This is from a larger publication, Alternative federal budget 2026-27: Bridge to independence
Introduction
The first year of the Carney government saw little movement in supporting health care, despite most Canadians telling pollsters they believe the system is in crisis and that health care remains among their top issues of concern.
Indeed, the federal government currently sees public health care strictly as a provincial responsibility, which allows it to prioritize “hard power” spending on national defence, infrastructure, and attracting foreign investment through tax cuts and subsidies.
The only health care program of note in this government’s first budget, $5 billion over three years in matching spending with provinces for new health infrastructure projects like hospitals, was not given to the Minister of Health to administer (as is usually the case for major health care transfers). Instead, it was handed over to the Minister of Housing and Infrastructure.
This stands in stark contrast to the previous government’s approach under Justin Trudeau, which acknowledged an important federal role and increased federal contributions through the Canada Health Transfer, bilateral agreements, and by establishing the Canadian Dental Care Plan and the Pharmacare Act.
Despite campaigning on these popular health care programs, the Carney government has frozen and even rolled back federal health care programs. This includes cutting over a thousand jobs at Health Canada and related agencies.
Overview
Pharmacare
The long-promised national universal pharmacare program has stalled, leaving only four provinces and territories receiving federal funding to provide residents with free contraceptives and diabetes treatments. This means only one in five Canadians can benefit from the program.1Steven Staples, “Most provinces are refusing hundreds of millions in federal pharmacare funding,” Canadian Centre for Policy Alternatives, July 17, 2025, https://www.policyalternatives.ca/news-research/most-provinces-are-refusing-hundreds-of-millions-in-federal-pharmacare-funding/.
The Pharmacare Act received Royal Assent in 2024, and the Trudeau government signed three funding agreements with Manitoba, British Columbia and Prince Edward Island. The Carney government signed a fourth agreement with Yukon before the federal election, but no new agreements have been signed since.2Health Canada, “Government of Canada signs pharmacare agreement with Yukon to improve universal access to free medications,” March 20, 2025, https://www.canada.ca/en/health-canada/news/2025/03/government-of-canada-signs-pharmacare-agreement-with-yukon-to-improve-universal-access-to-free-medications.html. The Newfoundland and Labrador’s health minister has complained publicly that her federal counterpart has refused to initiate negotiations for that province to join the federal program.3Abby Cole, “‘The door was closed on our province’: Feds not offering pharmacare to N.L., says health minister,” CBC News, April 27, 2026, https://www.cbc.ca/news/canada/newfoundland-labrador/the-door-was-closed-on-our-province-feds-not-offering-pharmacare-to-n-l-says-health-minister-9.7178965.
The medical community agrees that pharmacare will save lives, prevent more costly preventable conditions and help the economy through a healthy workforce.4Health Canada, Final Report of the National Pharmacare Committee of Experts, November 2025, https://www.canada.ca/en/health-canada/services/publications/health-system-services/report-national-pharmacare-committee-experts.html. Provinces and territories are being denied hundreds of millions in funding because the federal government is dragging its feet.
The nursing shortage
Nurses’ working conditions have been deteriorating for decades. Hospitals routinely operate over capacity and are understaffed. Violence and harassment are increasing, as are burnout and psychological distress. There are nearly 30,000 nursing vacancies in Canada, and filling these positions would only achieve the bare minimum required to operate the health care system.5Statistics Canada, “Job vacancies, fourth quarter 2025,” March 17, 2026, https://www150.statcan.gc.ca/n1/daily-quotidien/260317/dq260317a-eng.htm. As a stop gap, employers are relying on private nursing agencies. This costs the public significantly more than hiring permanent nurses while destabilizing health care teams.6Joan Almost, “Opening the Black Box: Unpacking the use of nursing agencies in Canada,” Canadian Federation of Nurses Unions, September 23, 2024, https://nursesunions.ca/research/opening-the-black-box/.
More than one in three nurses are considering leaving their current job or the nursing workforce within the next year, with insufficient staffing levels ranked as the top factor considered when leaving a job.7Viewpoints Research, CFNU National Nurses Survey, Canadian Federation of Nurses Unions, April 2026, https://nursesunions.ca/wp-content/uploads/2026/04/CFNU-National-Nurses-Survey-2026_Final.pdf. Staffing levels and nurse attrition are locked in a vicious cycle: low staffing levels lead to worse working conditions, which lead to nurses leaving the profession, which leads to lower staffing levels, etc.
Job cuts
Health Canada and the Public Health Agency of Canada play central co-ordination and regulation roles in our health system. On-the-ground medical care falls to the provinces, but this work is backstopped by federal regulations on health products and food, federal investments in chronic disease prevention and health promotion, and federal surveillance of infectious diseases to limit future outbreaks.
