Ontario Health Sector: 2025 Spending Plan Review

Publish date: October 23, 2025 ISSN 2562-4008
This report reviews the health sector spending plan as outlined in the 2025 Ontario Budget. Health sector spending consists of the combined spending by the Ministries of Health and Long-Term Care.
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About this document

Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office of Ontario (FAO) provides independent analysis on the state of the Province’s finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario.

Prepared by: Lisa Barkova (Financial Analyst) under the direction of Matthew Gurnham (Director, Financial Analysis) and Luan Ngo (Chief Financial Analyst).

This report has been prepared with the benefit of publicly available information and information provided by the Ministries of Health, Long-Term Care and Finance, and Treasury Board Secretariat.

In keeping with the FAO’s mandate to provide the Legislative Assembly of Ontario with independent economic and financial analysis, this report makes no policy recommendations.

© King’s Printer for Ontario, 2025

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Ontario Health Sector: 2025 Spending Plan Review, Financial Accountability Office of Ontario, 2025.
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1. Summary

At the request of a Member of Provincial Parliament, this report reviews the Government of Ontario’s (the Province’s) health sector spending plan as outlined in the 2025 Ontario Budget.

Spending Plan Overview

Spending Plan Analysis:

Interprovincial Comparison

2. Introduction

This report reviews the Government of Ontario’s (the Province’s) health sector spending plan as outlined in the 2025 Ontario Budget. Health sector spending consists of the combined spending by the Ministries of Health and Long-Term Care.

This analysis was undertaken in response to a request from a Member of Provincial Parliament and is part of a planned series that reviews the spending plans for five ministries: Health; Long-Term Care; Education; Colleges, Universities, Research Excellence and Security; and Children, Community and Social Services.

The report is organized as follows:

For additional information on the Ministries of Health and Long-Term Care’s 2025-26 spending plan, see the FAO’s Examining Ontario’s 2025-26 Expenditure Estimates, which compares planned spending against actual spending over the previous four years to the standard account level of detail.

3. Spending Plan Overview

In the 2025 Ontario Budget, the Province projects that health sector spending will grow at an average annual rate of 0.7 per cent, from $91.6 billion in 2024-25 to $93.6 billion in 2027-28. This is a significantly slower pace than the 6.6 per cent average annual growth over the previous three years from 2021-22 to 2024-25.

Figure 3.1 Health sector spending plan in the 2025 Ontario Budget

Note: Historical values are not restated for program transfers or reclassifications, if any.

Source: Ontario Public Accounts and the 2025 Ontario Budget.

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Average Annual Spending Growth (Per Cent)

2021-22 to 2024-25
Historical
2024-25 to 2027-28
2025 Ontario Budget
6.6 0.7

Annual Spending ($ Billions)

Historical 2025 Ontario Budget
Historical 2021-22 75.7
Historical 2022-23 78.5
Historical 2023-24 85.5
Historical 2024-25 91.6
2025 Budget Outlook 2025-26 91.1
2025 Budget Outlook 2026-27 92.4
2025 Budget Outlook 2027-28 93.6

For context, over the 34-year period from 1990-91 to 2023-24, health sector spending grew at an average annual rate of 5.0 per cent.[1] The Province’s health sector spending plan in the 2025 budget calls for significantly slower spending growth compared to the 34-year average and would be the slowest three-year growth rate since 1993-94 to 1996-97.

Spending Plan Compared to Cost Drivers

At the request of the Member of Provincial Parliament, the FAO estimated health sector spending from 2025-26 to 2027-28 that would be required to maintain 2024-25 health sector services levels. Also known as a cost driver forecast, this scenario does not recommend how spending should change but serves as a benchmark to show whether the 2025 budget’s health sector spending plan is likely to maintain, improve or reduce the quality and accessibility of health services.

Overall, the FAO estimates that health sector spending would need to grow by an average annual rate of 4.0 per cent over the next three years to maintain current health sector service levels. The components of the FAO’s health sector cost driver forecast take into account three key pressures:

Figure 3.2 Comparing health sector spending growth, FAO cost driver forecast vs. 2025 Ontario Budget, 2024-25 to 2027-28

Source: 2024-25 Public Accounts of Ontario, 2025 Ontario Budget and FAO analysis.

