Canada’s federal health program for refugees and asylum seekers has grown into a nearly $1-billion annual expense, driven by a much larger eligible population and the length of time many claimants remain in the immigration system. Parliamentary Budget Officer estimates show spending climbing from $211 million in 2020-21 to about $896 million in 2024-25, with costs approaching $1 billion in 2025-26.
The asylum backlog is closely connected to that spending. More than 300,000 refugee claims were pending around the end of 2025, although newer Immigration and Refugee Board data show the inventory falling to 276,649 by June 2026. A separate PBO calculation found that adding 30 days to average processing times could increase annual federal health costs by roughly $72 million in 2026-27—illustrating how administrative delays can translate directly into higher program expenses.
The Near-$1 Billion Price Tag Followed Years of Rapid Growth
The Interim Federal Health Program, or IFHP, has expanded dramatically alongside Canada’s asylum system. Federal spending on the program rose from $211 million in 2020-21 to approximately $896.5 million in 2024-25. The Parliamentary Budget Officer initially projected costs of roughly $989 million for 2025-26 before later updating its baseline to approximately $975 million. Without policy changes, spending was projected to continue rising beyond $1 billion annually as the number of people receiving coverage and their time in the program increased.
Those totals cover more than asylum seekers alone. The IFHP also serves resettled refugees and certain other eligible groups who temporarily lack provincial or territorial health coverage. In 2024-25, approximately 623,000 people were eligible for IFHP benefits, including more than 440,000 asylum claimants. That distinction matters because calling the entire amount “refugee health spending” can obscure the program’s broader mandate. Still, asylum claimants represent its largest beneficiary group and are a major factor behind the recent increase in expenditures.
What Canada’s Refugee Health Program Actually Covers
The IFHP is designed as temporary health protection rather than a replacement for provincial medicare. Eligible beneficiaries can receive basic services such as hospital treatment, physician and nursing care, laboratory testing, diagnostic services, ambulance transportation and prenatal and postnatal care. Supplemental benefits can include prescription medication, urgent dental treatment, vision services, mental-health counselling, physiotherapy, assistive devices and some home-care services.
Ottawa changed the cost structure on May 1, 2026. Basic medical services remain fully covered, but beneficiaries now pay $4 for each eligible prescription fill or refill and 30 per cent of the cost of covered supplemental services. A $200 eligible urgent dental treatment, for example, would leave the patient responsible for $60 while the federal program pays $140. The government presented the change as a way to preserve essential coverage while controlling rapidly rising expenses. The PBO estimates the new cost-sharing measures could reduce federal IFHP spending by about $162 million in 2026-27, with annual savings potentially reaching $217 million by 2029-30.
The Backlog Crossed 300,000—But Has Recently Started Falling
The size of Canada’s asylum inventory became especially significant in late 2025. The PBO found that more than 300,000 refugee claims were awaiting decisions in December, with roughly 65 per cent having already been pending for more than a year. Its underlying data put the inventory at approximately 304,000 claims, while the IRB’s subsequently published monthly series recorded 300,151 pending Refugee Protection Division claims for December 2025. Differences of that size can occur because of reporting dates and data revisions, but both datasets show the same basic picture: an historically large queue.
More recent figures provide an important update. The IRB reported 299,973 pending claims in January 2026, 295,502 in March, 286,940 in May and 276,649 by June. June was particularly notable because the Refugee Protection Division finalized 12,985 cases while receiving just 2,679 new claims. The backlog therefore remains enormous, but describing it as currently above 300,000 would no longer reflect the latest published monthly data. The 300,000 threshold is better understood as the recent peak that helped drive federal cost projections.
The $72 Million Figure Shows How Expensive Delays Can Become
The most striking number in the PBO analysis is also one that requires careful interpretation. The budget watchdog estimated what would happen if the average processing time for asylum claims increased by 30 days. Under its model, that additional month would raise annual IFHP expenditures by approximately $71.8 million in 2025-26 and $72.2 million in 2026-27. By 2029-30, the same 30-day increase could add about $92.2 million annually because the projected beneficiary population and health costs would be larger.
