The Current - Why is a trip to the vet so expensive in Canada?

Episode Date: January 24, 2025

Some pet owners are abandoning their animals because they can’t keep up with the high cost of veterinary care and medications. A CBC/Radio-Canada investigation looked into why vet bills are so expensive in Canada, and found big corporations buying up independent clinics — and a lack of competition due to limits on who can buy and sell pet medications.

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I have a fixed income senior and the vet bills are just getting astronomical now. Heaven forbid you have to have an operation because then it's horrendously expensive. That's the message that everybody is giving me. If you don't have the money, then you shouldn't own a pet. If you have a dog or a cat sitting on your lap right now, that might sound familiar. Many pet owners across this country have seen their vet bills skyrocket over the last few years and for some, as you heard, veterinary care is becoming increasingly unaffordable.

In a new CBC investigation, the fifth estate teamed up with marketplace, Radio Canada's investigative programs, Enquete and La Facture, to look into why both vet visits and pet medication have become so expensive in this country and what is responsible for driving up prices. Co-host of the fifth Estate, Stephen D'Souza

is with me in studio. Stephen, good morning. Good morning, Matt. How expensive is it to visit a veterinarian these days? Well, it's expensive just overall owning a pet. You know, there are 16 million dogs and cats in this country.

And one estimate we saw is that people will spend about $4,000 a year for a dog, close to $3,000 to maintain a cat. I have not done the math for our wonderful hound, but that sounds probably close to the right number. He's a member of your family. You're willing to spend whatever you can. And so then you get to the vet office and you

know, even people doing routine vaccines and preventive medicines are learning a lot when they get to the veterinary clinic about how prices are going up. And so you heard some examples. And one of the people we spoke with, a woman named Neola Corris, she got a dental estimate for her dog between 1300 and $1,800. And this is a woman whose dog is four years old thinking he's very healthy. Why is it

this high? Another woman we met, her son Ravi Chandran and she had a boxer mix named Bumi. And she rescued it a few years ago and didn't realize he had any issues. But then as he went for x-rays, they realized her dog needed ACL surgery on both legs. They quoted us 7,300, but that's per leg. So it's about $15,000. It's like, it was very scary to just have now this very expensive problem as someone who's quite low income.

I wasn't really educated on how expensive it can get. $15,000. That's a lot of money out of pocket for something. Um, what, what did she do in that situation? Well, in this case, she thought she had done the right thing, which was buy pet insurance, but she was told that these were preexisting conditions, so it wasn't going to be covered.

So she, you know, is not a high income earner. So she went to her friends, she went to social media, she went to a GoFundMe page and she was fortunate enough to raise about $5,000 to GoFundMe page and she was fortunate enough to raise about $5,000 to cover the first surgery, but she doesn't know what she's going to do to raise the, you know, close to $7,500 she needs for the, for the second surgery. And so she's saving up,

hoping that by the summer she'll have enough money. So she turned to her friends. What happens if people can't afford these fees? This is the difficult decision a lot of people are facing. And if you're having trouble with costs overall, you're, you're thinking, who do I prioritize? Is it the medication for my pets?

Is it food for my family? And we're learning that more and more people are having to abandon their pets because of the high cost of if there's a major surgery or if the pet has a chronic condition that requires prescription medicine. And so we're hearing from people who've said that animals are suffering because they can't afford the rising cost of care. And we visited the Toronto Humane Society where they're seeing pets being abandoned because their owners can't afford care. And the Humane Society is trying to mitigate this. They're trying to offer services to people at a lower cost. They're trying to offer food and support to prevent animals from being brought in in these situations. But

it's just, you know, it's hard to deal with this. And our Radio Canada colleagues looked at what's happening in Quebec and Montreal at the SPCA there. And they said in 2024, surrenders were over 3000 pets and one in six were because the owners couldn't afford their vet bills. What did you find when you looked into why it is that vet clinics are charging fees that are that high.

