What if the solution to our healthcare crisis is the opposite of what privatization advocates claim? In a Toronto emergency room on a Tuesday afternoon, a woman waits six hours for a fractured wrist. The nurse treating her is exhausted from covering shifts due to chronic understaffing. Meanwhile, a private clinic two kilometers away performs her neighbour’s routine cataract surgery while charging fees the neighbour cannot afford. This is the landscape the Fraser Institute tells us will improve with more privatization.
The recent Fraser Institute report, which NCRnow.ca covered on January 29, 2026, exemplifies this misdiagnosis of Canada’s healthcare challenges. The Institute claims that federal enforcement of the Canada Health Act constrains provincial reform and that Canada’s restrictions on privatization are unusually strict compared to those in other countries with universal healthcare. The evidence contradicts both claims. Canada is neither alone in restricting healthcare privatization nor does the evidence support privatization as a remedy for wait times and capacity constraints.
Understanding the Federal Penalties: Protection, Not Constraint
The Fraser Institute accurately reports that federal penalties under the Canada Health Act increased in recent years. In March 2024, $72.4 million in deductions were levied against seven provinces for patient charges on medically necessary diagnostic services. What the Institute frames as government overreach is actually enforcement working as designed.
These penalties exist because provinces increasingly allow private clinics to charge patients directly for services already covered by public insurance. When patients pay out of pocket to jump the queue for MRI scans or surgeries, they undermine the principle that healthcare should be based on need rather than ability to pay. The penalties represent dollar-for-dollar deductions for every dollar patients were illegally charged. Several provinces have since eliminated these charges and received reimbursements totaling over $175 million since 2018.
The question is not whether penalties are too strict. The question is whether privatization actually solves wait times and capacity problems. The evidence from Canadian provinces suggests it does not.
Canada Is Not Alone: How Other Countries Regulate Healthcare Privatization
The Fraser Institute points to Australia’s 40% private hospital share and Germany’s mixed system as proof that Canada’s approach is uniquely restrictive. This comparison omits crucial context. Australia and Germany both allow private hospitals, but only within tightly regulated systems that protect public care. In Australia, extra billing is restricted, private insurance is optional and limited in scope, and governments intervene when private growth harms public hospitals. In Germany, most people remain in public insurance, prices are strictly negotiated, and even private hospitals operate under state control. What the Fraser Institute omits is that these systems work because profit is constrained by law and public care remains dominant, not because markets are left to run freely.
Japan, on the other hand, achieves universal coverage and maintains some of the best health outcomes in the developed world. It explicitly prohibits for-profit investor-owned hospitals. The ban has been in place since 1948. Hospitals must be non-profit entities managed by physicians. Private practitioners cannot attend hospitalized patients.
Denmark and the Netherlands, frequently cited as privatization success stories, operate under heavy public regulation. Denmark’s system remains 84% publicly funded through taxation. Less than 1% of hospital beds are private. The Netherlands requires mandatory universal insurance through heavily regulated private insurers. These are not market-based systems where competition drives efficiency. They are public frameworks with strict regulatory guardrails that prevent the profit motive from dictating medical necessity.
The Alberta Evidence: When Privatization Worsens Wait Times
Andrew Longhurst, a health policy researcher at Simon Fraser University, documented what happened when Alberta pursued the privatization approach. His 2023 report for the Canadian Centre for Policy Alternatives found that as Alberta diverted surgeries to for-profit facilities between 2018-19 and 2021-22, surgical activity in the for-profit sector increased by 48% while hospital surgical volumes declined by 12%.
The mechanism is straightforward. Surgical capacity depends on qualified staff, not physical infrastructure. Adding profit margins does not create nurses and anesthesiologists. Private facilities recruit from the same limited pool of healthcare workers, often paying premium wages that public hospitals cannot match. This exodus worsens public sector shortages, the precise problem privatization claims to solve. Private clinics also perform the simplest, most profitable procedures while leaving complex cases to understaffed public hospitals.
Ontario demonstrates superior performance on metrics the Fraser Institute claims privatization will improve. In 2022, Ontario had among the shortest wait times in Canada for hip and knee replacements, with 72% and 68% of patients, respectively, receiving surgery within national benchmarks. The province also maintained the shortest median wait times for MRI and CT scans. Ontario achieved this without the significant for-profit involvement that the Fraser Institute now recommends expanding.
The Cost of Privatization: Extra-Billing and Two-Tier Access
The distinction between publicly funded private delivery and direct patient charges proves illusory in practice. Longhurst’s research found that Ontario patients have been reimbursed $3.6 million for unlawful extra-billing since 2003. Between 2003 and 2022, 30-40% of patient complaints about illegal charges were verified as contraventions of provincial legislation.
The Ontario Health Coalition documented patients charged up to $8,000 for cataract surgeries already covered by provincial insurance. Private clinics bundle insured and non-insured services, telling patients the extras are necessary for quality care. They manipulate wait time information, claiming patients face months-long delays when most cataract surgeries occur within the provincial benchmark.
Quebec provides additional evidence on cost. Freedom of Information data revealed that in 2019-20, Quebec paid up to 2.5 times more for procedures performed in for-profit clinics compared to public hospitals. Privatization does not reduce costs to the system. It adds profit margins while creating incentives for cream-skimming—selecting the easiest, most profitable patients while leaving complex cases to public facilities.
What Actually Improves Healthcare: The Funding Question
Ontario’s per capita healthcare spending is the lowest in Canada, at $4,889 in 2022-23, which is $876 below the provincial average. The province has the fewest hospital beds, the fewest nurses, and the lowest hospital funding per capita. Ontario also maintains unused operating room capacity. Multiple hospitals have functional operating rooms sitting idle during evenings and weekends due to inadequate staffing budgets.
The Ford government underspent its healthcare budget by $1.7 billion in 2022-23 while simultaneously increasing funding to private clinics. This pattern reveals privatization as policy choice rather than necessity. Evidence from jurisdictions with strong public systems demonstrates that adequate funding produces shorter wait times and better outcomes without introducing profit extraction or two-tier access.
Wait times respond to supply-side interventions: hiring more staff, opening more operating rooms, improving primary care to reduce emergency department demand, and implementing better clinical prioritization. Longhurst’s research identifies specific strategies that reduce wait times without privatization: single-entry models where patients are referred to the first available surgeon rather than individual wait lists, team-based care involving physicians and allied health professionals, and maximizing use of existing public operating room capacity.
The Real Constraint on Healthcare Reform
The Fraser Institute frames the Canada Health Act as an impediment to innovation. The evidence suggests otherwise. The Act prevents one specific innovation private investors seek: converting publicly funded healthcare into profit streams through extra-billing and queue-jumping. This is extraction, not innovation.
Provincial governments possess the flexibility needed to improve healthcare delivery within the Act’s framework. They can hire more staff, expand capacity, reduce administrative waste, strengthen primary care, and invest in prevention. What they cannot do is allow private interests to cherry-pick profitable procedures while leaving expensive, complex care to underfunded public hospitals.
The woman with the fractured wrist deserves better than a six-hour wait. Her neighbor deserves cataract surgery without illegal fees. Healthcare privatization offers neither woman a solution. It offers investors a return while worsening the staffing crisis that drives wait times. The solution requires political will to adequately fund and staff the public system we already have.
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