Health Canada Quarterly Financial Report - For the quarter ended December 31, 2025

Introduction
Basis of presentation
Highlights of fiscal quarter and fiscal year-to-date results
Risks and uncertainties
Significant changes in relation to operations, personnel and programs
Statement of authorities (unaudited)
Departmental budgetary expenditures by standard object (unaudited)

Introduction

Health Canada is the federal department responsible for helping Canadians maintain and improve their health. In keeping with the Department’s commitment to making this country’s population among the healthiest in the world as measured by longevity, lifestyle and effective use of the public health care system, its main responsibilities are as a regulator, a service provider, a catalyst for innovation, a funder, and an information provider. Health Canada administers the Canada Health Act, which embodies national principles to ensure a universal and equitable publicly funded health care system. A summary of Health Canada’s programs may be found in Part II of the Main Estimates.

This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act in the form and manner prescribed by the Treasury Board, and should be read in conjunction with the Main Estimates, Supplementary Estimates (A), and Supplementary Estimates (B).

This quarterly report has not been subject to an external audit or review.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of authorities includes the Department's spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates and Supplementary Estimates for the 2025-26 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts, or through legislation in the form of statutory spending authority for specific purposes.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of fiscal quarter and fiscal year-to-date results

This quarterly financial report reflects the results of the current fiscal period in comparison to the authorities provided in the Main Estimates, Supplementary Estimates (A), and Supplementary Estimates (B) for fiscal year 2025-26, as well as budget adjustments approved by Treasury Board up to December 31, 2025.

A. Significant changes to authorities

The following graph provides a comparison of net budgetary authorities available for spending at the end of each quarter of the current and previous fiscal years.

**Figure 1. Comparison of net budgetary authorities as at June 30, September 30 and December 31 of fiscal years 2024-25 and 2025-26 (in millions of dollars)**

The following table provides a comparison of total authorities available by vote at the end of the third quarter of the current and previous fiscal years.

Comparison of authorities available for spending as at December 31 of fiscal years 2024-25 and 2025-26
(in millions of dollars)
Authorities available	2024-25	2025-26	Variance
Vote 1 - Operating expenditures	3,397	5,933	2,536
Vote 5 - Capital expenditures	31	37	6
Vote 10 - Grants and contributions	5,818	6,020	202
Statutory	299	351	52
Total authorities	9,545	12,341	2,796

Authorities available for spending in fiscal year 2025-26 were $12,341 million at the end of the third quarter as compared with $9,545 million at the end of the third quarter of 2024-25, representing a net increase of $2,796 million, or 29%. This variance is primarily attributable to increases in funding related to the following:

$2,516.8 million for the Canadian Dental Care Plan;
$100.9 million in statutory authority for payments to provinces and territories under section 6 of the Pharmacare Act;
$53.1 million to support Youth Mental Health;
$50.0 million for the Oral Health Access Fund;
$49.9 million for the Emergency Treatment Fund;
$23.7 million to support internationally educated health professionals to transition to the Canadian workforce;
$22.4 million in statutory authority for payments to provinces and territories pursuant to section 103 of the Patent Act;
$20.5 million for the Diabetes Devices and Supplies Fund;
$17.0 million for Canada’s Border Plan; and
$10.0 million to support access to sexual and reproductive health care information and services.

These increases in authorities are partially offset by decreases in funding related to the following:

$78.9 million in statutory authority for payments pursuant to the Dental Benefit Act for the interim Canada Dental Benefit;
$19.5 million for the Opioid Crisis and Substance Use and Addictions Program; and
$15.5 million for Canada Health Infoway.

The fluctuations in authorities available for spending are most notable in the following standard objects: Transfer payments; Other subsidies and payments; Professional and special services; Personnel; and Repair and maintenance.

B. Significant changes in year-to-date expenditures

The following graph provides a comparison of net budgetary authorities available for spending and year-to-date expenditures by quarter for the current and previous fiscal years.

Figure 2. Comparison of net budgetary authorities and year-to-date expenditures for the quarters ended June 30, September 30 and December 31 of fiscal years 2024-25 and 2025-26 (in millions of dollars)

The following table provides a comparison of year-to-date spending by vote at the end of the third quarter of the current and previous fiscal years.