So of course we know that inflation has driven up costs across the board for everyone and pet products and pet care is no exception, but we also know that clinics are also charging higher fees in many cases because they've been bought up by corporations or private equity and they're facing pressure to increase profits and meet revenue targets. And you know, it's not something most people

probably think about when they go to their vet clinic, who owns it, but it's changing in the country right now. 20% of vet clinics and 50% of emergency and specialty animal hospitals are owned by corporations or private equity. And this is a big change from back in 2010, where pretty much all of the clinics in Canada were independently owned. And for example, there was a company back then called Vet Strategy, which owned just four clinics.

Now there are six major players in Canada and they own 788 clinics. And Vet Strategy now owns about half, about 365 of those clinics. And just a sign of how big this business is, Vet Strategy was bought by a major player in the UK, a company called IVC Evidencia. Mars, the chocolate company, it's a big player in this industry. It company called IVC Evidencia, Mars, the chocolate company. It's a big player in this industry. It owns a number of clinics in Canada as well. And this is a pattern we're seeing where these small independent clinics are being bought up by

corporations and private equity and what's called rolling up. And it's happening in other industries as well, like long-term care and dentistry, but it's something that's definitely happening in vet clinics. Just remind us, I mean, what private equity actually means. So private equity is when investors pool their money and put it into private companies and it's a little different than the stock market where it's public and there's public reporting responsibilities. These private equity companies don't offer stock to the public. They don't have the same financial reporting obligations and they can be large or small and in some cases, you know, they offer a lot of money to startups, companies really trying to get off the ground. But in other cases, you know, they offer a lot of money to start-ups, companies really trying to get off the ground.

But in other cases, when they see small, medium companies that are mature, that are in cash rich, profitable industries, they swoop in and then they start to extract value from those companies and they put their shareholders first and that's where the profits go instead of going back in the business. I was going to ask why private equity firms are buying up vet clinics, but you just answered in part because there's a lot of money that's sloshing around here. There is a lot of money.

You know, we mentioned the number of pets, you know, 16 million dogs and cats in this country. It's estimated the revenue at vet practices in Canada was $9.3 billion just a few years ago in one year. And Canadians spent more than $7 billion on their pets and pet food. And over the pandemic, that spending went up.

And so corporations, private equity, as you say, they see dollar signs in this, they see a chance to make money and they want to maximize shareholder value. And so what happens though, is when shareholders are getting paid, the business then can suffer. And what's interesting is this is a transformation that many pet owners may not

realize when they go to their clinic, because when these clinics are bought up, sometimes the clients are either not told or nothing really changes at the clinic itself from what they can see. You still think you're going to your local vet clinic, what have you, that is run by people in your community. People you've always known, the signs don't change and some, there are some brands that do put their branding on the front of the clinic, but there are many more that only listen on the website. So you really have to go searching to find out if your clinic has been sold. In some cases, clients will be informed,

but in many cases, people simply don't know unless they know to ask. It's big business. Is it just the clinics that private equity is investing in? No, and this is the thing. There's something called vertical integration where the private equity corporates will buy other aspects of pet care. So maybe diagnostic centers, emergency and animal hospitals, even pet food. So for example, Mars owns a number of major pet food brands. They also own a number of clinics as well. What did you hear from veterinarians

about why it is that they are selling their practices to these firms that are, you know, end up controlling a huge part of the veterinary landscape? In some cases, a lot of veterinarians welcome this because they're getting to a certain age. And in the past they may have just sold to a younger vet in the clinic, but now here comes a corporation or private equity fund with, you know, in some cases, millions of dollars, a big check. And so it's too good to be true. And in some cases, you know,

vets want to focus on taking care of the animals and don't necessarily want to deal with the backend of things, the staffing and the business side of things. So in some cases it's a very lucrative offer and it's, it's hard to turn away. And in one case, you know, we spoke with a vet named Tara Rissling who is in Calgary and she was in a partnership with a couple of other vets

