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Proceedings of the Standing Senate Committee on
National Finance

Issue No. 30 - Evidence - April 11, 2017

OTTAWA, Tuesday, April 11, 2017

The Standing Senate Committee on National Finance met today at 9:31 a.m. to continue its study on the financial implications and regional considerations in Canada's aging population.

Senator Mockler (Chair) in the chair.


The Chair: Honourable senators, I see we have quorum. I declare this meeting in session.

Welcome to this meeting of the Standing Senate Committee on National Finance.


My name is Percy Mockler, senator from New Brunswick and chair of the committee.

I wish to welcome all of those who are with us in the room and viewers across the country who may be watching on television or online. As a reminder to those watching, these committee hearings are open to the public and also available online on the Senate website at All other committee-related business can also be found online, including past reports, bills studied and lists of witnesses.

At this time, I would ask all senators to introduce themselves, starting from my left.


Senator Moncion: Hello. I am Lucie Moncion from Ontario.

Senator Pratte: Hello. André Pratte from Quebec.


Senator Andreychuk: Raynell Andreychuk, Saskatchewan.

Senator Neufeld: Richard Neufeld, British Columbia.

Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.

Senator Woo: Good morning. Yuen Pau Woo, British Columbia.

The Chair: Thank you, senators.


We also have at the table the clerk of the committee, Gaëtane Lemay, and our two analysts from the Library of Parliament, Sylvain Fleury and Olivier Leblanc-Laurendeau, who team up to support the work of the committee.


Today the committee is continuing its study on the financial implications and regional considerations of Canada's aging population.

We have two witnesses this morning, honourable senators. First, Queenie Choo, Chief Executive Officer, S.U.C.C.E.S.S. S.U.C.C.E.S.S. was initially founded to assist new Canadians of Chinese descent to overcome language and cultural barriers. S.U.C.C.E.S.S. has evolved into a multicultural, multi-service agency assisting people at all stages of their lives and Canadian experience. Today, the organization is recognized as one of British Columbia's largest social service providers and also as an icon. S.U.C.C.E.S.S. is active primarily in the health care sector, operates a number of senior centres, and also leads awareness groups on quality of life for seniors.


Our second witness is appearing by video conference. It is Pierre-Carl Michaud, professor in the department of applied economics, at HEC Montréal. Professor Michaud is also co-chairholder of the Industrial Alliance Research Chair on the Economics of Demographic Change, which is the collaborative effort of three Quebec Universities: HEC, UQAM and Laval University. Its objective is to provide decision makers with useful evidence on economic issues related to demographic change and how the change affects the financial security of citizens and governments. Professor Michaud, welcome and thank you for joining us.

Before I invite Ms. Choo to give her presentation —


— honourable senators, I would like to have a consensus. The committee has received the witnesses' presentations in only one official language. Do you agree that these presentations be circulated, even if they are available in only one official language?


Senator Neufeld: Yes.

The Chair: Thank you, Senator Neufeld.


Before I ask Ms. Choo, I would ask Senator Forest to introduce himself.


Senator Forest: Hello and welcome. Éric Forest, senator from Quebec, the Gulf region.

The Chair: Ms. Choo, you have the floor.


Queenie Choo, Chief Executive Officer, S.U.C.C.E.S.S.: Thank you very much. I am pleased to be here on behalf of S.U.C.C.E.S.S. and add to the conversation about financial implications and regional considerations of Canada's aging population.

British Columbia, like other regions of Canada, is also experiencing an aging population. While the province's overall population grew by 12 per cent in the past 10 years, the senior population, specifically, grew by 42 per cent.

In B.C., many seniors are immigrants. Forty-one per cent of the population that is aged 65 and above in B.C. are immigrants. This increases to 57 per cent in Metro Vancouver. In comparison, only 30 per cent of seniors across Canada are immigrants.

In terms of the impact of the growing senior population, let me talk about some of the consequences of not taking action to proactively address this coming new demographic reality.

Most seniors want to remain at home. Many are able to when their basic needs are addressed through appropriate supports such as adult day centres, home care and home support services. However, when the appropriate supports are not provided at the right time and right place, seniors are more likely to end up in emergency rooms, to be admitted to acute care hospitals, stay in hospital longer to recover, or to move to long-term residential care facilities, even when it is not needed yet because of other supports that are often lower in cost and available.

One report indicates that keeping seniors at home in residential care can result over $43,000 in savings annually per person.

In B.C., there are over 1,800 seniors waiting for long-term residential care; 23 per cent of these people are waiting in acute care with an average wait time of 46 days. Having these 23 per cent of seniors waiting in acute care would end up costing an extra $19.8 million.

For culturally sensitive, long-term care, the wait time is even more significant. For example, at S.U.C.C.E.S.S.'s 113- bed residential care facility in Vancouver, the average wait time is four years.

