A new Fraser Institute study reveals the hidden tax burden of public health care and why advisors need to factor it into client plans
A typical Canadian family of four will spend an estimated $21,115 on public health-care insurance this year, according to a new study by the Fraser Institute.
The report, authored by Nadeem Esmail, director of health policy studies at the Fraser Institute, along with senior economist Nathaniel Li and director of the Addington Centre for Measurement Milagros Palacios, calculates how much Canadians pay toward the publicly funded health-care system through the country's overall tax base.
Because Canada finances health care through general government revenues, rather than a dedicated, itemised tax, most Canadians have no clear sense of what they are actually paying.
"Canadians pay a substantial amount of money for public health care through a variety of taxes — even if we don't pay directly for medical services," said Esmail.
The $21,115 figure applies to a two-parent, two-child household earning an average income of $202,885. The study, which draws on the Fraser Institute's Canadian Tax Simulator and Statistics Canada data, also estimates costs for other household types: couples without children face a public health-care bill of approximately $19,225, single Canadians pay around $6,464, and single parents with one child pay roughly $6,966.
The numbers become even more striking when broken down by income. Canadians in the lowest 10 percent of earners — with average incomes of $17,654 — contribute approximately $637 annually. Those in the median income decile, earning an average of $88,572, pay an estimated $8,644. At the top end, the highest-earning 10 percent of Canadian families contribute approximately $66,350 toward public health care in 2026, reflecting Canada's progressive tax structure.
These are not out-of-pocket costs in the conventional sense — no invoice arrives. But they represent a significant and growing portion of the tax bills that clients bring to their advisors each year, and Wealth Professional has previously reported on the rising trajectory of this figure, which stood at more than $19,000 for the average family in 2025.
Health-care costs are outpacing income growth
Since 1997 — the earliest year for which Fraser Institute data are available — the inflation-adjusted cost of public health-care insurance for the average Canadian family has risen by 278.8 per cent, according to the report.
Over that same period, average cash income grew by 160.1 per cent, spending on shelter rose by 180.2 per cent, and food costs climbed by 123.5 per cent. In other words, the cost of public health care has grown 1.7 times faster than income and 2.3 times faster than food since 1997.
Clients who assume their tax burden will grow in line with income may be underestimating their exposure to health-care-related costs embedded in what they pay to government each year. Advisors working with clients in higher income brackets, in particular, face a planning gap worth addressing — the top income decile currently contributes $66,350 annually, a figure that has more than doubled in real terms since the late 1990s.
Over the past decade alone — from 2016 to 2026 — health-care insurance costs for a two-parent, two-child family rose 14.7 per cent in inflation-adjusted terms, according to the Fraser Institute's calculations using Statistics Canada's Social Policy Simulation Database and Model.
The Fraser Institute report does not address private supplemental insurance, but its data provides a useful baseline for client conversations: Canadians are already paying significantly for a publicly funded system, and those who want broader or faster access to care are likely incurring additional costs beyond what the tax system captures.
Canada's publicly funded health-care expenditure reached $261.1 billion in 2025, the most recent full year for which data from the Canadian Institute for Health Information (CIHI) are available — equivalent to approximately $6,269 per Canadian on a per capita basis. That aggregate figure, the Fraser Institute argues, tells Canadians very little about their individual exposure. Family-type breakdowns, as presented in this year's study, are a more useful lens for planning purposes.
