Stabilization funding for small northeastern hospitals may not cover rising costs

Ontario announced a four per cent increase in targeted funding for small and rural hospitals, but leaders in northeastern facilities say the allocations still leave them expecting deficits before the end-of-March budget deadline.

Ontario has released the final portion of a four per cent increase in targeted funding for small and rural hospitals under the Health Sector Stabilization Plan. The payment comes a few months before hospitals must balance their budgets under provincial law. Local hospital leaders in northeastern Ontario acknowledged the money but said it does not fully cover current operating pressures. They cited staffing, retroactive pay and new security expenses as drivers of ongoing shortfalls. What officials reported: - The Ministry said the four per cent increase represents about $6 billion more to hospitals provincewide compared with last year, and Conservative MPP Bill Rosenberg said $11 million was allocated to seven hospitals in Algoma-Manitoulin. - Manitoulin Health Centre received $1.3 million; the MICs Group of Health Services (Matheson, Iroquois Falls and Cochrane) received $2.7 million; and St. Joseph's Hospital in Elliott Lake received $2.8 million. - Hospital CEOs said they still expect to be in deficit at fiscal year end: Manitoulin anticipates about a $200,000 shortfall, MICs expects about $500,000 across three sites, and St. Joseph's said its deficit level is undetermined. - Leaders identified causes including high agency nursing costs, retroactive pay obligations after a wage-cap bill was struck down, current flu outbreaks, and added security costs linked to mental health and substance use presentations. Summary: The province describes the increase as targeted support for core services, while local leaders say the funds will not be sufficient to eliminate year-end deficits. Hospitals remain under pressure from staffing and related costs, and the next procedural milestone is the end of March when hospitals are required by law to balance their budgets. The Financial Accountability Office has noted that although targeted hospital funding is up, overall provincial health spending growth has slowed to 0.7 percent.