When we talk about an aging population, we also need to consider their family members, many of whom provide informal and unpaid care to loved ones. In B.C., 97 per cent of seniors who are eligible for home support have an unpaid, informal caregiver. Research has also found immigrant seniors, particularly those whose mother tongue is not English, are more likely to receive home support from their informal caregivers.

Informal caregivers devote a significant amount of their time to care giving. In B.C., they provide an average of 19 hours of unpaid informal care a week to their loved ones. It is estimated that over 25 per cent of the informal caregivers have the dual responsibility of caring for their senior parents as well as their own young children. With so many responsibilities, they are at a high-risk of burn out.

As the senior population increases in the coming years, it is expected that there will be even greater reliance on informal caregivers. Canada's population is aging. We can no longer afford not to take action. I would like to put forth the following recommendations on how we can better support seniors that will result in better health outcomes, and yet lower health costs over the long term for Canada.

Recommendation one, we need a national seniors' care strategy that takes a long-term and proactive approach. The strategy should focus on the continuum of care needed by seniors starting from early intervention all the way to end-of- life care. The strategy would recognize the diverse needs of seniors and the families and be reflective of the changing demographics of the Canadian population, such as the growing portion of immigrant seniors. The strategy should adopt a holistic and integrated approach and address needs comprehensively in areas of family and informal care giving: home support, wellness; illness prevention; primary, acute and specialized health care; assisted living; long-term care needs, and most importantly, culturally sensitive care.

Recommendation two, we need to recognize that Canada's senior population is diverse, and culturally sensitive care will result in better health outcomes. This can mean different things such as language, culturally familiar food and activities, culturally appropriate services, et cetera. Through culturally sensitive care, seniors are healthier because they can communicate and express their needs and are able to engage and interact with other seniors, thus reducing emotional hardship and social isolation, and enhancing the sense of belonging. It is a wellness model for causing less health expenditure to the system in the long run.

Three, we need to expand the right programs on the entire care continuum to ensure seniors have the right support at the right time. This includes culturally sensitive home care, more assisted living and residential care beds so that when seniors do reach that point on the care continuum, they do not have to spend years waiting for a culturally sensitive facility while their health deteriorates; a seamless transition as they journey from the home to assisted living, to residential care, with shorter wait times, fewer disruptions, increased predictability in planning that creates greater cost efficiency overall.

Number four, an early intervention and preventive approach is needed. We need to support programs that engage and support the health and wellness of seniors. This includes more activities to engage seniors in communities as well as more education to help increase seniors' understanding of health maintenance and illness prevention. Seniors are able to stay in the homes longer, remain independent and active, and are less likely to use more costly health services until later in life.

Five, we need to support the entire family who often act as informal caregivers to seniors. This trend is particularly prevalent amongst immigrant families. These informal family caregivers are at risk of burn out. We need to support family caregivers through more day programs, more home support, respite beds, and tax incentives to alleviate financial hardship and physical and psychological burn out on families.

With an aging population and a longer life expectancy, we definitely need to take these actions immediately in order to achieve better health outcomes with more cost efficiency that will benefit all Canadians in the long run. Thank you very much.


The Chair: We will now ask Professor Michaud to give his presentation.

Pierre-Carl Michaud, Professor, Department of Applied Economics, HEC Montréal, as an individual: Thank you, senators. On behalf of my fellow chairholders of the Industrial Alliance Research Chair on the Economics of Demographic Change, thank you for this opportunity to appear before your committee today. I am speaking for myself alone, however, as I am appearing as an individual. While I cannot be there in person, unfortunately, technology gives me this opportunity to join in the discussion.

Ever since the aging population has been a topic of discussion, we are getting to a critical point, to paraphrase the Quebec poet Gaston Miron. The first cohort of baby boomers, which is very large, is already receiving Old Age Security cheques, and the next cohorts will come along within the next 15 years or so. It is too late to find demographic solutions to this challenge, and that is quite well understood.

The impact of these changes on public finances is well known, assuming that behaviours and policies do not change. At the federal level, the greatest impact of the aging population is on expenditures on Old Age Security benefits, including the Guaranteed Income Ssupplement. We know that as retirement incomes from the CPP and the QPP increase, federal spending on seniors will decrease, remaining constant as a percentage of GDP, despite the aging population.

It is at the provincial level, however, that major challenges are expected because, despite considerable efforts, it will be difficult to restrict the annual increase in health care spending to less than 4 per cent, which is roughly equal to the anticipated increase in revenues. Aging certainly had a slightly weaker impact on health care spending in the past, but the combination of technological advances in health care, which are welcome, and the growing number of senior households will lead to growth of roughly 4.5 to 5 per cent in the future.

