New research reveals that while Ontario is funding training for recent nursing graduates, hospitals are spending more on agency nurses and other temporary workers than on permanent staff. (Ben Nelms/CBC)
In Ontario, hospitals have spent a staggering $9.2 billion on for-profit staffing agencies over the past decade. A new report commissioned by the Canadian Centre for Policy Alternatives, titled Hollowed Out: Ontario Public Hospitals and the Rise of Private Staffing Agencies, reveals that these agencies, which supply nurses and other health professionals, are becoming increasingly expensive for the province’s healthcare system.
From 2013 to 2023, the cost of agency nurses has nearly doubled, rising from $21 per person to $41. Meanwhile, the cost of employing full-time staff has grown more slowly, from $604 per capita to $641. This stark contrast highlights the burden on Ontario's public hospitals, which are paying significantly more for temporary agency staff than for their own employees.
Andrew Longhurst, a political economist and author of the report, pointed out that the rise in agency costs is largely due to government budget cuts in healthcare. As the population grows and ages, hospitals struggle to manage the increasing demand for healthcare services, exacerbating problems like long emergency room wait times and delayed surgeries.
The growing reliance on for-profit staffing agencies has created a vicious cycle: hospitals become more dependent on these costly agencies, further undermining the public sector. The agencies are able to charge up to three times the regular rate for temporary workers, making it difficult for hospitals to balance their budgets.
One hospital, Markham Stouffville, is working to break free from this cycle. By September, the hospital hopes to be "agency-free" and reduce its reliance on temporary nurses. The hospital has already reduced agency nursing by two-thirds by offering additional training for newly graduated and internationally educated nurses, creating a resource team to work across multiple units, and hosting recruitment events. This is part of a broader effort by Oak Valley Health, which oversees the hospital, to provide more stable staffing.
The provincial government has supported this initiative through the Nursing Graduate Guarantee program, which provides funding for new graduates and internationally trained nurses. Since 2020, the program has helped hire over 3,300 nurses across the province.
Despite the benefits of having their own staff, temp agency nurses are drawn to their higher wages and flexible schedules, often earning more than double what full-time nurses make for the same work. However, the hospital’s leadership believes that having their own staff is beneficial because it offers patients continuity of care and helps build trust, as the same nurses are more likely to see patients regularly.
Longhurst also pointed out that smaller hospitals, especially in northern Ontario, face even greater pressure. In areas with smaller budgets, the reliance on private agencies is higher, contributing to rising healthcare costs. In fact, private agency costs accounted for up to 17% of staffing expenditures in Ontario’s northern regions in 2022-23.
Despite these issues, Ontario’s Ministry of Health emphasized that agency hours still make up less than 2% of total hours worked in the province’s hospitals. The Ontario government has introduced new legislation to increase transparency in the use of staffing agencies, which could help reduce administrative costs.
Other provinces, including Quebec and New Brunswick, are also grappling with the issue of agency staffing. Quebec is planning to phase out private staffing agencies by 2026, though this is currently under legal challenge. British Columbia is considering similar measures, aiming to reduce the use of agencies over time.
Ultimately, experts agree that the real solution lies in addressing the root causes of the nursing shortage, including improving working conditions and reducing turnover. As long as these issues remain unresolved, hospitals will continue to face challenges in relying on temporary staffing.
