Canada has a history of innovative pilot projects that have failed to spread and scale to achieve transformative change in the organization and delivery of healthcare. Past experience suggests four essential dimensions of sustainability: funding, including incentives to adopt new working methods and longer-term program funding; strong policy guidance and/or legislation and regulation; sustained focus on addressing a particular problem or issue; and accountability for results. Had the Naylor Panel recommendations been implemented a decade ago, Canada's healthcare system would now be on a much stronger footing to confront today's challenges. The Naylor blueprint offers pertinent, practical solutions for issues such as improving access to primary care, improving digital health and contending with artificial intelligence.

Introduction

Braden Manns et al. (2025) have provided a timely reflection on the 2015 report of the Advisory Panel on Healthcare Innovation (2015). Progress on the key innovation areas identified by the Advisory Panel has been modest at best and has not translated into improvement in health system outcomes. They conclude that there is a burning platform for change and repeat the panel's principal recommendations for the creation of a Health Innovation Fund, Agency and Accelerator office (Manns et al. 2025).

As the federal government mobilizes to quickly respond to the threats from the US to Canada's sovereignty and economy, health innovation should not be forgotten. Much of Canada's annual $380 billion spend on healthcare goes to foreign-made medical supplies, pharmaceuticals and technology. Investing in innovative healthcare solutions at scale would not only help address the access crisis in primary care, seniors' care and mental health services, but can also be an important driver of jobs and economic growth.

This commentary will focus on the follow-up to the Advisory Panel's principal recommendations.

Côté-Boileau et al. (2019) have identified three core concepts of innovation:

• Spread: the process through which new working methods developed in one setting are adopted in other settings;
• Scale: the process of expanding the coverage of health interventions, but can also refer to increasing the resources required to expand coverage; and
• Sustainability: the process through which new working methods are (adopted and) maintained for an appropriate period (Côté-Boileau et al. 2019).

Sustainability is important in a publicly funded health system with regulated entry and where competition is not a driver of innovation to the extent it would be in a sector such as grocery retailing or financial services. For present purposes, additional resources are included under the sustainability concept. The Canadian experience of the past three decades suggests four key elements of sustainability that must be considered in the scaling up of health innovation:

• Funding, including both incentives to adopt new working methods and longer-term program funding;
• Strong policy guidance and/or legislation and regulation;
• A sustained focus on addressing a particular problem or issue; and
• Accountability for results.

The Federal Response to the Advisory Panel

Former Health Minister Monique Bégin and colleagues labelled Canada as the land of “perpetual pilot projects,” citing both the failure to share the results of projects and their successes or failures and the reluctance of governments to extend core funding to convert pilot projects to sustained programs (Bégin et al. 2009).

The panel report had a relatively immediate impact. It had recommended establishing the Healthcare Innovation Agency (HIA) by merging the Canadian Foundation for Healthcare Improvement (CFHI) and the Canadian Patient Safety Institute (CPSI), followed by the integration of Canada Health Infoway (CHI). The HIA would administer the Innovation Fund that would ramp up to $1 billion by 2020.

In 2017, Health Canada commissioned Pierre-Gerlier Forest and Danielle Martin to review eight federally funded pan-Canadian health organizations (PCHOs). Their report presented four scenarios on how the PCHOs could be reorganized to work together to support a long-term vision for the future of healthcare in Canada (Forest and Martin 2018). Each scenario included an amalgamation of funding from the CFHI and CPSI. Subsequently, they merged in 2020, becoming Healthcare Excellence Canada (HEC). HEC has developed expertise in the spread of innovative practices and in patient engagement in the development of policy solutions. Their methods have been tried in several areas. After the first wave of the COVID-19 pandemic, HEC launched LTC+. Six promising practices for pandemic recovery and resilience were identified and seed funding was provided to teams and long-term care facilities to spread them. Ultimately, LTC+ engaged 338 teams representing 1,500+ LTC and retirement homes across Canada (Zelmer et al. 2023).

