Accurate prognostic estimates were required to ensure the sufficiency of the $1.1 billion compensation fund established in 1998 to compensate Canadians who acquired hepatitis C virus (HCV) infection through blood transfusion between 1986 and 1990. This article reports the application of Markov modelling and epidemiological methods to estimate the prognosis of individuals who have claimed compensation. Clinical characteristics of the claimant cohort (n = 5004) were used to define the starting distribution. Annual stage-specific transition probabilities (F0-->F1, . . ., F3-->F4) were derived from the claimants, using the Markov maximum likelihood estimation method. HCV treatment efficacy was derived from the literature and practice patterns were estimated from a national survey. The estimated stage-specific transition probabilities of the cohort between F0-->F1, F1-->F2, F2-->F3 and F3-->F4 were 0.032, 0.137, 0.150 and 0.097 respectively. At 20 years after the index transfusion, approximately 10% of all living claimants (n = 3773) had cirrhosis and 0.5% developed hepatocellular carcinoma (HCC). For nonhaemophilic patients, the predicted 20-year (2030) risk of HCV-related cirrhosis was 23%, and the risk of HCC and liver-related death was 7% and 11% respectively. Haemophilic patients who are younger and are frequently co-infected with human immunodeficiency virus would have higher 20-year risks of cirrhosis (37%), HCC (12%) and liver-related death (19%). Our results indicate that rates of progression to advanced liver disease in post-transfusion cohorts may be lower than previously reported. The Canadian post-transfusion cohort offers new and relevant prognostic information for post-transfusion HCV patients in Canada and is an invaluable resource to study the natural history and resource utilization of HCV-infected individuals in future studies.