Good evening Senators. My name is Granger Avery, I live in Port McNeil, BC, and I am the President of the Canadian Medical Association. On behalf of the CMA and our 85,000 members I am pleased to have this opportunity to appear before you.
I congratulate you studying the implications of our aging population and its financial and regional implications. Such a study is long overdue as witnessed by the fact that in 1998 the Auditor General of Canada projected that public spending on health could almost double as a share of Gross Domestic Product between 1996 and 2031.
Today I will confine my remarks to what we know about the impact of Canada's changing demographics on health spending. Policy makers have tended to be complacent on this issue due the finding that population aging alone increases health spending by 1% or less per year. However, there is a compounding effect that is readily apparent when you examine the impact on the age distribution of spending over time.
For example, a study completed for the Ontario Economic Council in 1981 projected that the senior population 65+ in Ontario would increase from its share of institutional and physician costs from 38% in 1976 to 47% by 2001 and 57% by 2026. Data from the Canadian Institute for Health Information today show these projections have been very accurate. The actual observed share was 47% in 2001 and 51% in 2014 – the latest data available.
If we apply the most recent age and sex-specific spending estimates for Ontario to the 2026 population projection, the share will be 60% – slightly higher than the original projection. It is almost certain that this impending shift in the distribution is going to cause a lot of pressure. Since we know that average per capita health spending jumps by more than one-third between the 70-74 and 75-79 age groups cost pressure is likely to increase in 2021 and beyond when the leading age of the baby boom turns 75.
The CMA is particularly concerned that population aging is unevenly distributed across Canada. According to the July, 2016 population estimates, the population 65+ exceeds 19% in each of the Atlantic provinces compared to 16.5% for Canada as a whole.
So what is to be done? The CMA has been calling for a national seniors strategy since 2014. Our efforts have been supported by some 50,000 Canadians who have joined the CMA's "Demand a Plan" campaign and written nearly 100,000 emails and letters urging the government to act now for seniors. Our ask is clear and we have recommended four key actions that the federal government could take right now to improve this situation.
First, we have called for a demographic top-up to the Canada Health Transfer. This top-up would be based on increased provincial-territorial health expenditure due to aging alone and would provide extra funding to those jurisdictions that are aging more quickly. This was previously recommended in the 2009 report of the Special Senate Committee on Aging.
Second, while we welcome the current focus and investment in home care and mental health being made by the government, Canada is still going to require thousands more long-term beds. We therefore recommend that the federal government include capital investment, including retrofit and renovation as part of its commitments to invest in infrastructure.
Third, seniors also face a higher burden of out-of-pocket expenditure for prescription drugs. According to Statistics Canada in 2015 a household headed by a senior spent 55% more on average on prescription drugs compared to all households. CMA recommends that the federal government take a first step toward universal coverage for prescription drugs by establishing a cost-shared program with the provinces and private insurance companies that would cover part or all of the costs above the lesser amount of $1500 or 3% of gross household income annually.
Fourth, Statistics Canada has estimated that there are over eight million Canadians serving as informal, unpaid caregivers to loved ones. Just one in five (19%) received any form of financial support, and just one in 20 (5%) reported receiving support in the form of a federal tax credit. The CMA recommends that the federal government amend the Caregiver and Family Caregiver Tax Credits to make them refundable.
In closing, we have ample documentation on our proposals that we would be please to make available to you.
Thank you for your attention and I will be pleased to answer your questions.