In 2023–2024, HEC ran an initiative on strengthening primary care in northern rural and remote communities. Twenty teams of primary care providers, organizations and communities across the provinces and territories were supported to advance promising practices to meet the unique needs of their communities, ultimately reaching over 66,000 patients (HEC 2025). HEC has demonstrated excellent reach with its initiatives, considering its modest annual budget ($31 million in 2023–2024) (HEC 2024).

The severity of Canada's current primary care crisis alone makes the case for a large innovation fund to introduce and adopt new approaches to delivering primary care. The results of a 2022 survey estimate that 6.5 million Canadians did not have a regular primary care provider, and this could reach 10 million before the end of the decade (Glazier 2024; Pham and Kiran 2023). Health Canada has estimated that Canada was short 23,000 family physicians in 2022, and the shortfall will widen to 26,000 by 2034 (Health Canada 2025b). Team-based care is held out as the main hope to solve this crisis.

The four elements of innovation sustainability are illustrated in the Canadian context below.

Funding

The best Canadian example to date of funding innovation at scale in the delivery of healthcare was the $800 million Primary Health Care Transition Fund (PHCTF) included in the 2000 First Ministers' Health Accord (CICS 2000a). This was inspired by the 1997 $150 million Health Transition Fund that supported pilot projects in home care, pharmacare and primary care (Mable and Marriott 2002). The PHCTF included a provincial-territorial envelope intended to accelerate activities leading to “permanent and sustainable primary healthcare (allocated primarily on a per capita basis).” The PHCTF contributed to the introduction and expansion of team-based primary care models in Alberta, Ontario and Quebec on a large scale that have been sustained in ministry budgets (Health Canada 2007). Other jurisdictions have introduced team-based models, but not at the scale of these provinces. Moreover, the job is not finished in these three provinces. Ontario plans to add more than 300 new primary care teams to enrol an additional 2 million people by 2029 (Popovic 2025).

Policy guidance/legislation/regulation

These are the mechanisms that determine what services are publicly insured and under which circumstances, who is authorized to provide them and who is eligible to receive them. The rise of virtual care during the pandemic illustrates policy change. Virtual care (also called telemedicine and telehealth) was invented in Canada by the late Maxwell House in the 1970s to provide care remotely in rural and remote locations in Newfoundland and Labrador, but until 2020, its use was confined to designated centres and offered through special programs such as the Ontario Telemedicine Network. Outside these centres, it was not considered an insured service. With the onset of the COVID-19 pandemic, all jurisdictions put in place temporary billing codes to cover telephone and video conference calls, and the use of virtual care skyrocketed. In Ontario, virtual visits accounted for just 2% of physician services in 2019–2020. This increased by almost 15-fold to 29% in 2020–2021 (CIHI 2022). Since the pandemic has receded, virtual care has declined for various reasons, but one factor is that some jurisdictions have discounted virtual services relative to those delivered in person. No jurisdiction has either expanded or introduced public funding for asynchronous care (e.g., text messaging or secure e-mail) aside from an Ontario pilot. By comparison, Kaiser Permanente in the US reported that in 2022, there were more asynchronous e-visits than synchronous video visits, a clear indication that billing policy is a rate-limiting step to the adoption of virtual care in Canada (Kaiser Permanente 2023).

