance metrics.

After controlling for differences in age (where appropriate) between the two countries, our recent study found that Australia’s health-care system outperformed Canada’s on 33 (of 36) performance measures. For example, Australia had more physicians, hospital beds, CT scanners and MRI machines per person compared to Canada. And among the 30 universal health-care countries studied, Canada ranked in the bottom quartile for the availability of these critical health-care resources.

Australia also outperforms Canada on key measures of wait times. In 2023 (the latest year of available data), 39.5 per cent of patients in Australia were able to make a same or next day appointment when they were sick compared to only 22.3 per cent in Canada. And 9.6 per cent of Canadians reported waiting more than one year to see a specialist compared to only 4.5 per cent of Australians. Similarly, almost one-in-five (19.9 per cent) Canadians reported waiting more than one year for non-emergency surgery compared to only 11.8 per cent of Australians.

So, what does Australia do differently to outperform Canada on these key measures?

Although the Globe and Mail editorial touches on the availability of private insurance in Australia, less attention is given to the private sector’s prominent role in the delivery of health care.

In 2016 (the latest year of available data) almost half of all hospitals in Australia (48.5 per cent) were private. And in 2021/22 (again, the latest year of available data), 41 per cent of all hospital care took place in a private facility. That percentage goes up to 70.3 per cent when only considering hospital admissions for non-emergency surgery.

But it’s not only higher-income patients who can afford private insurance (or those paying out of pocket) who get these surgeries. The Australian government encourages the uptake of private insurance and partially subsidizes private care (at a rate of 75 per cent of the public fee), and governments in Australia also regularly contract out publicly-funded care to private facilities.

In 2021/22, more than 300,000 episodes of publicly-funded care occurred in private facilities in Australia. Private hospitals also delivered 73.5 per cent of care funded by Australia’s Department of Veterans’ Affairs. And in 2019/20, government sources (including the federal government) paid for almost one-third (32.8 per cent) of private hospital expenditures.

Which takes us back to the new opinion poll (by Navigator), which found that 69 per cent of Canadians agree that health-care services should include private-sector involvement. While defenders of the status quo continue to criticize this approach, Australia offers real-world examples of how public/private partnerships can be successfully integrated in a universal health-care framework. Not only does Australia prove it can be done without sacrificing universal coverage for all, Australia spends less money (as a share of its economy) than Canada and enjoys more timely medical care.

While provincial governments remain stubbornly committed to a failed model, Canadians are clearly expressing their desire for health-care reforms that include a prominent role for private partners in the delivery of universal care.

Australia is just one example. Public/private partnerships are the norm in several more successful universal health-care systems (such as Germany and Switzerland). Instead of continuing to remain an outlier, Canada should follow the examples of Australia and other countries and engage with the private sector to fulfill the promise of universal health care.

Authors:

Bacchus Barua and Mackenzie Moir

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Published on May 14, 2025

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From the Fraser Institute

By Jake Fuss and Grady Munro

On Tuesday in Ottawa, Prime Minister Mark Carney unveiled his new cabinet, consisting of 28 ministers and 10 secretaries of state. They have their work cut out for them. In addition to President Trump’s trade war, the Carney government must tackle several other critical issues that have persisted since long before Trump was re-elected.

First and foremost, the Carney government should address stagnant living standards for Canadians. From the beginning of 2016 to the end of 2024, per-person GDP—a broad measure of living standards—grew by only 2.5 per cent in Canada compared to 18.7 per cent in the United States (all figures adjusted for inflation). While U.S. tariffs threaten to further reduce living standards in Canada, the marked decline began almost a decade ago.

There’s a similar gloomy story in worker incomes as Canadians continue to fall further behind their American counterparts. According to the latest data, median employment earnings (in Canadian dollars) in all 10 provinces ranked lower than in every U.S. state in 2022—meaning Americans in low-earning states such as Mississippi ($42,430), Louisiana ($43,318) and Alabama ($43,982) typically earned higher incomes than Canadians in the highest-earning province of Alberta ($38,969).

Why is this happening?

Part of the problem is the state of federal finances. Even Prime Minister Carney has criticized the Trudeau government’s approach to spending increases and debt accumulation, which diverts taxpayer dollars away from programs and towards debt interest payments, and burdens younger generations with higher taxes in the future. But unfortunately, according to Carney’s election platform, his government plans to borrow $93.4 billion more over the next four years compared to the Trudeau government’s last spending plan. The prime minister and his new cabinet should rethink this approach before tabling their first budget.

The Carney government should also cut taxes. Canadians in every province face higher combined (federal and provincial) personal income tax (PIT) rates than Americans in virtually every U.S. state across a variety of income levels. Canada’s PIT rates are similarly uncompetitive compared to other advanced countries. High taxes impose a burden on families, but they also make it harder for Canada to attract and retain high-skilled workers (e.g. doctors, engineers), entrepreneurs and investment, which drives economic growth and prosperity.