That does not mean Ottawa receives a new $72-million bill every calendar month simply because the backlog still exists. Instead, it measures the financial effect of keeping claimants eligible for the health program an average of one month longer. The mechanism is straightforward: when a case takes longer to resolve, many claimants remain covered by the IFHP for longer as well. With hundreds of thousands of cases in the system, even a relatively small increase in average processing time can create tens of millions of dollars in additional annual expenses.
Some Claimants Remain Covered for Years While Cases Move Through the System
The length of time people spend eligible for IFHP coverage helps explain why processing speed matters so much. According to the PBO, asylum claimants were remaining covered for approximately four years on average by 2024-25, compared with roughly three years several years earlier. The figure can extend well beyond the time needed for an initial hearing because a claim may move through appeals, reviews or removal processes before a person leaves Canada or obtains another form of health coverage.
For cases finalized in 2025, the PBO found an average IRB processing time of approximately 19 months. Cases involving appeals generally took an additional six to 12 months compared with those without an appeal. The downstream system adds another layer: at the end of 2025, nearly 74,000 failed refugee claimants were in the Canada Border Services Agency’s removals inventory. Some were subject to stays or circumstances preventing removal, some had active removal proceedings and others were listed as wanted. Depending on status, certain individuals can remain eligible for federal health benefits until departure, meaning immigration-processing delays can continue affecting costs even after an initial decision.
Urgent Dental Care Has Become One of the Biggest Spending Drivers
The rise in IFHP costs is not simply the result of more doctor visits. Supplemental health benefits accounted for more than half of program expenditures examined by the PBO, with urgent dental treatment emerging as an especially large category. Federal spending on urgent dental benefits increased from roughly $30 million in 2019-20 to approximately $257 million in 2024-25—an increase of more than eightfold in five years.
Urgent dental care represented approximately 56 per cent of supplemental-benefit spending in 2024-25, while dental treatment and prescription drugs together accounted for nearly 80 per cent. The average cost of dental claims also increased by roughly 7 per cent annually between 2019-20 and 2024-25. Mental-health counselling has become more significant as well, rising from less than 1 per cent of supplemental expenditures in 2016 to about 11 per cent by 2025. Those figures help explain why Ottawa targeted supplemental services for its new 30-per-cent co-payment while continuing to fully cover core physician and hospital services.
Ontario and Quebec Account for Nearly Nine-Tenths of Spending
IFHP expenditures are also heavily concentrated geographically. Based on where health services were delivered in 2024-25, Ontario accounted for approximately 59.8 per cent of spending and Quebec another 29 per cent. Combined, the two provinces represented almost 89 per cent of federal IFHP health expenditures. Alberta accounted for roughly 7 per cent and British Columbia about 2.8 per cent, with the remaining provinces and territories making up a comparatively small share.
That distribution largely mirrors where many asylum claimants enter the system, settle temporarily or access services. Toronto and Montreal, in particular, have long been major destinations for newcomers and asylum seekers. The PBO cautioned that the location where a medical service is billed does not necessarily represent a beneficiary’s permanent residence, so the numbers should not automatically be treated as a measure of provincial population shares. Nor did its work attempt to quantify the effect on individual hospitals or clinics. What the data clearly show, however, is that the federal program’s rapid growth has not been evenly distributed across the country.
Ottawa Is Trying to Reduce Costs, but Faster Decisions Could Matter More
The federal government has already taken several steps aimed at limiting future IFHP growth. The May 2026 co-payment system is expected to save about $162 million in its first full fiscal year and potentially more than $217 million annually by 2029-30. Ottawa has also tightened asylum eligibility through Bill C-12, which received royal assent on March 26, 2026. Among its provisions, certain claims made more than one year after a person first entered Canada and some claims made after irregular entry from the United States are no longer referred to the IRB, although affected individuals can generally still seek a pre-removal risk assessment.
The PBO modelled an illustrative scenario in which the changes reduced the number of newly eligible asylum claimants by 26 per cent. Under that assumption, federal IFHP spending could be about $220 million lower by 2029-30, although the watchdog stressed that actual savings could be smaller because some affected people may remain eligible through other processes. Policy analysts at the C.D. Howe Institute have argued that reducing processing delays may offer a more durable solution than shifting costs to claimants. The broader lesson from the federal data is that health spending cannot be separated from the speed and efficiency of the asylum system itself.