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Average Annual Spending Growth (Per Cent)

FAO Cost Driver Forecast 2025 Ontario Budget
Health care inflation 2.6
Population aging 1.2
Population 0.3
Total 4.0 0.7

As noted above, in the 2025 budget, the Province projects that health sector spending will grow at an average annual rate of 0.7 per cent from 2024-25 to 2027-28. Compared to the FAO’s cost driver projection, the 2025 budget spending plan has a funding shortfall of $3.4 billion in 2025-26, $6.4 billion in 2026-27 and $9.6 billion in 2027-28.

Figure 3.3 FAO cost driver projection and the health sector spending plan in the 2025 Ontario Budget

Note: Historical values are not restated for program transfers or reclassifications, if any.

Source: Ontario Public Accounts, 2025 Ontario Budget and FAO analysis.

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Annual Spending ($ Billions)

Historical FAO Cost Driver Forecast 2025 Ontario Budget
Historical 2021-22 75.7
Historical 2022-23 78.5
Historical 2023-24 85.5
Historical 2024-25 91.6
Projection 2025-26 94.6 91.1
Projection 2026-27 98.8 92.4
Projection 2027-28 103.2 93.6

The funding shortfall means that, in order to maintain current service levels – for example, the ratio of hospital bed to age-adjusted population – the Province will need to implement significant health sector efficiencies (i.e., provide the same level of services with less resources) and/or commit additional funding to the health sector beyond what was planned in the 2025 Ontario Budget.

4. Spending Plan Analysis

At the request of the Member of Provincial Parliament, the FAO estimated the potential impact of the Province’s 2025 budget health sector spending plan on a select number of service level indicators. There are many other measures of health sector service levels. For more information, see Ontario Health, Health System Performance Reporting and CIHI, health system performance measurement.

Hospital Beds

In 2024-25, there were 35,540 funded hospital beds in Ontario.[2] Based on the 2025 budget health sector spending plan, the FAO projects that there would be sufficient funding for 33,083 hospital beds in 2027-28, a decrease of 2,457 funded hospital beds from 2024-25 levels.

On a per-capita basis, this represents a decline from 220 funded hospital beds per 100,000 Ontarians in 2024-25 to 203 hospital beds per 100,000 Ontarians in 2027-28.[3]

Figure 4.1 Number of funded hospital beds per 100,000 Ontarians, 2015-16 to 2027-28

Note: “2025 Budget Outlook” is the FAO’s projection based on the health sector spending plan in the 2025 Ontario Budget. Funded hospital beds represent hospital beds that have been allocated operating funding by the Province and are actively staffed and available to patients.

Source: FAO analysis of information provided by the Province, CIHI Trends in Hospital Spending, 2009-2010 to 2022-2023 – Data Tables – Series D: Beds Staffed and In Operation by Functional Centre, and Ontario Health Coalition hospital beds staffed and in operation Ontario 1990 to 2014.

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Funded Hospital Beds per 100,000 Ontarians

Historical 2025 Ontario Budget
Historical 2015-16 224
Historical 2016-17 221
Historical 2017-18 222
Historical 2018-19 224
Historical 2019-20 224
Historical 2020-21 224
Historical 2021-22 230
Historical 2022-23 228
Historical 2023-24 222
Historical 2024-25 220
2025 Budget Outlook 2025-26 212
2025 Budget Outlook 2026-27 207
2025 Budget Outlook 2027-28 203

Long-Term Care Beds

There were 79,212 long-term care beds in Ontario in 2024-25. Based on the 2025 budget health sector spending plan, the FAO projects that the number of long-term care beds would increase by 4,276, reaching 83,488 long-term care beds in 2027-28.

