Failure, by design: Ontario’s deepening hospital funding crisis

Summary

The deepening Ontario hospital funding crisis is harming patients and communities. New analysis of Ontario’s 136 hospitals shows that the majority of hospitals had operating deficits over the last three years. In 2024-25, 55 per cent of hospitals had deficits.

Geographical analysis of hospital deficits by region show that hospitals in northern and western regions of the province were more likely to be in deficit in 2024-25. In the LHIN regions of Erie St. Clair and Mississauga Halton, all hospitals were in deficit, followed by Hamilton Niagara Haldimand Brant (78 per cent), Waterloo Wellington (71 per cent), and the North East (63 per cent).

Costs in the hospital sector have been increasing by about six per cent per year due to population growth, aging, and inflation, according to the Ontario Hospital Association. However, the Ontario budget plans to increase total health care funding to by only 3.5 per cent in 2026-27 and 2.3 per cent in 2027-28.¹ These increases are insufficient to address the health care needs of the population.

Smaller and rural hospitals hardest hit

When analyzed by size of hospital, smaller hospitals with operating revenues under $100 million disproportionately had deficits in 2024-25: Smaller hospitals made up 61 per cent of the hospitals in deficit but made up only 49 per cent of all Ontario hospitals (Figure 3). Meanwhile, larger hospitals with operating revenues over $100 million made up 49 per cent of hospitals in deficit and accounted for 51 per cent of Ontario hospitals.

Hospital funding austerity harms patient care

Emergency department (ED) wait times are a canary in the coal mine for health care system performance. “Hallway medicine” occurs when patients have long waits in the ED, waiting to be admitted because there are no inpatient beds available. Two indicators demonstrate the risks to patient care:

In 2020-21, 90 per cent of patients waited 2.7 hours in the emergency department for their initial physician assessment, which increased to 4.5 hours in 2024-25—an increase of 67 per cent.
In 2020-21, 90 per cent of patients spent 29 hours in the emergency department while waiting to be admitted, which increased to 44 hours in 2024-25—an increase of 52 per cent.

Misleading claims by the Ontario government

The Ontario government is wrong when it claims that health care spending is “unsustainable.” The increase in total Ontario health care spending—from $53.9 billion in 2014 to $84.8 billion in 2023—appears large in absolute terms. However, as a share of the economy (measured as GDP), total health care spending was 7.4 per cent of GDP in 2014 and increased modestly to 7.6 per cent by 2023. These increases are sustainable over this time range and well within historical norms.

The Ontario government also suggests that the care economy is not the ‘real’ economy. These claims are used to justify underinvestment in health care and the devaluing of work in the care economy. In 2024, there were 1.4 million jobs in the care economy—representing one in five jobs in Ontario.

These ideas are harmful to workers as well as the patients and communities who depend on their skills and commitment. Between 2016 and 2025, the average wage for vacant hospital positions was seven per cent lower in 2024 than 2016, when adjusting for inflation. Over the same period, hospital job vacancies per 100,000 people increased by 101 per cent. Over the past decade, hospital funding austerity has contributed to ongoing and severe workforce recruitment and retention challenges.

Recommendations

Based on the findings of this report, the provincial government should implement an aggressive plan to address the hospital funding and capacity crisis:

Provide immediate and sustained funding to improve hospital finances and capacity: Hospital funding needs to increase by $3.2 billion to put hospitals on stable footing. The province should provide six per cent annual increases to the hospital sector to account for population growth, aging, and inflation.

Develop a provincial health workforce strategy and capital plan: Unlike other health systems in Canada and internationally, the Ontario government does not have a provincial health workforce strategy and capital plan to ensure that physical infrastructure, bed capacity, and equipment planning align with workforce expansion.

Introduction

In March, the Ontario Hospital Association warned that the hospital sector requires a cash infusion of $2.7 billion to address the dire financial situation.² This report provides a three-year geographical analysis of the deepening hospital funding crisis in Ontario.

For this analysis, a custom CCPA dataset of the finances of 136 hospital corporations was created. Operating revenues, expenses, deficits, surpluses, and margins for all hospitals in Ontario were analyzed. In addition, this report draws on publicly available data from the Canadian Institute for Health Information (CIHI), the Ontario Financial Accountability Office (FAO), and Statistics Canada.

Ontario hospital deficits and the harms to patient care

The majority of Ontario hospitals had deficits over the last three years

New analysis of Ontario’s 136 hospitals shows that the majority of hospitals had deficits over the last three years. Operating deficits occur when expenses are greater than revenues. The largest source of revenue for Ontario hospitals is public funding from the Ministry of Health and Ontario Health. The largest expense for Ontario hospitals is staff compensation.

