Endless spending increases will not fix Canada’s health-care system

Canada’s health-care system ranked as the most expensive (as a share of the economy) among 30 universal health-care countries. And despite these relatively high levels of spending, Canada continues to lag behind its peers on key indicators of performance.

In February 2023, the federal government announced the money they send to the provinces for health care would increase, yet again. Despite being billed as a fix for health care, these spending increases will not actually provide any relief for Canadian patients.

The Canada Health Transfer (CHT), the main federal financial tool for funding provincial health care, has increased from $34.0 billion in 2015/16 to $52.1 billion this year (2024/25), a 53.1 per cent increase in about a decade. Moreover, the federal government has committed to increases in the transfer at a guaranteed 5 per cent until 2027/28.

This latest increase in the CHT, however, is only one part of the $46.2 billion in new money being doled out over the next 10 years. More than half (roughly $25 billion) is currently being given to provinces who’ve signed up to work towards a number of “shared priorities” with Ottawa, such as mental health and substance abuse.

Clearly, the federal government has decided to substantially increase health-care spending in more than one way. But will it produce results?

These periodic “fixes” occasionally championed by Ottawa every few years are nothing new. And unfortunately, the data show that longstanding problems, including long waits for medical care and doctor shortages, will persist even though Canada is certainly no slouch when compared to its peers on health-care spending.

A recent study found that, when adjusted for differences in age (because older populations tend to spend more on health care), Canada’s health-care system ranked as the most expensive (as a share of the economy) among 30 universal health-care countries. And despite these relatively high levels of spending, Canada continues to lag behind its peers on key indicators of performance.

For example, Canada had some of the fewest physicians (ranked 28th of 30 countries), hospital beds (ranked 23rd of 29) and diagnostic technology such as MRIs (ranking 25th of 29 countries) and CT scanners (ranking 26th out of 30 countries) compared to other high-income countries with universal health care.

It also ranked at or near the bottom on measures such as same-day medical appointments, how easy it is to find afterhours care, and the timeliness of specialist appointments and surgical care.

And wait times have been getting worse. Just last year Canada recorded the longest ever delay for non-emergency care at 27.7 weeks, a 198 per cent increase from the 9.3 week wait experienced in 1993 (the first year national estimates were published).

But it’s not just the health-care system that’s in shambles, despite our high spending. Our federal finances are, too. Years of substantial increases in federal spending have strained the country’s finances. The Trudeau government’s latest budget projects a deficit of $39.8 billion this year, with more spent on debt interest ($54.1 billion) than on what the federal government gives to the provinces for health care.

Again, these periodic injections of federal funds to the provinces to supposedly fix health care are nothing new. Ottawa has relied on this strategy in the past and wait times have grown longer over the last three decades. Endless increases in spending will not fix our health-care system.

Authors:

Mackenzie Moir and Jake Fuss

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Patriotic Millionaires concept of tax ‘fairness’ ignores tax facts in Canada

Published on June 3, 2025

Todayville

From the Fraser Institute

By Jake Fuss and Tegan Hill

A group of wealthy Canadians called the “Patriotic Millionaires” recently asked governments in Canada to increase the amount of taxes they pay to “ensure greater fairness” in the system. In particular, the group is calling for a wealth tax and higher taxes on capital gains.

Unfortunately, the Patriotic Millionaires (whose motto is “Tax the rich!”) seem to misunderstand the current distribution of taxes paid by different income groups in Canada and the economic consequences of raising taxes.

The fixation on tax “fairness” (which the Patriotic Millionaires never actually define) is not new in Canada. It was a constant focus of the Trudeau government, which decided to increase “fairness” by increasing the top federal personal income tax rate from 29 per cent to 33 per cent in 2016 and proposing to raise taxes on capital gains in 2024.

These policies, like the Patriotic Millionaires, ignored basic facts about taxes. According to a recent study, the top 20 per cent of income-earning families in Canada paid 54.2 per cent of all federal, provincial and local taxes while earning less than half of the country’s total income (46.4 per cent). These families are the only income group in Canada that pay a larger share of taxes than their share of income.

In contrast, the remaining 80 per cent of Canadian families pay less in taxes than their share of total income. For example, the bottom 20 per cent of income-earning families pay 2.0 per cent of total taxes while earning 5.0 per cent of total income.