We can and must improve the efficiency of the system, but marginal gains will not be sufficient to keep growth in check. With respect to long-term care, as the previous witness mentioned, our work at the research chair shows that the limited capacity in long-term care that has been developed in recent years could create tremendous cost pressure if new infrastructures have to be developed quickly.

What is less certain is the way the population and governments will respond over the coming years. Our work at the research chair shows for instance that Canadians, and especially Quebecers, are continuing to work into their later years. We estimate that this will reduce but not eliminate the effects of slowing growth in the working age population.

Moreover, the ability of our governments to increase tax revenues is limited, and it is likely, but not desirable, that the effect on the provinces will lead to cuts to public services. That is something that must be avoided.

The aging population offers an interesting opportunity to review some of the policies that were established when the population was younger. Among the options I would like to consider in the discussion period are the following repositioning possibilities. We need policies that send a clear message that extending one's working years is desirable. We must avoid contradictory messages, such as reinstating 65 as the age of eligibility for Old Age Security without other measures that encourage people to work. Concrete steps can be taken because a good many of us are living longer and longer and in good health.

Despite a recent accord with the provinces on the future of the Canada health transfer, it could be helpful to consider federal transfers that are based on the needs arising from the larger percentage of the population that is aging in certain provinces. The underlying objective could thus be achieved through the transfer of tax points. This imbalance must be recognized. The provinces have long-standing expertise in health care development and management, and I cannot see the federal government taking over this role from the provinces in the next 20 years.

A tax system that focuses on taxation and consumption, and that is neutral with regard to savings, can also help offset the effects of the aging population. This kind of flexibility offers a number of economic benefits. In addition, we must examine the effects of intergenerational redistribution in the current tax system.

There are some difficult choices to be made, and the window for making them is quickly coming to an end.

Thank you for giving me this time for my introductory remarks.


Senator Woo: Ms. Choo, thank you for your presentation. You talked about the care continuum and seniors requiring different types of care as they get older, but I want you to back up a little bit and talk a bit about the care continuum in terms of seniors as caregivers themselves. Obviously, as both of you have mentioned, we are living longer, and many people are living healthier longer as well, so either their working life or their active life has extended beyond what used to be the case. Could you just give us a broader picture of the role that seniors play, both as caregivers for their family needs, but later in life, of course, as receivers of care, and how that continuum fits into the lives of many immigrant families?

Ms. Choo: Thank you very much, Senator Woo, for the question. Certainly, no one wants to stay inactive and create that sense of longing as we age. We all want to have a continuous sense of fulfilment, commitment and contribution to the community and society rather than being inactive.

From the time when they come to Canada, and I'm talking about immigrant families, of course, they want to continue to contribute not only to the family but also to the community. That's what we are all about. We want to engage those folks from the get-go, whether they need to continue to work for the family or they have retired yet continue to stay connected to the community through volunteering or through some other work that they have experienced that would allow them to contribute to the skill set that is required in their community.

So from that continuum onward to the time that they become the recipient of care, I think there are a lot of creative ways to engage seniors. We believe that they would be value-added to the community, both before retirement and after, if they continue to stay active and to contribute to the community. They are not only recipients of care but also offer their contribution to the community in return. I think the key here is to stay active physically, socially and mentally.

Senator Woo: Thank you.

Professor Michaud, I'm very interested in the ideas you have floated on fiscal adjustments to deal with the aging population. I ask you to please go into a bit more detail, particularly on the idea of taxing consumption. Are you referring to increasing the GST, for example? Also, with respect to the idea of adjustments to the tax system to deal with inter-generational inequities, what specifically would you suggest?

Mr. Michaud: Regarding the tax system, when we think of how tax revenue is collected over the different age groups, clearly we see that consumption or spending of households is flatter with age than is income. So at a first pass, when we look at this, we see that when we're going to have demographic change or aging, clearly, the change in government revenue is going to be smoother when we have more emphasis on consumption taxes than we do on income taxes. That is basically the orientation that, for example, Scandinavian countries and many European countries have decided to take.

In principle, if you work in a vacuum, that is the tax revenue collection system that you would want. Of course, that would imply raising the GST and provincial equivalent. Clearly, we have to take into account that we live in a world where we're competing with the U.S. and with other countries, for example, Mexico, and there, of course, you can't go to rates or levels of consumption taxes that we see in Europe because you would have a lot of leakage in terms of spending.

But there is room for shifting or tilting things going forward, recognizing these changes.

In terms of intergenerational transfers, as you move more toward consumption taxes you become less dependent on these very large implicit transfers across generations that are due to the fact that mostly working people pay taxes and older people, to use a caricature, spend more as they age. So it has these two desirable properties.

Senator Marshall: Thank you very much for being here. I was very interested in your presentation when you were discussing home care, the benefits of home care and the savings that could be realized. The government has just committed to funding for a home-care program over the next 10 years. Is your organization in any way involved in gearing up to help spend this money? Do you have any suggestions as to how it should be targeted?

