Ontario’s health-care, education sectors need to spend more or service levels will drop: FAO reports

The province’s health-care, university and college sectors will need to spend more to sustain their current service levels, according to reports from Ontario’s Financial Accountability Office (FAO).

The watchdog’s reports, released Wednesday, follow an independent review of provincial spending plans, outlined in the government’s 2026 budget. 

The reviews serve as a benchmark to show whether the 2026 budget’s spending plan is likely to maintain, improve or reduce the quality and accessibility of various services, according to the FAO.

The province projected health-care spending would grow at an average annual rate of 3.2 per cent, the FAO’s review said. But the report found that health-sector spending would need to grow by an average annual rate of 4.4 per cent over the next three years to maintain current levels of service. 

Likewise, the report said the province’s last budget predicted spending for the ministry of colleges and universities will decrease at an average annual rate of 2.2 per cent, but estimates the ministry’s spending would need to grow by an average annual rate of 3.2 per cent over the next three years to maintain current service levels. 

According to the FAO reports, these numbers mean both ministries will see funding shortfalls starting in 2027-28.

The reports also show that spending is growing at a significantly slower pace compared to the years between 2022-23 and 2025-26, when accounting for inflation. In that period, average annual spending growth for the health-care sector was at 7.4 per cent. For the universities and colleges sector during that same span, spending growth was 5.3 per cent.

‘If you think it’s bad now, it’s going to get worse’: Fraser

In light of the reports, John Fraser, interim leader of the Ontario Liberal Party, criticized Doug Ford’s government for underspending.

“We know hospitals are already cutting at an alarming rate. We know the government has starved our colleges and universities, driving students and families further into debt,” Fraser said at Queen’s Park Wednesday.

Fraser pointed to current plans to cut 400 staff from Hamilton Health Sciences, which includes a reduction of 143 nursing positions and 84 health-care aide roles. Ontario’s ministry of health has said those cuts won’t impact patient care or access to services in the region.

For the health-care sector, the FAO report estimates at the current level of spending, and accounting for inflation and population aging, around 2,500 nursing positions will be cut over the next three years in Ontario, along with 2,400 hospital beds.

“Very simply put: If you think it’s bad now, it’s going to get worse,” Fraser said. “That’s what those numbers say.”

The report doesn’t come as a surprise, said Dr. Adil Shamji, MPP for Don Valley East.

“It just confirms what patients are feeling, but just shows it in numbers,” he said at a news conference at Queen’s Park.

In a joint statement from the ministries of education, health, and colleges and universities, the province said that the government “continues to make record investments in the services people rely on, including health care, education, postsecondary education and social services.”

It identified $101 billion in health-care funding this year, as well as long-term investments in the post-secondary sector totalling $6.4 billion for colleges, universities and Indigenous institutes.

“The FAO’s projections are a snapshot in time and do not reflect the full picture of government spending,” the statement reads.

Young people already facing uncertainty: opposition

“Under this Premier, the budgets for essential services keep getting stretched thinner and thinner, and we all feel the harm,” Ontario Greens Leader Mike Schreiner said in a statement Wednesday.  

“We feel it in the form of longer wait times at the ER, fewer kids who can afford to go to college or university, fewer long-term care beds for the people that need them and even less support for people forced to live in legislative poverty on OW and ODSP,” he said.

The FAO’s review of the ministry of colleges and universities also comes after changes to the Ontario Student Assistance Program (OSAP) program. They affect the provincial portion of OSAP and reduce the amount of grant money students can receive from a maximum of 85 per cent to 25 per cent. 

Peggy Sattler, NDP MPP for London West, told CBC News young people are already experiencing uncertainty.

“This is a time when we need a strong stable post-secondary education system more than ever,” she said.

“We can’t introduce these kinds of cuts and expect that we are going to be able to graduate the skilled workforce that this province needs to remain competitive and that young people need in order to build a future for themselves.”