Rising costs of food and housing have been heavily discussed as major factors contributing to the affordability crisis. However, according to consumer price index (CPI) data, the expenses related to maintaining good health have also significantly increased since the peak of overall inflation in June 2022.
The surge in health-care expenses might not be as noticeable to many Canadians, experts suggest. This is partly because a portion of these costs is covered by the public health-care system, hence not reflected in the CPI data. Additionally, typical out-of-pocket health expenditures may be sporadic, unlike regular expenses like rent or groceries.
Andrew Longhurst, a senior researcher at the Canadian Centre for Policy Alternatives (CCPA), pointed out that health-care prices have been on a steep upward trajectory in recent years. This trend is expected to continue, especially with the aging population and provincial governments opting for fiscal restraint and austerity measures.
While the overall inflation rate, known as all-items CPI, has increased by slightly over 11% since June 2022, the category encompassing health and personal care has risen by over 15% during the same period. Specifically, health-care services, including eye exams, physiotherapy, and basic dental care, have seen an 18.5% surge, almost on par with the increase in food prices.
Dental care services and eye care products have experienced a 20% price hike since June 2022. These sectors highlight a divide in the health-care industry, with costs being regulated mainly on one side, as explained by Longhurst.
Statistics from Statistics Canada show that health-care services’ prices have consistently outpaced overall inflation for the past two decades, reflecting the economic dynamics of these sectors. The scarcity of efficiency gains in health and dental services, largely due to high skilled labor costs, contributes to the persistent rise in prices.
The Canadian Dental Care Plan was introduced in 2024 to address health-care affordability issues, but dental care costs have continued to climb. The plan’s administration by a private insurer has led to additional out-of-pocket expenses for patients, contributing to ongoing challenges in the sector.
Despite the substantial increase in health-care costs, many Canadians may not be acutely aware of the inflation in this sector. The public health-care system covers a significant portion of expenses, making the out-of-pocket costs less prominent in people’s budgets compared to other essentials like food and shelter.
Private health-care spending is on the rise in Canada, with individuals increasingly bearing a larger share of the financial burden. A recent analysis by the CCPA revealed that private health-care spending per person grew by 8.1% from 2021 to 2023, outpacing public spending growth.
Longhurst emphasized that without government intervention to address the growing health-care affordability gap, individuals with limited financial resources may face challenges accessing necessary care. The disparities in health-care access based on income levels are likely to widen if adequate measures are not taken by provincial and federal authorities.