Canada’s health-care system is grappling with a growing dependence on private nursing agencies to fill staffing gaps in hospitals and nursing homes. A recent study by the Canadian Federation of Nurses Unions (CFNU) reveals that these agencies cost the system at least $1.5 billion in 2023-24. This massive expenditure reflects not only a diversion of public funds but also a reliance on short-term solutions that worsen long-term problems.

The report, Opening the Black Box: Unpacking the Use of Nursing Agencies in Canada, by nursing scholar Joan Almost, outlines troubling trends. Since the COVID-19 pandemic, health-care facilities have increasingly relied on for-profit staffing firms to address critical shortages caused by burnout and overwork among front-line workers. This reliance has driven a six-fold increase in spending on agency staff since 2020.

Private agency nurses often earn significantly higher hourly wages than their public-sector counterparts, but this comes at a steep cost to the system. Agencies charge hospitals and care homes exorbitant fees—averaging $133 per hour in 2023-24—to cover wages and their own profits. According to the CFNU, agency nurses provided the equivalent of 3,724 full-time hours last year, illustrating the scale of outsourcing.

While agency work offers nurses better pay, it often lacks benefits such as pensions and health coverage, further destabilizing the public system by drawing away experienced staff. This stopgap approach redirects resources away from addressing root issues: underfunding, stagnant wages, rigid working conditions, and insufficient training opportunities for nurses.

Historically, staffing agencies were a supplemental resource, providing travel nurses to remote areas or filling emergency shifts. However, the pandemic transformed them into a staple of health-care staffing, creating a vicious cycle: public facilities, unable to retain staff, increasingly rely on agencies, while higher pay at agencies attracts more nurses away from the public system.

The implications for Canada’s public health-care system are profound. Every dollar spent on agency fees is a dollar that could have been invested in recruiting and retaining permanent staff. The lack of regulation around agency practices has allowed costs to balloon unchecked. As CFNU President Linda Silas noted, “All you need is a laptop to promote yourself to employers.”

The report proposes several solutions to curb reliance on private staffing. Central to these is the creation of a government-run centralized staffing agency. A publicly funded model could provide temporary staff without the profit-driven markups of private agencies, ensuring cost control and accountability.

Public facilities must also focus on becoming “employers of choice” by offering competitive compensation, flexible schedules, and professional development opportunities. These measures would help draw nurses back from private agencies and stabilize the workforce. The report further urges governments to engage directly with nurses, recognizing their expertise and involving them in crafting policy solutions for staffing shortages.

This issue transcends economics and strikes at the values underpinning Canada’s health-care system. Built on principles of equity and public service, the system is threatened by the rise of for-profit staffing agencies, which represent creeping privatization. Redirecting public funds to private profits undermines the system’s integrity, with patients ultimately paying the price.

A fundamental shift in priorities is needed. Governments and health-care providers must move away from temporary fixes and invest in sustainable strategies to rebuild the public health-care workforce. Addressing the root causes of the staffing crisis—low pay, burnout, and inflexible working conditions—requires bold action and significant investment. Such steps are essential to ensuring Canada’s health-care system remains equitable and capable of meeting the nation’s needs.

As Almost’s report concludes, “Agencies were never intended to fill a chronic nationwide full-time nursing staff shortage, and the system cannot continue to accommodate this spending.” The time has come to rethink resource allocation and restore the public system’s capacity to serve Canadians. Every dollar spent on private agencies is a dollar lost to the public system—and to the patients who depend on it.

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