On a per-capita basis, this represents a decline from 60 long-term care beds per 1,000 Ontarians aged 75 and over[4] in 2024-25 to 56 long-term care beds per 1,000 Ontarians aged 75 and over in 2027-28, as the projected growth rate in Ontarians aged 75 and over is expected to outpace the increase in the number of long-term care beds.[5]

Figure 4.2 Number of long-term care beds per 1,000 Ontarians aged 75 and over, 2015-16 to 2027-28

Note: “2025 Budget Outlook” is the FAO’s projection based on the health sector spending plan in the 2025 Ontario Budget.

Source: FAO analysis of information provided by the Province.

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Long-Term Care Beds per 1,000 Ontarians Aged 75 and Over

Historical 2025 Ontario Budget
Historical 2015-16 81
Historical 2016-17 79
Historical 2017-18 77
Historical 2018-19 74
Historical 2019-20 72
Historical 2020-21 70
Historical 2021-22 67
Historical 2022-23 64
Historical 2023-24 63
Historical 2024-25 60
2025 Budget Outlook 2025-26 61
2025 Budget Outlook 2026-27 60
2025 Budget Outlook 2027-28 56

Nurses

Provincially funded nurses, which include registered nurses, nurse practitioners and licensed practical nurses, are employed in hospitals, long-term care homes, clinics and many other health care settings. The FAO estimates that, in 2024-25, there were 150,989 provincially funded nurses in the health sector.

Based on the 2025 budget health sector spending plan, the FAO projects that there would be sufficient funding for 143,726 provincially funded nurses in 2027-28, a decrease of 7,263 provincially funded nurses from 2024-25 levels. On a per-capita basis, this represents a decline from 936 provincially funded nurses per 100,000 Ontarians in 2024-25 to 883 provincially funded nurses per 100,000 Ontarians in 2027-28.

Figure 4.3 Number of provincially funded nurses per 100,000 Ontarians, 2015-16 to 2027-28

Note: “2025 Budget Outlook” is the FAO’s projection based on the health sector spending plan in the 2025 Ontario Budget.

Source: FAO analysis of information provided by the Province and CIHI Registered Nurses – Workforce of regulated nurses, by jurisdiction and type of professional, 2015 to 2024.

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Provincially Funded Nurses per 100,000 Ontarians

Historical 2025 Ontario Budget
Historical 2015-16 891
Historical 2016-17 895
Historical 2017-18 888
Historical 2018-19 892
Historical 2019-20 907
Historical 2020-21 909
Historical 2021-22 914
Historical 2022-23 913
Historical 2023-24 918
Historical 2024-25 936
2025 Budget Outlook 2025-26 917
2025 Budget Outlook 2026-27 900
2025 Budget Outlook 2027-28 883

Personal Support Workers

Provincially funded personal support workers (PSWs) provide care in long-term care homes, hospitals, and home and community care. The FAO estimates that, in 2024-25, there were 118,883 provincially funded PSWs in the health sector.

Based on the 2025 budget health sector spending plan, the FAO projects that the number of provincially funded PSWs would decrease by 1,784, reaching 117,099 PSWs in 2027-28. On a per-capita basis, this represents a decline from 737 provincially funded PSWs per 100,000 Ontarians in 2024-25 to 719 provincially funded PSWs per 100,000 Ontarians in 2027-28.

Figure 4.4 Number of provincially funded personal support workers per 100,000 Ontarians, 2021-22 to 2027-28

Note: “2025 Budget Outlook” is the FAO’s projection based on the health sector spending plan in the 2025 Ontario Budget.

Source: FAO analysis of information provided by the Province.

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Provincially Funded PSWs per 100,000 Ontarians

Historical 2025 Ontario Budget
Historical 2021-22 684
Historical 2022-23 690
Historical 2023-24 734
Historical 2024-25 737
2025 Budget Outlook 2025-26 745
2025 Budget Outlook 2026-27 734
2025 Budget Outlook 2027-28 719

Physicians

Physicians provide care in their own practices, as well as in hospitals and community settings. Unlike nurses and PSWs, physicians are typically not direct employees of the Province. Instead, they are largely independent practitioners who are mainly paid through the Ontario Health Insurance Program (OHIP), under agreements negotiated between the Ministry of Health and the Ontario Medical Association (OMA).

