This is the Fraser Institute's fourth annual report on the financial sustainability of health spending by provincial governments in Canada. The report uses a moving-trend analysis to measure sustainability. The trend is derived from the average, annual growth rates for total provincial government health expenditures (GHEX) and total available provincial government revenue from all sources (TAREV) over the most recent ten-year period. Government spending on health care is deemed unsustainable when it grows faster on average than revenue over the trend period. Future growth in government health spending and revenue is projected on the basis of the trend to estimate the urgency of the sustainability problem.

The report also examines the long-term feasibility of attempts by provincial governments to deal with the unsustainable growth in health spending through increased tax burdens and centrally planned rationing. The analysis partially exposes the degree to which Canadians are paying more for government health insurance over the trend period and getting less.

Many drugs, generics in particular, are significantly more expensive in Canada than they are in the United States. On balance between the higher prices paid for brand name drugs and the much lower prices paid for generic drugs in the US, Americans spend about the same percentage of their incomes on prescription drugs as Canadians.