How does the Canadian health care system work?

Universal health care operates on the idea that every person deserves health care regardless of their income. One of the roles of the Canadian government is to provide universal coverage of health care services. The Canadian health care system is one that is rooted in a rather socialist philosophy, in that the government acts as a centralized fund collector who then distributes the wealth among citizens for the betterment of their lives. Access to health care is something held in utmost importance. 
The Canada Health Act of 1984 is government legislation providing criteria and conditions as to how cash contributions get dispersed to the different health care services. It states that all health services be fully insured, which includes hospitals, physicians, and surgical-dental services, by the government so that Canadian citizens always have access to doctors. The Act only deals with the financial side of health care. According to the Act, “the primary objective of Canadian health care policy is to protect, promote and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers.”

The health care system covers family physicians, hospital visits and surgeries (including dental surgeries). It does not cover oral health, so citizens must pay out of pocket for dentist visits unless their workplace provides dental insurance.

We see countries with privatized health care, where citizens pay out of pocket for doctors, surgeries, hospital visits and medicines. Most of the citizens suffer because they cannot afford these bills. Access to health care is a fundamental human right.

Each person’s health information is held in confidence between the person and their physician. The government does not collect this information. Each province has its own Medicare system, and each doctor handles the claims against the provincial insurer. Citizens/patients are not involved in the billing/claim process. For example, Ontario has OHIP (Ontario Health Insurance Plan).

The Canada Health Act does not cover prescription drugs, home care, prescription glasses or dental service. These are paid out of pocket by the citizen, but some workplaces provide insurance for these services, which reduces the cost for the citizen. Provinces provide partial coverage for seniors, children and those in poverty. More than 60% of prescription medication is paid out of pocket in Canada.


So how does the government receive funding? 30% of funding is from private health expenditure, while the other 70% comes from income tax and sales taxes. Each purchase is taxed (different percentages for each province and territory). Businesses then collect the sales taxes and give it to the government. In British Columbia, for example, there is a monthly fee collected, but these fee is waived or reduced for low-income citizens. And if the premium is unpaid, the citizen will still receive care. They cannot be denied care.

Each citizen who enrolls in the health care program (most if not all citizens) receives a health card. This is a piece of photo ID that describes the person’s age, sex, and date of birth. The doctor’s office will swipe the card and your medical file comes up.

Cosmetic surgery is not covered by the Act, as it is not considered essential care, since it is elective.

In Quebec, citizens pay $0-$660 when they file their income taxes, and this goes into a universal coverage of prescription medication.

In 2012 there was a record number of doctors in Canada. This number was 75 142. Doctors make a lot of money: the average salary is $328 000 gross (gross means before expenses are paid). Out of the gross income doctors pay rent, staff salaries, taxes and equipment. It is reassuring to know that there are so many doctors here, however some rural communities may experience a shortage, and have to travel to see a doctor. Doctors do not receive an annual salary, but rather are given a fee per visit or service provided.

94% of funding comes from the provincial level.

Health care costs have changed in the last 40 years. For example, in 1975 the three biggest costs were hospitals (44.7%), physicians (15.1%), and medications (8.8%) while in 2007 the biggest costs were hospitals (28.2%), medications (16.5%) and physicians (13.4%).

The cost of health care per capita changes throughout the country. The lowest are in Quebec ($4891) and British Columbia ($5254). Also, it costs more for those older than 80 ($17 469) and those less than one year old ($8239). Comparatively, it costs $3809 for those between 1 and 64 years of age (these statistics are from 2007).


Medicare is the largest government health program, which is divided into ten provincial programs. These programs are required to meet the guidelines given by the Canada Health Act. Almost all government health spending goes through Medicare. The federal government directly administers health funding to the military and inmates of federal prisons. They also provide some funding to the Royal Canadian Mounted Police and veterans, as well as First Nations peoples. The federal government guarantees complete coverage of Native peoples’ health needs, by maintaining a network of clinics and health centres on Native reserves. Native peoples qualify for a set amount of visits to the optometrist and dentist. If there are any provincial user fees, the federal government covers this. The federal government also fully compensates each province for the expense. The health care system for First Nations, however, has not been considered very effective. Since 1997 the funding for their optometry, dentistry and medicines has diminished significantly. The plight of First Nations peoples is an unfortunate yet widely documented truth.

About 27% of Canadians’ healthcare is paid for through the private sector. For example, prescription drugs, dentistry and optometry are not covered by Medicare, and are therefore paid for out of pocket by individual citizens.

Family physicians make different money in different provinces. For example in Alberta they make, on average, $230 000, while in Quebec they make on average $165 000. This difference in pay arguably causes provincial competition and creates shortages of doctors where they are paid less. Each province has a College of Physicians and Surgeons that is responsible for licensing physicians, setting standards and for investigating and disciplining its members.

On the national level, there is the Canadian Medical Association, which aims to serve and unite physicians and advocate for the highest standards of health care. While some doctors support parallel private financing, the Canadian Medical Association has strongly advocated for maintaining a publicly funded system, by lobbying the government to increase funding.

Comparatively, in the United States of America, the government does not pay for health care for the entire population. The country’s population is over 300 million people, which is ten times more than the population of Canada. The USA has Medicare and Medicaid, which are designed more to help those with low income such as people with disabilities or the elderly. Health care facilities are owned and operated by private sector businesses, which means those with more money get taken care of first. Some employers provide some insurance. 58% of US community hospitals are non-profit, 21% are government owned, and 21% are for profit. It is the most expensive health care system in the world, but according to a study by the Commonwealth Fund, it is last or near last in terms of access, efficiency and equity.

Wait times & Privatization

In Canada, the average wait time for an MRI or CAT scan is two weeks to three months. The median wait time for non-urgent (or elective) surgery is four weeks to three months. Wait times are the longest for emergency services, among the eleven countries surveyed in the aforementioned Commonwealth Fund study. 29% of Canadians report waiting more than four hours in the emergency department. 56% of Canadians wait over four weeks to see a specialist. These wait times are one of the downsides to having a government-funded health care program. However, Canadians are guaranteed timely access to care in the priority areas such as cancer care, cardiac care, cataract surgery or hip and knee replacement. Some have countered these points by stating that longer wait times actually help patients, since instant care means people might receive unnecessary (or unproven) surgery. The idea is that waiting lists prioritize higher-risk patients, thereby reducing overall patient mortality. Other patients who are wealthy or have better insurance may be pushed into procedures too quickly and result in higher mortality risk.

Some private clinics exist, but are subject to provincial regulations that they cannot charge above the agreed-upon fee. It is an ongoing debate, whether or not to privatize health care, however it is usually the wealthy citizens and the physicians themselves who push for privatization, of course.

Some Canadian citizens go to the USA for health care, for reasons such as confidentiality, substance abuse or abortion, things they don’t want to tell their usual physician or employer or family. If they have the money, they can do it. Some politicians have been noted going to the states for surgery, but this is because politicians are very well paid and can afford to pay out of pocket for these procedures.

Some US citizens also travel to Canada for lower costs of health care procedures. More often than not they purchase prescription drugs here because they are much cheaper than in the US. Medical marijuana is an example of this: it is legal in Canada but illegal in most of the US, so many US citizens with cancer, glaucoma or multiple sclerosis come to Canada to obtain this medicine.

Canada’s health care system is not perfect but it is government-funded, which means most citizens have equal access to it. Citizens can find a family doctor fairly easily and are allowed to visit the doctor as often as they need. There is no limit on visits to the doctor or hospitals, of course. Negatives include the wait times, but there are neverending debates surrounding the health care system.

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