Health care is good medicine for Canada's economy

OTTAWA, January 31, 2013 /Canada NewsWire/ - Health care is a large and essentially recession-proof part of Canada's economy, creating more than 10 per cent of the country's total gross domestic product (GDP) annually and supporting more than two million jobs, according to a Conference Board of Canada analysis for its Canadian Alliance for Sustainable Health Care.

HIGHLIGHTS

...At over 10 per cent of GDP, the health care industry in Canada is almost the same size as the entire manufacturing sector.

...Governments get more than 21 per cent of all health spending back in the form of tax revenues.

...Overall wages in the health care sector are $59,300 per job, slightly higher than the national average of $57,677.

"The Canadian health care sector is a major source of spending for governments. Yet it is also an important driver of economic growth—a perspective often overlooked. The health care sector contributes to Canada's wealth by improving health outcomes and creating jobs," said Fares Bounajm, Economist, Canadian Alliance for Sustainable Health Care, and author of The Economic Footprint of Health Care Delivery in Canada.

"It should be considered both as an integral part of the Canadian economy and as a sector that can help to drive economic growth, improve Canada's productivity performance and generate additional wealth for Canadians."

About 1.6 million Canadians are directly employed in the health care sector, representing about nine per cent of the total jobs in Canada. These physicians, nurses, other health care professionals, technicians and support staff pay taxes and purchase goods and services from all sectors of the economy.

An additional 500,000 jobs are indirectly supported by health care spending. These are jobs in the various firms that are part of the supply chain for the health care sector, spanning a large number of industries including retail, communications, wholesale and banking.

In aggregate, health care delivery supported 2.1 million jobs in 2011, with a total labour compensation of $127.2 billion. This represents an average of $59,300 per job, which is slightly above the national average of $57,677.

Unlike most other sectors of the economy, the demand for health care does not fall during a recession. By supporting 2.1 million essentially 'recession-proof' jobs, health care spending can go a long way to mitigate the effects of an economic downturn on Canadians.

More than 21 per cent of all public spending on health care returns to governments in the form of taxes and other revenues. In 2011, the public sector's $141 billion expenditure on health care delivery generated an estimated $30.6 billion in government revenues.

In 2011, health care delivery in Canada contributed $163.4 billion to the domestic GDP, which represents 10.1 per cent of national GDP. As a share of provincial GDP, the economic contribution of health care is highest in Nova Scotia at 13.2 per cent and lowest in Alberta at 7.6 per cent.

This is the first briefing in the series Health Care in Canada: An Economic Growth Engine, which looks at the Canadian health care sector from an economic perspective. The research is produced under the banner of the Canadian Alliance for Sustainable Health Care. Launched in 2011, CASHC is a five-year Conference Board program of research and dialogue. It will delve deeply into facets of Canada's health care challenge, including the financial, workplace, and institutional dimensions, in an effort to develop forward-looking qualitative and quantitative analysis and solutions to make the system more sustainable.