Editor’s note: The theme of the 25^th Annual Research Money Conference, June 3 and 4 in Ottawa, is “Acting on Health: Reimagining Canada’s Promise.” Leading up to the conference, Research Money will be highlighting news stories, reports on research, commentaries and analyses focused on health and life sciences.

Canada needs to address its health care crisis and rising health care costs by creating a national market for digital health, says a new a report by the Council for Canadian Innovators (CCI).

This market would enable provinces and health authorities to buy in to existing competitive procurement outcomes under common requirements, rather than the current fragmented procurement market for health technologies.

Also, Canada’s digital health ecosystem should be strengthened by applying Buy Canadian policies and evaluating procurement bids based on total public value rather than lowest upfront cost, the report said.

“Our public Medicare system is a source of enormous pride for Canadians, but too often we’re walking away from interactions with the health care system discouraged about its future,” report co-author Laurent Carbonneau (photo at right), vice-president of policy and advocacy at CCI, said in an email to Research Money. The report’s other co-author is Claire Wilson (photo at left), policy and research analyst at CCI.

The health care sector makes up 12 percent of Canada’s economy, or about $400 billion, Carbonneau noted. “We’re spending more than most OECD countries, but Canadians are less satisfied with our system than people in other advanced economies.”

That amount is growing every year more quickly than the rest of the economy, “which means that we’re not going to be able afford the level of care that Canadians expect indefinitely,” Carbonneau added.

“These are problems you can’t solve just by throwing more people at the problem,” he said.

“Introducing more innovation into the system – and Canadian innovation that creates the growth we need – is going to be critical for restoring confidence, performance and sustainability. Fixing public buying and how we govern data are the keys that unlock innovation,” Carbonneau said.

CCI's report t was written in consultation with four of CCI's healthtech member companies: AlayaCare in Montreal; Vancouver's WELL Health; Petal Health in Québec City; and Think Research in Toronto.

“Our publicly funded health care system should function as a platform where Canadian innovators can prove their solutions, scale them nationally, and build the credibility to compete globally,” Patrick Searle, CEO of CCI, wrote in the report’s introduction.

Demand for health care is rising as our population ages and care becomes more complex, he said. Costs are growing faster than the economy. Hospitals are full, wait times are longer, and clinicians are being asked to do more with less.

“The system needs stronger productivity, better integration, and the ability to deliver care reliably at scale,” Searle said, adding that this challenge also presents an economic opportunity.

Health care is one of the largest sectors in Canada’s economy, and Canadian companies are building world-class digital tools that improve access, reduce administrative burden, support clinicians, and help patients receive care sooner and closer to home.

But too often, these solutions stall in pilots or face fragmented procurement across jurisdictions, Searle said. “When pathways to scale are unclear, patients wait longer for improvement and Canada becomes more dependent on large foreign vendors.”

Changing that picture means procurement that reflects outcomes and long-term public value, predictable pathways from pilot to scale, coordination across provinces and health authorities, and secure, usable data that supports innovation while protecting privacy, he said.

“Where strong domestic solutions exist, governments should prioritize building and scaling them at home,” Searle said.

“This is about delivering timely, high-quality care, supporting the clinicians who carry the system every day, and strengthening Canada’s economic capacity.”

Canadians confront longer hospital wait times, deferred treatments, less preventive care

In 2024, Canada spent $372 billion on health care, according to CCI’s report. In 2025, those costs were projected to rise to $399 billion – over 12 percent of Canada’s GDP.

Most of this spending is on salaries and benefits for medical professionals, but roughly one-third of this spending is non-compensation expenditures, including drugs, medical supplies, contracted services, equipment, infrastructure and operating costs.

Health care costs are rising faster than our ability, as a country, to pay for the level of care that Canadians are accustomed to, the report said.

This has real, tangible consequences for Canadians: longer wait times at hospitals and for surgeries, deferred treatments, and less preventive care.

Seventeen percent of Canadian adults in 2023 reported not having a regular health care provider. Median wait times for specialist appointments after referrals are increasing, reaching 30 weeks last year, 2.3 weeks longer than the year before.

“Health technologies offer a clear path to improving Canada’s worsening health care crisis and driving scale for Canadian innovators,” the report said.

However, fragmented governance and outdated slow, procurement processes limit interoperability, slow adoption and prevent proven solutions from scaling, the report noted. “These barriers slow down Canadian digital health firms and entrench the dominance of large, foreign incumbents.”

Fragmentation is expensive for both the medical system and innovators, the report pointed out. It creates a unique and significant challenge to adoption and scale across Canada.

