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Executive Summary

Canada has a single-payer health insurance scheme that covers virtually all residents.  Most physicians are in private practice and they bill the insurance plans for their services.  Being in private practice, they require medical liability insurance.  This is usually obtained through a professional organization.  However, physicians are reimbursed for a large portion of their insurance premiums by provincial governments.  Fees are lower than in the United States for a number of reasons.  Two of these are that Canada’s highest courts have set limits on awards and the country’s liability laws make establishing professional negligence more difficult.  Another is that the physicians’ insurance company defends lawsuits very vigorously.

The Canadian Health Care System

Although Canada is often characterized as a country that has “socialized” medicine, its system differs considerably from countries in which physicians are essentially employed by the state or the entire medical profession is under unified state control.  In Canada, most medical practitioners are in private practice just as they are in the United States.  Most physicians have their own offices, set their own schedules, and see patients who have chosen to come to them on a regular basis or for a particular condition.  Canadians are not assigned doctors by the government or an insurance plan.  They do have choices.[1

Where the Canadian system differs most significantly from that of the United States is in how health insurance is provided.  In Canada, all of the provinces have a single health insurance program that covers virtually all residents.  For example, Ontario has the Ontario Health Insurance Plan[2] and Quebec has the Quebec Health Insurance Plan.[3] The federal government subsidizes these provincial health insurance plans through its general revenues.  There are no separate payroll deductions to fund the health care plans and Canada does not have a separate old-age health care program like Medicare in the United States.

When the provincial health insurance plans were first created in the 1960’s and 1970’s, the federal government paid for about half of the provincial plans’ costs.  This percentage fell by more than half in the 1990’s, but has gone back up somewhat in recent years.[4]  The provincial contributions to the plans are also mostly from general revenues.  However, the largest province, Ontario, and a couple of other provinces also impose a levy on employers to help pay for their programs.

As can be seen from the above, the Canadian system is more accurately described as a “single-payer” system than a “socialized” one.  However, even this description needs to be qualified.  Canadian physicians are not required to submit bills for their fees to the provincial health insurance plans.  They can “opt out” of the systems and bill their patients directly.  However, physicians who do decline to participate in a provincial plan must operate entirely outside it as they are generally prohibited from billing the insurance plan for some of their services and patients for others.  In other words, physicians cannot be partial participants.  For this reason, the vast majority of Canada’s physicians are enrolled in the provincial health insurance plans and earn virtually all of their income from the bills they submit to them.

Canada’s provincial health insurance plans are generally similar, but do have some differences.  For example, the Province of Quebec has more generous prescription drug coverage than any other province.  However, the similarities are far greater than the differences.  One of the major reasons for this is that in order to qualify for federal subsidies, provincial health insurance plans must adhere to the guidelines set out in the Canada Health Act.[5]  The one guideline that has been the subject of the most controversy over the years has concerned “extra-billing.”  The Canada Health Act does not allow the provinces to permit physicians to bill patients for a portion of their services through co-payments or other types of additional fees.  The federal government has remained firm in this position for many years on the grounds that it does not want to see the creation of two-tiered systems in which patients who could afford to pay for a portion of their health care would receive more comprehensive coverage and preferential treatment compared to those who could not afford additional health costs.  In the past, some provinces have lost a portion of their transfer funds for allowing some extra-billing, but a number would still like to be able to allow for extra-billing in certain cases in order to help keep their costs down without having to pay a penalty in the form of reduced transfer payments.

Canada’s provincial health insurance plans do not cover all services.  Dental care, eye exams, and cosmetic surgery are three examples of services that generally are not covered.  However, most Canadian employees have supplemental medical insurance provided by their employers that give at least partial coverage for these services.  For example, supplemental insurance will usually cover one eye exam and one pair of glasses per year.  Many collective bargaining agreements provide for supplemental insurance.  In other cases, supplemental insurance is offered as a non-mandated work benefit, but it is not required.

