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Randall Denley: Ontario finds surpise health care surplus

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The province has gone from spending drought to spending downpours

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About the only thing Ontario health care isn’t short of is statistics, and there are some interesting new ones in a report Wednesday from the province’s Financial Accountability Office (FAO).

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The good news is that the government will spend $15.2 billion more on health care over three years, enough to cover the cost of its reasonably ambitious health care expansion. The big surprise is that the sum includes $4.4 billion in money that has not yet been allocated for specific spending.

It seems as if Ontario has gone from a spending drought to a spending downpour. Just last year, the FAO said that the province planned to spend $10 billion less than would be required to cover health care costs this year and the next two.

Surely all this new spending is a good news story. One would have expected that Premier Doug Ford would be eager to seize those who had criticized his government for underfunding, using the earlier FAO report as proof. Instead, the new health spending was underplayed.

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What the government calls “incremental health care investments” didn’t rate more than a small mention in this year’s budget. One had to read to page 86 to find it. The information there actually says spending will go up $15.3 billion, but who’s going to quibble over $100 million? The government’s budget package points to 28 “highlights,” but the increase in health care spending wasn’t one of them.

To understand how the government had picked up the spending place, one would have to go back to the previous year’s budget. The 2023 budget says Ontario will spend $87.6 billion on health by 2025-26. Last year’s budget said it would take two additional years to hit that number.

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A government spokesperson said that its previous spending underestimate was partly due to uncertainty over how much extra money the federal government would contribute in a new health care deal with the provinces. That’s a legitimate partial answer.

One suspects a bit of strategy at play here. When the Ontario government was crying for health care poverty and begging the feds for more money, it was useful to have the FAO pointing out a big gap between what the government planned to spend and what would be required for health services.

In the end, the federal government will contribute $4.4 billion over three years, the same amount of money that the province has not tied to any program. Perhaps that’s just an unfortunate coincidence.

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Don’t think that $4.4 billion is a windfall that’s up for grabs. It’s a cumulative amount over three years and most of it could disappear quickly.

The FAO notes that the fallout from Bill 124, the province’s wage restraint law, could be expensive. A court has ruled the unconstitutional bill and Ontario is waiting to hear the results of an appeal. The initial ruling has triggered retroactive pay for some workers totaling about $900 million. If all hospital employees end up with retroactive pay, that could add another $2.7 billion in costs. Goodbye should be a surplus.

All of that was before the impact of any large increases in new contracts for the health of workers.

There is one other item of note in the FAO’s detailed breakdown of health care spending. Despite all the talk about how independent surgery clinics will devastate hospitals and drain their funds, the surgery clinic’s spending is a relative pittance compared to what the hospitals earn. The government will spend $200 million on surgery clinics over three years in an effort to expand surgical capacity and reduce wait lists. Hospitals will receive $23.8 billion this year alone.

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The complexities of health care funding can be baffling, but for the public the real question is whether the planned spending will be enough to meet the needs of an aging and expanding population.

Ontario plans to add 3,000 hospital beds over 10 years and 30,000 new long-term care beds by 2028, as well as increasing the supply of doctors and nurses. It might reasonably be said that this provincial government is doing all it can.

The biggest challenge is not lack of spending; it’s the shortage of health care workers. At least one million Ontarians don’t have a family doctor. In a separate report earlier this year, the FAO estimates that Ontario will be short about 33,000 nurses and personal support workers by 2027-28.

Those are not problems that money can easily solve.

Randall Denley is an Ottawa journalist, author and former Ontario PC candidate. Contact him at [email protected]


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