OBJECTIVES: We estimated the cost-effectiveness of once-weekly semaglutide 1 mg vs. canagliflozin 300 mg in Canada from the payer and societal perspectives. METHODS: Modeling methods were used to extrapolate benefits observed in the SUSTAIN 8 clinical trial into long-term costs and outcomes, measured by quality-adjusted life-years (QALYs), for patients treated with semaglutide or canagliflozin. The SUSTAIN 8 trial, a 52-week, randomized, double-blind clinical trial, demonstrated significantly greater lowering of HbA1c and body weight for semaglutide 1 mg vs. canagliflozin 300 mg for patients with type 2 diabetes mellitus (T2DM) uncontrolled on metformin. The Swedish Institute for Health Economics diabetes cohort model (IHE-DCM) was used for modelling, and to consider structural uncertainty and robustness of results, the analysis was also run using the microsimulation model ECHO-T2DM. Patient baseline characteristics and treatment effects were sourced from SUSTAIN 8. In the simulation, both agents were discontinued, and insulin therapy initiated when HbA_1c exceeded 8.0%. Unit costs (CAD$) and utilities were sourced from the literature. RESULTS: Semaglutide 1 mg was associated with incrementally more QALYs than canagliflozin 300 mg over 40 years (0.38 in IHE-DCM and 0.36 in ECHO-T2DM). The gains came with increased total costs (CAD 8,097 in IHE-DCM and CAD 8,867 in ECHO-T2DM), yielding incremental cost-effectiveness ratios (ICER) of CAD 21,307 and CAD 24,513 per QALY gained, respectively, below the often-cited willingness-to-pay threshold of CAD 50,000 per QALY. Including productivity costs and the full societal perspective lowered the ICERs to CAD 19,303 and CAD 18,962, respectively. Sensitivity analyses around assumptions related to costs, treatment effects, time horizon, and biomarker evolution generally confirmed the results. CONCLUSIONS: Using two different models and modeling approaches (cohort and microsimulation), semaglutide 1 mg was found to be cost-effective compared to canagliflozin 300 mg for the treatment of patients with T2D uncontrolled on metformin in Canada.