A new study reveals that Canadian families are paying thousands of dollars more for public health care than many realize, with costs rising far faster than income or basic necessities over the past three decades.
The Fraser Institute’s study, “The Price of Public Health Care Insurance, 2025,” estimates that Canadian families pay between $5,213 and $19,060 for public health-care insurance through their taxes, depending on family type. The Hub senior editor Graeme Gordon spoke with Fraser Institute director of health policy Nadeem Esmail, co-author of the report, to better understand the true cost of Canada’s current health-care system.
Here are five key takeaways from the conversation:
1. Health-care costs have dramatically outpaced income growth: Between 1997 and 2025, public health-care insurance costs for Canadian families increased 2.2 times faster than food costs, 1.6 times faster than average income, and 1.6 times faster than shelter costs.
2. Canada operates one of the world’s most expensive universal health-care systems: Despite high spending, Canada ranks poorly in international comparisons, placing fourth in spending but 28th in doctors per capita and last in wait times among developed nations.
3. The average family of four pays over $19,000 annually: This substantial cost is hidden from most Canadians because health care appears “free” at the point of use, leading to widespread misunderstanding about the system’s true expense.
4. Policy reforms could improve value without abandoning universal access: Countries like Switzerland, Germany, and Australia deliver better health outcomes at similar or lower costs through different policy approaches, including modest user fees and private sector involvement.
5. Current policies create inefficiencies and excess demand: Zero-dollar cost at point of access, combined with restrictions on private sector innovation and inefficient hospital funding models, contribute to Canada’s poor performance relative to spending.
Health-care costs have dramatically outpaced income growth
The Fraser Institute’s research paper reveals a troubling trend in health-care affordability for Canadian families. Since 1997, the inflation-adjusted cost of public health-care insurance has increased by between 87.6 percent and 157.6 percent across different family types, far exceeding growth in household incomes or basic living expenses.
“The cost of public health-care insurance for the average Canadian family grew 1.6 times faster than its average income between 1997 and 2025,” Esmail explained. This disparity means health care is consuming an increasingly large share of family budgets through the tax system, even as many Canadians remain unaware of these costs.
The report shows that a two-parent family with two children now pays approximately $19,060 annually for health-care insurance, while single-parent families pay between $5,213 and $5,934, depending on the number of children.
Canada operates one of the world’s most expensive universal health-care systems
Despite the high costs, Canada’s health system delivers poor value compared to other developed nations with universal access. Esmail noted that when comparing Canada to other countries with similar goals of providing care regardless of ability to pay, “Canada’s health-care system is one of the most expensive in the developed world.”
“We’re fourth in spending, but we’re 28th in doctors, we’re last in wait times, we’re 25th in care beds, we’re 28th in CT scanners,” he said, describing what he characterized as “a very high cost but poorly accessible health-care system.”
This poor performance relative to spending raises fundamental questions about whether Canadians are receiving adequate value for their substantial investment in public health care.
The average family of four pays over $19,000 annually
The report’s central finding challenges common perceptions about health-care costs in Canada. Many Canadians believe health care is “free” because they don’t pay directly when receiving services, but the reality is far different.
“Health care comes with a very real cost through the tax system, which is over $19,000 for the average Canadian family of four,” Esmail emphasized. The study estimates that 23.8 percent of all tax revenues are dedicated to health-care spending across all levels of government.
The burden varies significantly by income level. The lowest-income 10 percent of families pay approximately $702 annually, while middle-income families earning around $88,725 pay $8,292, and the highest-income 10 percent contribute $58,853 toward public health-care insurance.
Policy reforms could improve value without abandoning universal access
Esmail argued that Canada faces a “false dichotomy” between the current system and American-style private health care, pointing to numerous examples of countries that achieve better results while maintaining universal access.
“There are 30 other developed nations out there that have universal access health-care systems that, in many of which, do a better job at health care than we do by doing health care very differently from Canada in policy terms,” he said.
Countries like Switzerland and Australia serve as particularly relevant models, offering similar demographic and geographic challenges to Canada while delivering superior outcomes. These systems typically incorporate modest user fees, private sector competition, and more efficient hospital funding mechanisms.
Current policies create inefficiencies and excess demand
Esmail identified several specific policy problems contributing to Canada’s poor performance. Zero-dollar cost at the point of access creates what economists call moral hazard, leading to overuse of services and inefficient resource allocation.
“When you have a small cost at the point of access in the health-care system, it encourages patients to make a more informed decision about when and where it’s best to access the health-care system,” Esmail explained, noting that such fees are common internationally and include protections for low-income populations and those with chronic conditions.
He also pointed to inefficient hospital funding models and restrictions on private sector innovation as key barriers to improvement. The combination of these factors has created what he described as a health-care system “really clearly in crisis” despite its enormous cost to taxpayers.
“It’s unfortunate that Canadians are dying when in some cases they may simply not need to,” Esmail said. “It’s because we have our healthcare policies wrong, and we have our healthcare system, which now is really clearly in crisis, and yet we can’t seem to understand that there are better ways to do health care out there.”
This commentary draws on a Hub interview. It was edited using AI.