Comparison of year-to-date expenditures for the quarter ended December 31 of fiscal years 2024-25 and 2025-26
(in millions of dollars)
Year-to-date expenditures	2024-25	2025-26	Variance
Vote 1 - Operating expenditures	2,002	3,977	1,975
Vote 5 - Capital expenditures	9	9	0
Vote 10 - Grants and contributions	3,322	4,290	968
Statutory	203	251	48
Total year-to-date expenditures	5,536	8,527	2,991

At the end of the third quarter of 2025-26, total budgetary expenditures were $8,527 million compared with $5,536 million reported for the same period of 2024-25, representing an increase of $2,991 million, or 54%.

Year-to-date net operating expenditures have increased by $1,975 million or 99% when compared to the third quarter of 2024-25. The increase is a result of the following significant and partially offsetting factors:

Expenditures in relation to the Canadian Dental Care Plan including:
- $2,012.5 million increase in benefit payments and advance payments to Sun Life Assurance Company of Canada, due to an increase in the number of Canadians accessing this new program; and
- $27.0 million increase in Professional and special services for program administration support, program design and claims processing services provided by Sun Life Assurance Company of Canada and Employment and Social Development Canada;
$23.3 million increase in revenues, which results in a decrease in net operating expenditures. This variance largely reflects a fluctuation in timing of invoicing and collection of revenue and an increase in revenues of a regulatory nature following annual fee increases in accordance with Section 4(1) of the Fees in Respect of Drugs and Medical Devices Order; and
$15.0 million decrease in Personnel, primarily due to measures taken across the Department in managing the number of FTEs in a period of fiscal restraint, partially offset by an increase from annual salary increments for inflation and step increases.

There was an increase in Vote 10 – Grants and contributions year-to-date expenditures of $968 million or 29%, primarily a result of several offsetting factors including timing of payments made to recipients and changes in amount of funding available. Significant variances from the prior year are as follows:

$514.0 million increase in contributions to provinces and territories for Shared Health Priorities;
$392.9 million increase in contributions to provinces and territories for the National Strategy for Drugs for Rare Diseases Program;
$25.0 million in contributions to the Emergency Treatment Fund;
$13.2 million increase in contributions to the Canada Brain Research Fund Program; and
$11.1 million in contributions to provinces for the Diabetes Devices and Supplies Fund.

Statutory year-to-date expenditures have increased by $48 million or 23% from $203 million in 2024-25 to $251 million in 2025-26, primarily as a result of the following factors:

$59.3 million in contributions to provinces under section 6 of the Pharmacare Act;
$20.3 million in payments to provinces and territories pursuant to section 103 of the Patent Act; and
$18.7 million increase in statutory spending for employee benefit plan costs due to an increase in the rate used for the calculation of the employee benefit plan for 2025-26 and an increase in salary expenditures as indicated in the main estimates including annual salary and step increases; partially offset by
$27.5 million decrease in statutory spending for payments to recipients and advance payments to Canada Revenue Agency through an administrative arrangement to provide payments to recipients pursuant to the Dental Benefit Act under the interim Canada Dental Benefit, which ended on June 30, 2024; and
$23.5 million decrease in statutory spending for costs incurred by Health Canada on behalf of the Public Health Agency of Canada under the Shared Services Partnership agreement, due to a variation in timing and amount in allocation of expenditures pursuant to section 4.2 of the Department of Health Act.

C. Quarterly variances

The following graph presents a comparison of quarterly spending by quarter and by fiscal year.

**Figure 3. Comparison of quarterly expenditures for the quarters ended June 30, September 30 and December 31 of fiscal years 2024-25 and 2025-26 (in millions of dollars)**

Expenditures in the third quarter of fiscal year 2025-26 were $3,198 million compared with $1,669 million for the third quarter of 2024-25, representing an increase of $1,529 million or 92% in quarterly spending.

The increase in quarterly spending is primarily due to:

Expenditures in relation to the Canadian Dental Care Plan including:
- $681.1 million increase in payments to Sun Life Assurance Company of Canada for dental benefits; and
- $33.9 million increase in Professional and special services for program administration support, program design and claims processing services provided by Sun Life Assurance Company of Canada and Employment and Social Development Canada;
$514.6 million increase in contributions to provinces and territories for Shared Health Priorities;
$190.8 million increase in contributions for the National Strategy for Drugs for Rare Diseases Program;
$57.5 million increase in contributions resulting from an adjustment recorded in the previous year to reduce the advance payment to Canada Revenues Agency under the interim Canada Dental benefit;
$29.7 million in contributions to provinces under section 6 of the Pharmacare Act;
$21.3 million increase in contributions to Canada Health Infoway;
$16.0 million increase in contributions to Terry Fox Research Institute;
$13.8 million in contributions to the Emergency Treatment Fund; and
$11.1 million in contributions to provinces for the Diabetes Devices and Supplies Fund; partially offset by
$11.2 million decrease in contributions to the Canadian Partnership Against Cancer.

