Ontario to spend extra $1.5B on new doctors' contract, budget watchdog says

Ontario's budget watchdog estimates that a new contract with the province's doctors will increase health spending by $1.5 billion over four years.

Last month's arbitration ruling put no hard cap on increases in the physician services budget, which the government had urged.

• Ontario doctors awarded new 4-year contract in arbitrated settlement

Payments to physicians in Ontario are currently over $12 billion, and the arbitrator's decision means the government will foot the bill for any growth at a time when it is working to eliminate a $13.5-billion deficit.

In a report on health spending released today, the Financial Accountability Office estimates the decision will increase the budget by $83 million in 2017-18, the first year of the retroactive, four-year deal, by $230 million this fiscal year, $710 million in the next year and $472 million in 2020-21.

The arbitrator also directed the province and the doctors to work together to find $480 million in annual savings, which the FAO says it took into account in its analysis.

The FAO also projects that the rate of growth in overall health spending will rise over the next several years, due to inflation, population growth and aging -- up to $73 billion in 2022-23, up from the current approximately $60 billion budget.