Aim. To examine the Canadian health system, in particular as it relates to health care, and to assess the functions of the provincial and federal governments in relation to health care, spending, funding, and reform. Methods. Description and analysis of the Canadian health care system, including the overall structure, funding and spending, history, necessary reforms, and future of the system. Results. Canada's health care system, through funding from both the federal and provincial/territorial governments, provides insured hospital and medical care services to all eligible Canadian residents. In order for the provinces to receive funding from the federal government, five criteria as stated in the Canada Health Act, must be met, namely: public administration, comprehensiveness, universality, accessibility, and portability. Funding is provided primarily through taxation, with some provinces also utilizing ancillary funding methods, such as health care premiums. In the latest review of Canada's health care system, the National Forum on Health reported in 1997 that the system must become more efficient, effective, and reflective of contemporary practices in health care delivery. Conclusions. The benefits of our system can be seen in the favorable health status of Canadians. Canada has been successful in its efforts to contain health expenditures and begin the process of reallocating resources. Health care is recognized as only one element of a larger health system, encompassing a broader range of services, providers, and delivery sites.