The coming age wave: Is Canada ready?

A new century is almost upon us. In fact, a new millennium. How are the various levels of government in Canada preparing for the challenges of this brave new era — especially as far as the aging population is concerned? In fact, governments have already taken decisive action — good or bad, right or wrong — to prepare for the new reality that, by 2030, 9.8 million baby boomers will be 65 or older.

In healthcare, the federal government has reduced funding to the provinces by $6.5 billion over the past four years. However, in December, 1997, Ottawa announced it will not cut the proposed $143 million in transfer payments to the provinces for health. In effect, the federal government has budgeted $12.5 billion for provincial health systems, although provinces and health experts alike have argued this amount is insufficient. As a result, hospitals have closed, including some of the chronic care facilities needed in the future. A recent issue of The Canadian Medical Association Journal (November, 1997), in unison with medical journals across the world, has warned governments that this is a most shortsighted policy.

Inherent in these new healthcare policies is the shifting of reonsibility for frail seniors to family and friends. On the bright side, the Health Minister, Alan Rock had promised to convene a national meeting in March, 1998, to explore extending the Canada Health Act to include in-home healthcare. (Currently, the Canada Act only applies to healthcare within institutions.) This will benefit families — particularly women — who provide 80 per cent of the care frail seniors need. However, critics say this new policy further legitimizes the fact that the care of the frail elderly — and others — is becoming the responsibility of family members. At the same time, provincial governments are looking to consumers, particularly seniors, to increase their participation in decision-making and the delivery of community services — in effect, turning consumers into unpaid staff. The long-term consequences of this policy are easy to predict — burn-out and loss of interest, as well as deflection from other voluntary activities. But the policy reflects another aspect of provincial policy to down-load responsibility on to individuals.

What of public pensions? The government has taken similar preparatory steps. Contributions to CPP will rise to 9.9 per cent of income (up to $35,800 per year) while benefits will in fact decrease by up to $12 per month. (The more you contribute, the less you get, even with the increased revenue generated by the new Investment Advisory Board). The proposed Seniors Benefit will eliminate tax credits based on age and retirement, a loss to the senior tax-payer averaging $4,500. per year. Old Age Security (OAS) and Guaranteed Income Supplement (GIS) will be unfairly reduced for many people, especially for couples with a combined family income of $45,000. Singles with incomes over $40,000 will also see their public pensions decrease. In return, poor seniors will enjoy a windfall of $120 per year. Meanwhile, the new tax structure for retirees could range from 26.6 per cent to 76.6 per cent, depending on income, paid in a haphazard, not graduated manner. Research by Walter Kelm, a retired pension expert, shows that an individual who joins the work force after 2001, when the Seniors Benefit is to take effect, and contributes to his/her RRSP until retirement, will earn $2.92 while the government will earn $16.02 in taxes and clawback for every dollar contributed.

While the federal government lowers public pensions, provincial governments are increasing the charges to individuals residing in nursing homes and homes for the aged — another example of the shifting of responsibility for healthcare. If this trend continues, baby boomers may not be as well-off when their parents die as many predict.

This is the present. But what of the future? Much depends on how quiet and accepting the public in general — and baby boomers in particular — are when they get to be 65. For the most part, it seems governments are moving backwards into the future, looking back to the 19th century rather than forward into the 21st century. CARP, of course, will continue to monitor this situation very closely. Stay tuned.