Five Reasons Why Mark Carney Needs to Care About Healthcare 

From: Marcel Saulnier 

To: Healthcare observers 

Date: July 17, 2026 

Re: Five Reasons Why Mark Carney Needs to Care About Healthcare 

The Carney government has moved quickly since taking office, tackling everything from trade diversification to industrial strategy. Yet one area where the Prime Minister has been noticeably silent is health care. 

That is understandable to a point. Canada is confronting geopolitical and economic threats from south of the border, and healthcare may not seem like the most urgent item on the national agenda. But Canadians continue to rank it among their top concerns and, more importantly, healthcare is not merely a social program, it is a cornerstone of Canada’s economy and competitiveness. 

The first reason the government should have healthcare central to its agenda is simple: Healthcare is one of the largest sectors of the Canadian economy. 

According to the Canadian Institute for Health Information, health expenditures account for approximately 12.7 per cent of GDP; one out of every eight dollars circulating through the economy flows through the health system. As an industrial sector, healthcare’s economic footprint is about the same as manufacturing, and larger than financial services, agriculture, and agri-food. The sector employs more than 2.1 million Canadians – roughly 14 per cent of the workforce – and has become the country’s leading source of job creation, outpacing all other industries combined. 

The second reason is that the federal government has a substantial and growing financial stake in the health system. 

Ottawa contributes billions each year through the Canada Health Transfer, targeted funding agreements with provinces and territories, equalization, and territorial formula financing. Together, these transfers total approximately $71 billion annually. Add direct federal health spending – including programs delivered by Health Canada, Indigenous Services Canada, Veterans Affairs, and other departments – and the total rises by another $16 billion. 

There is also support through the tax system. Measures such as the medical expense tax credit and the tax exemption for employer-paid health benefits represent billions in forgone revenue each year. Altogether, federal support for healthcare approached $95 billion in 2025-26, representing roughly one-fifth of total federal spending. 

The third reason is that health and life sciences represent one of Canada’s most promising growth sectors. 

Canada is home to more than 3,800 health and bioscience companies employing more than 220,000 highly skilled workers. The sector attracts billions of dollars in annual investment and includes world-class strengths in pharmaceuticals, vaccines, clinical trials, genomics, regenerative medicine, and artificial intelligence. 

Canada’s universal healthcare system provides a unique competitive advantage. We are one of the few countries that can offer researchers and investors access to a large, diverse patient population, world-class academic institutions, and a highly trained workforce within a publicly funded health system that operates at the frontier for standards of care. 

Yet significant barriers remain. Regulatory complexity, fragmented provincial systems, and jurisdictional hurdles continue to impede growth and innovation. A government serious about economic development should see health innovation as a strategic opportunity and work actively to unlock its full potential.  

The fourth reason is that healthcare is a prerequisite for economic development. 

The pandemic provided a powerful reminder that economies cannot function without healthy populations and resilient health systems.  

The lesson extends far beyond pandemics. Communities hoping to attract investment in mining, energy, manufacturing, or critical minerals need adequate health services to support workers and their families. Major firms considering investments in Canadian cities evaluate health infrastructure alongside transportation, housing, education, and public safety. 

Healthcare is often discussed as a cost. In reality, it is also a form of economic infrastructure. Just as businesses depend on roads, ports, and broadband networks, they depend on a functioning health system that helps attract and retain talent. 

The final reason is more political and social, but it is also solidly grounded in economics. 

Canadians expect the federal government to play a leadership role in sustaining, protecting, and improving medicare. Universal access to medically necessary care remains one of the defining features of Canadian identity and a source of national pride. 

Allowing a larger private-pay health care system to emerge – as Alberta appears determined to do – risks undermining the social contract that has supported medicare for generations. Greater reliance on private financing would worsen affordability challenges by shifting costs onto households and employers through higher out-of-pocket expenses and rising insurance premiums. 

One of Canada’s longstanding competitive advantages is that employers do not bear the same health insurance costs as their counterparts in many other countries, particularly the United States. Weakening that advantage would be a step backward. 

For all these reasons, healthcare deserves a much more prominent place on the federal agenda. 

If Mark Carney wants to build a stronger, more productive, and more competitive Canada, healthcare must be recognized for what it truly is: Both a public service and a vital economic asset. 

Marcel Saulnier is a Senior Fellow at the C.D. Howe Institute and Associate at Santis Health. He is a former Associate Assistant Deputy Minister of the Strategic Policy Branch at Health Canada. 

To send a comment or leave feedback, email us at blog@cdhowe.org. 

The views expressed here are those of the author. The C.D. Howe Institute does not take corporate positions on policy matters.