Provincial and territorial health care systems across the country are struggling under the weight of a growing and aging population with more complex health needs. Health care workers are doing their utmost within a system that is starved of the resources needed to provide high-quality, public health care within service standards and where privatization threatens it from all directions. In this environment, the federal role in upstream prevention, disease surveillance and consumer protection has become more important than ever.
Dental care
The government proudly announced its ongoing support for the Canadian Dental Care Plan with budget 2025, yet long-term funding for this program is far from assured. While the plan has helped more than four million people who have no dental coverage whatsoever, the program must be enhanced to meet the needs of more Canadians and to ensure that fees are not a barrier to this essential health care.
Balance billing and co-pays function as barriers to service. They mean that plan beneficiaries must shop around to try to make their coverage go farther, which effectively limits access. Under the plan, co-pays of 40 to 60 per cent are levied on households earning $70,000 to $90,000 annually. Even the lowest-income households (earning under $70,000 per year), of whom co-pays are not required, are still subject to “balance billing” fees from dentists because reimbursement rates under the plan remain below the fee guides for dental services in many provinces.
Funding for community health centres
Primary care should serve as the entryway into the health care system, yet one in five people in Canada do not have access to it.8Thuy-Nga (Tia) Pham Tara Kiran Tara Kiran, “More than 6.5 million adults in Canada lack access to primary care”, Mar 14, 2023, HealthyDebate, https://healthydebate.ca/2023/03/topic/millions-adults-lack-canada-primary-care/ . Evidence demonstrates that countries with a strong primary health care orientation have lower health care costs, better health outcomes and fewer inequities.
If people don’t have timely access to a regular primary care provider or team, they often end up in emergency departments, or they delay necessary health care until they’re in a health crisis. This is much more costly to the public system. But the federal government does not provide direct infrastructure funding in support of non-profit primary care services.
The Canada Health Transfer
The Canada Health Transfer (CHT) is the largest federal contribution to provinces and territories—and the AFB has long called for greater transparency and accountability in how federal health transfers are spent. In 2023, the Trudeau government committed to a guaranteed five per cent annual increase, or “escalator,” for the CHT. This five per cent escalator will continue through 2027-28. In 2028-29, without a new commitment, the CHT escalator drops to nominal GDP growth or three per cent, whichever is greater. If the federal government does not commit to maintaining the five per cent escalator, the CHT will be reduced by $723 million in 2028-29 and $1.4 billion in 2029-30. This is assuming 3.8 and 3.9 per cent escalators, which are expected with such economic uncertainty.
Funding agreements with provinces and territories
Multiple bilateral agreements with the provinces and territories are due to expire in the next year or two.9Althia Raj, “Mark Carney has forgotten who helped get him elected,” Toronto Star, May 3, 2026, https://www.thestar.com/politics/political-opinion/mark-carney-has-forgotten-who-helped-get-him-elected/article_37ccba7b-6b33-47a8-b7a6-1438f8a410ea.html.
The federal government won’t be renewing the Aging with Dignity agreements worth $1.2 billion in annual transfers to the provinces to support long-term-care standards and improvements to home and community care, which expire after 2027-28.10Health Canada, “Working together to improve health care in Canada: Aging with Dignity bilateral agreements,” February 24, 2025, https://www.canada.ca/en/health-canada/corporate/transparency/health-agreements/shared-health-priorities/aging-dignity-bilateral-agreements.html.
The National Strategy for Drugs for Rare Diseases, worth $1.4 billion over three years, increases Canadians’ access to expensive drugs for rare diseases. It won’t extend beyond 2026-2027.11Health Canada, “The National Strategy for Drugs for Rare Diseases,” February 11, 2026, https://www.canada.ca/en/health-canada/services/health-services-benefits/strategy-drugs-rare-diseases.html ) The bilateral agreements devoting $600 million a year through 2026-27 towards mental health and substance use are not scheduled to be renewed either.12Health Canada, “Working together to improve health care in Canada: Aging with Dignity bilateral agreements,” February 24, 2025. https://www.canada.ca/en/health-canada/corporate/transparency/health-agreements/shared-health-priorities/aging-dignity-bilateral-agreements.html.
