US-Iran Conflict Has Exposed Cost Risks in Canada’s Healthcare Supply Chain

June 25, 2026 – The US-Iran conflict has highlighted vulnerabilities and potential cost risks within Canada’s healthcare supply chains and reinforced the need for better preparedness for future disruptions, according to a new Communiqué from the C.D. Howe Institute’s Health Sector Economic Growth and Resilience Working Group. 

In “From Crisis to Crisis: The US-Iran Conflict and Healthcare Supply Chains,” the group assessed the impact of the conflict on Canada’s healthcare supply chain – examining four important areas of domestic exposure: helium, pharmaceuticals, nitrile gloves and fuel surcharges. They concluded that while the risk of widespread supply chain disruption remains low, the uncertainty around the duration of the conflict, the potential for exploitation by other countries, and ongoing price pressures on fuel and raw materials could raise healthcare expenses across the country. 

“Raw materials continue to flow and production remains operational, distinguishing the current situation from the COVID-19 pandemic,” said the Communiqué. “However, sustained cost pressure, particularly on petroleum-derived inputs and fuel, poses a real threat to health system budgets and the viability of community-based care providers operating on thin margins.” 

The group noted that rising fuel costs prompted vendors to impose surcharges on deliveries, and that nitrile gloves, which rely on petroleum-derived raw material, are sensitive to rising oil prices. 

“While the Middle East is not a major source of pharmaceutical products, many global trade routes related to active pharmaceutical ingredients and inputs could be affected by the broader trade disruptions,” said the Working Group’s Communiqué.  

For instance, several pharmaceutical vendors maintain production facilities in Israel, potentially putting them at risk for disruptions.  

Qatar also produces about a third of the global supply of helium, which is necessary to cool MRI systems, support clinical procedures and to manufacture microchips used in healthcare technologies. Notably, its supply was disrupted by the conflict’s impact on production infrastructure and Russia has recently introduced export controls on helium, further tightening supply. Global distribution has been further constrained due to shipping restrictions.  

The group noted that existing supplier contracts provide short-term protection against price volatility and that organizations with firm pricing provisions and clear force majeure definitions are better positioned to manage near-term uncertainty. 

But critically, the Working Group re-emphasized the need for Canada to update its infrastructure and expand domestic production or secure strategic supplies of critical inputs to insulate healthcare from both current and future shocks. 

Individuals also discussed how nearly all personal protective equipment used in Canada’s healthcare system can now be produced domestically because of the pandemic, and argued that a similar approach should be extended to other critical medical supplies.  

Saskatchewan’s significant helium reserves were also highlighted, with the group arguing they have the potential for Canada to become a strategic supplier – creating economic opportunities for Canada and serving as a meaningful contribution to global healthcare resilience. 

The Working Group also recommended stronger engagement with national defence establishments and health emergency readiness agencies; continued international collaboration; and regulatory agility in approving alternative pharmaceutical products and the adoption of next-generation medical technologies such as helium-free MRI systems.