The increases stem, not from over-generous benefits, but from longer processing times. Coverage applies for as long as the refugee is in the system, including appeals. Under current rules and volumes, every extra month adds about $72 million to the price tag. Which means two months of delays in the immigration determination system will eat up the entire annual savings from the new charges. In effect, Ottawa is mopping the floor while the tap runs.
- Media Releases
- Opinions & Editorials
- |
We need to fix how we charge refugees for health care
Summary:
| Citation | Tingting Zhang. 2026. We need to fix how we charge refugees for health care. Opinions & Editorials. Toronto: C.D. Howe Institute. |
| Page Title: | We need to fix how we charge refugees for health care – C.D. Howe Institute |
| Article Title: | We need to fix how we charge refugees for health care |
| URL: | https://cdhowe.org/publication/we-need-to-fix-how-we-charge-refugees-for-health-care/ |
| Published Date: | August 4, 2026 |
| Accessed Date: | August 4, 2026 |
Outline
Outline
Authors
Related Topics
For all media inquiries, including requests for reports or interviews:
Published in the Financial Post.
The public cost of providing health coverage for asylum-seekers and refugees has more than quadrupled over the past five years. The Parliamentary Budget Officer projects the cost of Canada’s Interim Federal Health Program (IFHP) for refugees and asylum claimants will reach nearly $1 billion this fiscal year and $1.5 billion in 2029-30. That’s up from $211 million in 2020-21.
To reduce costs, Ottawa this year introduced co-payments, requiring asylum-seekers and refugees to pay $4 per prescription and 30 per cent of the cost of other supplemental health services. The PBO estimates this will save about $162 million in 2026-27. That sounds significant until you consider what’s actually driving spending.
Canada’s asylum system is among the most generous and complex in the world. Eligible claimants may proceed through several stages of review and appeal, including an initial decision by the Immigration and Refugee Board (IRB), an appeal to the Refugee Appeal Division and judicial review by the Federal Court. This complexity has combined with chronic undercapacity to produce a massive backlog. As of last December, more than 300,000 claimants were waiting for their initial decision. In 2024–25, the average stay in the system was about four years.
In fiscal year 2024-25, the IRB received more than 173,000 new refugee claims but was budgeted to process just 60,000. In fact, adjudicators disposed of almost 79,000 cases that year, 30 per cent above target but still falling behind by more than two to one. No co-payment can close a gap that wide.
Meanwhile, 74,000 failed asylum claimants — people whose cases were denied — remain eligible for IFHP coverage while they appeal their cases or await departure. Nearly half of the claimants rejected in 2019 were still in the system more than three years later. Between January 2016 and December 2025, approximately one-third of claims were rejected. But roughly 79 per cent of those rejected filed at least one appeal. Applying those ratios to the current backlog suggests 92,600 claims could ultimately be rejected, with 73,000 likely being appealed.
A case that is appealed takes six to 12 months longer to finalize. That currently adds an estimated $146.5 million in annual costs, a little over half for supplemental benefits like dental and vision care.
A different way to save money would be to reduce non-urgent coverage for failed asylum claimants, even if doing so would likely increase administrative costs. However, the surge in claims has not primarily come from people arriving without authorization. They were up 144 per cent between 2016 and 2025, which is significant but still modest compared to the 600 per cent increase among individuals already in Canada on temporary visas, study permits and work permits. This pattern may indicate that some claimants are using the asylum system strategically after their temporary status expires, rather than out of genuine need for protection. Legitimate applicants who ultimately get protected-person status should not face co-payments; cost-sharing needs to preserve the integrity of protection for those who need it most.
England offers a useful comparison. Rejected asylum-seekers can still register with a National Health Service general practitioner and access free emergency hospital treatment, regular checkups and maternal care. But they have to pay for non-urgent secondary care, as well as medication, dental services and eye care — unless they qualify for a low-income exemption. The model distinguishes between essential care and supplemental benefits, and it means-tests access for those whose claims have failed.
Canada should adopt a similar approach for failed claimants still in the system. Necessary drugs and urgent care should remain fully covered. But supplemental benefits for people who may stay in the system for years after their claims are denied should be scaled back and means-tested. This would ensure coverage adhered to the program’s original purpose: essential, temporary health-care coverage until vulnerable migrants become eligible for public health insurance.
We need to treat the current backlog of claimants as a fiscal emergency. Streamlining adjudication, investing in IRB capacity and setting binding timelines for claim resolution would cut IFHP spending more than any co-payment scheme ever could. Every month the backlog persists means $72 million in avoidable costs. The co-payment model asks genuine asylum-seekers and refugees to pay for delays they didn’t cause. That’s not fiscal discipline, it’s cost-shifting dressed up as reform.
Tingting Zhang is a policy analyst at the C.D. Howe Institute.
Related Publications
- Opinions & Editorials
Ari Pandes
- Research
Jeremy Kronick, Wendy Wu