The toxic drug crisis
The toxic drug crisis continues to kill people in Canada, surpassing 55,000 opioid-related deaths over 10 years.13Public Health Agency of Canada, “Opioid- and Stimulant-related Harms in Canada,” March 25, 2026, https://health-infobase.canada.ca/substance-related-harms/opioids-stimulants/#a2. The unregulated drug supply, which has evolved to contain novel and highly potent substances, is the primary driver of preventable death.14Health Canada, “Spotlight: The evolution of Fentanyl in Canada over the past 11 years,” March 2023, https://www.canada.ca/en/health-canada/services/publications/healthy-living/evolution-fentanyl-canada-11-years.html#t2. Hypoxic brain injury following consumption of unregulated drugs has also become increasingly common.15Chloe G. Xavier et al., “Association between toxic drug events and encephalopathy in British Columbia, Canada: A cross-sectional analysis,” Substance Abuse Treatment, Prevention, and Policy, July 7, 2023, https://doi.org/10.1186/s13011-023-00544-z. The unpredictable nature of the drug supply intersects with pre-existing socioeconomic barriers to health care, causing disproportionately high rates of death among people who experience poverty and housing insecurity16Richard Booth et al., “Opioid-related overdose deaths among people experiencing homelessness, 2017 to 2021: A population-based analysis using coroner and health administrative data from Ontario, Canada,” Addiction, 119(2), October 16, 2023, https://doi.org/10.1111/add.16357. and people who are Indigenous.17BC Coroners Service Death Review Panel, “An Urgent Response to a Continuing Crisis,” Government of British Columbia, November 1, 2023, https://www2.gov.bc.ca/assets/gov/birth-adoption-death-marriage-and-divorce/deaths/coroners-service/death-review-panel/an_urgent_response_to_a_continuing_crisis_report.pdf.
Despite the severity of this crisis, the Carney government ended funding in 2025 for programs under Health Canada’s Substance Use and Addictions Program, which provided prescribed alternatives to the unregulated drug supply. In addition, some provinces have ended funding for harm-reduction services, including supervised consumption, a proven initiative that provides emergency overdose response and reduces HIV and hepatitis C transmission. This happened despite stated federal support for supervised consumption in the federal Sexually Transmitted and Blood-Borne Infections Action Plan and the Canadian Drugs and Substances Strategy.
For those who seek treatment, the substance use treatment sector in Canada lacks national minimum standards of care for service delivery. Transparency and accountability measures are also lacking. Currently, treatment service providers are not required to report on clinical outcomes, including deaths and injuries, and it is difficult for patients to seek recourse for human rights abuses occurring in these facilities.
Actions
The AFB will continue to build a national universal pharmacare program by enrolling the remaining provinces and territories at a cost of $5.3 billion over four years in addition to the $928.5 million already committed, and funding public coverage of essential prescription medications at $13.4 billion per year.18Lisa Barkova & Carleigh Busby, “Cost Estimate of a Single-payer Universal Drug Plan,” Office of the Parliamentary Budget Officer, October 12, 2023, https://www.pbo-dpb.ca/en/publications/RP-2324-016-S–cost-estimate-single-payer-universal-drug-plan–estimation-couts-un-regime-assurance-medicaments-universel-payeur-unique.
The AFB will take profits out of nurse staffing by funding government-run or non-profit organizations to staff hard-to-recruit posts. It will also require public health care employers to develop, publish and implement strategies to phase out private, for-profit nurse staffing agencies. These will include targets, timelines, regular evaluation and penalties for non-compliance.
The AFB will use conditional health funding agreements to require provinces and territories to include minimum nurse-to-patient ratios in health human resources strategies.
The AFB will reverse job cuts to Health Canada and the Public Health Agency of Canada. This funding will help ensure enforcement of the Canada Health Act and will put the population’s health and well-being at the forefront.
The AFB will increase Canadian Dental Care Plan coverage to remove co-pays and eradicate balance billing. Dental care providers will be reimbursed at rates commensurate with the provincial and territorial fee guides.
The AFB will extend the principle of universality to dental care. This universal dental care program would cover everyone equally, including self-employed or gig workers who have no benefits but have a family income of more than $90,000. The AFB will implement a fourth phase to the Canadian Dental Care Plan in 2027 that will remove the income restriction.
The AFB will create a $5 billion primary care infrastructure fund, indexed to inflation, to help provinces finance non-profit primary care infrastructure, including community health centres and non-profit primary care organizations.
The AFB will continue the five per cent escalator in the Canada Health Transfer in 2028-29 and in perpetuity, and will ensure that, at a minimum, federal spending on health care keeps up with inflation.
The AFB will negotiate extensions to existing bilateral agreements that are due to expire or replace them with new agreements. These include the Aging with Dignity agreements, the bilateral agreements for mental health and substance use, and the National Strategy on Drugs for Rare Diseases.
The AFB has determined that Alberta’s two-tier health care law (known as Bill 11) violates the Canada Health Act. If the Alberta government moves forward with the law, transfers will be withheld in accordance with the Canada Health Act.
The AFB will cancel the Interim Federal Health Program co-payment policy and expand status-blind health care, working with the provinces and territories to guarantee health coverage for all migrants, regardless of status. It will restore full program coverage for prescription drugs, dental care, vision care, counselling, assistive devices and other supplemental care.
The AFB will provide funding in the amount of $492 million over three years to establish 20 new supervised consumption sites that provide 24-hour service delivery, and 20 new community-based overdose response outreach teams composed of peer workers, medical professionals and social service workers.
The AFB will establish national standards for substance use treatment, including quality assurances and minimum standards of care, client redress mechanisms, mandatory evaluation of outcomes, and reporting of deaths and injuries.
