Canada's doctor shortage is bad and is only going to get worse, concludes a new report from the B.C.-based think tank The Fraser Institute.

The report finds that Canada has 2.3 doctors for every 1,000 people -- a ratio that ranks our country 26th out of 28 developed nations with publicly funded health care. That compares to the average ratio of 3 doctors per 1,000.

The doctor shortage will only get worse, the report says, because of what the authors call "restricted physician training."

Nadeem Esmail, a Fraser Institute senior fellow and the report's author, says while Canada once enjoyed a healthy physician-to-population ratio, that's all changed because of poorly conceived government policies that have restricted admissions to Canadian medical schools.

"We've engineered a physician shortage," Esmail told CTV's Canada AM from Calgary.

"In the early 1990s, governments were concerned about a looming physician surplus so they cut back government-funded physician training in this contry, which brought us now to the physician-to-population ratio we now have that ranks us well behind other developed nations," he said.

The result has been a doctor shortage that is only going to worsen as older physicians retire.

The report looked at recent medical school enrolment and graduation rates and calculates that Canada will require between 2,200 and 2,300 new physicians each year from now through 2020.

That figure would be just enough to maintain the current physician-to-population ratio, not to improve the ratio. Nor does that estimate account for the increasing number of doctors currently practising who will retire between now and 2020.

"In fact, in 2010, 38 per cent of Canada's physician workforce was aged 55 or older and the projections we've made don't even account for that increase in retirement that we're likely to see over the next 10 years," Esmail said.

Esmail believes it was a mistake for the government to try to control the number of doctors graduating in Canada.

He cites an Organisation for Economic Co-operation and Development (OECD) study that found that countries that have allowed the markets to determine how many physicians should be trained tend to fewer problems physician-to-population ratio.

In countries such as Switzerland and Germany, physician training has been left to the marketplace, he says. So prospective students decided whether they wanted to go into medical school based on their prospects for finding a job later, and medical school decided whether they wanted to take them. Those countries are now having fewer problems keeping up with an aging population.

Esmail's report says that even if Canada's policies were reversed now, it wouldn't have an effect for at least another decade.

The report concludes that government-imposed limitations on the number of physicians being trained in Canada has been a policy choice that has not served the best interests of Canadians.

As well, capable students who have hoped to become doctors have been unable to access medical training in this country and have been either forced to seek training elsewhere or to change their career plans.

Esmail's report, "Canada's Physician Supply" appears in the latest issue of Fraser Forum, the Institute's bi-monthly magazine.