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Liability Insurance

Canadian physicians who are in private practice or work for hospitals are required to obtain medical liability insurance.  Such insurance is available through the Canadian Medical Protective Association (CMPA).  Insurance premiums or “membership fees” are based upon the type of work a physician performs and the region in which he or she practices.  The three fee regions are Quebec, Ontario, and the Rest of Canada.  The CMPA has published Fee Schedules.[6]  Fees are not based upon a physician’s record and are not increased for a history of complaints or on account of claims paid.

Membership fees paid to the CMPA give physicians insurance coverage and a right to representation in medical malpractice lawsuits.  However, provincial governments reimburse physicians for at least a portion of their membership fees.  These arrangements are not generally made public.  However, a recently released Memorandum of Understanding between the Ministry of Health, the Ontario Medical Association, and the CMPA reveals that physicians are currently reimbursed for about 83 percent of their membership fees.[7]  It has been reported that the Ontario government paid about Can$112 million to reimburse physicians for medical malpractice fees in 2008.[8]  Government officials in Ontario have explained that the purpose of the reimbursement program is to encourage physicians to practice in the province and not to move to another province or the United States where average incomes may be higher.  Critics contend that because the CMPA’s fees are not based upon a physician’s record, the system does little to penalize physicians who are found to be liable for malpractice even on multiple occasions.[9]  Physicians who have committed acts of malpractice may, however, be disciplined by their provincial licensing body.  Discipline can range from suspensions to losses of the privilege to continue practicing medicine.

The CMPA has also been criticized for defending medical malpractice suits extremely vigorously and turning down reasonable offers to settle claims to discourage other lawsuits on a number of occasions.[10]  One judge reportedly referred to the CMPA as pursuing a “scorched earth policy.”[11]  In Canada, a losing party is generally required to pay about two-thirds of a successful party’s legal fees.  Since the CMPA often incurs large legal expenses in defending claims, this is an additional disincentive to persons who believe that they have been injured through malpractice from bringing an action for damages.

One other feature of Canadian law that tends to discourage parties from suing physicians for malpractice is that the Supreme Court has set out guidelines that effectively cap awards for pain and suffering in all but exceptional cases.  In a trilogy of decisions released in 1978, the Supreme Court established a limit of Can$100,000 on general damages for non-pecuniary losses such as pain and suffering, loss of amenities and enjoyment of life, and loss of life expectancy.[12]  The Supreme Court did state that there may be extraordinary circumstances in which this amount could be exceeded, and courts have allowed the figure to be indexed for inflation so that the current suggested upper limit on awards for non-pecuniary losses is close to $300,000.[13]  Nevertheless, the flexible cap on non-pecuniary losses is a major disincentive to persons considering whether they should sue a physician for malpractice and for lawyers to specialize in or seek out malpractice cases.

The Supreme Court of Canada has also limited the types of cases in which punitive damages may be awarded, although it has allowed as much as Can$1 million in punitive damages in an extraordinary case.[14]  A Canadian law firm has summarized the holding in this leading case concerning punitive damages as follows:

  1. Punitive damages are very much the exception rather than the rule;
  2. Imposed only if there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour.
  3. Where they are awarded, punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage or profit gained by the defendant,
  4. Having regard to any other fines or penalties suffered by the defendant for the misconduct in question.
  5. Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation.
  6. Their purpose is not to compensate the plaintiff, but
  7. to give a defendant his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community’s collective condemnation (denunciation) of what has happened.
  8. Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives, and
  9. they are given an amount that is no greater than necessary to rationally accomplish their purpose.
  10. While normally the state would be the recipient of any fine or penalty for misconduct, the plaintiff will keep punitive damages as a "windfall" in addition to compensatory damages.
  11. Judges and juries in our system have usually found that moderate awards of punitive damages, which inevitably carry a stigma in the broader community, are generally sufficient.[15]

Thus, punitive damages in tort actions in Canada are relatively rare.

