Ontario hospitals have already started making some "lower risk" cuts in the face of rising deficits, but those alone won't alleviate hospitals' financial strain, the head of their association says, warning there are no easy choices left.
The Ontario Hospital Association has told the provincial government in its submission ahead of the spring budget that the sector faces a structural deficit of $1 billion and needs not just more money this year but a predictable, multi-year funding plan.
"Worryingly, our financial reserves — also called working capital — which are really intended to be for long-term, capital-related expenses like medical and diagnostic equipment or refurbishing and rebuilding hospitals … those working capital dollars are being used to actually pay for operating expenses, and that is a sign of a sector under real, serious financial (pressure)," association president and CEO Anthony Dale said in an interview.
If the province were to actually meet the full operating needs of the hospital sector, it would need to add about $2.7 billion, Dale said, but the hospital association realizes that due to other budgetary constraints caused by the trade war with the United States, the province is not in a position to offer that amount.
The Ministry of Health asked hospitals last year to come up with a three-year plan to balance their budgets, with an assumption of getting two per cent annual funding increases. That is half of the increase they received the previous year.
Hospitals were told to immediately implement any low-risk cost-saving moves they come up with and Dale said that has already been happening. He gave examples such as declining to fill vacant positions and shifting work between professions, including getting registered practical nurses to perform work that has been done by registered nurses.
"The last thing we want to do is start examining other areas where expenditures might be considered for reduction and … there's really only a few areas left," Dale said.
That includes spending reductions in core inpatient services, closing non-core inpatient services and consolidating programs, he said.
"There's no escaping that there are no easy choices left," Dale said.
Lee Fairclough, the Liberals’ hospitals critic and a former hospital president, said the "lower-risk" measures are likely already having some impacts on patients.
"The example of holding vacancies and ultimately eliminating them, that's really hospitals working without the full staffing complement that you would ideally have in place," she said.
"What that does is it just gives you far less flexibility if you have big surges. It means people will be waiting longer."
A spokesperson for Health Minister Sylvia Jones said the government is working with hospitals to plan for long-term stability that ensures high-quality care, and characterized the cost-saving moves being made by hospitals not as cuts, but as "changes."
"To be clear, the changes being currently made by hospitals address non-clinical, administrative functions to improve efficiency and connect more people to the care they need when they need it – they do not affect patient care," Ema Popovic wrote in a statement.
This report by The Canadian Press was first published Jan. 23, 2026.