From 2015-16 to 2018-19, the number of physicians in Ontario increased by 3,378, reaching 33,872. This increase outpaced population growth, raising the number of physicians per 100,000 Ontarians from 222 in 2015-16 to 235 in 2018-19. From 2018-19 to 2023-24, the number of physicians in Ontario increased by 1,343, reaching 35,215. However, during this period, the increase in the number of physicians was not able to keep pace with population growth, such that the number of physicians per 100,000 Ontarians declined to 224 in 2023-24.[6]

Figure 4.5 Number of physicians per 100,000 Ontarians, 2015-16 to 2023-24

Source: FAO analysis of CIHI Supply, Distribution and Migration of Physicians in Canada, 2023 – Historical Data.

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Physicians per 100,000 Ontarians
2015-16 222
2016-17 223
2017-18 227
2018-19 235
2019-20 233
2020-21 229
2021-22 234
2022-23 231
2023-24 224

Looking forward, the FAO is unable to project the number of physicians in Ontario based on the 2025 budget health sector spending plan, as most physicians are not directly employed by the Province and all physician services delivered through OHIP are funded irrespective of the spending targets in the 2025 budget.[7] However, the FAO expects that the number of physicians in Ontario will increase, due to increased demand for physician services from Ontario’s growing and aging population, and from supply-side measures implemented by the Province.[8]

5. Interprovincial Comparison

At the request of the Member of Provincial Parliament, this chapter compares Ontario’s age-standardized per capita health spending and select service levels with those of other provinces. The information is for the 2022 calendar year, the latest year with comparable data.

Total Provincial Health Sector Funding

In 2022, Ontario had the second lowest age-standardized[9] per capita health sector funding[10] among the provinces. Ontario’s total provincial health sector funding was $5,268 per person, $294 below the national average of $5,562. Compared to the next three largest provinces by population, Ontario’s funding was lower than in British Columbia ($5,521), Quebec ($5,627) and Alberta ($6,293).

Figure 5.1 Age-standardized per capita total provincial health sector funding by province in 2022

Note: Canada average excludes territories.

Source: FAO analysis of CIHI National Health Expenditure Trends, 2024: Data Tables – Series E1.

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Province Dollars per Person, Adjusted for Population Age
NB 4,922
ON 5,268
BC 5,521
PE 5,619
QC 5,627
NS 5,741
MB 5,831
SK 5,877
AB 6,293
NL 6,884
Canada Average 5,562

Provincial Hospital Funding

In 2022, Ontario had the lowest age-standardized per capita provincial funding for hospitals at $1,805, compared to the Canadian average of $1,949. British Columbia ($1,855) and Quebec ($1,909) were also below the Canadian average, while Alberta ($2,305) was above the Canadian average.

Figure 5.2 Age-standardized per capita provincial funding for hospitals in 2022

Note: Canada average excludes territories.

Source: FAO analysis of CIHI National Health Expenditure Trends, 2024: Data Tables – Series E2.

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Table 5.2 Dollars Source: remove
Province Dollars per Person, Adjusted for Population Age
ON 1,805
BC 1,855
QC 1,909
NB 2,141
PE 2,161
SK 2,208
AB 2,305
MB 2,315
NS 2,327
NL 2,434
Canada Average 1,949

Spending on Physicians

In 2022, Ontario had above average age-standardized per capita spending on physicians, at $1,137 per person. Ontario’s spending on physicians was higher than spending by British Columbia ($1,040) and Quebec ($905) but lower than spending by Alberta ($1,374).

Figure 5.3 Age-standardized per capita spending on physicians by province in 2022

Note: Canada average excludes territories.

Source: FAO analysis of CIHI National Health Expenditure Trends, 2024: Data Tables – Series E4.

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Province Dollars per Person, Adjusted for Population Age
NB 856
QC 905
NL 906
NS 938
PE 967
BC 1,040
MB 1,095
ON 1,137
SK 1,300
AB 1,374
Canada Average 1,084

Public Drug Spending

In 2022, Ontario ranked second among the provinces for age-standardized per capita public drug spending, at $440 per person, above the national average of $353. Ontario was second only to Alberta ($489) and significantly ahead of British Columbia ($233) and Quebec ($262).