For providers, duplicative procurement processes dramatically slow down adoption of proven solutions.

For innovators, successfully qualifying and selling into one part of the system or province provides little advantage when attempting to enter another, and unwillingness to procure from Canadian companies at home creates a disadvantage when companies look to sell abroad.

Canada’s procurement rules date from a different era of health technology and service delivery, the report said.

In today’s more complex environment, procurement processes that cannot account for benefits to different parts of the system beyond the point of purchase are missing something important. They also often require the full upfront cost of a digital solution to be available at the time of purchase, even when that solution would generate near-term efficiency gains and cost savings that would partially offset the initial cost of acquisition.

“This approach does not align with the realities of digital health innovation and Canada’s evolving economic and geopolitical context,” the report said.

Processes that treat bids as interchangeable on the basis of price alone, without assessing factors such as interoperability, lifecycle cost, switching/exit cost, security, and domestic ownership and control over intellectual property and data stewardship, do not reflect our new reality.

Governments must use procurement as a lever to drive domestic innovation capacity, maintain and grow data assets and support economic resilience, the report said.

Canada’s publicly funded healthcare system is uniquely positioned not only as a service delivery model, but as a platform to grow Canadian companies to global scale, according to the report.

“When deployed strategically, procurement can act as an engine of economic growth, driving productivity and efficiency in the healthcare system.”

Digital transformation can drive better outcomes for patients and the health care system

To drive better outcomes for patients and the health care system, governments need to spend their budgets more effectively, including by buying and accelerating the adoption of innovative technologies.

Canada’s international peers have recognized this, according to CCI’s report. The National Health Service in the United Kingdom has leveraged coordinated validation and procurement pathways to accelerate domestic innovation and export readiness.

Israel’s integrated health organizations function as real-world test beds that allow firms to validate products at scale before entering global markets.

Nordic countries have built interoperable national registries that foster competitive ecosystems around health data.

Just as the federal government’s new Defence Industrial Strategy takes a build-partner-buy approach to developing Canada’s defence innovation capabilities, public, strategic investment in Canada’s healthcare sector should look to build at home first and partner and buy off-the-shelf only where options can deepen Canadian capabilities and innovation ecosystems, the report said.

However, rather than serving one Canadian health system and a national market, health care professionals and innovators now face 13 different provincial and territorial systems that vary in their capacity, policies and the way they deliver care.

Canada Health Infoway estimates that greater interoperability alone could unlock $2.4 billion annually in efficiency gains, CCI’s report said.

For example, while strong demand for digital health records exists across the country and health authorities have invested billions of dollars in digital health infrastructure over the past few decades, progress in electronic health and medical records adoption and deployment has been slow. In 2023, only 39 percent of Canadians accessed their health records online. 

Thirty-five percent of Canadian physicians report spending two or more hours each workday beyond what they feel should be necessary searching for patient information. 

Digital health is an excellent opportunity to start reforming how Canada buys and deploys technology to strengthen its health care system, the report said.

Digital health technologies involve leveraging data and digital technologies to improve patient outcomes and healthcare delivery. This can include electronic medical records, remote monitoring tools, artificial intelligence, and predictive and prescriptive analysis to better deliver preventive care.

While 80 percent of Canadians express interest in accessing their personal health information electronically, only 40 percent report having ever done so. “Care delivery lags behind patient expectations and their needs for digital access.”

“This gulf between what Canadians want and what they get is not the product of a lack of demand, or the result of a lack of technological capabilities. The culprit is the incredible fragmentation of Canada’s health care system.”

Lack of interoperability greatly impedes quick, secure transfers of health information between systems.

This creates massive costs in duplication and depresses competition and innovation in the health care space, the report said. It also entrenches dominant, often foreign, players in the digital health sector by allowing them to gate-keep access to data assets.

Pilot programs such as AlayaCare’s home and community care platform at CIUSS du Nord-de-l’Île-de-Montréal show how harmonized and centralized patient information can improve care delivery, including a documented 33-percent improvement for health care workers in accessing to up-to-date care plans.

This means both better coordination between health care practitioners and more comprehensive documentation in patient files, ensuring informed care decisions.

“Digital transformation can deliver real-world gains for patients and health care practitioners when systems support scale and integration,” the report said.

CCI’s report makes six recommendations

Health care is a publicly funded sector. Policymakers should ensure that the lion’s share of jobs, intellectual property, control of data assets and value-adding parts of the industry are kept in the domestic economy rather than offshored through foreign ownership and control, according to the report.

