Planning for the future of Canada’s long-term care (LTC) system presents two fundamental concerns: Who will provide the care, and how will those services be financed?

Already, a major demographic shift is underway. Adults over 65 outnumber children under 15, and by 2030, nearly one in four Canadians will be seniors, according to Gabrielle Gallant, director of policy at the National Institute on Ageing, and David Coletto, CEO of Abacus Data.

Rising Demand, Growing Costs

Between 2019 and 2050, the National Institute on Ageing projects that the cost of public care in nursing homes and private homes will more than triple, growing from $22 billion to $71 billion annually.

LTC, the largest form of hands-on care not covered under the Canada Health Act, already faces significant costs and an unprecedented demand for services, which is expected to continue growing.

A recent report by the Canadian Institute for Health Information indicated that the next decade will be a challenging period for the LTC sector, as many facilities were already facing staffing and quality challenges before the COVID-19 pandemic. More than 50% of LTC facilities reported staff reductions severe enough to affect the quality of care and increase wait times.  

The report concludes that “the connections between workforce, work arrangements and their impact on quality of care and residents’ outcomes is essential for planning and creating a system that can consistently deliver high-quality care—particularly in light of Canada’s aging population and the growing demand for LTC services.”

Emerging trends point to ongoing challenges in staffing and care quality:

• Fewer providers are working in LTC relative to other sectors
• Overtime, sick and purchased hours remain high
• Health care job vacancies are increasing
• Rates of potentially inappropriate use of antipsychotics are on the rise.

Bridging the Gap

According to the Canadian Centre for Caregiving Excellence, half of all Canadians will be caregivers at some point in their lives; nearly 8 million provide care today for family members or friends with health challenges, disabilities or ageing-related issues. Their contributions total an estimated 5.7 billion unpaid hours each year, equivalent to work valued at over $97 billion, yet caregivers receive little support in return.

The National Institute on Ageing projects that “pressure on unpaid care provided by families will also increase as baby boomers get older and family sizes decline, largely due to reductions in Canadian fertility rates.” By 2050, there will be approximately 120% more older adults using home care support, while there will be approximately 30% fewer close family members potentially available to provide unpaid care.

Funding LTC Care

Each province and territory currently has a funding model in place to address the current well-being of LTC home residents, which combines publicly supported and privately funded sources.

While the public health care system covers some medical services, there are still many substantial additional costs.

The LTC News provides this example, among others, in their Simple Guide to Long-Term Care Options for Seniors in Canada.

Public Funding

Provincial and territorial governments subsidize LTC services, but coverage varies.

• Ontario: As of July 1, 2024, the basic co-payment rate for LTC homes is C$66.96 per day (C$2,036.40 per month).
• Nova Scotia: Effective November 1, 2024, the standard accommodation charge is C$110.50 per day.

These rates cover room and board; additional services may incur extra charges.

Private Payments

For services not covered publicly, individuals often pay out of pocket.

• Private LTC facilities: Costs range from CA$6,000 to CA$15,000 per month, depending on location and level of care.
• Home care services: Rates for in-home care vary between CA$25 and CA$75 per hour, based on the type of care and region.

Paying for LTC

Eligibility for financial assistance through the Long-Term Care Rate Reduction Program, which helps cover the co-payment for eligible residents living in basic accommodations, and/or spouses or partners who live together in a two-bed, semi-private room redesignated as a basic accommodation. The program is designed to reduce the financial burden of LTC for those who qualify.

Multiple factors, including income level and the need to support dependents living in the community, contribute to the reduction in the rate.

A recent study conducted by Frances Woolley for the Institute for Research on Public Policy notes that the system relies heavily on unpaid caregivers because publicly funded home care is difficult to access, and purchased home care is costly. “This leaves Canadians with three choices: raise taxes and/or cut spending to finance improvements in the quality of long-term care while meeting growing demand; maintain current financing levels and witness the human cost of declining care; generate new sources of revenue by building on long-term financing models used elsewhere,” writes Woolley.

Learn more about public coverage issues from Woolley’s study, Long-Term Care Financing: What’s Fair and Sustainable?

Challenges for Employees and Employers

Most employees will have caregiving responsibilities at some point in their lives and/or a need for LTC for themselves or a loved one. Employers are increasingly realizing the challenges created by caregiving and LTC for their employees and their businesses.

In her article “Long-Term Care and Caregiving: Issues for Employers” in the first quarter of Benefits Quarterly, author Anna M. Rappaport discusses the current LTC environment and considerations for employers, highlighting research from the Society of Actuaries (SOA). Rappaport suggests that employers may have a role in helping employees plan for LTC and accommodating caregiving responsibilities.

“Employers can explore several actions by studying the issues raised in this article,” Rappaport writes. “The article can help them identify the business impact of LTC and caregiving, potential areas for inclusion in financial wellness offerings, areas where employees need flexibility to manage caregiving responsibilities as well as possible areas for advocacy and community partnerships.”

Integrating LTC With Retirement Planning

There are many risks to consider when planning retirement, and LTC is a major risk area for which most people are uninsured, Rappaport writes. Planning for LTC varies based on life stages and personal circumstances. 

LTC factors that should be considered with retirement planning include:

• Declining physical and mental capability
• Potential loss of friends and family for support
• Where to live. Some living arrangements accommodate limitations, while others do not. Specific options even integrate support services into the living arrangements. Location determines access to health care, transportation, and proximity to family or friends who can provide help.
• Gender differences. For example, women tend to have longer life expectancies and are more likely to live alone in old age.

Impact of Caregiving on Employees

Rappaport highlights the following impacts of caregiving on employees.

• Caregiving often requires time off from work, involving a mix of predictable and unpredictable absences. Depending on the situation, this could range from occasional short absences to reduced workhours or even a leave of absence.
• Family members frequently juggle work and caregiving responsibilities, navigating care decisions while maintaining employment. Many cover caregiving costs out of their pocket or leave the workforce prematurely, impacting their retirement security.
• In addition to the physical and mental strain, caregiving can significantly impact a caregiver’s career and earning potential. Work accommodations for caregiving can lead to reduced earnings, fewer benefits, lower retirement income and decreased Social Security benefits.
• It is difficult for caregivers to plan for caregiving expenses because they don’t know how long the responsibilities will last or what impact it will have on their career.

Potential Solutions

There are no easy answers, and without a viable solution in the public space, it will be up to the individual to plan so that their future care needs are met.

Now is the time for organizations to explore practical ways to support caregivers and assist employees and retirees in preparing for LTC challenges while managing costs. Potential steps, such as creating new savings accounts earmarked for future care needs, expanding or modifying coverage for LTC under benefits plans, and providing funds in health care spending accounts for employees to use based on their needs, would be steps towards addressing the impending dilemma.