Figure 5.4 Age-standardized per capita public drug spending by province in 2022

Note: Canada average excludes territories.

Source: FAO analysis of CIHI National Health Expenditure Trends, 2024: Data Tables – Series E6.

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Province Dollars per Person, Adjusted for Population Age
BC 233
QC 262
NB 271
PE 280
NS 298
NL 305
MB 322
SK 351
ON 440
AB 489
Canada Average 353

Hospital Beds

In 2022, Ontario had a below average number of hospital beds among the provinces, after adjusting for population and population age, with 230 hospital beds per 100,000 population. This placed Ontario ahead of British Columbia (225) but below the national average of 249 beds per 100,000 residents and Alberta (281).

Figure 5.5 Age-standardized number of hospital beds per 100,000 population by province in 2022

Note: *Quebec is excluded from the comparison because it does not report to CIHI hospital-based long-term care beds (referred to as chronic care beds in Ontario). These beds are distinct from long-term care beds in residential facilities. Canada average excludes territories.

Source: FAO analysis of CIHI Trends in Hospital Spending, 2009-2010 to 2022-2023 – Data Tables – Series D: Beds Staffed and In Operation by Functional Centre.

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Province Beds per 100,000 Population, Adjusted for Population Age
QC NA*
BC 225
ON 230
PE 275
AB 281
NB 282
NS 287
SK 307
MB 318
NL 365
Canada Average 249

Number of Physicians

In 2022, Ontario had the fourth lowest number of physicians among the provinces, after adjusting for population and population age, with 233 physicians per 100,000 population. Ontario was below the Canadian average (246), Quebec (252), British Columbia (261) and Alberta (262).

Figure 5.6 Age-standardized number of physicians per 100,000 population by province in 2022

Note: Canada average excludes territories.

Source: FAO analysis of CIHI Supply, Distribution and Migration of Physicians in Canada, 2023 – Historical Data.

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Province Physicians per 100,000 Population, Adjusted for Population Age
PE 205
MB 224
SK 230
ON 233
NL 242
NB 247
NS 250
QC 252
BC 261
AB 262
Canada Average 246

Footnotes

[1] FAO, Government Spending Trends: 1990 to 2023.

[2] Funded hospital beds represent hospital beds that have been allocated operating funding by the Province and are actively staffed and available to patients.

[3] For a long-term historical analysis of the number of hospital beds in Ontario, see FAO, Government Spending Trends: 1990 to 2023.

[4] Over 90 per cent of LTC residents are over the age of 75, CIHI, Profile of Residents in Residential and Hospital-Based Continuing Care, 2023–2024, Table 3.

[5] For a long-term historical analysis of the number of long-term care beds in Ontario, see FAO, Government Spending Trends: 1990 to 2023.

[6] For a long-term historical analysis of the number of physicians in Ontario, see FAO, Government Spending Trends: 1990 to 2023.

[7] Payments to physicians are authorized through the Health Insurance Act, 1990, applicable regulations and physician services agreements negotiated between the Province and the OMA.

[8] For example, the renewed Physician Services Agreement (PSA) provided a 9.95 per cent pay increase retroactive to April 1, 2024 and a subsequent arbitration decision granted a further 7.3 per cent compensation increase from 2025 to 2028. The PSA also confirmed the new Family Health Organization Plus (FHO+) model, which is intended to reduce administrative burden, address compensation issues and strengthen primary care. In addition, the Province plans to further reduce administrative burden through digitization. The Province is also expanding physician training with a new medical school at Toronto Metropolitan University in Brampton (2025) and another planned at York University (2028), while adding undergraduate and residency seats across existing programs. To improve retention of medical school graduates, the Province is reserving at least 95 per cent of medical school spots for Ontario residents and tying grants to commitments to practise locally, with an emphasis on primary care.

[9] Age standardization adjusts for differences in population age structures. On average, older Canadians require more health care spending than younger Canadians.

[10] Health sector funding refers to provincial payments to fund the health sector.