Manitoba Rethinks Workforce Strategy

Nursing Agency Costs, Workforce Shortages, and Manitoba’s Reconsideration

Summary:
Manitoba’s recent reconsideration of private nursing agency use highlights a broader national issue: rising agency costs, persistent workforce shortages, and an overreliance on expensive intermediaries. This article examines the data behind agency spending, overtime trends, and why long-term workforce investment – to support retention – remains the most sustainable path forward.

Why did Manitoba rethink this?

When a province reverses a major staffing decision within days, it’s worth asking why.

This week, CBC News reported that Manitoba returned to private nursing agencies just days after cutting them, as rural hospitals struggled to staff essential shifts.

That reconsideration shines a light on a much bigger issue: the rising cost – and hidden consequences – of how we’re using staffing agencies in healthcare.

One line in the story deserves far more attention: Manitoba’s spending on private nursing agencies rose from $26.9M in 2020–21 to $80M in 2024–25 – nearly tripling in four years (Shared Health Manitoba).

This isn’t about nurses. Who could blame anyone for choosing an employer that pays more and offers flexibility?

The real question is this: what portion of that $80M is actually paying for nursing care, and how much is being absorbed by agency overhead, administration, profit, travel markups, and intermediaries?

And this isn’t just about Manitoba. A March 2025 policy paper from Healthcare Excellence Canada shows this is a national problem.

Agency staffing costs across Canada grew from $717M in 2021–22 to $1.2B in 2022–23 – with projections of $1.5B in 2023–24.

This isn’t just a staffing shortage – this is an economic problem.  We have become reliant on one of the most expensive ways to access scarce supply.

At the same time, data cited by the Canadian Institute for Health Information shows:

• a 50% increase in overtime hours in hospital inpatient units
• overtime equivalent to 7,000 full-time roles nationally

Costs are rising faster than hours worked.

That’s the context governments are operating in, and it’s unsustainable.

So it’s understandable that provinces are taking drastic steps – capping rates, limiting hours, shrinking approved vendor lists. Manitoba’s decision to move from nearly 80 agencies to just 4 is just one of the most recent and public-facing examples.

But this situation raises questions that deserve scrutiny:

• Were agencies excluded due to quality issues, pricing, or both?
• Were administrative and operating costs, or margins, out of step with public expectations?
• What criteria were used to approve some agencies and not others?
• And where did the displaced agencies – and nurses – actually go?

Are those agencies now supplying other provinces? Staffing private or long-term care facilities? Operating in remote regions elsewhere? Or pushing talent out of the Canadian public system entirely?

If the supply hasn’t improved and has only shifted, then we haven’t solved the problem. We’re still paying for this labour, just at premium rates.

This isn’t a procurement failure. Organizations didn’t suddenly forget how to issue RFPs and negotiate contracts. They’re turning to agencies out of necessity because they don’t have enough nurses available inside the system – and they need coverage to care for patients now.

But how much more can we afford before this approach breaks down entirely?

Imagine what would happen if more of those dollars flowed directly to nurses through flexible roles, internal travel pools, better scheduling, training, career development and retention incentives, instead of being diluted through multiple layers of agency overhead.

Healthcare will always need surge capacity. But when intermediaries extract disproportionate value from a publicly funded system, it’s fair to ask whether that model still serves patients, communities, or taxpayers.

There may be many things we can debate in healthcare policy – but one principle should be clear.

There is very little room for excessive profit-taking in a system built to deliver patient care.

The real story isn’t whether agencies should exist – they are filling a gap in the market.

But have we allowed a costly workaround to grow so large that it now competes with – rather than supports – the public system it was meant to help?

The better news… none of this is inevitable.

As Healthcare Excellence Canada and others have shown, jurisdictions that invest in flexible roles, internal mobility, better scheduling, and meaningful retention supports consistently reduce reliance on agencies over time.

When we pay nurses directly for their expertise, and design systems that encourage them to stay and grow, costs fall, continuity improves, and surge capacity becomes the exception again, not the norm.

The path forward isn’t immediate, but it is clear. And it starts with treating our existing workforce as the most valuable asset we have – and protecting it – like lives depend on it.

Resources / sources:

• CBC News – Manitoba returns to private nursing agencies (Jan 2026)
• Healthcare Excellence Canada (Mar 2025) – Policy Considerations: Optimizing the Use of Staffing Agencies
• Canadian Institute for Health Information (CIHI), Hospital Staffing and Hospital Harm Trends Throughout the Pandemic, October 2023.
• Shared Health Manitoba – Agency spending data (2020–25)