In 2017, a Canadian Institute for Health Information report found the number of Canadians over 65 years old had more than tripled in the previous 40 years. From 2.0 million in 1977, the number of seniors increased to 6.2 million in 2017, and is projected to hit 11.4 million by 2037.
A Conference Board of Canada report published in 2021 projected that by 2040, 22.7 percent of Canada’s population will be 65 or older, up from 17.6 per cent in 2019.
Falling pension coverage in non-union sectors raises retirement security concerns
Along with the dramatic increase in the number of seniors in Canada come concerns about the incomes of retired Canadians. Statistics Canada in 2020 reported the total income of those 65 years and older was $308 billion. About $45 billion (14 per cent) of this was employment income. Government transfers provided $124 billion of income (41 per cent) with Canada Pension Plan and Old Age Security accounting for 85 percent of this amount.
A critical $91 billion of seniors’ income comes from private pension plans, and there are concerns that many fewer of today’s workers will have this important income source when they retire.
A Statistics Canada report found in the private sector, pension membership has been in continuous decline, covering 28.2 percent of workers in 2000, falling to 24.1 per cent in 2020. By 2020, there were just 3.1 million pension plan members in the private sector, 400,000 fewer than in the much smaller public sector.
The decline in private sector pension plan membership echoes a decline in private sector union density. Statistics Canada reported in 2021 that private sector union density has declined from 18.4 percent of workers in 2000 to only 13.4 per cent in 2021. By contrast, in the same period, union density in the public sector has increased from 70 per cent to 74 per cent.
And while pension plan membership falls alongside private sector union density, so have the number of workers in a defined benefit plan have fallen even faster. In the private sector, defined benefit plans covered 21.3 percent of workers in 2000, but just 9.6 per cent in 2020.
With workplace pensions currently providing about 30 percent of retirement income, the decline in pension membership among today’s workers raises concern about the income security of tomorrow’s retirees. Data is already showing an increase in poverty among retired workers. According to a 2023 Statistics Canada report, a longer term trend toward fewer Canadians of all ages living below the Low-Income-Cut-Off (LICO) reversed in 2020. This reversal has particularly affected Canada’s senior population.
In 2015, 14.5 per cent of Canadians’ incomes were below LICO. By 2020 the situation had improved to only 6.4 per cent, but then worsened to 7.4 per cent below LICO in 2021. Among people in Canada over 65 years old, those with incomes below LICO improved to 3.1 per cent in 2020, but shot up to 5.6 per cent in 2021. Among seniors not in an economic family (living on their own) those with an income below LICO increased from 7.4 per cent to 13 per cent.
At a time when people are living longer than ever, the cost of living is on a steep rise, fewer and fewer workers have a pension, and those with one increasingly lack a plan with a predictable defined benefit, the numbers are bleak. There are various solutions to this problem, but it would be important to hear from Canadians about the options they prefer.
Seniors caught between a need for care and the long term care failure
Half of healthcare spending is for older Canadians, although today they are less than one fifth of the population. Proposed increases in health care spending are often based on inflation or inflation plus population growth. But an aging population adds an additional one per cent per year to health care requirements, according to a 2018 report from the Conference Board of Canada. Provincial and territorial healthcare systems will require an additional $93 billion between 2018 and 2028 to address population aging, according to the Conference Board.
A survey of Ontarians 55 years or older by Campaign Research in 2020 found 93 per cent of respondents would prefer to live at home as long as possible if additional supports are available to them. But it’s not clear those home care supports are available and, if not, whether adequate residential facilities will exist.
Any lack of home care adds pressure to long term care facilities already under stress. Research from the Canadian Medical Association in 2021 found the demand for long term care stood at 380,000 people in 2019 with demand from about 77,000 people (20.4 per cent) going unmet by existing facilities. CIHI also estimated about 7.7 per cent of home care demand is currently being unmet. This unmet care includes seniors on waiting lists and those being informally cared for but would like professional care.
While demand goes unmet, about 11 per cent of residents newly admitted to long term care facilities in 2018 and 2019 could have been cared for at home, according to research from the Canadian Institute for Health Information published in 2020.
CIHI found seniors were moving to care facilities earlier than medically necessary because of the difficulty finding affordable home care, the time and money required to travel to care appointments, difficulty obtaining reliable care that changes with changing needs, and a desire for social and emotional support.
People from rural areas were over 50 per cent more likely than those living in urban areas to be admitted to long term care when they could have been cared for at home. People living alone were twice as likely as those living with family members to be admitted to long-term care.
While seniors from smaller communities and rural areas are more likely to move to long term care before medically required, a 2021 Environics report based on census data found older Canadians are more likely to live in smaller communities and rural areas. In Canada’s largest urban areas, 17.5 per cent of their population is 65 years or older compared to 22 per cent for communities with between 10,000 and 100,000 residents and 23.2 per cent in rural areas. These statistics raise questions about the availability of home care outside larger urban centres.
The CMA estimated the demand for long term care would nearly double to 606,000 in 2031 while home care demand would increase from 1.2 million in 2019 to 1.8 million in 2031.
A 2021 report by the Canadian Institute for Health Information found there were 198,220 long term care beds in Canada, 29 beds per 1000 Canadians over 65 years old. There is a wide variation by province, With 47 beds per 1000 seniors in Saskatchewan but only 24 per 1000 seniors in Quebec. An Environics report found slightly different results, with 160,000 Canadians living in seniors’ residences, 185,000 in nursing homes and 68,000 in facilities that were a mix of the two care levels.
In the aftermath of the numerous COVID deaths in long term care facilities, recent opinion research found strong public support for transitioning Canada’s long term care homes to public ownership. Nearly half (49 per cent) of survey respondents said care homes should be taken over by the government with fewer than one in five (19 per cent) opposing. More than four in five respondents want more PSWs, more government investment, and national standards for long term care facilities.
It’s not clear whether the health care costs – through home care and long term care – are planned to meet the increased demands they face with an older population.
Next steps for secondary research
The Douglas Coldwell Layton Foundation is committed to exploring this current health care crisis further and researching the potential for a looming disaster facing aging Canadians over the next 10-20 years and beyond, with the goal of finding solutions that can avoid future tragedy.
From this discovery phase of our research we have learned that Canadians are not well financially equipped to deal with the realities of our current long term care system; the financial support from the CPP and OAS are terribly inadequate. Workplace pensions are in steep decline. And, as wages are not keeping up with rapidly increasing cost of living, workers are less able to save for retirement. Long term care facilities are in high demand and overextended, doctors and nurses are overworked, and a major investment in PSWs is desperately needed. We have also learned that more research is needed to truly sound the alarm and raise awareness.
We will work with partner unions and organizations in healthcare to better understand the issues, gather new information, and help develop a final report that can be used to educate the public and policy makers alike.
This health care issue is social, economic, and political - it has major ramifications on the lives of millions of Canadians now, and will have an even greater impact on the quality of lives in the future.
Research Phase Two: The questions we need to answer.
- How much investment is needed in the immediate, short, and long term to fix this crisis?
- What are the province’s long term and at home care plans? Do they meet anticipated demand?
- What must governments do to protect our seniors now, and in the future?
- What is the projected impact of declining pension plan membership?
- What is the relationship between pension enrolment and union coverage?
- What is the financial need for seniors to live a quality life?
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Contact: Josh Bizjak, Executive Director: [email protected]
If you would like to support the next phase of our research on Seniors Care and Long Term Care please make a contribution to our research fund: www.douglascoldwelllayton.ca/research_fund