In a data- and intangibles-driven economy, value and profits accrue to those who control integration layers, platforms and data governance. “The traditional, attractive logic underlying foreign direct investment (FDI) in services in host economies no longer holds.”

Recent analysis shows that the link between GDP growth and foreign direct investment (FDI) in the services sector – which includes health care – is negative: more FDI means reduced growth. Foreign firms, without interoperability safeguards, block new domestic entrants into markets, meaning less domestic innovation and growth.

Competition, including foreign competition, is beneficial, the report said. But Canada needs  disciplined, trade-compliant modernization of procurement frameworks that assess lifecycle cost, interoperability, resilience, data stewardship and domestic value creation alongside price.

The report makes six recommendations:

1. Strengthen Canada’s digital health ecosystem by applying Buy Canadian policies and evaluating procurement bids based on total public value rather than lowest upfront cost alone.

In addition to cost-based assessment criteria, procurement officials should assess bids based on their strategic and economic value to make sure public dollars are prioritizing Canadian growth and control in strategically important sectors like healthcare.

Procurement evaluations should explicitly incorporate whole-of-lifecycle costs, implementation and change-management costs, interoperability requirements, security posture, switching and exit costs, and demonstrated impacts on outcomes and workflow productivity – not simply purchase price.

Procurement contracts in the health care and digital health care sector in particular should, at minimum, explicitly ask and assess:

• whether a Canadian-controlled entity will serve as the data controller for data generated during the contract fulfillment period.
• whether foreign entities will have access to this data during the contract period and on what terms.
• what rights vendors retain to reuse, train on or commercialize outputs derived from Canadian public system data.

The EU already employs a flexible, value-based procurement model: the Most Economically Advantageous Tender and Public Procurement of Innovation (MEAT). Under the MEAT framework, purchases consider economic, social and innovation characteristic and whole-of-lifecycle costs alongside other factors not strictly related to up-front costs.

Canada should adopt a similar framework, weighting economic value-add and data sovereignty as important procurement components.

2. Ensure successful digital health innovations can scale by establishing clear and predictable pathways from pilot projects to procurement contracts.

A strengthened pilot-to-procurement pathway should include:

• clear criteria for what constitutes a “successful pilot” (clinical outcomes, workflow impact, safety, patient experience, cost offsets).
• clear timelines and decision points from pilot completion to contracting.
• pre-approved contracting pathways (including competitive standing offers or qualification lists) that can be activated quickly when pilots meet predefined thresholds.
• standardized evaluation templates so pilot evidence is portable across jurisdictions and buyers.

Ontario’s recently launched Health Innovation Pathway makes it the only province with a formal, multi-ministry end-to-end health pathway with a single designated intake point at Ontario Health.

Other provinces should seek to adopt similar programming, ensuring that proven solutions are taken abroad by provincial systems at scale and speed.

3. Create a national market for digital health by enabling provinces and health authorities to buy in to existing competitive procurement outcomes under common requirements.

One important lever to combat fragmentation is to allowing buyers across Canada to fully leverage existing requests for proposals in other jurisdictions and allow them to buy in via “piggybacking.” By running a procurement once, authorities across Canada save time, duplicative compliance efforts, and can adopt and employ digital health technologies at scale and at speed.

Hospitals across Canada have begun to explicitly recognize “piggybacking” as a legitimate means of procuring goods and services, including requiring request for proposal documents to include which organizations may leverage an agreement following its completion by another.

Ontario’s Trillium Health Partners have previously piggybacked on competitive processes to obtain service contracts. In this future, this model should be expanded and leveraged for procuring proven healthcare technologies.

The Coordinated Accessible National (CAN) Health Network provides a good framework for how such a system would work at wider scale. The CAN Health Network allows “edges” – public or private organizations with shared challenges – to form an integrated network to collaborate, adopt and procure innovative solutions.

Provinces and operational health buyers should build on proven frameworks like the CAN Health Network to reduce duplication. “There is no reason innovative Canadian companies should be required to navigate dozens of distinct procurement processes to sell across Canada, especially when the technology has already been validated.”

Focus procurement decisions on achieving system-wide benefits

4. Ensure procurement decisions reflect system-wide benefits and efficiency gains delivered by digital health investments by better accounting for value in procurement bids.

