CIHI projects 4.8% growth in 2026, with $5 billion in spending beyond inflation and aging
Canada is projected to spend $433 billion on health care in 2026, or $10,398 per Canadian, as growth moderates but continues to outpace the economy, according to a new report from the Canadian Institute for Health Information (CIHI).
Total spending is expected to grow 4.8% this year, following increases of 5.2% in 2025 and 8.5% in 2024, CIHI said in National health expenditure trends, 2026, released Tuesday. Health expenditures would represent 12.8% of gross domestic product (GDP). CIHI said growth remains above pre-pandemic levels.
Public-sector spending is forecast to rise 5.4% in 2025 and 5.2% in 2026. Total private-sector spending is projected to increase 4.6% in 2025 and 4.0% in 2026.
CIHI said post-pandemic increases in public spending largely reflected inflation and an aging, growing population. In 2026, spending is projected to grow by more than $5 billion above those pressures, which the agency said signals a possible shift toward investment in health system capacity, care delivery, technology and innovation.
“What’s notable this year is not simply that health care spending continues to grow, but that the factors behind that growth may be shifting,” said Lacey Langlois, director of Health Spending at CIHI. “As population and inflation pressures begin to ease, we may see more health care spending translate into new health system capacity and new ways of delivering care. Health data is immensely valuable to assess how investments made within the sector make a difference for patients.”
Where the money goes
Hospitals remain the largest component, at more than a quarter of national health expenditure. Hospital spending is projected to grow 5.1% in 2026, with employee compensation the largest driver. Spending on private agency staffing, overtime and sick leave has slowed from its post-pandemic peak, but costs remain above pre-pandemic levels, CIHI said.
Physicians account for about 14% of spending and drugs for nearly 13%. Spending on physician services is forecast to grow 8.3% in 2026, following 5.6% in 2025.
Looking ahead, CIHI said spending will be shaped by workforce and capacity pressures, capital investment, technology and artificial intelligence, and broader economic conditions. Those investments may raise costs in the short term, it said, but could also create opportunities to expand capacity and deliver care differently.
Among 38 Organisation for Economic Co-operation and Development countries, the United States had the highest ratio of health spending to GDP in 2024, at 17.2%. Canada, at 11.5%, was grouped with France (11.3%), Sweden (11.2%) and the United Kingdom (11.1%).
Context for benefits plans
CIHI’s estimates have shifted since last year. In November 2025, the institute projected 2025 spending would grow 4.2% to $399 billion. It cautions that preliminary estimates are subject to revision.
Private-sector payers spent about $16.5 billion on prescription drugs in 2024, according to the C.D. Howe Institute.
The Pharmacare Act received Royal Assent on Oct. 10, 2024. Bilateral agreements with British Columbia, Manitoba, Prince Edward Island and Yukon are valued at $928 million over four years starting in 2026, according to the Canadian Centre for Policy Alternatives (CCPA). Health Canada says private and public plans will continue to cover products outside the contraceptives and diabetes medications in those agreements.
CCPA researcher Andrew Longhurst said Ottawa’s Spring 2026 Economic Update signals no new federal funding for pharmacare expansion. Insurers have argued that employer-sponsored drug plans cover a majority of working Canadians and that any national model should avoid disrupting them.