Ms. Choo: Thank you, Senator Marshall, for that question. In fact, shifting to home and community care has been the goal of our system for a long time. No seniors want to be admitted to residential care prematurely. It is important to help the senior stay home as long as possible.

But there are some issues about being user-friendly, if I can say it that way. Perhaps the home-care system needs to be flexible, reflective of the demography and the cultural needs of these people, where they are from, the language of the senior and the cultural preferences. That approach will help those seniors as they age either in the right place or at home, and this is important.

No one wants to go to assisted living or residential care if you don't have to. These are the expenses that, perhaps, could be avoided, and there could be a cost saving to the overall system if seniors stayed home longer.

Senator Marshall: Everyone is looking forward to this funding and being able to spend it. My experience in home care is that it is something that could quickly get out of control.

Has there been any thought given, while we are anticipating the influx of money, to how the spending will be controlled? Have there been any thoughts to that aspect? Usually there is so much money in the pot and you spend until it's all gone or you can't spend anymore, and then you are left with a population that doesn't get anything. You have one group that gets good service and funding and then you get to the end of the money and you have a group with nothing.

Has there been any thought given to that aspect? My concern would be with trying to contain the spending so that we don't jeopardize the program.

Ms. Choo: That is why there needs to be a seniors' strategy. It is important to look at assessed needs rather than giving the care regardless.

The other area is ensuring that there is cost efficiency in the system. Going in and out of the homes seven times a day does not speak to the efficiency of the system. It has to be changed.

There are creative models that help seniors stay home and home care and home support are being provided. We have to look at those rather than creating a big monster where we are spending money out of control. Yet, we are missing the target to help seniors stay at home as long as possible with the quality of life that we are speaking about.

Senator Marshall: Thank you very much.

Thank you very much for your presentation, Mr. Michaud. I am a baby boomer. We knew we were coming through and now we are going through, so the time has come.

Some provinces are making a case — New Brunswick is one — and have been putting pressure on the federal government to top up the health transfer in order to compensate for the older population. You mentioned it in your opening remarks.

Do you have any suggestions that could be done specifically? How would you do it? Would you say everyone over the age of 80 would be given so much per person? Have you given any thought as to how you would compensate or fund that issue?

Mr. Michaud: That is a good question. I am not aware of calculations or simulations that would tell us what sort of objectives we could use to implement this idea. That would be interesting to pursue. I suspect something to the effect of using a well-recognized marker, such as the number of people over the age of 80. Weighting the number of people by age, say over the age of 65, would also be a good marker.

The characteristics that would need to be used is that the statistic is well agreed upon and computed by Statistics Canada or some other organization like that. We would not want, for example, to base it on the health of the population or some other marker of needs where there could be a dispute over the exact metric or the definition and it could be manipulated.

It would be a better definition and perhaps more targeted, but the danger there is that we might agree less on the exact metric.


The Chair: Before I give Senator Pratte the floor, I have just learned that Professor Michaud has to leave us in 45 minutes so let us start with our questions for him.

Senator Pratte: Mr. Michaud, welcome to the committee. In your presentation, you referred to concrete steps that could be taken to allow people to work longer. Do you have any specific ideas in this regard, considering that such measures are often extremely controversial? Increasing the age of eligibility for Old Age Security, for instance, even by just two years and over a very long period of time, has been very controversial. What kind of measures are you thinking of?

M. Michaud: In terms of a pension system, we always try to think of a system that is neutral, that does not have dissuasive effects and that could potentially encourage people to work longer. Among the measures mentioned, increasing the age of eligibility for Old Age Security, for certain households, especially for low-income households, is a very powerful incentive because it forces people who receive that kind of revenue to work longer to meet their needs. In general then, the most socially acceptable measures will be neutral ones that eliminate the dissuasive effects that we are seeing now.

So we need to come up with concrete measures. Looking at what a number of other countries have done, it is clear that refundable tax credits and working bonuses that are targeted to seniors' households have had some success in certain countries. That is one measure for workers.

There have also been incentives for companies, tax measures that allowed and potentially encouraged companies to hire older workers because that is one of the problems that we are seeing. Sometimes older people have to leave their jobs because the company's pension plan discourages them from staying on with that employer. On the other hand, we would like these people to show an interest in continuing to work, but perhaps in another type of work. With that, however, comes the issue of matching the supply of workers with companies' needs, and measures can be taken in this regard to encourage companies or send the message that hiring older workers is something positive.

