Long-Term Care Costs in Canada Projected to Triple to $71B in Only 30 Years

October 8, 2019

Baby Boomer generation facing risk of unsustainable systems of care, unmet care needs in future

The National Institute on Ageing (NIA) released a report today projecting that long-term care costs will more than triple within 30 years, from $22B today to $71B by 2050. With baby boomers starting to turn 75 next year, time is running out to improve system sustainability and the availability and quality of long-term care options in Canada. A generation of Canadian seniors is at risk of going with unmet care needs as they age.

The Future Cost of Long-Term Care in Canada by Dr. Bonnie-Jeanne MacDonald, Dr. Michael Wolfson, and Dr. John Hirdes, builds on Statistics Canada’s population microsimulation model to project the future costs of long-term care in Canada to both the public purse as well as the care support provided to Canadian seniors by their families. By quantifying the economic and personal costs that Canada will face in home- and nursing home care by continuing to follow its current path, the report is intended promote informed and targeted discussion by governments, providers of long-term care, and individual Canadians on how best to move forward on this pressing national concern.

The NIA defines long-term care is defined as “a range of preventive and responsive care and supports, primarily for older adults, provided by not-for-profit and for-profit providers or unpaid caregivers in settings that are not location-specific, including designated buildings like nursing homes or in-home and community-based settings. These services are delivered by the provinces and territories through a mixture of publicly funded programs, which seniors can supplement with privately paid services, and care provided by close relatives and friends serving as unpaid caregivers.” 

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There are legitimate concerns around the quality and delivery of long-term care in Canada today – but these concerns pale in comparison with the concerns for the system’s future sustainability as baby boomers make their way to advanced ages, more than tripling the number of Canadians over the age of 85 in the next 30 years. 

Alongside the inevitable increase in the number of older Canadians needing long-term care services, Canada is also facing lower fertility rates and socio-economic shifts that will decrease the availability of unpaid caregiver support, which is a primary source of care for Canada’s older population. Taken together, these factors point to a future in which there will be significant increases in the amount of support needed from unpaid, family caregivers as well as substantially larger costs to the public purse, if current health care policies and practices continue.

Between 2019 and 2050, projections show there will be 30 per cent fewer unpaid caregivers in Canada available to provide unpaid support to seniors in need. This means that by 2050, the average Canadian unpaid caregiver would need to increase their efforts by over 40 per cent to keep up with current levels of unpaid care. This is a burden Canadians may not be able to shoulder, which would further increase costs to public services. If all the projected hours of home care provided by unpaid caregivers were instead paid publicly, $27 billion would be added to public sector costs by 2050.

From a public policy perspective, the projected increase in government expenditures is concerning. The potentially greater challenge, however, is likely to be the increased pressure on unpaid support. The reality of the emotional, physical, and financial stress already being reported by current unpaid caregivers carries a cost – one that is often poorly understood until faced directly. The NIA’s numerous studies have shown that unpaid caregiving is already a strain on Canadian families, so it is not clear that these projections will be sustainable under the status quo. Continued emphasis on home and community care is not only important for maintaining a comfortable environment consistent with the preferences of older Canadians, but also for controlling costs.   

There is little more than a decade before the first waves of baby boomers reach the critical ages when the higher levels of care utilization identified by this paper will begin to be felt – mostly by seniors themselves as they support one another, and their adult children who provide critical unpaid support. As pressure on the public long-term care services mount, moreover, there will likely also be spillover on other (more expensive) programs, as seniors look elsewhere for the care that they need – such as hospital-based care.

Echoing the long-standing call of long-term care experts across Canada, proactive and concerted measures are needed, as are better data, to guide these efforts. Failure to do so risks leaving the state of long-term care to future generations, and the likelihood of a series of short-term reactive decisions that could well be more expensive and produce poorer outcomes.

Baby boomers themselves are strongly advised to take a long and hard look at their own personal circumstances and plan ahead, to the extent that they have the health and means to better protect their future and possibly more vulnerable selves. At the public policy level, effective system reforms require long lead times, suggesting that examination of long-term care options should be an immediate and high national priority.

The Future Cost of Long-Term Care in Canada is the second in a three-part series on the Future of Long-Term Care in Canada, by the National Institute on Ageing (NIA) in collaboration with AdvantAge Ontario, the Canadian Institute of Actuaries (CIA), the Canadian Medical Association (CMA), Essity Canada Inc, and Home Instead Senior Care. The first report, authored by Dr. Samir Sinha, was released in September 2019 and explores the current landscape of the full range of long-term care services across Canada to determine how Canadians can be best supported to age with greater quality of life, better health outcomes, and dignity through appropriate models of care and support and best practices. The third and final report of the series will then bring together experts in financial and health policy to present options and recommendations for a feasible and fiscally responsible set of policy scenarios, which bring the right type of needed reforms to our future systems of long-term care, and high-quality care services for older adults that can be both affordable and increasingly sustainable.

Read the full report and findings: The Future Cost of Long-Term Care in Canada

This report is sponsored by and in collaboration with AdvantAge Ontario, the Canadian Medical Association, the Canadian Institute of Actuaries, Essity Canada Inc, and Home Instead Senior Care.

About the National Institute on Ageing

The National Institute on Ageing is a Ryerson University think tank focused on the realities of Canada’s ageing population. We are Canada’s only think tank dedicated to policy solutions at the intersections of healthcare, financial security, and social well-being. Through our work, our mission is to enhance successful ageing across the life course and to make Canada the best place grow up and grow old. Follow us on Twitter. 

By Arianne Persaud | Communications and Public Affairs Manager, National Institute on Ageing| Email: Arianne.persaud@ryerson.ca  

Allan McKee