In the last fiscal year (2024-25), 55 per cent of public hospitals ran deficits. In 2023-24 and 2022-23, 50 per cent and 63 per cent of public hospitals had operating deficits (Figure 1). In absolute terms, London Health Sciences had the largest operating deficit of $153 million in 2024-25.³

Hospitals in the northern and western regions more likely to be in deficit

Geographical analysis of hospital deficits by region show that hospitals in northern and western regions were more likely to be in deficit in 2024-25 (Figure 2). In Erie St. Clair and Mississauga Halton, all hospitals were in deficit, followed by Hamilton Niagara Haldimand Brant (78 per cent), Waterloo Wellington (71 per cent), and the North East (63 per cent).

Smaller and rural hospitals are the hardest hit

While the hospital funding crisis affects all hospitals, analysis of financial data from the last three years shows that smaller and rural hospitals are among the hardest hit by provincial funding austerity (Figure 3).

When analyzed by size of hospital, smaller hospitals with operating revenues under $100 million disproportionately had deficits in 2024-25: Smaller hospitals made up 61 per cent of the hospitals in deficit but made up only 49 per cent of all Ontario hospitals (Figure 3). Meanwhile, larger hospitals with operating revenues over $100m made up 49 per cent of hospitals in deficit and accounted for 51 per cent of Ontario hospitals.

Smaller hospitals generally have fewer resources to draw upon than large urban hospital systems, including working capital, if they want to backstop shortfalls and maintain service levels.

Hospital funding austerity harms patient care

Multiple important indicators suggest that hospital funding austerity is undermining care and putting patients at risk.

Emergency department wait times are on the rise

Emergency department (ED) wait times are a canary in the coal mine for health system performance. EDs with long wait times and overcrowding signal that the overall health care system is struggling to meet patient demand for care. The causes are multifactorial. However, hospital capacity—including staffed beds—is a significant influence.

“Hallway medicine” occurs when patients have long waits in the ED, waiting to be admitted because there are no inpatient beds available. Although Ontario Health discontinued public reporting of its hallway medicine indicator, there were an average of 1,390 inpatients being treated in “unconventional spaces” in March 2024.⁴

According to provincial data reported by the Canadian Institute for Health Information (CIHI), Ontario ED indicators are moving in the wrong direction. Table 1 shows that the ED wait time for patients to receive an initial physician assessment has significantly increased over the last five years. The 90th percentile of patients waited 2.7 hours in 2020-21, which increased to 4.5 hours in 2024-25—an increase of 67 per cent. The 90th percentile represents the maximum length of time that 90 per cent of patients waited for an initial physician assessment in the ED.

The second indicator—shown in Figure 4—demonstrates that wait times to be admitted to an inpatient bed are dramatically increasing for patients waiting in the ED. In 2020-21, the 90th percentile of patients waiting in the ED spent 29 hours to be admitted to an inpatient ward, which increased to 44 hours in 2024-25. This is an increase of 52 per cent. The 90th percentile represents the maximum length of time that 90 per cent of patients admitted into hospital from the ED spend in the ED.

When analyzed geographically, the 90th percentile of patients waited the longest in the Central, East, and North East regions in 2024-25 (Figure 5). The Central region includes cities from Mississauga to Huntsville and Orangeville to Markham, the East region includes the communities from Pickering to the Quebec border north to Deep River, and the North East region includes the communities of West Parry Sound, White River, Peawanuck, the James Bay Coast, Mattawa and all points in between.⁵

The significant increase in wait times for patients to be admitted demonstrates a system under immense strain, unable to cope with the demand for acute care services. The longer patients languish in the ED waiting to be admitted, the risks of deteriorating health status and poorer outcomes increase.⁶

Staffed hospital beds are far below what is required—and projected to get worse

Projecting inpatient hospital bed demand is complex and depends on multiple factors, including population growth, aging, and utilization. Primary and community care, disease prevalence, and the socio-economic determinants of health are also contributing factors. A sicker population without access to primary and community care is more likely to access emergency departments and require inpatient hospital services.

There is widespread agreement among analysts that Ontario’s hospital sector is the most undersized in Canada relative to size of the population—and it is one of the most under capacity when compared to high-income countries.⁷ In 2022, Ontario ranked number 33 when compared to 38 OECD countries.⁸ At 199 beds per 100,000 people, Ontario had fewer beds than the Canadian average (217 beds per 100,000 people) and fell behind many other high-income countries with universal, publicly financed health systems, including Norway, Finland, New Zealand, and the U.K. Even though many northern European countries generally have stronger systems of primary and community care, these countries still have more hospital beds, per capita, than Ontario.

