The Financial Accountability Office (FAO) released its year-end Expenditure Monitor for 2025 to 2026, and the numbers show where the province is actually prioritizing its dollars. In the 2025-26 fiscal year, health spending reached $97.2 billion, up 6.1% from the prior year and $1.2 billion more than the government originally planned to spend.
Highlights
Major Spending Increases in Health Care
- Physician and Practitioners: The single largest change was a $2.3 billion increase for the Ontario Health Insurance Plan, largely for payments to physicians and practitioners.
- Drug Programs: Provincial drug programs received a significant funding boost of $810 million.
- Hospitals: Base hospital operations saw an additional $449 million allocated for day-to-day operations.
- Home and Community Care: Funding grew by $263 million for home care and $185 million for Community Health Centres to help manage patients outside of acute care settings.
- Emergency Health Services: Received an extra $198 million mainly for municipal and air ambulance services, while the Ministry of Emergency Preparedness and Response was allocated an additional $138 million.
- Mental Health and Addictions: Targeted funding rose by $135 million for the Addiction Program and $101 million for specialty psychiatric hospitals.
Major Spending Decreases in Health Care
- Health Capital and Infrastructure: The largest budget cutback by far was a $1.9 billion decrease in the Health Capital Program, primarily driven by delayed timelines or underspending on Major Hospital Projects.
- Long Term Care: The Long Term Care Homes Program, which supports both the operation and development of care homes, saw a funding reduction of $343 million.
- Community Mental Health: In contrast to the increases for addiction supports and psychiatric hospitals, localized Community Mental Health programs faced a targeted funding decrease of $153 million.
What It Means
Looking at the FAO report, the government appears to be funding service volumes and acute care pressures and slowing down on health infrastructure spending, whether it’s building new or renovating existing hospitals and long-term facilities. Home care is one of the few areas growing year-over-year and receiving top-ups. The drug plan increases are also the result of regular increases in year-over-year drug spending as was reflected in the 2026-27 provincial estimates, and do not yet reflect the impact of new programs like FAST (Funding Accelerated for Specific Treatments) and the Health Innovation Pathway.
Final audited numbers will land with the release of the 2025-26 Public Accounts this fall, but last year’s trends in overall health spending align with what we saw in the 2026-27 Estimates which looked at spending for the coming year post-Ontario budget. Expect the government to continue to invest in community-based care (i.e. home care, primary care), shore up existing acute care capacity, and see higher prices and price growth in its drug negotiations as they are overshadowed by U.S. drug pricing challenges and political efforts to expand access to innovative medicines.