Healthcare Expenditure
The Canadian healthcare system is funded primarily by tax dollars. The federal government makes cash transfers to the provinces, but the provinces may levy their own taxes to help defray the costs. Alberta and British Columbia require a health insurance premium, and other provinces have instituted employer payroll taxes (Klatt, 2002). In 2004, $91.1 billion or 70% of total health spending was by the public sector. Private sector spending totalled $39.2 billion in 2004, or 30%. In 2004, total health expenditure was estimated at $130 billion, about 10 per cent of GDP (Ibid). This is estimated to be around $4,078 per person. Latest OECD figures on spending per person is for year 2002, when it reports Canada spent $2,931 per person using purchasing power parities (PPPs), up from $2587 as used in report. This was the third highest, below the USA and Switzerland.
Federal government’s contributions have decreased significantly in 1998; federal payments make up only slightly more than 20 percent of provincial medical care costs (Kraker, 2002). Provincial government share of total health spending was up to 63.8 per cent in 2002. Other public sector expenditure (which includes federal spending, social security funds and municipal government) totals 5.9 per cent. Private sector spending accounted for 30.3 per cent of total spending in 2002. Private expenditure, which goes towards the cost of services (such as clinics for eye laser surgery or in-vitro fertilisation) not covered by provincial health insurance programmes, is divided between out-of-pocket expenditure and insurance.