As to the pension system, the Guaranteed Income Supplement offers two kinds of incentives. First, after the age of 65, for each dollar earned by lower-income people who decide to work and who are potentially receiving GIS benefits, they lose 75 cents of their income supplement. That is downstream, but upstream, for people who decide at the age of 62 to delay CPP or QPP benefits for one year, their benefits will increase if we do a good job of offering incentives. Should they decide to collect this pension or additional benefit at the age of 65, however, if they can potentially receive the GIS, they will also benefit from this incentive. So this does not only for incentives after the age of 65, but before that as well. So this is a measure that could be examined. We do, of course, have to find a balance between the objective of reducing poverty among seniors and work-related incentives.


Senator Pratte: My other question is for Ms. Choo. You advocate a national senior care strategy. Since most of your other recommendations seem to be in the field of provincial jurisdiction, since this is health care, what role do you see for a national senior care strategy?

Ms. Choo: One of the things that I also touch on is some of the tax incentives for the caregivers. This is across the board.

Currently, there are some jurisdictions already that implement those tax incentives for their informal caregivers but it is not across all the jurisdictions in Canada.

So I'm hoping there will be an opportunity to look at support to caregivers, especially since 95 per cent of our seniors are being cared for by informal caregivers. If we don't look after them well, they will get burned out psychologically, physically and socially. That means seniors who require care will be falling to the general system. It will incur expenses in the long run, so I would urge that addressing caregiver burnout might be a way to address some of the issues at hand.


Senator Forest: Thank you for joining us, Mr. Michaud. I was looking at the model you proposed as to the projections for various scenarios. For the least optimistic possible scenario, the results are quite worrisome. For Quebec, the gross debt would increase to 150 per cent of GDP. Although the budget is balanced right now, it would increase to over 18 per cent. What measures could the current or future government take to offset this reality?

In addition, you talked about creating an environment that would encourage people to continue working longer, but what do you think about the recognition of educational credentials? Could that help offset the situation?

Mr. Michaud: As to the projections you mentioned, our objective was to make it possible to look at different hypotheses. In debating these issues, we often end up arguing about hypotheses, so we wanted to present a range of scenarios.

Looking at the most catastrophic scenario, the provincial debt is clearly not sustainable. Yet the most likely scenarios have a major impact on the sustainability of the provinces' public finances. Growth in the GDP is certainly a key factor. That is nothing new, but is bears repetition. In establishing measures to help stimulate the economy and productivity, these measures should be encouraged in the short term.

We do, of course, have to help people stay in the labour market as long as possible, to be more productive, and as regards public investments, investments in infrastructure potentially have a role to play. We need a strategy that focuses on increasing productivity.

Although we can control spending, try to limit it, the pressure is so great, as I said in my introductory remarks, that we could end up in a situation where it would be relatively easier to simply limit spending. This, however, could have a major impact on quality of life. So that is not an approach that I would recommend. I would focus more on income and try to create policies that are favourable to growth over the next two decades.

Senator Forest: I have a supplementary question. Looking broadly at employability and the aging population, certain sectors are hit much harder than others. That includes natural caregivers, not health care professionals, but everything in the core sectors — nurse's aides, plumbers and electricians. Would it be helpful to do a complete analysis of the labour market in order to develop targeted incentives for certain categories? If things keep going as they are, plumbers will soon be paid more than university professors.

Mr. Michaud: Are you trying to tell me I should go back to school?

Senator Forest: No, I'm just telling you to check your information.

Mr. Michaud: Quite right. I think that demand in certain occupations or labour market sectors could be much greater in the years ahead. We need to train these people, provide good vocational guidance, and recognize these positions. But to say that there should be tax incentives to do so, if that can be done without necessarily investing money in this area, but by providing good vocational guidance instead, I agree that many of those positions might be in demand. It would be unfortunate if we could not meet those needs. As you said, I think that is important. If we want older people to continue working longer, we also need to help them if they are also natural caregivers. We will have to find jobs that balance out these two needs. I think that is an interesting avenue to explore.

Senator Moncion: I don't really have a question, but more of an observation. I have to say that we have experienced this type of situation in my family.

There are a number of aspects. First, when we say that seniors should stay in their homes for as long as possible because that is where they feel good, I agree to an extent. The elderly, at some point, are no longer able to care for a household. Home maintenance is a whole heap of trouble, as they say — the lawn in the summer, snow in the winter, and so on.

I do not know whether this is a common trend, but in Ottawa, the elderly who can afford it tend to sell their homes and move into apartments. By significantly reducing the amount of work that comes with home maintenance, they are able to keep their independence. In my opinion, governments should perhaps invest in housing for independent seniors.

Aging includes different stages of transition. First, the elderly are independent, then semi-independent, and ultimately they lose their independence completely. They need services the most when they are semi-independent. Perhaps we should try to change attitudes. Many seniors do not want to leave their homes and end up in seniors' residences, because they think these are places for the elderly and where you go to die. However, these residences are for living. It's a matter of changing attitudes, because this affects the people who care for the elderly, as well as seniors' ability to pay.