Why? Because Canada, like most advanced economies, has a progressive income tax system where government taxes individuals at increasingly higher rates as their income rises. For example, the marginal federal tax rate is 15 per cent on individual incomes up to $57,375 but more than double that rate (33 per cent) on income that exceeds $253,414.

According to the Patriotic Millionaires, Canada needs a “wealth tax,” which taxes a person’s net wealth. But time and time again, wealth taxes have failed to deliver the promised results of proponents. Eight European countries that experimented with wealth taxes have since abandoned them because they were expensive to administer, raised little revenue and imposed enormous costs on their economies. In particular, wealth taxes discourage investment, which is needed to broadly raise living standards and improve prosperity, by prompting people to move their assets away from productive investments (e.g. new businesses) to investments that may be exempt from the tax.

So, if Ottawa implemented a wealth tax, we’d likely see a reallocation of investment away from startups and towards housing (assuming housing remains exempt from the tax). Consequently, companies and investors would have less resources to invest in the technology, machinery and equipment that improve productivity, create jobs and drive higher living standards, particularly for average workers.

The Patriotic Millionaires also want to raise taxes on capital gains, which would have similar negative effects by making it more expensive for individuals and businesses to invest in Canada, leading to stagnant wages and living standards for Canadians.

The Patriotic Millionaires are misguided in their claims about “fairness” in the tax system. High-income earners already pay the majority of all taxes in Canada, and proportionality is one of the only objective measures of fairness with respect to the tax burden. Their policy proposals, if enacted by government, would only harm the economy rather than help it. That wouldn’t be fair to Canadian workers.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Tegan Hill

Director, Alberta Policy, Fraser Institute

Business

Federal government should cut red tape to spur economic growth

Published on June 3, 2025

Todayville

From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

As Parliament resumes, Prime Minister Mark Carney should recognize a simple fact—Canada has a regulation problem, which discourages business investment and stifles economic growth. And if we don’t solve the problem, we risk falling further behind the United States.

Since his re-election in November, President Donald Trump has vowed to cut “job-killing” red tape, promised to eliminate 10 regulations for each new regulation, and directed federal agencies to halt the enforcement of burdensome and potentially unlawful regulations. To amplify these efforts, the Department of Government Efficiency (DOGE) launched a website tracking the regulatory complexity across government agencies in Washington.

Meanwhile in Canada, Canada’s regulatory burden is growing. CFIB estimates that in 2024 businesses spent 735 hours on regulatory compliance—58 hours more than in 2020. Meanwhile, the annual cost of dealing with regulations jumped from $45.4 billion in 2020 to $51.5 billion in 2024 (inflation-adjusted).

This growing regulatory burden isn’t just costly—it also creates uncertainty, erodes productivity by forcing business to spend time and resources navigating the bureaucracy, and ultimately deters investment.

Not surprisingly, business investment in Canada—measured on a per-worker basis—has plummeted by 33 per cent, from $18,600 in 2014 to about 14,000 in 2024 (inflation-adjusted). Moreover, according to renowned economist Jack Mintz, from “2016 through 2022 close to $225 billion in capital was lost as more direct investment left the country than came here.”

Even before Trump’s deregulatory campaign, the 2024 OECD Regulatory Restrictiveness Index ranked Canada as the most restrictive country for foreign investment in both the G7 and North America—behind the United States and Mexico—due to regulatory barriers in sectors such as telecommunications, agriculture, mining and finance.

Red tape is also hurting investment in Canada’s energy sector, our main source of exports. According to the latest survey of oil and gas investors, 68 per cent of respondents said uncertainty about environmental regulations deters investment in Canada’s oil and gas sector compared to 41 per cent in the U.S. And 54 per cent said Canada’s regulatory duplication and inconsistencies deter investment compared to only 34 per cent for the U.S. (This survey was also conducted before Trump’s regulatory rollbacks.) Investment is key to increasing incomes and improving living standards; it provides workers with the tools and technology to produce more and better goods and services. Less investment also means less money to develop new projects, infrastructure and technologies, and consequently fewer jobs and less economic opportunity for Canadians across the country.

While Parliament was off for months, the Trump administration was busy cutting red tape to create a more welcoming investment climate. Now, the new Carney government should adopt its own reform agenda to reduce regulations and spur economic growth, for the benefit of Canadian workers and their families.