and she had a smaller end of the partnership. And so the other partners wanted to sell, they were ready to sell, especially after COVID, things got very stressful because a lot of people had pets. The pet industry actually was on the rise during the pandemic. And so the money was attractive and they sold. And so part of the agreement for selling was that

she would maintain her role for a few years in the clinic, but she soon found that there was a lack of input in decisions. Take a listen. I had no say in where prices were set. I think that it's hard for clients to get, let's say four price increases in a year. What's very important to me is that I have say in what equipment is in the clinic,

the breadth of diagnostic tests I can run in clinic and what the cost of those tests will be. She's now left that clinic and she does have her own independent clinic in Calgary. You spoke with some of the former employees of clinics that have been taken over. What did they tell you about how they think this practice of taking over those smaller clinics is affecting the care of animals? So what they see is they say that the corporatization is really changing the focus at the vet clinics, that it's going from pets to profits and that managers are being brought in with little to no pet health experience and that prices are being repeatedly raised and staff are feeling the toll because they're the ones who have to explain to the pet owner,

you know, why they have to make this decision and spend so much more than they're used to. And one of the people we spoke with is a former employee of VCA, which is the chain of clinics owned by Mars. And the employee asked us not to use her name or even her voice because she's afraid of reprisals. So we're calling her Megan. And the voice you're going to hear is one of our producers reading what she told us about the practices in the clinic that really troubled her.

There are sort of, price increases where we or the management are told to creatively increase prices in areas that clients won't notice. It's become just such a machine. I think clients are frustrated with the astronomical price of veterinary care so the animals are suffering. You know people are at times having to euthanize their animals because they can't pay for the care. A lot of staff are going on stress leave. It's not what the people think the industry is, you know? That's just one of the stories we heard.

We heard from other employees as well who said that they were given incentives to push specific drugs. What did the companies say about all this? So we did reach out to VCA, uh, the clinic that, uh, formally employed the, the person you just heard from and they sent us a statement and they said that our veterinary teams are expected to prioritize the health and welfare of the pets they

treat above else and that vets are trained to explore a range of treatment options and talk to clients about the benefits and costs. But they say that their vets are not encouraged or directed to recommend unnecessary services or products. Hey there, I'm David Common. If you're like me, there are things you love about living in the GTA and things that drive you absolutely crazy. Every day on This is Toronto we connect

you to what matters most about life in the GTA, the news you gotta know, and the conversations your friends will be talking about. Whether you listen on a run through your about life in the GTA, the news you gotta know, and the conversations your friends will be talking about. Whether you listen on a run through your neighbourhood or while sitting in the parking lot that is the 401, check out This Is Toronto, wherever you get your podcasts. You also spoke with the head of the Canadian

Veterinary Medical Association. This represents what, 8,000 vets across this country. What did he have to say about the stories we've just heard? So his name is Dr. Tim Arthur and he actually sold his Toronto Clinic to a corporate entity, moved to Ottawa where he now works part-time for two corporately owned clinics. And I asked him if he saw a downside to all

this corporatization. I don't see it. I'm not really sure that a lot of young veterinarians nowadays are that interested in buying in an ownership. I think they're interested in their life being as least stressful as it possibly can. The issues we're hearing though, the stress, the increased workload, they're saying this is driven by the new corporate owners, that they're pushing revenue per visit,

they're pushing more services on people to increase the number of patients being seen in a day. Is that something you're hearing? And that's not what we're hearing. Personally, I have no concerns about it. I haven't seen a humongous amount of damage done. Just again, this is the head of the organization that represents vets across the country, now works part time for those corporate equity firms that we're talking about here.

Yeah. And we asked him directly about that. If he thought his answers would be influenced by that, he said they weren't. Is this happening in other countries? People have pets all around the world. Of course. Yeah. And it certainly is. And in some cases it's at a more advanced stage than it is here in Canada.

