It could cost the federal government $3.3 billion over the next year to implement strategies that will help it cope with Canada’s aging population, says a new report by the Conference Board of Canada and the Canadian Medical Association.
And, over the next five years, that cost could jump to $17.5 billion, as boomers put a strain on the healthcare system. “The reality [is] that it costs more to look after people who are aging,” said Dr. Cindy Forbes, president of the CMA—a recent study seen in medical journal PLOS ONE finds the average cost for care in a patient’s last year of life is $54,000.
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Here’s a breakdown of three main strategies the government could pursue:
1. Give provinces and territories more money for healthcare based on the ages of their populations.
This would require a boost in funding to the Canada Health Transfer, which is the country’s largest handover of cash to provinces and territories.
That money is currently provided based on the size of each region’s population, rather than on a breakdown of those populations. Already, says the Conference Board, countries such as Belgium, Germany and Switzerland all top up their healthcare transfers based on age.
To date, Prime Minister Stephen Harper has said he plans to renegotiate the terms of the CHT when it expires in 2017. Liberal Leader Justin Trudeau has said that, if elected, he’d also negotiate the terms of an adjusted CHT come 2017. Meanwhile, NDP leader Tom Mulcair has said an NDP government would reverse Conservative cuts to provincial health transfers.
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2. Cover the full cost of medications.
A July study by Angus Reid showed 14% of Canadians have neglected to fill a prescription due to cost. So the Conference Board’s report suggests the full cost of drugs be covered for households that are currently spending at least $1,500 per year or 3% of their annual income on drugs.
Due to this issue, Mulcair recently suggested a similar strategy as the report: he would see the creation of a universal pharmacare program. He said that, if elected, he’d contribute $2.6 billion to the project over the next four years.
But the problem with that solution, says the Conference Board, is funding a national pharmacare plan would cost $8.4 billion over the next five years. In 2016 alone, it would cost $1.5 billion, which is more than half of Mulcair’s proposed four-year budget.
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3. Make two key caregiver tax credits refundable.
According to Statistics Canada, there are currently eight million “informal caregivers” in Canada. Those are people who look after aging or sick loved ones without financial compensation.
So far, these caregivers can be eligible for the non-refundable Canada Caregiver Tax Credit (CCTC) or Family Caregiver Tax Credit (FCTC), which both offer a tax return on expenses incurred during the course of caring for a dependant.
However, says the Conference Board, a refundable tax credit could reduce a tax bill to below zero. It adds it would cost $90.8 million in 2016 to make the credits refundable. The Board’s report doesn’t detail the cost of making the credits refundable past next year, but it says the price tag is only expected to grow by about 1% each year (bringing the total cost to $500 million by 2020).
Matthew Stewart, the Conference Board’s associate director of national forecasting, says politicians must decide whether they’re willing to invest in strategies to cope with ballooning healthcare costs.
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