You talk about making them work longer, but that creates another problem at the other end of the spectrum: there are young people who want to enter the workforce. So I do not necessarily have a question for you, but there are some changes to be made. I don't know what more advice or information you can give us. We are always talking about government investment, more money, and so on, but it seems to me that there is also room for rethinking the issue of the aging population and the transfer of wealth, services and care. It's not really a question.

Mr. Michaud: The only comment I can make is that you are right, it is an important issue. Seniors' households or single seniors are in a predicament. Often, they have a home that has significant value, in terms of equity. However, their only alternative is to go to a seniors' residence with people who really are not independent.

What is somewhat strange is that we do not yet have a well-developed mechanism in Canada to allow people to use a portion of their home equity money, either to stay at home or to live in a place more suited to their situation. I am not sure that the solution is necessarily government programs, but it is clear that there is a gap in the transition from a home with significant equity to a residence for end-of-life care. We can do a better job of guiding people.


Ms. Choo: That is a great question. That is what I was talking about in my paper, namely, aging in the right place. It is not aging at the place; it's aging at the right place. This is very important. As Professor Michaud said earlier, we should leverage some of the innovative ideas, for example, using technology to help people to stay at home, as well as complementing the assessed needs and requirements in order to enable seniors to stay at home.

Leaving them at home without help would create disasters. We also want to make sure that we are not overcompensating for the care at the same time. When we are talking about the real care needs of seniors, seniors need to be able to speak about what they require — the supports that can be available for them so they can stay at the right place. It is so important. The right place could be at home, in assisted living, or going to an adult day program during the day or during the week. There are many options available. What is lacking right now is a coordinated approach in the system when supports are required, and that is currently not available.

Senator Moncion: I will give you an example. My father was in his home until he was 90 years old. In his 91st year he went from his home — and he had help, but we didn't want a lot of help — to not assisted living but to a retirement home, where he received some care, but was still autonomous. He will be 96 in a couple of weeks, and he is now in a nursing home, where he gets long-term care. His transition took about 15 years in total, from the time my mother left the home until he went into retirement living.

He had the financial means to live in a retirement living area. It was quite expensive to live there, but he had the means to pay for it. The transition has been good for him, but I think a cultural change needs to take place in our society regarding people who don't want to leave their home, especially aging people. That's where we have to work on changing the mindset.

I have seen here in Ottawa retirement homes that are geared to income. People with lower income are still able to live in apartments where there is care and a few things available, but it is geared to their income. If they don't have a lot of money, they pay $30 or $40 rent per month and they have access to a good place to live. In time, they might need to go into assisted living, but it is just the transition and all the services that we can provide that are there. They are expensive, but they are there.

Ms. Choo: Absolutely. That is very important. As I mentioned, aging in the right place enables seniors to talk about the transition without disruption, and we have to lessen the wait time. When people wait, it takes a lot of effort by the informal caregiver. Their health deteriorates at the same time, so health outcomes will be affected in the long run.

Senator Moncion: I agree.

Senator Neufeld: This question is for both witnesses. Canada isn't the only place where we have baby boomers. They are obviously all over the world. Are there other countries that we should be looking at to find out how they are handling this huge problem in a way that makes good sense? I'm sure everyone is different; I know different countries are different. Japan is one country that has a lot of seniors. What are they doing? Could you help us a bit there and tell us whether we should be looking at these things?

Ms. Choo: That is a very good question. Senator Neufeld, you talk about Japan. I want to tell you a story. When a patient goes to see their doctor in Japan, the doctor will say, "Why do you come to see me?'' The patient will say, "Because I want to stay healthy.'' Their mindset is that you don't go to see a doctor when you have problems; you see a doctor when you want to stay healthy. That speaks to the mindset and other ways that people are living. It is how to stay healthy rather than illness oriented in that sense.

There are lots of good examples in the world that address the aging population. I think we have to bring them home as we take a look at our regional particulars, our requirements and preferences, examine those ideas that speak to the cultural sensitivity of those particular regions and to the community's needs. That is very important as well.

Senator Neufeld: Mr. Michaud, do you have any suggestions?

Mr. Michaud: Yes. I think all countries are struggling with this transition. It's a difficult transition. I would invite the committee to look at Northern European countries, which I think are doing a relatively good job of providing quality long-term care services and good insurance, and helping people as they transition. Countries that are doing better often have taken steps in past decades, have foreseen this problem and have already implemented policies before the problem arose. Here we are in a particular situation where we are now discussing those policies at a moment when population aging is a reality.

