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By Milagros Palacios
and Bacchus Barua
The Fraser Institute

The fall federal election showed that politicians across the spectrum are happy to promise to spend more on our government-run healthcare system. Whether the spending is for long-term care or pharmacare, the political solution to any healthcare problem seems to be to pump more money into it.

Milagros Palacios


Of course, the Canadian taxpayer is stuck with the bill.

So just how large of a tab did we run up last year?

While it’s fairly easy to obtain a receipt for our healthcare bill ($163 billion in 2018), most Canadians remain unaware of their individual contributions. This is through no fault of their own. It’s primarily because general government revenues – not a dedicated tax – finance healthcare in Canada. That means we pay for healthcare through a variety of taxes, including income, sales and so-called sin taxes on alcohol and tobacco.

Even per-person estimates ($4,389) are misleading because Canadians don’t pay equal amounts of tax each year. For example, children and dependents are not taxpayers.

Bacchus Barua

Bacchus Barua

Meanwhile, health insurance premiums in provinces that impose them only cover a fraction of the true cost of healthcare, which further exacerbates the confusion.

In reality, the amount we pay for healthcare through the tax system depends on family income and size. And while difficult, it’s possible to estimate these relative contributions using data from Statistics Canada and the Canadian Institute for Health Information. A recent study by the Fraser Institute does just that.

Calculating estimates across six common family types, the study finds that a typical Canadian family (two parents, two children) with an average household income of $140,049 will pay $13,311 for public healthcare this year. A single-parent family with two children (earning $65,858) will pay $3,833.

The amount individual Canadian families pay for healthcare varies widely across the income spectrum. For example, the 10 percent of families with the lowest incomes (earning $15,070 per household, on average) will pay $464 for healthcare in 2019 while families in the top 10 percent of income earners (with a household income of $298,872, on average) will pay $39,486.

Why should we care how much Canadian families pay for healthcare?

Because knowing how much we pay enables us to better judge whether we receive good value for our healthcare dollars. For example, while some Canadians may consider these amounts reasonable for a system that provides life-saving treatment in the emergency room, others may rue the fact that despite spending thousands of dollars, they had to wait more than 26 weeks for neurosurgery last year.

By comparing how much families annually contribute towards the public system, we can better understand the impact of the growing burden of public healthcare.

For example, between 1997 and 2019, the cost of public healthcare for the average Canadian family grew 1.7 times faster than the average income. However – again due to the complex nature of how we pay for healthcare – many Canadians are unaware of this unsustainable growth in the cost of healthcare relative to their incomes.

These numbers should help disabuse Canadians of any notion that we have a ‘free’ healthcare system. Families across Canada pay a lot for healthcare through our tax system, and it’s important they know just how much of the $163-billion bill is on their tab.

Milagros Palacios and Bacchus Barua are analysts at the Fraser Institute.

Milagros and Bacchus are Troy Media contributors. Why aren’t you?

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