So we went to the UK where 60% of their clinics are now owned by corporate or private equity groups. And that's a much bigger difference than it was just 10, 10 years ago, where the majority were where 60% of their clinics are now owned by corporate or private equity groups. And that's a much bigger difference than it was just 10 years ago when the majority were independent and they're seeing the same sort of issues as we heard from that former employee, but on much larger scale. And one of the key differences though in the UK is that they have a union in their vet sector for a lot of veterinary workers. And so those workers are starting to fight back, demanding better pay, better working conditions. And the British Veterinary Union, we talked to them

and they told us that, you know, they're seeing a huge impact on pay, on stress for workers. And then just the fact that it's getting harder to even find an independent clinic anymore. And so their competition authority, the Competition Market Authority, is looking at this issue now, trying to study whether

or not there is a problem in what should be done. But some are worrying that it's a bit too late for that to happen. Are there rules in this country? I mean, when it comes to that, you talk about the competition authority in the UK. Is there anything to guard against the concentration, I suppose, of ownership here?

I mean, you mentioned one of these companies owns almost half of the veterinary clinics that are owned by private equity. So is there anything to guard against that kind of large scale ownership in this country? There is and there isn't. So we talked to the competition bureau and they said they are aware of this potential issue, but they're limited in what they can do because they look at mergers when they hit a certain threshold and that threshold is $93 million dollars that triggers a closer look on the competition bureaus part but when you have all of these smaller

smaller deals none of those a competition bureau says is enough for them to notice for them to take to take an official look at it and so we looked at it though and we found that in for example Winnipeg half of the 22 clinics in Winnipeg are owned by vet strategy. And so there's these mini monopolies popping up around the country, but they're not big enough to, to, to gain the attention of the competition bureau. We had a conversation not so long ago on the program about, I mean, it's airlines. It's about, uh, where you buy your groceries and the, you know, the cliche is the Canada is, um, three companies in a trench coat, essentially.

That's what we are. And that can now extend perhaps to the world of pet care as well. There's this other, and this is connected, this other issue that you look at in the program that the competition bureau has weighed in on. This is the issue of around pet medication. Yeah. And so in other countries, pet owners can go to their pharmacy, they can go to big box stores, and they can,

especially in the US, they can buy their pet medicine pretty much anywhere. And the answer comes down to supply and who controls the supply. And a lot of people don't realize that they don't have to get their pet medicines from their veterinarian specifically, that they can go elsewhere.

But the competition bureau is looking at how those medicines are actually distributed. And what they found after they did an investigation was that there are these exclusive distribution deals between the pharmaceutical manufacturers and the distributors who limit, which limits who can purchase and sell pet medicines. Explain how this works. I mean, if you have an animal, you understand this, you go to the vet and you get the medication. Who exactly is allowed to sell pet medications in Canada? Well, v exactly is allowed to sell pet medications in Canada?

Well, vets are allowed to sell, but pharmacists are also allowed to sell pet medications. But the challenge for pharmacists is that they don't always get the supply and they're not able to get the supply. In some places in Quebec, pharmacists can get it through a distributor, but it's provincially regulated.

So in others, there's actually regulations against vets selling to pharmacists. So essentially pharmacists are shut out. And in the case in Ontario, the main distributor is a co-op owned by veterinarians and they confirmed to us that they only sell to their members. So they aren't selling to pharmacists

who could sell it to me, they're just selling it to their other members. Exactly. Is there any limit to what veterinarians can charge for those medications? There is not. So in Canada, human medicines are governed in terms of whatians can charge for those medications? There is not. So in Canada, human medicines are governed in terms of what people can charge,

but pet medicines, there are no regulations around that. So vets are really left on their own to decide what they charge. How much can pet owners end up paying for medication for their pet? So we talked to one woman who actually is a pharmacist in Manitoba and her dog had a gut disease and he was experiencing seizures. And because she was a pharmacist, sheitoba and her dog had a gut disease and he was experiencing seizures.

