Health Infrastructure Fund: Briefing Note
HealthCareCAN, the national voice of hospitals, health authorities and health research institutes across Canada, welcomes the commitment in Budget 2025 to invest $17.2 billion over ten years for provincial and territorial infrastructure and a dedicated $5 billion Health Infrastructure Fund over three years to modernize and strengthen health infrastructure in partnership with provinces and territories. This important commitment to health infrastructure can help enable hospitals and health care facilities to carry out overdue renovations, maintenance and upgrades to ensure a modern, safe, and sustainable health system for people across Canada while supporting private sector job growth, stronger local supply chains and long-term prosperity in communities of all sizes.
Budget 2025 signals that the government is serious about investing in healthcare capital that delivers results for patients and taxpayers. Targeted, time-limited capital investments improve patient care and safety, support Canada’s economy by creating good jobs for skilled trades and professionals in local communities and help reduce pressure on operating budgets through more recent buildings and equipment. This briefing note outlines practical recommendations to guide the rollout of the Health Infrastructure Fund in a way that is disciplined, measurable and focused on front line outcomes.
BACKGROUND
Approximately half of Canada’s healthcare facilities were built more than 50 years ago. The age of existing health infrastructure can make modern upgrades to hospitals, emergency departments, and operating rooms much more challenging and expensive and can make facilities less reliable, less efficient and more costly to operate over time.
On top of aging facilities, Canada also has one of the lowest acute care beds per capita compared to other OECD countries (2.6 acute beds per 1,000 people compared to the OECD average of 4.6 beds per 1,000 people), and is estimated to be even lower in rural, remote, and Northern communities. This is a significant contributor to hospital overcrowding and hallway medicine across the country. Canada’s hospital capacity problem pre-dates the COVID-19 pandemic: the number of acute care beds has been in decline since the 1980s.
While healthcare spending is increasing steadily over time, capital investment has not kept pace, despite a clarion call to carry out deferred maintenance and repairs. According to the Canadian Institute of Health Information (CIHI), hospital expenditures account for more than 25% of health spending in Canada, which does not include capital costs, which accounts for only 4.5% of total healthcare spending and yet, is critical to keeping hospitals running efficiently and effectively. This underinvestment in capital means many communities have not seen the full economic benefits that come from modern construction projects, local procurement and the attraction of new health and research activity.
WHY IT MATTERS
Old and end-of-life infrastructure should be given critical priority in funding categories. Heavy infrastructure, like electrical, plumbing, energy, and HVAC systems need upgrading. These systems in some hospitals have not been updated since they were first installed in the 1970s and yet, the demand on a hospital’s electrical system is far greater today than in 1975. Further delays to upgrade these aging systems risks service continuity, and costly “band-aid” repairs if, for example, an electrical fire occurs, a pipe bursts and causes a flood, or air-conditioning fails during a heat wave. For patients and families, these failures mean cancelled surgeries, closed beds, reduced service in their own community, and increased travel costs for care. For local employers, they mean more delays for workers who rely on timely care to stay on the job.
In addition, upgrades to these systems are needed so that hospitals and health authorities can support and scale digital infrastructure, such as patient portals, remote monitoring devices, computing servers, and cybersecurity systems. Without basic electrical and mechanical upgrades, hospitals cannot safely plug in new diagnostic equipment, digital tools or security systems that protect patient information and keep services online.
It is also important to keep in mind that over the last 50 years advancements in technology have made physical infrastructure much more energy efficient, cleaner, and cost-effective. Refurbishments and retrofits can help hospitals reduce the health sector’s carbon footprint, enhance its climate resiliency, and produce long-term capital cost savings. Lower energy and maintenance costs free up scarce operating dollars so more funding can go to front line staff and services rather than avoidable repairs.
Funding smaller-scale deferred maintenance projects also has the advantage for more local small and medium-sized businesses, trade contractors, and HVAC companies (including Indigenous-owned companies), to qualify to bid on government contracts and buy from domestic suppliers. Smaller, clearly scoped projects are easier for local firms to bid on and deliver, which helps them keep apprentices and journeypersons working in their home communities rather than chasing work elsewhere. In fact, these small and medium-sized businesses could take advantage of Budget 2025’s Buy Canadian Policy and procure Canadian steel, aluminum, lumber, infrastructure technology, and other Canadian materials and products. This keeps more procurement dollars circulating in local economies, supports family-owned businesses and builds long term capacity in Canada’s construction and manufacturing sectors.
Every hospital and health authority has varying needs across the country and a one-size approach to program design will not fit all, so flexibility is key, but hospitals and health authorities across the country have plenty of shovel-ready infrastructure projects that will improve patient care and safety, build capacity for the long-term, and attract and retain Canadian and global talent.
RECOMMENDATIONS
The following recommendations reflect what HealthCareCAN members identified as the priorities to address the health infrastructure gaps facing Canada’s health facilities. They focus on practical steps that deliver visible results in communities, respect provincial jurisdiction and offer good value for taxpayers.
Recommendation 1: Fix aging health infrastructure
Design the Health Infrastructure Fund on the proven COVID-19 resilience stream of the Investing in Canada Infrastructure Fund, with flexibility, cost sharing with provinces and territories up to a defined federal maximum and a focus on quick-start deferred maintenance projects like retrofits, repairs, refurbishments, and upgrades. Program rules should be simple and time-limited, so projects can start quickly, avoid unnecessary red tape and stay on budget. With population growth and high demand for care, prioritizing these critical infrastructure upgrades are important to the smooth operation of health care facilities, better infection control practices, can lead to cost savings, reduced patient harm, and ultimately, improve patient care while keeping spending focused on front-line needs. These projects also support local construction and building trades in every region, creating jobs that cannot be outsourced and strengthening the tax base that funds public services.
Recommendation 2: Upgrade hospitals to accommodate more beds and diagnostics
Use the Health Infrastructure Fund to address growing wait lists and improve timely access to care by supporting expansion of diagnostic image capacity and increase hospital bed availability. Canada’s low acute care bed capacity limits patient flow and contributes to emergency department wait times, which can in turn result in delays in diagnostics, delayed treatment, and prolonged hospital stays. Long waits for surgery, imaging and rehabilitation keep people off the job and reduce productivity for employers, especially in small and medium-sized businesses that rely on every member of their team.
Funding projects to upgrade hospital facilities to accommodate new equipment, including space, electrical and IT systems and expand bed capacity, including acute rehab beds, continuing care, and long-term care beds can improve better access to healthcare. Strategic investments in diagnostics and bed capacity are among the most direct ways to reduce wait times, support a healthy workforce, and give businesses and communities confidence that their local health system can keep up with demand.
Recommendation 3: Build modern health and training centres to attract and retain talent
Use the Health Infrastructure Fund to support regionally significant health and training centres that bring together hospitals, universities, colleges and private partners. These projects should modernize clinical space for team-based care, create dedicated teaching and simulation facilities in clinical environments, and build research and innovation capacity that is directly tied to patient care. Strategic investments of this kind help hospitals and health authorities recruit and keep staff, expand training seats for key professions and anchor broader health and bioscience districts that drive jobs and growth in surrounding communities. Modern health and training hubs also help attract private investment, start-ups and industry partnerships, turning federal and provincial capital dollars into larger economic clusters that support high quality jobs and long-term regional development.
SUBMITTED
January 26, 2026
FOR FURTHER INFORMATION
Emily Follwell
Policy and Research Analyst
efollwell@healthcarecan.ca
Annie Barrette
Vice President, External Affairs
abarrette@healthcarecan.ca
