GOLDSTEIN: The real cost of 'free' health care in Canada — report (2024)

Contrary to the myth that Canadian health care is “free,” families pay anywhere from $726 to $41,916 annually for it through their taxes, according to a new study by the Fraser Institute.

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“Canadians pay a substantial amount of money for health care through a variety of taxes — even if we don’t pay directly for medical services,” said Bacchus Barua, co-author of The Price of Public Health Care Insurance, 2021.

“Most Canadians are unaware of the true cost of health care because they never see a bill for medical services … This situation leads many people to grossly underestimate the true cost of (publicly-funded) health care. When people speak of ‘free’ health care in Canada, they are entirely ignoring the substantial taxpayer-funded cost of the system.”

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The study by the fiscally-conservative think tank says that since 1997, the cost of health care for the average Canadian family has increased 177.6%, outstripping increases in average incomes of 109.9%.

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Families among the top 10% of income earners in Canada making an average annual income of $286,808 pay an estimated $41,916 for health care annually through taxes, the study says, while the bottom 10% earning an average of $18,686 annually pay $726 annually.

Families earning an average of $38,110 annually pay $1,799 a year; those earning $49,586 annually pay $3,283 a year; those earning $61,073 pay $4,857; those earning $75,300 pay $6,521; those earning $91,097 pay $8,516; those earning $109,374 pay $10,854; those earning $131,552 pay $14,022; and those earning $166,740 pay $19,166.

The study also estimates the amount six typical households pay for health care annually through their taxes based on income.

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It says a single, unattached adult earning $49,215 annually will pay $4,296 annually through their taxes for publicly funded health care, while two adults with no children earning $123,996 annually will pay $13,533.

A single parent with an income of $66,989 annually and one child will pay $3,909, while a single parent with two children and an income of $76,890 will pay $3,842.

A family of two parents with one child earning $141,749 annually will pay $13,746, while a family with two parents and two children earning $150,177 annually will pay $15,039 through their taxes for health care.

In total, Canadians paid $174 billion through their taxes to fund health care in 2019, a number the study says is expected to rise to about $191 billion this year.

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But the latter number should be viewed cautiously, the study says, because it doesn’t account for the full impact of the COVID-19 pandemic on healthcare spending for 2020 and 2021.

(In addition, many Canadians pay privately for health-care insurance on top of the money they contribute to the health-care system through their taxes, by purchasing medical insurance either on their own or through their workplaces, to help cover the costs of medical services and drugs not covered by medicare.)

Between 1997 and 2021 the study notes, the cost of public healthcare insurance for Canadians paid for by their taxes has increased 3.4 times as fast as the cost of clothing, 2.2 times as fast as the cost of food, 1.7 times as fast as the cost of shelter and 1.6 times faster than average income growth.

That said, in the last decade, the cost of medical insurance paid through taxes has slowed down considerably, now averaging an increase of 1.6% annually as opposed to 6.4% annual increases from 1997 to 2011.

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