Finally, the Carney government should meaningfully address Canada’s housing affordability crisis. Housing costs have risen dramatically due to a significant gap between the demand for houses and the supply of housing units. In 2024, construction began on 245,367 new housing units nationwide while the population grew by 951,717 people due in part to one of the highest levels of immigration in Canadian history. This problem has been growing for decades—housing starts per year have remained stuck at essentially the same level they were in the 1970s while annual population growth has more than tripled. If policymakers want to help lower housing costs, they must reduce the imbalance between population growth and housing starts.

For the federal government, that means aligning immigration targets more closely to housing supply and rethinking policies that increase housing demand such as homebuyer tax credits and First Home Savings Accounts. Meanwhile, provincial and local governments should reduce red tape and construction costs to increase supply.

The Carney government has its work cut out for it. Besides U.S. tariffs, Canadians face several critical issues, which have persisted long before Trump was re-elected, and will continue unless something changes.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute

Fraser Institute

Carney government’s housing plan poses major risks to taxpayers

Published on May 13, 2025

Todayville

From the Fraser Institute

By Jake Fuss and Austin Thompson

A trade war, Trump’s threats to Canada’s sovereignty, and global economic volatility loomed large in the recent federal election. Yet many voters remained focused on an issue much closer to home: housing affordability.

In 2023, under Justin Trudeau, Canada added a record high 1.2 million new residents—more than double the previous record in 2019—and another 951,000 new residents last year. All told, Canada’s population has grown by about 3 million people since 2022—roughly matching the total population increase during the entire decade of the 1990s. Not surprisingly, homebuilding has failed to keep pace. In fact, housing construction rates have barely exceeded 1970s levels, even though the population has more than tripled since then. The result—a historic surge in housing costs.

On the campaign trail, the Liberals set an immigration target of about 400,000 per year, which is lower than the recent record highs but still high by historical standards, and tabled a plan they claim will double Canada’s residential construction rate to 500,000 new homes per year within a decade. But is it a good plan? And can the Liberals deliver it?

First, the good news. To help boost private homebuilding, the Carney government promised to introduce tax incentives including a rental building allowance, which would help reduce the tax bill on new multi-unit rental buildings, and a GST exemption for some first-time homebuyers, which may reduce the cost of newly-built homes and spur more homebuilding. The government also plans to expand the “Housing Accelerator Fund,” which offers federal dollars to municipalities in exchange for more flexible municipal building rules, and modernize the federal building code, which could shorten construction timelines. While much will depend on execution, these policies rightly aim to make it faster, cheaper and more attractive for the private sector to build homes.

Now, the bad news. The Carney government plans to create a new federal entity called Build Canada Homes (BCH) to “get the government back in the business of building.” According to Carney’s vision, the BCH will act “as a developer to build affordable housing” and provide more than “$25 billion in financing” to homebuilders and “$10 billion in low-cost financing and capital” for homebuilders to build “affordable” homes.

We’ve seen a similar movie before. In 2017, the Trudeau government created the Canada Infrastructure Bank (CIB) to invest in the “next generation of infrastructure Canadians need.” Since then, the CIB has approved approximately $13.2 billion in investments across 76 projects (as of July 2024), yet only two CIB-funded projects had been completed, prompting the authors of a multi-party House of Commons committee report to recommend abolishing the CIB.

The bureaucrats who will run the BCH won’t have the private sector’s expertise in housing development, nor the same incentives to keep costs down. BCH’s mandate is already muddled by competing goals—it must deliver “affordable” homes while simultaneously prioritizing certain building materials (e.g. Canadian softwood lumber), which could increase building costs.

The plan for BCH’s multi-billion-dollar loan portfolio includes significant “low cost” (that is, taxpayer subsidized) financing, a huge bet on prefabricated homebuilding, and no certainty about who will be on the hook for any failed projects—combined, this represents a major increase in costs and risks for taxpayers at a time when they already shoulder rising federal deficits and debt.

There’s also a real risk that BCH will simply divert limited investment dollars and construction resources away from private homebuilding—where projects respond to the needs of Canadian homebuyers and renters—and toward government-backed housing projects shaped by political goals. Instead of boosting overall homebuilding, BCH may simply reshuffle limited resources. And, as noted by the government, there’s a severe shortage of skilled construction labour in Canada.

It’s hard to see how Carney’s housing plan would double the pace of homebuilding in Canada—a very ambitious target that would require not only prudent housing policies but greater domestic savings, an implausibly large expansion in the construction workforce (which grew by only 18.4 per cent over the last decade), and the political fortitude to endure vocal opposition to housing development in certain neighbourhoods and on public lands.

Canada’s housing crisis will benefit from federal leadership—but not federal overreach. Rather than overpromising what it can’t deliver, the Carney government should refocus on what it’s best positioned to do: reform incentives, streamline regulations, and nudge municipalities and provinces to remove constraints on homebuilding. Trying to also act as a housing developer and lender is a far riskier approach.