New analysis shows that while population growth and aging increased by 27 per cent between 2014-15 to 2024-25, the actual number of hospital beds increased by only 14 per cent (Table 2). In 2024-25, Ontario had 35,540 inpatient beds when it should have had at least 39,892 beds, if the number of hospital beds increased by 27 per cent.

Ontario had a gap of 4,352 beds in 2025.

This is a conservative estimate of the missing hospital beds in Ontario. Based on rapid growth of the population 65 and older, the Ontario Council of Hospital Unions estimates that 41,777 staffed beds were required in 2025—a gap of 6,237 beds.⁹ Between 4,352 and 6,237 staffed beds were required in 2025 to avoid hallway medicine and meet demand for inpatient care.

For multiple years now, the Financial Accountability Office of Ontario (FAO) has also raised concerns over the shrinking size of the hospital sector relative to demand for care. Analysis shows that the provincial government’s funding budget plan for 2025-26 to 2027-28 is projected to result in a reduction in staffed hospital beds from 220 beds per 100,000 people in 2024-25 to 203 beds in 2027-28.¹⁰

Provincial funding austerity is shrinking the public hospital capacity required to ensure patients receive timely access to care.

Fact checking the Ontario government’s claims

Hospital spending is not “unsustainable”

In February, the Ontario finance minister claimed that health care spending growth is “unsustainable.”¹¹ However, when the hospital and total health care spending increases are put into perspective—that is, relative to the size of the economy (measured as GDP)—the government’s claims do not withstand scrutiny.

Drawing on provincial expenditure data reported by CIHI, we see that between 2014 and 2023, Ontario’s hospital spending increased from $19.6 billion to $30.7 billion (Figure 6). This may seem like a big jump in spending, but when we look at it in relation to the size of the growing economy, hospital spending in 2014 to 2023 represents the same share of the economy—2.7 per cent of GDP.

Similarly, the increase in total Ontario health care spending—from $53.9 billion in 2014 to $84.8 billion in 2023—appears large, in absolute terms, but represents an increase of only 0.2 percentage points as a share of GDP. In 2014, total health care spending as a share of the economy stood at 7.4 per cent and increased modestly to 7.6 per cent by 2023.

These increases are sustainable within this time range and well within historical norms. The provincial government’s claims are misleading. In fact, Ontario ranks below the Canadian average for provincial hospital and total health care spending (Table 3).

The province is also below the Canadian average when it comes to hospital and total health care spending as a share of the economy. In 2023, Ontario spent 7.6 per cent of GDP on hospitals versus eight per cent in Canada. Clearly, Ontario has the capacity to invest in critical public health services.

However, in order to invest in the health care services that Ontarians depend on, the provincial government must ensure that the province benefits from the significant wealth created in the province by increasing taxes on higher-income households and corporations, and generating revenue that can increase health care access and strengthen the care economy.

The care economy is the economy

In February, Ontario’s finance minister stated that “85 per cent of the spending in the budget is actually for social spending [and] about 15 per cent is for infrastructure and the economy.”¹²

This statement assumes that jobs in the care economy are not part of the ‘real’ economy. This is a very outdated and sexist belief about what counts as Ontario’s economy. Work in the care economy is overwhelmingly performed by women in the public sector who pay taxes, support families, and contribute to community wellbeing. The care economy includes employment in health care, social assistance, and educational services.¹³

When we look at the employment data, a very different picture emerges than what the government presents. In Ontario and Canada, there are more jobs in the care economy than in many industries, including finance and insurance, construction, and professional and technical services. In 2024, there were 1,410,087 jobs in the care economy—representing one in five jobs in Ontario (Table 4). In Canada, there were 3,857,142 care economy jobs in 2024—also one in five jobs.

To suggest that this work is not part of the ‘real’ economy devalues the critical contributions of hundreds of thousands of frontline Ontario workers in health and social care. At a time of great geopolitical uncertainty, governments must recognize the central importance of the care economy to Canada’s ability to care for its population and sustain itself in the world.

Devaluing of the care economy—by the numbers

The problem of devaluing the care economy—and care workers—unfortunately, has a long history in Canada.¹⁴ These ideas are harmful to as well as the patients and communities who depend on their skills and commitment. Devaluing of the care economy comes in the form of cuts to post-secondary training institutions, lower immigration targets, hospital privatization, and real spending cuts to health care services.

