The federal government has authority over matters related to health and health care derived mainly from its criminal law power for issues related to public health and safety, and from its spending power through which it makes transfers to the provinces and territories, including health transfers. The federal government contributes to the provinces’ and territories’ public health spending primarily through the Canada Health Transfer (CHT). It can also fund targeted health care directly. It negotiates with each province the amounts to be transferred to them and the use of the funds. In 2017, it granted funding over 10 years to the provinces for home care and mental health initiatives.
Approximately 70% of health spending in Canada comes from public funding, and this percentage has remained stable in the last 20 years. The balance of funding comes from private sources, mainly out-of-pocket spending and private insurance. The proportion contributed to public funding by the Canada Health Transfer has risen from 21% in 2012 to 23.5% in 2019. In late 2020, the federal and provincial governments signed the Safe Restart Agreement which provides funding to the provinces to help them deal with future waves of COVID‑19 and restart their economies.
Read the full text of the Background Paper: Federal Funding for Health Care
Author: Sonya Norris, Library of Parliament