Where Do Our Tax Dollars Go?

Do you know how much of your tax dollars go into the medical system?

What if I told you that I think we spend a wildly — yes, wildly — disproportionate share of public money downstream: on medical care, rather than on the upstream conditions that shape whether we become sick in the first place?

To kick off this conversation for The Upstream Health Project, I want to start with something simple but revealing: government spending.

Statistics Canada¹ breaks down how federal, provincial, and municipal governments allocate public funds — in other words, this is our tax money in action. Step back and look at the numbers, and a clear pattern emerges. One that says a lot about what we value.

Health Spending Dwarfs Everything Else

The largest single category of government expenditure, by far, is health spending.

This covers the administration, development, and delivery of medical services — an enormous public investment running into almost $6,000 per person annually.

Most of it goes to:

• Hospitals (about 67%)
• Outpatient services, including doctors (around 16%)
• Medical products, including in-hospital pharmaceuticals (roughly 7%)

And even at that scale, the number above doesn’t tell the whole story.

A significant chunk, more than 30%, of health-related spending happens outside the public system entirely. Prescription drugs, over-the-counter medications, supplements, and many medical devices are paid for privately, out of pocket. Add dental care, vision care, psychotherapy, social work, and home care — none of it universally covered — and the real cost of “health” climbs a lot higher.

And still, millions of Canadians are left on the outside looking in. Roughly 6 million people in Canada don’t have access to a family doctor — the primary gateway into the healthcare system. Some turn to the parallel private system, online medical care, or increasingly, AI. Others cross borders as medical tourists. The system, in short, doesn’t cover everybody or everything.

Despite this massive financial investment, access for Canadians is uneven and incomplete. Add to that the working conditions crushing doctors, nurses, and everyone else propping up the system, and we have a crisis in care.

We Underspend Everywhere Else

Here’s where things get even more head-spinning.

We underspend on nearly every downstream intervention that could reduce the need for medical care, diagnosis, and treatment in the first place.

The other large category of spending is social protection but it involves many diverse programs— programs meant to reduce poverty and provide a basic safety net for hard times and difficult situations: employment insurance, disability insurance, pensions, and the like. None of these programs is adequate on its own. People who depend entirely on this money end up living in poverty — facing housing and food insecurity, using foodbanks, living on the streets or in tents — lacking the basic necessities for a sustainable life.

These are the upstream government interventions. And none of them comes anywhere close to the cost of the downstream one: medical care.

Education is another upstream issue worth naming. Governments spend about half as much on education as on healthcare — despite education being one of the strongest predictors of long-term health and life expectancy. More education tends to mean better health, and longer lives.

In other words: we’re underinvesting in two of the most powerful upstream drivers of health — poverty reduction and education — while pouring resources into treating illness after it’s already appeared.

The Rest of the Pie

A few more categories round out the picture:

• General public services (government administration, foreign aid, fiscal affairs, public debt)
• Other functions — environmental protection and cultural investment: libraries, museums, archives, historic and nature parks, arts and performing arts, film and broadcasting, multiculturalism, and more

Broken down further, these areas receive surprisingly small shares of support:

• Culture: ~1%
• Environmental protection: ~3%
• Recreation and religion: ~1%
• Public order and safety: ~5%
• Defence: ~2%

And then there’s housing.

Housing and community amenities — water supply, street lighting, social housing — account for only about 1% of total spending.

Just 1%.

Yet we know that safe, stable, and adequate housing is foundational to health. Clean water, proper ventilation, and secure shelter aren’t luxuries. They’re prerequisites for a healthy life.

The Core Tension

This is the tension at the heart of the upstream conversation: we invest heavily in treating disease, while comparatively underinvesting in the conditions that prevent it and support well-being in the first place.

If we’re serious about improving health — not just healthcare — we have to ask a harder question:

What would it look like to shift even a fraction of these resources upstream?

That’s the question this project will keep returning to.