Innovation needed to address growing pressures of delivering health care

November 27, 2025 — A new report from the Canadian Institute for Health Information (CIHI) estimates that in 2025 health care spending in Canada will grow nearly 2 percentage points faster than the economy, reaching a projected $399 billion ($9,626 per Canadian).

Prior to the pandemic, spending trends were stable, with spending outpacing inflation and population growth; however, in 2022–2023, Canada-wide inflation rates rose to levels not seen since the 1980s. 

Inflationary demand pressures — along with population growth, population aging and service utilization — mean that although health spending continues to rise, without innovation, more spending alone will not be able to address the challenges facing patients and health care providers.

“Canadians take pride in our public health care, but the reality is that economic pressures are impacting jurisdictions across the country, while at the same time demographic pressures such as population growth and aging are making it more expensive to deliver care,” says Anderson Chuck, President and CEO, CIHI. “The solution is not more spending; it’s innovating how we resource and deliver health care.”

Hospitals, physicians and drugs remain the major areas of spending and combined are expected to represent more than 50% of total health spending in Canada in 2025.

“In the current environment, it will be increasingly difficult to simply increase spending,” Chuck explains. “So, when we do make investments, we need to ensure that it’s where they can truly make a difference for patients — like improving primary care, implementing team-based care and shifting to delivering more care in the community.”

Using data to strengthen health care systems and the economy

To support this, he continues, “Connected pan-Canadian data is critical if we are to successfully transform health care in Canada. Health data is a modern public good with the power to catalyze change and drive innovation. By reimagining data and health systems as not a cost driver but as fuel for an innovation engine, we can transform the system to provide the health care Canadians need.”

Quick facts

• Total health spending in Canada is expected to reach $399 billion in 2025.
• Hospitals (26%), physicians (13.8%) and drugs (13.3%) are expected to account for the largest shares of health spending in Canada in 2025.
• Health spending is expected to exceed economic growth: spending is expected to grow by 4.2% while the economy is expected to grow by 2.6%.

About CIHI

The Canadian Institute for Health Information (CIHI) is an independent, not-for-profit organization dedicated to providing essential health information to all Canadians.