And because she was a pharmacist, she knew about various medications that her veterinarian did not, but it ended up being about $600 a month for her, for her medication. And so there's a lot there that people are spending, but in some cases, in the case of this pharmacist, she knew about some extra drugs because they had a human equivalent that the veterinarian did not. What sort of potential price difference would there be between getting your medication from the veterinarian versus if you could getting it from the pharmacy? We looked at six doses of a common flea and tick

medication, and we compared a Toronto vet clinic to an online distributor here in, in Ontario. And we found that it was 36% cheaper. Wow. We looked at another human generic antibiotic and it was 40% cheaper for 11 pills. And our colleagues at Radio Canada looked in Quebec where they've had for a few years now,

the pharmacists having the ability to sell pet medications and they found a 36% difference in the prices between what you would pay at a vet versus what you would pay at a vet versus what you would pay at a pharmacist. 36 to 40% cheaper is a whole lot of money. Particularly given everything you've talked about in the cost of living crisis that people

are going through. You did speak with people in the province of Ontario who are trying to change that system. What did they tell you? One of them is a guy named Dr. Howard Covent and he's a vet in Thornhill, just north of Toronto. And he's been trying to push to open up access to animal specific medications and making them available to pharmacists. So he would take the supply that he would buy

from the manufacturers, he would sell it to pharmacists so that they could sell it. But he got in trouble with the provincial regulator and one of the drug manufacturers for doing this and so he was in this long legal battle. But his main point is that he believes there's an inherent conflict of interest that vets shouldn't be allowed to sell the same Medications they dispense something human doctors are aren't able to do my opinion would be that veterinarians have specifically tried to prevent people from Understanding that there are other sources for their pets medication if you are the person prescribing the only medication that can save you And I'm also the only one who's selling it. There's a problem there

There's no question that veterinarians are in the best position to decide which medications are best for pets. The question is, is the medication available over the internet or at a pet pharmacy the same as the one that your veterinarian is selling? And the answer is yes. And if they're selling it for 30% less and it's not going to endanger the animal to pick that medication up, why wouldn't you? Why wouldn't you indeed? Is the good doctor's viewpoint getting any traction? Absolutely. The, the competition bureau believes that these

exclusive distribution deals should be ended and that pharmacists should have more access to supply because it would give Canadians more choices and possibly lead to lower prices. But remember Tim Arthur, who we spoke to from the Canadian veterinary medical association, he says there's a reason the system is the way it is, is because vets know animals better than pharmacists.

And he also said that the markup for pet medications is important for the bottom line of veterinarians and that if that revenue is taken away from them, then they may have to raise prices on other services. If we are directed to change, what we will have to do is rearrange that the money that potentially we won't get anymore, we're gonna have to make it somewhere else. We need to keep the doors open and you can't walk into a business and eliminate, you know, 10% of their potential profits without having something change somewhere else. They aren't running a philanthropy. This is a business and they need to make money.

Mm-hmm. This goes back to what we started with, which is how much it costs to have a pet, love pets, love our dog, we had cats, they're great. But it's expensive. And so for people who are struggling with that cost, is anything likely to change as a result of what the competition bureau is ruling on? So the competition bureau can recommend things,

but it can't force anybody to do anything. And so we are seeing though, change as a result of this. Manufacturers do say that they are starting to distribute to pharmacists in one instance on a case by case basis, but we did get a copy from the Ontario Veterinary Medical Association's newsletter, which they sent out to their members after the competition bureau report came out. And they say the status quo remains for now and that things aren't going to change. But I think it's important for listeners to know that when they do go to their vet,

they do have the right to ask for a prescription and they can take it somewhere else and at least try. So that's definitely a conversation people should be having with their veterinarian. Steven, thank you very much. My pleasure. Thank you.

Steven D'Souza is a cohost with CBC's The Fifth Estate, that documentary Pet Care Inc. airs tonight at 9 p.m.