Sustained focus

Since 2000, the Federal/Provincial/Territorial Premiers (FPT) and health ministers have attempted to drive healthcare transformation through a series of federal funding agreements. The dominant theme has been access to care, but there are many competing priorities and it is challenging to sustain focus on any one. The 2000 Health Accord included eight priorities, with targeted funding directed at just three (CICS 2000a). The 2003 Accord included a notional $16.5 billion Health Reform Fund to address primary healthcare, home care and catastrophic drug coverage, but in the 2004 Accord, focus had shifted to access to advanced diagnostic services and specialty care, backed by a $4.5 billion Wait Times Reduction Fund (CICS 2003, 2004). Primary care did not re-emerge on the national agenda until the 2019 federal action when the Liberal Party pledged to “make sure that every Canadian has access to a family doctor or primary health care team,” followed by a more aggressive 2021 election pledge to provide $3.2 billion to the provinces and territories to hire 7,500 new family doctors, nurses and nurse practitioners (Liberal Party of Canada 2019, 2021). The COVID-19 pandemic exacerbated the primary care shortage with many family physicians ceasing practice in the first waves of the pandemic (Kiran et al. 2022). The 2023 federal health funding agreements with the provinces and territories focus more narrowly on four priorities, of which access to family health services is the first (Health Canada 2023a), but it was not highlighted in the communiqué following the January 2025 meeting of health ministers (Health Canada 2025a).

Accountability for results

The federal government has been trying to drive innovation by attempting to hold the provinces and territories accountable for increased federal transfers since the 2000 Accord with minimal success. The 2000 Accord identified several health indicators and included a commitment for the FPT governments to report to their citizens on them at two-year intervals starting in 2002 (CICS 2000b). The 2003 Accord included a more detailed list of indicators and provided for the establishment of the Health Council of Canada (HCC) to monitor progress (CICS 2003). The FPT governments published a second series of reports in 2004 and then ceased, and the FPT committee to support indicator development was disbanded (HCC 2007). Funding for the HCC was terminated in 2013.

In 2017, the federal government tried a new approach to accountability. The 2017 federal budget committed $11 billion over 10 years for home care and mental health (Department of Finance Canada 2017). This was allocated through bilateral agreements that required each jurisdiction to sign onto a common statement of principles on shared health priorities (Health Canada 2017). This statement included a commitment to work with the Canadian Institute for Health Information (CIHI) on a set of common indicators for mental health and addictions and home and community care, and CIHI is now reporting on 12 indicators (CIHI 2024). The agreements (except for Quebec) included a provision for withholding the second semi-annual payment if the jurisdiction failed to provide information to CIHI on these priorities for the previous fiscal year. This approach was also used in the federal government's 2023 offer of $25 billion over 10 years in exchange for bilateral agreements on four priorities that include baseline measures and targets for eight key indicators (Health Canada 2023a). The agreements also include a commitment to a data strategy on the collection, sharing and use of de-personalized health information (Health Canada 2023b).

From Precision Medicine to Generative Artificial Intelligence and Interoperability

Two other issues examined by the Advisory Panel have since grown in prominence. In its chapter on the “data deluge,” the panel called for a national strategy on precision medicine, greater availability of health data and the acceleration of interoperability of electronic health records across points of care.

Since 2015, precision medicine has been subsumed under the burgeoning interest and concern about artificial intelligence (AI) in health due to its potential to solve for wicked healthcare problems such as access to primary care and health workforce shortages (Johnson et al. 2020; Kueper et al. 2022). A call for national leadership was issued by a Senate Committee in 2017, and a 2020 report from the Canadian Institute for Advanced Research (CIFAR) called for the development of an AI for health infrastructure supported by an AI for Health (AI4H) strategy (CIFAR 2020; Senate of Canada 2017). There has been heightened concern about the need for regulation of AI in health since the arrival of ChatGPT in 2022 and the subsequent launch of other large language models. These concerns include data privacy and the need for post-market surveillance (Da Silva et al. 2022). Ambient AI scribes that summarize patient-physician interactions are now being rapidly adopted by Canadian physicians. While they most likely would not presently qualify as a medical device, the next advance will be their ability to link to AI-assisted clinical decision support systems to perform agentic functions such as developing and initiating investigation and treatment protocols, which would fall in a grey area (Fuentes et al. 2025).

