Healthcare stock traders are closely following developments in Ontario, but even the most astute analysts underestimated the rapid decline in hospital finances. A newly released report shows the system is in deep trouble, struggling to pay for essential costs like employee salaries and medical supplies. The amount of working capital available for daily hospital operations has dropped dramatically. In just a few years, it fell by $2.2 billion, ending the previous year at a negative $280 million.
Borrowing to Survive Amid Budget Cuts
According to the Ontario Council of Hospital Unions (OCHU/CUPE), the provincial government under Premier Doug Ford has enacted a pattern of deliberate underfunding. As part of this so-called 'austerity agenda,' hospitals have been forced to take on debt just to operate. The situation has led to emergency room closures, increased wait times, and a noticeable drop in the quality of care provided to patients. Operating deficits have climbed steeply, with the total exceeding $400 million in 2025 alone. Most hospitals now operate at or above 90% bed occupancy, far beyond the established safety threshold of 80%.
Michael Hurley, the president of OCHU/CUPE, explains that to maintain current levels of service, hospitals need a 6% annual funding boost. However, the government only plans to provide a 3.3% increase for the 2026/2027 fiscal year. This gap has already led to the loss of more than 1,300 hospital jobs in just one year, as well as a sharp decline in the number of available hospital beds.
The Ford administration has promoted privatization as a way to cut down wait times. However, the report from OCHU/CUPE reveals the opposite. For example, in the case of cataract surgeries, the average wait time for patients actually increased by 12% after private clinics were brought in. Hurley argues that privatizing healthcare services raises costs, delays care, and makes treatment less accessible for the broader population. He notes that the situation has become so dire that hospital hallways are now filled with patients, with nearly 2,000 sleeping in such conditions on any given day in 2024 — double the number from 2018.
To address the crisis, OCHU/CUPE is pushing for an urgent commitment of $5 billion in new funding for Ontario hospitals. This money would be used to improve staffing levels and upgrade aging infrastructure. The group also wants the government to stop expanding private healthcare options, implement nurse-to-patient staffing ratios, and provide long-term funding assurances. The Canadian Institute for Health Information (CIHI) has confirmed that Ontario hospitals are the least supported by provincial funding compared to other provinces. At the same time, the demand for hospital services is rising sharply, with over 2 million additional inpatient days recorded in the past decade.