Funding Long-Term Care in Canada: Issues and Options

Canada's aging population is likely to result in increased health and long-term care (LTC) costs. It is estimated that between 2012 and 2046, LTC cost liability could reach almost $1.2 trillion. Many Canadians are unaware of the potential burden of LTC expenditures, and there is no consensus on who should pay for them. There are four possible options: (1) general tax revenues; (2) social insurance (employer/employee contributions); (3) private purchase of LTC insurance; and (4) private savings. This paper reviews these options as they have materialized to date in Canada and other countries. Despite the growing acuity of this issue, it seems unlikely that a universal, publicly funded approach to LTC will emerge in Canada. It is clear that federal and provincial/territorial governments must continue to explore policy options for LTC funding including public education, prevention and mitigation strategies and provision for tax-sheltered savings specifically for LTC.