Hospitals Sound Alarm Over Mounting Costs
Ontario hospitals are warning they need an extra $1 billion this year to keep up with inflation and population growth. Without it, they say, healthcare services could face serious strain.
According to the Ontario Hospital Association (OHA), hospitals across the province are struggling to balance budgets after years of mounting costs. While the overall hospital deficit fell to $360 million last year—down from a projected $706 million—the sector is still burdened by unfunded pressures heading into 2025-26.
Even after factoring in $1.1 billion in government support announced in the spring budget, the OHA says hospitals remain short of what’s needed to meet rising demand.
Efficiency Has Limits, OHA Warns
Melissa Prokopy, the OHA’s vice-president of policy and advocacy, said hospitals are running out of ways to cut costs.
“Hospitals face a mix of financial and operational challenges,” she explained. “We’ve become the most efficient province in Canada, but efficiency alone can’t cover rising costs.”
Over the years, hospitals have relied on strategies like managing patient admissions and using new technologies to reduce stay lengths. However, these measures, Prokopy said, can only stretch so far before quality of care is at risk.
Government Response and Budget Outlook
Ontario’s fall economic statement—essentially a mini budget—is expected in the coming weeks. Whether hospitals will receive more support remains unclear.
Health Minister Sylvia Jones’ office said the government is “working with hospital partners” to ensure high-quality care continues. A spokesperson highlighted that hospital funding has already grown by 4% annually for three straight years.
Still, hospitals argue that annual bumps aren’t enough without multi-year planning to stabilize budgets and prepare for long-term demographic shifts.
Structural Pressures Decades in the Making
Prokopy said the financial crunch isn’t new. “These pressures are structural, built up over years,” she said. “We must plan now for an aging population and more complex patient needs.”
Without predictable funding, hospitals risk cutting back on services, delaying maintenance, and overworking staff — issues already visible in many communities.
Labour Costs Leave Little Flexibility
Liberal MPP Lee Fairclough, the party’s hospital critic and a former hospital president, said labour makes up most hospital expenses. That leaves few options for savings.
“What else can they cut — food quality?” she asked. “Hospitals can’t keep raising parking fees or slashing services without hurting patients.”
Fairclough urged the government to step up. “You can’t tell hospitals to maintain services and absorb rising costs. At some point, something has to give.”
The Bottom Line
Ontario’s hospitals say the numbers don’t lie — inflation, aging populations, and higher demand are pushing budgets to the brink. Without new funding or longer-term planning, the province risks deeper cuts and strained care delivery.
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