Ontario public hospitals face large deficits even as the provincial government doles out more cash to for-profit providers.
In a submission to the provincial government ahead of the spring budget, the Ontario Hospital Association stated that the hospital sector faces a structural deficit of $1 billion and needs a predictable, multi-year funding plan. This deficit is not surprising—data reveals that the province continues to have the lowest per capita hospital spending in the country at $1,967—behind BC ($2,111), Quebec ($2,113), and Alberta ($2,169).
This has caused Ontario to have one of the most below capacity hospital systems in the industrialized world. Ontario had five per cent fewer hospital beds per 100,000 people in 2022 than in 2009—based on the most recent data available.
And while the hospital sector is being downsized through government funding decisions, Ontario is expanding outsourcing contracts with for-profit surgical facilities. In December, the government announced four new private orthopedic surgery facilities as part of a $125 million scheme over two years to increase for-profit involvement. This is the largest injection of public dollars into for-profit health care in Ontario—and likely Canadian—history.
For investor-owned providers, it’s a time of plenty. For public hospitals, austerity is the order of the day.
Funding decisions are political choices. And the decision to flow dollars to investor-owned facilities comes at the expense of public hospitals.
Despite assurances by the Ontario government that for-profit facilities securing lucrative contracts with the government would have to show how they won’t harm staffing levels in the public system, no concrete guarantees have been made public.
That’s because the introduction of for-profit surgical facilities has only one place to draw specialized staff from: existing public sector staff. There is no secondary workforce waiting in the wings.
To continue down this path ignores the growing body of evidence from Canada and internationally. The experience of the Alberta private surgical initiative is instructive.
After pouring $154 million into public funding to for-profit surgical facilities between 2019-20 and 2023-24, the initiative only added 16,493 of the least-complex procedures to the province’s surgical capacity – an eight per cent volume increase. This happened as hospital surgical activity declined by one per cent. The private surgery initiative simply shifted surgeries —and the workforce required—to for-profit facilities at the expense of public hospitals.
What did this mean for patients?
Wait times increased for nine out of 11 priority procedures, including all priority cancer surgeries, which are only performed in the hospital setting. Now, Alberta has among the longest waits for key procedures in the country.
As the Ontario government prepares the 2026 provincial budget, it still has an opportunity for sober second thought. As things stand, handing contracts out to investors to pull staff and resources from the public system isn’t sound health policy. It simply makes Ontario’s wait times worse.
The Ontario government can support patients and the public hospitals they rely on by addressing the hospital funding crisis.
First and foremost, the provincial government should provide predictable annual funding increases of between five to six per cent in order to account for population growth, aging, and inflation. The government’s 2025 budget plan, according to the Ontario Financial Accountability Office, only increases health sector funding by 0.7 per cent. For context, health care spending grew at an average rate of five per cent annually over the 34-year period from 1990 to 2023.
In order to avoid cuts to current service levels, Ontario will need to increase health sector spending by $6.4 billion in the upcoming budget. However, immediate emergency funding is needed now to ameliorate the $1 billion structural deficit facing Ontario hospitals. As the Ontario Council of Hospital Unions warns, at least 1,000 jobs are already being cut in hospitals in North Bay, Hamilton, Ottawa, Niagara and the GTA.
While these numbers may seem big, Ontario spends less than three per cent of GDP on hospitals, and less than eight per cent of GDP on the broader health sector. Indeed, rather than helping heal the gaping wound of hospital finances and staffing, the Ontario government’s current spending plans are making the hemorrhage worse.
