Hollowed out: Ontario public hospitals and the rise of private staffing agencies
- Andrew Longhurst
- 4 days ago
- 2 min read
May 12, 2025 | Written by:‎ Andrew Longhurst
Summary
Ontario public hospitals are under intense pressure. Provincial funding and policy decisions have left hospitals with multi-year budget deficits and severe staffing shortages.
New data from the Canadian Institute for Health Information finds that Ontario had the lowest per capita hospital spending in the country ($1,805), behind B.C. ($1,902), Quebec ($2,028), and Alberta ($2,045) in 2022. In real per capita terms, Ontario hospital spending increased by four per cent from 2013 to 2022, with most of this increase in 2022 and when the province benefitted from federal pandemic funds. Over the decade from 2013 to 2022, Ontario hospitals had seven years of real per capita spending cuts—that is, years in which funding increases did not keep up with inflation and population growth.
As a result, 66 of 134 hospitals—49 per cent—had budget deficits in 2023-24, and the Ontario Hospital Association expects that most hospitals will end 2024-25 in deficit. The hospital funding crisis disproportionately impacts smaller and northern Ontario hospitals with revenues under $100 million: 63 per cent had deficits but only comprised 50 per cent of Ontario hospitals.
Rather than simply funding hospital deficits, the provincial government continues to encourage for-profit involvement that is destabilizing Ontario’s health system. This report focuses on the impact of hospital privatization through the dramatic growth of costly for-profit staffing agencies. Among the findings:
Growth in public spending on private agencies has outpaced growth in public hospital staff: The growing number of vacancies has led hospitals to contract private agency staff (nurses, allied health professionals, and support staff) in an effort to maintain services and prevent closures.
Ontario public hospitals paid for-profit agencies $9.2 billion for services over 10 years (2013-14 to 2022-23).
During this period, real per capita private agency costs in Ontario nearly doubled (98 per cent) while spending on public hospital staff increased by only six per cent.
Real per capita private agency costs outpaced those of public hospital staff in all but one region of the province. In rural and northern regions—where shortages are often most severe—agency costs jumped: they increased by 480 per cent in the North West, by 372 per cent in North Simcoe Muskoka, and by 216 per cent in the North East.
Costly private agencies undermine long-term workforce investment in public hospitals: The use of private agencies is a vicious cycle of parasitic dependence: the more reliant public hospitals become on private agencies, the more they squeeze hospital budgets and hollow out the public sector workforce. Private agency staff can be at least three times more expensive than regular employees.