The federal government tabled the Artificial Intelligence and Data Act (AIDA) in 2022 as part of a larger Bill (Bill C-27) intended to modernize privacy legislation (House of Commons of Canada 2022). AIDA did not mention health specifically but referred to high-impact systems, and a companion document did elaborate on health aspects of high-impact systems (Innovation, Science and Economic Development Canada 2025). Bill C-27 was ceased when Parliament was prorogued in January 2025 and AIDA has since been criticized for its shortcomings in not addressing health (Ishaque et al. 2025; Tsuei 2025). Following the April 2025 federal election, Evan Solomon was appointed as the first minister of AI and digital innovation, with a government mandate of focusing on economic development, given geopolitical tensions with the US (Prime Minister of Canada 2025). Minister Solomon has stated that he will not reintroduce AIDA but will consider which aspects to revive (Hemmadi 2025).

In the absence of legislation and clear guidance, clinicians will be cautious about adopting the advanced functionality of AI tools that are sure to arrive quickly on the scene. Similarly, the successful implementation of AI innovations in healthcare will require a sustained focus on solving clearly defined healthcare challenges. Canada will be unable to train and recruit its way out of the mission-critical health human resources shortages we now face. AI-driven tools that increase clinicians' time and effectiveness will be a crucial piece of that puzzle.

Interoperability

Looking ahead, AI in health will only be as trustworthy and useful as the validity and completeness of the data that underpin it. Over the course of the past 25 years, nine out of 10 physicians have been using electronic medical records, but there is low electronic exchange of information outside the practice, and the data are not compiled in any meaningful way (Canada Health Infoway and Canadian Medical Association 2024). As outlined in the Pan-Canadian AI4H Guiding Principles endorsed by the FPT health ministers, advancing interoperability must also respect Indigenous-led governance frameworks and uphold Indigenous Peoples' and communities' rights to self-determination and data sovereignty, ensuring that modernized health data systems are inclusive, representative and accountable (Health Canada 2025c).

In March 2023, the FPT deputy ministers of health endorsed an interoperability roadmap developed by Infoway, and in October 2023, the FPT health ministers approved an Action Plan on Health Data and Digital Health (CHI 2023a; Health Canada 2023b).

The Connected Care for Canadians Act was tabled on June 24, 2024 (House of Commons of Canada 2024). The bill took an initial step of prohibiting data blocking by health technology vendors, but it did not proceed beyond first reading before parliament was prorogued and it remains to be seen if it will be a priority of the new health ministers and government. The importance of this issue is underscored by a 2023 report titled Interoperability Saves Lives that documents how patient harm can occur at several levels as a result of unconnected data (Affleck et al. 2023). Interoperability of health data also has an economic dimension, as noted later. Infoway has estimated that a lack of interoperability of health data costs almost $4 billion annually (CHI 2023b).

The four elements of innovation sustainability: funding, policy guidance, sustained focus and accountability, offer a useful lens for assessing Canada's progress on AI and interoperability. For example, while ambient AI tools are increasingly used by clinicians, their scalable adoption is constrained by the absence of dedicated funding mechanisms. Policy guidance remains fragmented; the failure to pass AIDA and the Connected Care for Canadians Act highlights a lack of legislative clarity, particularly around health. The Pan-Canadian AI4H Guiding Principles offer a promising foundation for policy development, recognizing the importance of accelerating adoption while ensuring that safeguards are in place to protect the public from harm. However, sustained focus is still lacking, as AI and interoperability have not been consistently prioritized in federal health strategies despite their potential to address critical system challenges. Accountability mechanisms are similarly underdeveloped, making it difficult to evaluate the impact of AI tools or the effectiveness of interoperability initiatives in healthcare. To move beyond pilot projects and achieve transformative change, Canada should embed these four sustainability elements into its health innovation strategy, ensuring that AI and interoperability are not only adopted but meaningfully integrated into the health system.

Conclusion

Innumerable pilot projects have been launched in Canada over the past three decades, with little success in resulting in large-scale transformative change. More consideration needs to be given to sustainability plans and the change management necessary to encourage patients and clinicians to adopt new practices.

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