Ontario hospitals operating in the red are taking out private bank loans
More than 60 per cent of Ontario hospitals were in the red at the end of the 2025 fiscal year, and many, including some of the largest in the country, have turned to banks to cover their costs, spending millions of public dollars on loan interest payments, the Investigative Journalism Bureau (IJB) has found.
More than half a billion dollars were logged by hospitals in annual operating deficits by the end of March, 2025, despite an Ontario law requiring hospitals to plan for a balanced budget each year.
As of March 2025, Ontario hospitals owed banks more than $66 million.
Among them was Hamilton Health Sciences (HHS). Public financial statements from March 2025 showed HHS owed $40 million on two lines of credit. In the 2024-25 fiscal year, HHS paid just under $2 million in interest to private banks on those lines of credit, according to Hilary Rodrigues, the hospital’s chief administrative and financial officer. She said in a written statement that “the hospital will continue to draw on our operating line of credit as is necessary to continue to provide the care our community, region and province needs and deserves.”
In the same year, Niagara Health System owed $3.6 million to a bank and paid more than $1 million in interest on short-term borrowings. Niagara Health confirmed the IJB’s analysis in an email, but did not comment further.
Some hospitals that cleared their lines of credit by the end of the fiscal year still paid hundreds of thousands in interest. Perth and Smiths Falls District Hospital and Brockville General Hospital respectively paid $226,000 and $214,429 in bank interest last fiscal year.
Perth and Smiths Falls District Hospital declined comment; Brockville General Hospital did not answer requests for comment.
Despite its own legislation, the Ontario government has allowed hospitals to end the year in the red more than 100 times since 2022, compared to only nine times between 2016-2020, according to data obtained through freedom of information requests.
Ontario spends less per person on health care than any other province, yet health care is still its biggest cost item: about 40 per cent of the provincial operating budget, or approximately $90 billion. About one-third of that goes to hospitals.
These funds, many experts say, are not enough. Ontarians face long ER waits, are often forced to bed down in corridors and closets, and face delays for elective surgery. In January 2024 alone, thousands of patients were reportedly kept in spaces such as hallways and break rooms. In February 2024, a 16-year old Ontario teen died after reportedly spending eight hours at an Oakville ER.
Last fiscal year alone, hospitals paid at least $4 million in bank interest on operating lines of credit. Rates on those short-term loans reach as high as prime plus 5.7 per cent, meaning some would hover around 10 per cent.
“No taxpayer wants to say I put this dollar in the health-care bucket and it ended up in the CEO of some financial institution’s pocket,” said Alex Hoagland, assistant professor of health economics at the University of Toronto, who reviewed the IJB findings.
Neither Ontario Health Minister Sylvia Jones, the health ministry or the Office of Ontario Premier Doug Ford responded to the IJB’s questions about hospital bank borrowing and budget challenges.
As hospitals struggle to find efficiencies, Walter Wodchis, a professor of finance at the University of Toronto, says there is a “significant possibility” that the quality of care will get worse.
“People’s lives are at stake,” he said.
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Of the 92 hospital systems that had lines of credit with chartered banks to manage cash flow, 15 had not cleared their debt by the end of the 2024/25 fiscal year, according to the IJB analysis.
In recent financial statements, several hospital auditors said these credit lines were essential.
“At certain times of the year, the system is dependent on the continued availability of its credit facilities,” reads a note from the auditor for Brant Community Healthcare System (BCHS) in the hospital’s 2025 audited financial statement. “The system is also exploring opportunities to increase debt financing to provide sufficient cash flows.”
Michael Marini, manager of communications for the Brant system, said BCHS borrowed $24 million in the most challenging month last year and currently still owes $10 million.
Even hospitals in a balanced position may rely on operating lines of credit, according to health economists and consultants who spoke with the IJB. Borrowing allows accountants to cover fluctuations in revenue and expenses and manage sporadic, often late, payments from the province. “It’s like running a normal business,” said Mark Hundert, the former national director of health care consulting at Hay Group, now part of Korn Ferry, a global consulting firm.
But relying on credit is worrisome, some experts say.
Dr. Isser Dubinsky, a professor at the University of Toronto Institute of Health Policy, Management and Evaluation, and previously chief of emergency medicine at two Ontario hospitals, says the province has to intervene when hospitals spend taxpayer dollars on bank interest payments.
“I don’t think it should be allowed,” he said.
IJB reporters compiled three years’ worth of financial statements from 129 publicly funded hospital corporations, some of which run multiple hospitals. The analysis found 77 had not balanced their books by the end of March 2025. In many cases, the shortfalls were persistent. Fifty-two logged an annual operating deficit for three consecutive years. Among them were Guelph General Hospital, Lakeridge Health in Oshawa, and the Hospital for Sick Children in Toronto.
“The hospital’s cost structure remains challenged and underfunded based on the current provincial funding model,” said SickKids spokesperson Sherina Harris, who noted that a 2023 external review of the hospital’s operations had determined it ran efficiently.