We can examine the relationship between hospital wages and vacancies to understand how the devaluing of care work by the Ontario government is detrimental to the ability of hospitals to recruit and retain the workforce that Ontarians depend on. Between 2016 and 2025, the average wage for vacant hospital positions was seven per cent lower in 2024 than 2016, when adjusting for inflation (Figure 7). Over the same period, hospital job vacancies per 100,000 people increased by 101 per cent (Figure 8).

The recent history of public sector wage suppression is important. Passed in 2019, Bill 124 was an explicit attempt by the government to suppress wages and was ultimately found to be unconstitutional. This wage suppression legislation and hospital funding austerity over the past decade have contributed to ongoing and severe workforce recruitment and retention challenges.

Conclusion and recommendations

The majority of Ontario public hospitals had operating deficits over the last three years—this is a clear sign of a deepening hospital funding crisis in Ontario. It demonstrates that the available resources are insufficient to meet the population’s needs. Although the funding crisis is felt in rural and urban communities and hospitals large and small, hospitals in northern and western regions of the province were more likely to be in deficit in the last fiscal year.

The funding crisis harms patient care. Multiple health care system indicators provide dire warnings of the growing harms. Emergency department wait times have dramatically increased, leaving Ontario short thousands of inpatient beds. Rather than “hallway medicine” becoming a thing of the past, it has become a permanent fixture in Ontario’s hospitals. Unfortunately, the Ontario government mistakenly claims that health care spending is “unsustainable” when, in fact, it has remained relatively stable as a share of the economy.

Based on the findings of this report, the provincial government should implement an aggressive plan to address the hospital funding and capacity crisis:

Immediately increase funding to improve hospital finances and capacity

The Financial Accountability Office of Ontario (FAO) estimates that $6.4 billion in new health care spending is required in 2026-27 just to maintain 2024-25 service levels.¹⁵ Budget 2026 only adds $3.4 billion in additional spending, which leaves the health care system short by $3 billion in this fiscal year.

Costs in the hospital sector have been increasing by about six per cent per year due to population growth, aging, and inflation, according to the Ontario Hospital Association.¹⁶ However, the Ontario budget plans for total health care funding to increase by 3.5 per cent in 2026-27 and 2.3 per cent in 2027-28.¹⁷ These increases are insufficient to address the health care needs of the population.

The Ontario Hospital Association (OHA) estimates that hospitals require financial stabilization funding of $2.7 billion in 2025-26. While the provincial government offered an additional $1.1 billion for 2026-27, this falls short of addressing the dire financial situation. Detailed analysis by the Ontario Council of Hospital Unions (CUPE) finds that core hospital funding needs to be increased by $3.2 billion in the fiscal year ending March 2026.

In 2026-27, the provincial government is projected to increase base and targeted hospital funding by four per cent, which falls short of the six per cent annual needed to account for population growth, aging, and inflation—and to simply maintain service levels.

Develop a provincial health care workforce strategy and capital plan

Ontario lacks a health care workforce strategy with provincial and regional solutions to address staffing shortages. Importantly, the provincial government and health care sector employers must recognize that the conditions of work are the conditions of patient care, and that improving the workplace environment is associated with better-performing organizations that deliver safer patient care and better outcomes.¹⁸

A workforce strategy should be accompanied by a long-term hospital capital infrastructure plan to ensure that physical infrastructure, bed capacity, and equipment planning aligns with workforce expansion.

The Ministry of Health and Ontario Health should establish a provincial advisory table, including researchers, unions, educators, employer representatives, professional associations, and patient and citizen advocacy groups, to inform development and implementation of a provincial health workforce strategy and capital plan.

About the author

Andrew Longhurst

Andrew Longhurst is a senior researcher and political economist, with a focus on health policy, at the Canadian Centre for Policy Alternatives. His work has been published in academic journals and by research institutes, including Canadian Journal on Aging, Political Geography, the CCPA, and the Parkland Institute.

Failure, by design: Ontario’s deepening hospital funding crisis

Summary

Smaller and rural hospitals hardest hit

Hospital funding austerity harms patient care

Misleading claims by the Ontario government

Recommendations

Introduction

Ontario hospital deficits and the harms to patient care

The majority of Ontario hospitals had deficits over the last three years

Hospitals in the northern and western regions more likely to be in deficit

Smaller and rural hospitals are the hardest hit

Hospital funding austerity harms patient care

Emergency department wait times are on the rise

Staffed hospital beds are far below what is required—and projected to get worse

Fact checking the Ontario government’s claims

Hospital spending is not “unsustainable”

The care economy is the economy

Devaluing of the care economy—by the numbers

Conclusion and recommendations

Immediately increase funding to improve hospital finances and capacity

Develop a provincial health care workforce strategy and capital plan

About the author

Andrew Longhurst

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