Risks and uncertainties

Health Canada operates in a complex and dynamic environment, where several factors can impact on its efforts to deliver results for Canadians. These include health workforce shortages, the availability and affordability of health services, substance use-related harms and the illegal drug crisis, global supply chain disruptions, misinformation and disinformation, and the impacts of climate change, which often lie beyond the Department’s sole control. Addressing these complex issues requires close collaboration with federal partners, provincial and territorial (P/Ts) governments, Indigenous organizations, non-governmental stakeholders, industry, and international regulators.

Health Canada works to foster sustainable health care systems, with the goal of ensuring that Canadians have access to appropriate and effective health care. However, these systems face significant challenges related to sustainability, access to services, and service delivery. Although health care delivery is primarily under P/T jurisdiction, with funding administered via the Canada Health Transfer, the Department plays an important role in supporting P/Ts in their health care and health system priorities. This includes upholding the Canada Health Act, advancing the Government’s Working Together to Improve Health Care for Canadians Plan, which provides funding to support P/Ts on shared priorities, and supporting access to oral health care services for Canadians.

The Department also works with domestic and international partners to assess, manage, and communicate the health and safety risks and benefits associated with health and consumer products, food, chemicals, pesticides, environmental factors, tobacco and vaping products, cannabis, and controlled substances. Addressing the need for increased access to health products, the illegal drug crisis, global supply chain disruptions, and emerging health and environmental risks underscores the importance of maintaining and adapting regulatory measures. Health Canada continuously modernizes its regulatory approaches, strengthens partnerships, and supports innovative initiatives to respond to health risks more effectively and efficiently, and with greater agility, as outlined in the Report on Red Tape Reduction.

Health Canada’s priorities remain focused on ensuring that government investments and the regulatory framework protect the health and safety of Canadians. There are both corporate- and program-level risks associated with the rapid delivery of government commitments, programs and services. As per its Risk Management Policy, the Department applies a consistent approach to risk management and maintains a comprehensive, up-to-date Corporate Risk Profile to support risk-based decision-making.

Health Canada manages risks and uncertainty through effective engagement across the organization with agile and sound governance structures, as well as long-term planning. The executive-level committee on Finance, Investment Projects and Transformation recommends overall direction for financial management and control, and ensures alignment of investments with departmental strategies and transformation initiatives.

Significant changes in relation to operations, personnel and programs

While there have been no significant changes in relation to operations, personnel and programs during this quarter, it should be noted that, on December 19, 2025, the Prime Minister announced the appointment of Ms. Shalene Curtis-Micallef as Deputy Minister of Health Canada, effective January 19, 2026.

Approved by:

Original signed by Shalene Curtis-Micallef
Shalene Curtis-Micallef
Deputy Minister
Ottawa, Canada
Date: February 26, 2026

Original signed by Ryan Higgs
Ryan Higgs
Acting Assistant Deputy Minister and Chief Financial Officer
Ottawa, Canada
Date: February 13, 2026

Statement of authorities (unaudited)

Statement of authorities for fiscal year 2025-26
(in thousands of dollars)
Authority	Total available for use for the year ending March 31, 2026^{Footnote 1}	Used during the quarter ended December 31, 2025	Year-to-date used at quarter-end
Vote 1 - Operating expenditures	5,932,526	1,563,604	3,976,904
Vote 5 - Capital expenditures	36,758	4,291	9,302
Vote 10 - Grants and contributions	6,020,117	1,533,824	4,290,139
(S)^{Footnote 2} Contributions to employee benefit plans	153,692	38,423	115,269
(S) Ministers’ salary and motor car allowance	204	25	73
(S) Spending of proceeds from the disposal of surplus Crown assets	603	0	0
(S) Spending of revenues pursuant to section 4.2 of the Department of Health Act	51,463	27,246	34,232
(S) Payments to provinces and territories pursuant to section 103 of the Patent Act	22,940	1,130	20,265
(S) Payments related to the Dental Benefit Act	21,278	0	21,278
(S) Payments to provinces and territories under section 6 of the Pharmacare Act	100,939	29,652	59,305
Total authorities	12,340,520	3,198,195	8,526,767
Footnote 1 Includes only Authorities available for use and granted by Parliament at quarter end Return to footnote 1 referrer Footnote 2 (S) - Statutory Vote Return to footnote 2 referrer