Procurement systems that ignore cross-system efficiencies inhibit precisely the gains the system requires. In practice, governments can operationalize this recommendation through:

• evaluation models that include downstream cost offsets (e.g., avoided admissions, reduced duplicative tests, reduced administrative hours).
• shared-savings procurement pilots where buyers and vendors share benefits tied to measured outcomes.
• standardized methods for valuing workflow time and redeploying capacity.
• budgeting rules that recognize that spending now to reduce costs later is not “new spend,” but prudent fiscal management.

5. Enable more competition and drive the development and simplified adoption of new digital health products by adopting international standards for data portability and interoperability.

Data portability allows users to transfer their personal data between different systems in a structured format, preventing vendor lock-in. In an interoperable environment, patient records can follow individuals across providers and provinces.

Health data can also be transformed from a series of closed silos into a shared input for innovation and entry into a more competitive market. When patients are empowered through common standards and portability to move their data to alternative electronic medical record systems or digital tools, vendors and businesses have to compete and win on the merits of product functionality, innovation and value.

For improved interoperability, Canada should adopt the HL7 Fast Healthcare Interoperability Resources (FHIR) standard.

While several Canadian jurisdictions and organizations currently use this standard – Canada Health Infoway, British Columbia and Nova Scotia – it is not employed nationally.

International peers like the U.S. have already adopted the FHIR standard with the explicit goal of creating a more competitive ecosystem and economy around EHRs and disrupting large incumbents.

Employing FHIR and making compliance a precondition for procurements and integration into provincial platforms will create a harmonized system across the country.

Passing S-5, the Connected Care for Canadians Act, will require IT vendors to make their products interoperable, employ common standards and prevent data blocking.

6. Unlock the power of data in the health sector by providing domestic firms aggregated, de-personalized health data to leverage for digital solutions.

Governments can play an important enabling role by providing domestic innovators with responsible access to data, including secure access to aggregated, high-level health datasets.

While Canada cannot compete with large superpowers like the U.S. and China on the sheer scale, it can build comparative advantage by prioritizing critical sector verticals and routinely publishing comprehensive, high-quality and usable data that can be leveraged in digital health applications.

Without access to relevant datasets, innovators cannot develop or deploy digital solutions effectively.

Peer nations like the U.K. are already taking steps to provide AI-ready public datasets by establishing clear shared standards and a coordinated plan of action for data collection, cleaning and aggregation.

These efforts are explicitly aimed at positioning public data as a critical national infrastructure. Canada should similarly establish standards and processes for preparing and making health data available in a form that supports the development and commercialization of digital health solutions.

Interprovincial barriers to strategic procurement can be demolished without intruding on provincial jurisdiction

“These are all important recommendations that have to work together in a complex system, but certainly there’s a real need to get the ball rolling as soon as possible on a more holistic, value-based model for how we buy,” Carbonneau said.

“The lowest bid model is nice in theory but hasn’t delivered the results it promises in practices,” he added. “There is also federal legislation before the House of Commons on unlocking health data, S-5, that make this recommendation actionable and even low-hanging fruit.”

Since health is a shared jurisdiction/responsibility between the federal and provincial/territorial governments, Research Money asked Carbonneau whether there would be any concerns, in creating a national market for digital health, that some provinces (such as Alberta) might see doing so an intrusion on their jurisdiction by Ottawa.

Carbonneau responded: “What CCI is calling for is for public buyers to be able to say, in effect, ‘We’ll have what they’re having’ – to be able to piggy-back their way into procurements elsewhere that meet their requirements. This doesn’t step on anybody’s jurisdiction; it demolishes another set of interprovincial barriers that make it harder for Canadian companies to scale in our own home market.”

Canada cannot hire its way out of structural demographic pressures, the report concluded. The working-age population is not expanding fast enough to sustain ever-increasing labour intensity in care delivery. “Improving output per dollar and per clinician is essential to preserving universal access.”

Modern health technologies, like digital platforms, interoperable records, AI-enabled tools, diagnostics, devices and data infrastructure, provide a path forward, the report said. When properly procured and scaled, they reduce duplication, improve workflow efficiency, enable preventive care and unlock system-wide gains.

“A failure to unlock innovation in the digital health space means worse patient outcomes, a continued mismatch between Canadians care needs and expectations and on-the-ground realities, and a world in which foreign, often American, firms extract and capitalize on the value created by our healthcare system and Canadians health data.”

To fully realize the benefits of modernized care, governments need to modernize their approach to health care procurement and health data, the report said.

Fragmented procurement, rigid budgeting rules, limited interoperability and barriers to data access continue to slow progress and prevent innovations from scaling.

“A concerted, nationalized effort to remove these obstacles is needed to unleash the power of digital health technologies.”

R$