Average Canadian family will pay almost $16,000 for health care this year

As inflation continues upward, many Canadians worry about the increasing cost of living and their household finances. However, there’s a crucial expense line missing—the amount we pay for public health care.

Most of us intuitively know that health care isn’t free. At some level, we all understand that the money in the government’s coffers for health care comes from our pockets. However, many Canadians, through no fault of their own, might not know exactly what that amount is because our public health-care system is funded through general government revenues instead of a dedicated tax. Basically, revenues from income taxes, sales taxes, business taxes and more get poured into a fiscal brew, from which a certain amount is ladled-out for health care.

How much? It’s easy enough to get the big picture. According to data from the Canadian Institute of Health Information, provinces spent about $200 billion on health care in 2021 or about $5,284 per Canadian. But that isn’t the full story. Obviously, children don’t have money to pay upwards of $5,000, and higher-income earners pay significantly more in taxes compared to the teenager who just took your order at Tim Hortons.

We all pay vastly different amounts for health care; it’s just virtually impossible for Canadian families to calculate exactly how much.

We can, however, get a general idea from a new study published by the Fraser Institute, which estimates that a typical family (two parents and two children) earning $156,086 will pay $15,847 for public health-care insurance this year. The average individual earning $50,140 can expect to pay $4,907. And the numbers vary considerably by income. The 10 per cent of families with the lowest incomes in Canada will pay $690 for public health-care insurance while the highest 10 per cent will pay a whopping $41,914.

Moreover, since 1997 (the first year of available data), the change in the cost of health care for the average Canadian family has outstripped the growth in income and inflation—for the average family the cost has increased by 210.3 per cent while incomes have only risen 116.3 per cent over the same period. Inflation, as measured by the Consumer Price Index, has only risen by 56.6 per cent although this will undoubtedly be a much larger part of the story over the next year.

Finally, even if we exclude the last few years from our analysis (to exclude the effect of COVID) we see a similar story with the cost of health care for the average Canadian family increasing 1.8 times as fast as average incomes between 1997 and 2019.

It’s important to understand exactly how much we pay for health care so we better understand the real cost of Canada’s health-care system.