Senator Neufeld: I have an observation more than a question. I worry about where all the money will come from. The province of British Columbia has a good economy and has balanced budgets for the last four years, and will probably do so well into the future. But when health care needs take 50 per cent of the budget and everything else has to be provided out of the other basket, what is left? People say we need more and more money. I don't know where it will come from after a while. We can increase taxes and all those kinds of things, but we become uncompetitive in the world market, as has already been said, when we continue to increase taxes. It worries me where the money will come from. I am similar to Senator Marshall, probably a bit older. I am one of those baby boomers who will probably need care at some point in time. That's something I worry about, and have always worried about.

In my 18 years in government, in British Columbia, I have seen the huge bite taken by health care and then social services on top of that. You have hardly anything left for all the other things that we say we have to do. Do you have a comment on that aspect?

Ms. Choo: Thank you. That's a very fair statement, Senator Neufeld. Having more is not better. I always believe in doing things smarter rather than asking for more. Asking for more might not be the right target to shoot for.

Quality of life is immeasurable. We must take a look at what the baby boomers want in the future — you and I and the other baby boomers. I am one as well. The outlook on health of the generation before us is very different from that of our generation. We must think about what people want. What are the demographics? What are the regional considerations?

Another consideration for you is that we cannot build all the residential care facilities for these baby boomers as they age because after us they will be empty. I wanted to bring this point up and say more is not better. Wiser might be the way to go.


Senator Forest: Ms. Choo, your comments that those facilities will be completely empty are very relevant. Today, we are confronted with the fact that the previous generation was much more comfortable with care. It will not be easy when we, the baby boomers, get to this stage. We have had careers, we have high standards and we demand quality services. In my view, health care professionals will be happy when they finish their shifts, because it will not be easy for them to look after us.

The biggest challenge is our capacity to keep those who want and are able to at home. That's the challenge of home care. The federal government has clearly identified this as an objective, but in areas of jurisdiction shared between the federal government and the provincial government. If you had a single recommendation to improve the quality of care to keep seniors in their homes, what would it be? What would be your main priority in terms of taking concrete action, not just talking about a possible program?


Ms. Choo: Thank you for the question. If I had a magic wand, I would like to see a more coordinated approach between home and community care and housing. There are many innovative models out there. We don't need to have seven people coming to the door and offering that service when the client, the patients, do not understand what they require and their state is not really conducive to those strange people coming to the door. I would like to see a whole coordinated approach between housing for seniors and a leveraging of the home and community care right where they live so that people don't have to go there seven times a day. They would be provided care as they need it in the building where they live. We can create a campus of care approach and have people truly aging in the right place. Thank you.


Senator Moncion: My question is about informal caregivers. What kind of program are you suggesting for helping informal caregivers?


Ms. Choo: That's a very good question. In my former experiences, I created a program to test a model to see whether it would help to relieve caregiver burnout. Many of these programs exist now, like providing respite care beds. They help informal caregivers, who can take their vacation without continuing the care burden in their life. An adult day centre is another one where loved ones can go once or twice a week so that informal caregivers can be relieved to do their own personal errands and enjoy what they need to do apart from caregiving.

There are many innovative programs such as the informal caregiver support group where they actually can share some of the experiences. They are not alone. Mentally, they can be supported within their community. Many of the informal caregivers can support one another in those settings. That is only naming a few.

I talked about the tax incentive for caregiving. I think some jurisdictions have already implemented it, but it's not Canada-wide. This might be something to alleviate not only the psychological and social burdens, but also address some of the financial implications for those caregivers who have been working so hard, day in and day out.


The Chair: Mr. Michaud, would you like to comment on Senator Moncion's question?

Mr. Michaud: Yes, we often forget that we don't have a well-developed insurance plan for long-term care in Canada. However, this could meet the many needs that we have just discussed.

Very few people between the ages of 55 and 65 buy insurance to make sure they will receive quality long-term care at home or in a private facility. Earlier, we were discussing our concerns about the current generations who are retiring, but we also have to ask ourselves what barriers are preventing us from putting such a system in place. We have to ask ourselves whether it would be useful to start a discussion on implementing a system that would allow people to pay now for future care, to save up for that possibility and to use the equity of their principal residence. It is an important mechanism that could help not only pay for home care, but also pay informal caregivers, the family members.

There is a major problem with the adequacy of resources even before getting into the issue of government participation. Once the public is aware of this issue, the people will want to save, because they will realize that the government will have trouble helping them. We must ask ourselves why very few people are protecting themselves against those risks right now.

Senator Moncion: My other question is about the privatization of long-term care. Provincial governments have entrusted the administration of long-term care facilities to businesses. Ultimately, companies work in partnership with the government to generate profits. Are there constructive solutions to this market that has become extremely lucrative for companies that are profiting from an aging population?


Ms. Choo: In fact, an article was published about the quality outcomes of seniors who were being cared for in non- profit organizations and care centres versus private care centres. The quality of life and quality outcomes are far better in a non-profit organization versus a private for-profit care facility. We must think through this very carefully and thoughtfully about how we are going to approach this area.