Statement of authorities for fiscal year 2024-25
(in thousands of dollars)
Authority	Total available for use for the year ending March 31, 2025^{Footnote 1}	Used during the quarter ended December 31, 2024	Year-to-date used at quarter-end
Vote 1 - Operating expenditures	3,397,340	878,684	2,002,183
Vote 5 - Capital expenditures	31,102	2,728	8,447
Vote 10 - Grants and contributions	5,817,814	779,739	3,321,778
(S)^{Footnote 2} Contributions to employee benefit plans	140,244	32,182	96,545
(S) Minister of Health - Salary and motor car allowance	197	50	149
(S) Collection agency fees	18	18	18
(S) Spending of proceeds from the disposal of surplus Crown assets	542	20	45
(S) Spending of revenues pursuant to section 4.2 of the Department of Health Act	57,742	33,270	57,742
(S) Payments related to the Dental Benefit Act	100,200	(57,500)	48,764
Total authorities	9,545,199	1,669,191	5,535,671
Footnote 1 Includes only Authorities available for use and granted by Parliament at quarter end Return to footnote 1 referrer Footnote 2 (S) - Statutory Vote Return to footnote 2 referrer

Departmental budgetary expenditures by standard object (unaudited)

Budgetary expenditures by standard object for fiscal year 2025-26
(in thousands of dollars)
Standard object	Planned expenditures for the year ending March 31, 2026	Expended during the quarter ended December 31, 2025	Year-to-date used at quarter-end
Expenditures:
Personnel	1,204,066	315,887	863,403
Transportation and communications	15,058	2,636	5,934
Information	38,664	7,804	11,052
Professional and special services	488,087	136,245	258,608
Rentals	22,943	9,120	21,728
Repair and maintenance	31,639	3,521	7,331
Utilities, materials and supplies	26,979	5,330	10,121
Acquisition of land, buildings and works	1,105	1,072	1,778
Acquisition of machinery and equipment	38,523	3,795	11,192
Transfer payments	10,689,996	2,801,518	7,518,710
Other subsidies and payments	30,149	422	25,103
Total gross budgetary expenditures	12,587,209	3,287,350	8,734,960
Less revenues netted against expenditures:
Rights and privileges	63,784	55,230	61,898
Services of a non-regulatory nature	39,281	7,523	25,813
Services of a regulatory nature	137,925	26,402	115,477
Services to other government departments	5,699	0	5,005
Total revenues netted against expenditures	246,689	89,155	208,193
Total net budgetary expenditures	12,340,520	3,198,195	8,526,767

Budgetary expenditures by standard object for fiscal year 2024-25
(in thousands of dollars)
Standard object	Planned expenditures for the year ending March 31, 2025	Expended during the quarter ended December 31, 2024	Year-to-date used at quarter-end
Expenditures:
Personnel	1,159,661	318,613	866,863
Transportation and communications	12,275	3,093	6,842
Information	42,952	10,310	15,306
Professional and special services	693,768	107,330	258,363
Rentals	17,438	11,922	24,619
Repair and maintenance	15,163	4,370	11,485
Utilities, materials and supplies	26,821	3,751	10,934
Acquisition of land, buildings and works	174	(977)	189
Acquisition of machinery and equipment	41,955	8,052	14,204
Transfer payments	7,514,014	1,335,582	4,491,954
Other subsidies and payments	261,257	(56,607)	19,799
Total gross budgetary expenditures	9,785,478	1,745,439	5,720,558
Less revenues netted against expenditures:
Rights and privileges	62,690	48,267	54,710
Services of a non-regulatory nature	36,790	6,876	25,041
Services of a regulatory nature	135,100	21,103	100,518
Services to other government departments	5,699	2	4,618
Total revenues netted against expenditures	240,279	76,248	184,887
Total net budgetary expenditures	9,545,199	1,669,191	5,535,671

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2026-02-27

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