Can the Canada Health Act Still Deliver? New Policy Leaves Loopholes in Place

May 27, 2025 – A recent federal directive aiming to expand the scope of the Canada Health Act (CHA) could spark legal tensions and shift costs to Canada’s provinces – all while leaving major drivers of two-tier healthcare untouched, according to a new report from the C.D. Howe Institute.

In “Reinterpreting the Canada Health Act: The 2025 “Holland Letter” and What it Means for Healthcare in Canada,” Katherine Fierlbeck analyzes former federal health minister Mark Holland’s January CHA Services Policy letter. The policy seeks to treat medically necessary care delivered by non-physician providers – such as nurse practitioners – as “insured services” under the CHA if those services are equivalent to those provided by doctors.

The federal government’s stated goal with this letter is to preserve single-tier care by closing loopholes that allow medically necessary, physician-equivalent services to be delivered privately on an out-of-pocket basis. However, Fierlbeck cautions that the policy may do little to curb the growth of private care unless it is interpreted very broadly – a move that would require a significant departure from how “insured services” have traditionally been defined under the CHA.

“The letter walks a political and legal tightrope,” says Fierlbeck. “Either it goes too far by reinterpreting key terms beyond what the CHA allows, or it doesn’t go far enough to make a real difference in access to private care.”

The report traces the policy’s roots to earlier interpretation letters, including the 2018 Diagnostic Services Policy that penalized provinces for out-of-pocket charges on diagnostics. While the new policy builds on this precedent, Fierlbeck cautions that the compliance tools Ottawa plans to use – specifically sections 18 and 19 of the CHA – may not be legally applicable to non-physician care.

Moreover, the policy does not apply to services provided entirely outside the public system. This means that private clinics staffed solely by nurse practitioners or non-enrolled physicians will remain unaffected. Instead, the policy targets non-physician professionals who straddle both public and private settings – creating only a narrow impact on access to privately delivered care.

“You can’t solve structural problems in healthcare with policy letters alone,” says Fierlbeck. “Unless there’s legislative reform or a new federal-provincial agreement, the Canada Health Act risks becoming a symbol of single-tier care that no longer shapes the reality on the ground.”

Read the Full Report

For more information, contact: Katherine Fierlbeck, Fellow-in-Residence, C.D. Howe Institute; Percy Sherwood, Associate Editor and Communications Officer, C.D. Howe Institute, 416-407-4798, psherwood@cdhowe.org.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

Want more insights like this? Subscribe to our newsletter for the latest research and expert commentary.