Canada’s healthcare debate usually focuses on familiar problems: emergency-room wait times, shortages of family doctors, surgical backlogs and overcrowded hospitals.
All matter. But they may be symptoms of something bigger.
Canada is spending more on healthcare while struggling to convert that spending into timely access, a healthier workforce and stronger economic productivity. As the country confronts U.S. tariffs, trade uncertainty and slower economic growth, the consequences of a strained healthcare system extend well beyond hospitals.
The question is no longer simply what is wrong with Canada’s healthcare system?
It is whether Canada can afford to leave it unchanged.
More spending, more pressure
Canada is not starving healthcare of public money.
The Canadian Institute for Health Information (CIHI) estimates total health spending will reach approximately $399 billion in 2025, or about $9,626 per Canadian. Healthcare spending is expected to represent 12.7% of GDP.
Yet access remains difficult. CIHI reports that Canadian emergency departments recorded 16.1 million visits in 2024–25, with half of patients waiting almost two hours to see a physician and one in 10 waiting more than five hours.
These pressures do not originate solely in emergency departments. CIHI points to challenges throughout the system, including primary care, home care, inpatient capacity and long-term care.
And increasingly, mental health is part of the problem.
Mental health: the hidden economic burden
Mental illness is often treated as a separate healthcare issue.
Economically, that is a mistake.
Mental health affects whether people work, how many hours they work, whether they remain attached to the labour force and how productive they are.
The federal government estimates that mental health problems and mental illnesses cost Canada approximately $50 billion annually, including healthcare, lost work and reduced quality of life.
The Public Health Agency of Canada similarly estimates the economic burden at approximately $51 billion a year.
The federal government also reports that roughly 30% of disability claims are related to mental health problems or mental illness.
The consequences can become a vicious cycle.
Someone develops depression, anxiety, chronic pain or another disabling condition. Treatment is delayed. Their condition worsens. They leave work. Short-term disability becomes long-term disability. The healthcare system, employer, insurer and government may ultimately pay for consequences that earlier intervention might have reduced.
Statistics Canada illustrates the scale of the challenge. In 2022, approximately 3.1 million Canadians aged 15 and older — 10.4% of the population — had a mental health-related disability.
Among Canadians aged 15 to 24, the proportion was even higher, at 13.6%.
This is not simply a healthcare statistic.
It is a workforce statistic.
The disability challenge
Statistics Canada’s 2022 Canadian Survey on Disability found that 27% of Canadians aged 15 and older — approximately eight million people — had at least one disability, up from 22% in 2017.
Not everyone with a disability can or should work. But there is a legitimate economic question:
How many Canadians who want to work are being prevented from working, or from working to their full potential, because healthcare, rehabilitation, mental-health treatment, workplace accommodation and disability systems are not sufficiently connected?
In 2024, the employment rate for Canadians with disabilities was 46.4%, compared with 66.2% for Canadians without disabilities.
The issue is therefore not simply the cost of disability benefits.
It is the potential economic capacity being lost when people cannot access timely treatment, rehabilitation or workplace support.
Healthcare spending versus economic growth
There is another warning sign.
CIHI projects healthcare spending will grow by 4.2% in 2025, compared with estimated economic growth of approximately 2.6%.
Healthcare spending growing faster than the economy does not automatically mean the system is unsustainable. A healthy population is an economic asset, and healthcare is an investment as well as a cost.
But the distinction becomes important when higher spending does not consistently produce greater access, faster treatment or stronger workforce participation.
Canada risks a cycle:
more illness → more demand → more spending → longer waits → delayed treatment → more disability → lower workforce participation → weaker economic growth → greater fiscal pressure.
That is the cycle Canada needs to break.
Then came the tariffs
The urgency is increasing because Canada’s economic environment has changed.
The United States remains Canada’s largest trading partner, and tariffs and trade uncertainty are creating additional pressure on Canadian businesses and workers.
The Bank of Canada has warned that tariffs could reduce Canadian economic output and slow potential growth.
The OECD has also identified trade tensions with the United States as a significant drag on Canada’s economic outlook, while continuing to highlight Canada’s longstanding productivity problem.
That creates an uncomfortable collision.
Canada cannot control economic decisions made in Washington. But it can influence how effectively it uses its own workforce.
And that puts healthcare directly into the productivity conversation.
Health is economic infrastructure
The OECD estimates that mental-health disorders cost OECD economies more than 4% of GDP when treatment costs and the effects of lower employment and productivity are considered.
Canada already faces a significant productivity gap with the United States.
At the same time, the country is dealing with an aging population, chronic disease, rising disability, mental-health pressures and healthcare workforce shortages.
These problems reinforce one another.
A worker unable to access timely mental-health treatment may eventually become a disability claimant.
A claimant unable to access effective rehabilitation may leave the workforce.
A worker leaving the workforce reduces Canada’s productive capacity.
Lower productivity makes the economy less resilient to shocks such as tariffs.
And weaker economic growth makes it harder for governments to finance growing healthcare and social-support commitments.
What should Canada do?
The answer cannot simply be spend more.
Canada needs to become better at identifying where healthcare spending can prevent much larger downstream costs.
That means improving access to primary care, expanding community mental-health services and integrating healthcare more effectively with rehabilitation, disability and workplace systems — while protecting privacy and individual rights.
It also means measuring outcomes, not simply dollars spent.
The critical question should be:
How many Canadians could return to work, remain at work or avoid disability altogether if they received the right intervention earlier?
That is both a healthcare question and an economic one.
The bigger question
Canada’s healthcare system is not failing everywhere. The OECD notes that Canada performs well on several health outcomes, including life expectancy and aspects of healthcare quality.
The problem is that good clinical outcomes do not necessarily mean good access, integration or economic efficiency.
Canada’s healthcare debate has spent years asking:
How much more should we spend?
The more important question may now be:
What should Canadians get for every dollar we spend?
With healthcare spending approaching 13% of GDP, approximately eight million Canadians living with a disability and mental-health costs measured in the tens of billions, the status quo deserves much greater scrutiny.
At a time when tariffs and geopolitical uncertainty are testing Canada’s economic resilience, healthcare can no longer be treated as an isolated public service.
It is part of Canada’s productive infrastructure.
And healthcare reform may increasingly be one of Canada’s most important economic-policy opportunities.
Healthcare reform is economic reform.
Sources: Canadian Institute for Health Information; Statistics Canada; Public Health Agency of Canada; Bank of Canada; OECD; Government of Canada.