Mark Walton, president and CEO of Guelph General Hospital, said the hospital is “facing significant financial pressures” like many across Ontario, and remains committed to providing quality care. Lakeridge Health did not respond to requests for comment.
Many hospital systems received approval from the Ontario Ministry of Health — in the form of balanced budget waivers — to be in the red.
For fiscal year 2023-24, the last year in which complete data on waivers is available, 85 hospital corporations were issued a balanced budget waiver. For instance, Sensenbrenner Hospital in Kapuskasing was allowed to end 2024 with a new deficit target of 28 per cent, instead of zero, while Weeneebayko Area Health Authority on James Bay was allowed to end 2025 with a new deficit target of almost 17 per cent.
No one from Weenebayko Area Health Authority or Sensenbrenner Hospital responded to requests for comment.
Financial pressure inside hospitals is causing clawbacks in patient services, such as temporarily closing emergency rooms, shuttering clinics, cutting back diagnostic imaging hours, laying off nurses, pressuring doctors to discharge patients earlier, and replacing registered nurses with cheaper aides, according to some hospital executives interviewed by the IJB.
Loss of hospital beds and nurses
The Ontario government has pledged to increase the overall health sector budget by 0.7 per cent for the next fiscal year, compared to an average of five per cent annually for the last two decades, according to the government’s Financial Accountability Office (FAO).
The FAO says it’s not feasible for the government to ask the health sector to maintain “the same level of services with less resources” without additional funding or system efficiencies, and projects a loss of 2,000 hospital beds and 7,000 nurses over the next two years.
Former Conservative cabinet minister, MPP and health-care advocate Dr. Merrilee Fullerton told the IJB that “it is unrealistic to expect additional efficiencies under the current funding framework.
“Forcing more efficiencies without investment at this point risks compromising access and safety further along with exacerbating hallway health care,” she said. “Without additional funding … nursing layoffs and hospital bed closures are expected.”
Ontario’s 2025 budget said the government planned to launch 50 major projects that would allow it to add about 3,000 new beds over the next decade.
Specific funding allocations to the hospital sector are not available to the public, according to the FAO. But the IJB obtained confidential letters written by Jones that show the health ministry is quietly bailing out certain hospitals.
In letters dated December 2024 and January 2025, the ministry offered $218 million in onetime funding to address financial shortfalls for 23 hospitals.
U of T’s health economist Wodchis calls it “inequitable” for some hospitals to receive this kind of break, while others must cut to the bone to find efficiencies.
“I think what you’re seeing here is a lack of transparency and that leads to a lack of trust,” he said.
Hospital financial mismanagement is the exception, not the rule, according to experts. Yet the province took control of two hospitals in 2024 because of financial irregularities now under investigation.
The ministry uncovered personal expenses charged to corporate credit cards at Renfrew Victoria Hospital, where the board also approved an interest-free loan to develop the CEO’s personal property. (The hospital is no longer under provincial supervision.)
At London Health Sciences Centre (LHSC), the hospital’s deficit tripled over three years to $150 million, prompting the departure of the CEO and board in 2024. A few months later, LHSC received a one-time $100 million payment from the health ministry to address “cash failure” — by far the largest one-time payment to any hospital that year. LHSC did not respond to a request for comment.
Health policy and research consultant Steven Lewis, who previously served on the governing council of the Canadian Institutes of Health Research, said “Ontario hospitals are overall the most efficient in Canada on a cost per case basis,” forecasted to spend $9,000 per person in 2025, compared to $11,600 in Nova Scotia or $10,600 in British Columbia.
Still, regional savings may be found, says former health consultant Hundert. Smaller hospitals need to shift some complex services, such as emergency care or obstetrics, to larger hospitals, rather than duplicating them in every small facility, he said. Decisions to maintain high-complexity services in remote areas which are hard to staff are often motivated by politicians needing to keep voter support, Hundert added.
“Governments and politicians insist on maintaining services in places that can’t really support those services. As a result, we now have a very expensive system that doesn’t really provide very good care in many places,” he said.
Other efficiencies may come from technological advancements, said Barb Collins, CEO of Humber River Health, one of the 18 hospital systems that ended the past three years in a surplus. She said the hospital’s command centre, which uses predictive software to help prevent patients’ conditions from worsening while in hospital, saves the hospital costs equivalent to 35 beds at any given point.
The strain on the health system is expected to increase dramatically in the next two decades, says a University of Toronto report that predicts a 70 per cent increase in the number of people living with major illness from 2020 to 2040 because of the aging population and more individuals living with multiple chronic conditions.
Hospitals are “redoubling efforts to try and find new efficiencies,” said Anthony Dale, the president of the Ontario Hospital Association. He says hospitals need certainty in the short term to plan their finances while a new funding model is discussed.
“While some savings will be found, it will not be possible to bring hospitals in deficit back into balance using these measures alone,” he said. “Remaining expenditure reduction strategies all have direct implications for patient care.”
The Investigative Journalism Bureau (IJB) at the University of Toronto’s Dalla Lana School of Public Health is a collaborative investigative newsroom supported by Postmedia that partners with academics, researchers and journalists while training the next generation of investigative reporters.
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