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Despite the above factors that discourage medical malpractice lawsuits in Canada, there are numerous reported cases in which doctors, hospitals, and health care professionals have been found liable for acts of negligence in the delivery of health care.  In order to be successful, a plaintiff must show that the defendant owed him or her a duty of care, the defendant did not deliver the standard of care owed, the plaintiff’s injuries were reasonably foreseeable, and the defendant’s breach of the duty of care was the proximate cause of the plaintiff’s injuries.[16]  An error of judgment is not necessarily negligence even if it causes injury.[17]

Common types of negligence actions are as follows:

  1. Failure to attend a patient
  2. Failures in diagnosis
  3. Failures in re-diagnosis
  4. Failures in referral or consultation
  5. Failure to communicate with other physicians
  6. Failure to protect or warn third parties
  7. Failure to report abuse
  8. Substandard treatment[18]

Hospitals can be held liable under the doctrines of vicarious liability or direct liability for the conduct of their staffs.[19]

Concluding Remarks

Controversy over the effect that malpractice lawsuits are having on the delivery of health care have never risen in Canada to the levels that they have in the United States.  Awards against physicians have, on a per capita basis, been much less frequent than in the United States and awards have generally been much smaller for similar injuries.  There are a number of factors as to why this is the case.  Proving negligence can be harder, the CMPA defends malpractice lawsuits very vigorously, there is a flexible cap on non-pecuniary losses, and punitive damages are seldom awarded.  Nevertheless, there is a growing body of case law respecting medical malpractice that demonstrates a tendency of the courts and juries to be somewhat more open to claims that a physician should be held liable for committing an act of negligence that causes injury to a person to whom he or she owes a duty of care.

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For more information on Canada see:

Prepared by Stephen F. Clarke,
Senior Foreign Law Specialist
June 2009

  1. Bruce Robinson, Canada’s Single-Payer Health Care System—It’s Worth a Look, us/health/healthwatch/canada.html (external link) (last visited June 10, 2009). [Back to Text]
  2. Ontario Ministry of Health and Long Term Care, Ontario Health Insurance Plan, (external link) (last visited May 27, 2009). [Back to Text]
  3. Quebec, Regie de l’Assurance Maladie, Heath Insurance: Coverage for Your Health, http://www.ramq. (external link) (last visited May 27, 2009). [Back to Text]
  4. Health Canada, Federal Transfers and Deductions, (external link) (last visited June 8, 2009). [Back to Text]
  5. Canada Health Act, R.S.C. c. C-6 (1985), as amended, available at (external link) (last visited May 27, 2009). [Back to Text]
  6. Canadian Medical Protective Association, Membership Fees, available at cmpapd04/docs/membership/fees/2009cal-e.pdf (external link) (PDF) (last visited May 27, 2009). [Back to Text]
  7. Steve Buist, Taxpayers Footing the Bill for Malpractice Insurance, Hamilton Spectator, Feb. 7, 2009, available at (external link) (last visited May 28, 2009). [Back to Text]
  8. Id. [Back to Text]
  9. Id. [Back to Text]
  10. Id. [Back to Text]
  11. Id. [Back to Text]
  12. Andrews v. Grand & Toy Alberta Ltd., [1978] 2 S.C.R. 229. [Back to Text]
  13. Koukounakis v. Stainrod, 23 O.R. (3d) 299 (Ont.) (1995). [Back to Text]
  14. Whiten v. Pilot, [2002] 1 S.C.R. 595, available at (external link). [Back to Text]
  15. Nelligan O’Brien Payne LLP, Aggravated and Punitive Damages (2006), available at (external link) (PDF). [Back to Text]
  16. Canadian Health Facilities Law Guide (C.C.H. Can.) ¶ 3815 (2009).
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  17. Lapointe et al. v. Chevrette, 90 D.L.R. (4th) 7 (S.C.C. 1992).
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  18. Canadian Health Facilities Law Guide, supra note 15, ¶¶ 4105-4150. [Back to Text]
  19. Id. ¶ 4151.

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Last Updated: 06/06/2015