Ontario Budget Highlights

March 29, 2018

Older Canadians are becoming ever more important constituencies to provincial and federal governments. They now outnumber children under the age of 15, and more importantly, they vote. And they vote at levels unmatched by other age demographics.

It’s no surprise, then, that the pre-election Ontario budget released on March 28th landed with substantial investments in new programs and issues targeted at older Ontarians. While a number of items were announced in the days leading up to the budget, there were a few surprises that may have pocketbook appeal for older voters. More importantly, many provisions of the budget aimed at supporting older adults meet many of the advocacy positions formed by the NIA and the National Seniors Strategy housed at the NIA.

But as a promissory budget, much of the detail required for thorough policy analysis is still missing. The broad strokes of the plan released yesterday hit on a number of points made by the NIA’s National Seniors Strategy, but not all policies are created alike. The details will need to be examined and evaluated if and when they’re implemented.

Increasing Hospital Funding: The province is investing $822 million more into hospitals starting this year, which represents a 4.6% growth in funding. While all hospitals will see an increase in funding, $305 million of the total new funding will be directed to support hospitals with services related to population growth and ageing. It’s not clear from the budget just how that population-based spending would be implemented, but recognition that demographics will have an effect on health care planning is an important step forward.   

Creating OHIP+ For All Seniors: The NIA’s National Seniors’ Strategy has called on governments to improve access to prescription medications for all older Canadians. OHIP+ would accomplish that goal in Ontario in the simplest sense. Starting in August 2019, OHIP+ would be expanded to seniors, eliminating the annual deductible and the co-payment for seniors under the current prescription medication program. Evidence shows that costs of medications reduce compliance. Even marginal costs to patients can mean improper usage and poorer health outcomes.

All Ontarians aged 65 and over would receive prescription medications free of charge, regardless of income, saving the average older Ontarian approximately $240 per year at a cost to government of $575 million per year by 2020-21, and increasing with the ageing population. 

While removing barriers to medication access is one of the evidence-informed recommendations made by the NIA, its National Seniors Strategy also recommended that governments should help improve appropriate prescribing practices by their health care providers and look at ways to bulk purchase prescription medications on a national scale – this has allowed other nations with universal pharmacare programs to spend significantly less to deliver drugs universally.

OHIP+ creates the pathway forward on universal pharmacare, but Ontario will have to work with the federal and other provincial governments to ultimately reduce the cost of drugs.

Reducing Dental Costs: The budget announced plans for a new Ontario Drug and Dental (ODD) Program for people who don’t have coverage from an extended health plan. Sixty per cent of seniors do not have a plan that covers dental costs, according to the budget document.

Starting in summer 2019, The ODD would reimburse participants for up to 80% of eligible dental expenses, up to an annual maximum of $400 for singles and $600 for couples. This investment would add up to $800 million over the first two years of the program.

The new ODD responds to the National Seniors’ Strategy call for government support for wellness and prevention programs in promotion of healthy ageing. Often neglected by governments and individuals, oral health is integral to general health and well-being. Older Ontarians, who couldn’t otherwise afford to take care of dental issues, could find an easier, more affordable path forward should the ODD be implemented.

But the cost differential between potential provincial coverage and the real, high cost of dentistry may still prove too high a barrier for lower and modest income Ontarians. Is $400 per year better than nothing or not enough to meaningfully help seniors improve their oral health? Time and analysis will eventually derive the answer.

Supporting Older Adults Living Independently: The National Seniors’ Strategy has also called on governments to help older Canadians have access to affordable housing to help them age at home and remain independent.

The budget responded with over $1 billion over three years to help older Ontarians with the cost of maintaining their homes. The goal of the Seniors’ Healthy Home Program, starting in 2019-20, would be to design a benefit that provides up to $750 per year for every eligible household led by older Ontarians who are 75 and older. The budget notes that older Ontarians spend more on average than other age groups on domestic and other custodial services.

Programs such as this are typically popular and well-subscribed. The budget describes scenarios in which older Ontarians will be able to offset the cost of services such as snow shoveling and in-home help. While these services are easily taken for granted by younger, physically fit individuals, difficulty with Activities of Daily Living (ADLs) can prove to be trigger points forcing older adults to leave their homes for supportive or institutional housing, neither of which is typically preferable to living independently at home for as long as possible.

Supporting Caregivers, Home Care, and Compassionate End-of-Life Care: The province is also investing an additional $650 million over the next three years in home and community care for clients and caregivers. This includes $180 million for 2.8 million more hours of personal support, including caregiver respite. The state of home care in Ontario is complex. The funding is certainly welcome, but government will need to focus next on fixing a system that is often too complex to navigate and has in the past been criticized for significant inefficiencies.

The province is aiming to provide a boost to compassionate palliative and end-of-life care, investing an additional $15 million this year. The funding will support 20 new residential hospices across the province.

As announced last week, there’s $35 million dollars for the mental health support of caregivers of people living with mental health issues. Caregivers, often unpaid family members and friends, can experience significant levels of stress and mental health challenges.

The $2.1 billion investment in child care will also help caregivers, especially ‘sandwich’ generation women.  In 2012, almost 30 per cent of Canadian caregivers were women aged 35-44, which are pivotal years for building a strong career and working towards financial security, at a time when they are often caring for their young children as well.

The NIA’s recent report, Why Canada Needs to Better Care for Its Working Caregivers, specifically called for health care and respite support for caregivers as well as further investments in home care to alleviate some of the burden borne by caregivers in helping older adults age at home.

Protecting Ontario’s Pension Plan Members: Building on the 2017 budget announcement that the Pension Benefits Guarantee Fund (PBGF) would be increased from $1,000 per month to $1,500 per month, the 2018 budget outlines a plan to make the increase retroactive to May 19, 2017. The increase and retroactivity will be a significant source of income security, especially to former Sears employees.

The budget also outlines plans to further strengthen the regulatory framework for pensions.

The province intends to continue steps towards a new pension regulator, the Financial Services Regulatory Authority. There are plans to implement a disclosable events regime that would increase transparency and alert the pension regulator to potential issues, such as significant asset stripping.

Finally, the budget indicates plans to introduce a distressed pension plan workout scheme to give the regulator more tools to respond to pension plans with a distressed sponsor. There are few details on the proposed regulatory changes, but the government says it will be consulting industry before proceeding.

The National Institute on Ageing (NIA) is a university-based think tank focused on leading cross-disciplinary research, thought leadership, innovative solutions, policies, and products on ageing. The NIA’s mission is to help governments, health care systems, pension plans, businesses, and Canadian families to best meet the challenges and opportunities posed to ageing Canadians and by an ageing demographic. Follow us on Twitter and sign up for our mailing list.

By Michael Nicin, Executive Director, National Institute on Ageing | Email: Michael.Nicin@ryerson.ca

Allan McKee