None of us is here because we don't care for the quality of life of people in their senior years. They are very vulnerable. They have to rely on others at times to make decisions for them, so when leaving vulnerable populations in a care facility, we must believe that it provides high-quality care. This is a caution.

When studies have shown that the quality outcome is not there for a private for-profit facility that is profiting from the needs of seniors, that leaves me in doubt, and I question how they would do it with the profit to be made.

Senator Andreychuk: One of the problems is how to deal with aging population and the numbers, but we have a lot of problems today with the system. You have said seven at your door a number of times. That seems to me the problem; it's so segmented. Having lived through that experience myself with an aging parent, the doctor can only give you answers on certain things. Then you go to the home care, which may be provincial, they can only give you so many answers; then you go to the people that provide ancillary services.

It seems to me it's costly. Administratively it's a nightmare and extra strain on caregivers and the person receiving the care, because you show up, the pills weren't provided because somebody got sick on that shift. In my case, I found that I was chasing those who were supposed to be relieving me of the responsibility. How do we change the present system so it's more holistic, rather than looking at the source, who is giving the service? Until we solve that problem, we're going to have a lot of bureaucracies and a lot of private agencies assisting us.

We're chasing and being accountable for all that, and very little care is being given and two people are getting very tired during that process.

Ms. Choo: Absolutely. I have heard those stories many times. That's what I talk about in my paper, about a coordinated, integrated approach, because different sectors seem to be fragmented in terms of what they do and the scope of what they offer, and they don't put the clients and family in the centrepiece. Who should be the driver of care programs and what clients need? >

Very often, there is no transition. Let's say a senior falls and goes to the hospital and after surgery comes back home. There is not a lot of consistency and continuity. You talk about medication, for one. Second is the care level. The care needs to be adjusted according to the needs of the seniors rather than according to what the system offers.

That's what you speak about. Two people, the family as well as the senior, are very tired of this. We have got to change how we do things.

Rather than acute care versus community, there should be a continuum of care for seniors, or anyone for that matter, rather than seniors going through this system only to be told that this is all the care we have for you.

That's why I spoke about housing and care, so there is truly aging in the right place. There are tons of innovative programs that address some of these issues, yet they haven't been generalized across our country. Best practice has been well researched, but has yet to be implemented.

Senator Andreychuk: I go back to Senator Neufeld's point about where we are going to get the money. From what I have seen, and I have been looking at it for ten years, it's a very costly system now, unnecessarily, to have somebody get into a car and drive from home to home or facility to facility, over and over again, each doing their bit.

Do you share with me that there would be cost savings if we revamped the system? There are federal-provincial problems too.

Ms. Choo: Absolutely. That's why I mention about an integrated and more coordinated approach cradle to grave, with the case manager helping to navigate the system throughout. Whether the person needed to go to a different care setting, there is always "the person'' who is able to navigate the system, assist the family as well when looking at the availability of programs so that they don't have to search or wait for it. There is a lot of technology. We can leverage the technologies, like home monitoring, so that there is peace of mind for the caregivers and the informal caregivers.

What I would offer is that we really look at the system. Who says that we can't have the case manager at the acute care location when the person is admitted on day one and be able to follow from there to home or to wherever their destination? When they get discharged from acute care, who says we can't have the whole system integrated through a case management model?

Combining that with housing, we can certainly eliminate waste in the system where people have to travel and offer care so many times a day, and yet, the outcome is not any better that anybody else.


The Chair: Mr. Michaud, before you leave, I have a question for you.

When you say that we should avoid conflicting messages such as restoring the retirement age to 65, what alternative measures would improve the Old Age Security program without raising the age of eligibility?

Mr. Michaud: When the retirement age was brought back to 65, there was still a possibility to defer the benefits for those who voluntarily chose to do so. So there's an increase. I think it was a good idea. Of course, the message is that the retirement age has decreased from 67 to 65 years. The Old Age Security program has a symbolic value in terms of age, but that is not what determines the retirement age for the vast majority of people. It's more the tax incentives for the CPP and the QPP. So in the case of Old Age Security, the idea is to encourage people to defer their benefits if they are interested. However, they must be given the choice.

We also have to work on the clawback of the Guaranteed Income Supplement and Old Age Security, which is also clawed back on incomes starting at approximately $70,000 at a rate of 33 per cent. We can work on those aspects without questioning the benefits of the plan.

The Chair: Thank you very much, Professor Michaud.


Now we will move to the second round, with Senator Neufeld.

Senator Neufeld: You suggested a tax break be put in for family caregivers, and some provinces or jurisdictions are doing that now. Maybe you could tell us who they are. I'm not sure who they are off the top of my head. How do you manage that? It's easy and quick to say, but how do you manage that in a system? Who decides which family gets a tax break? Is it just across the board? If it's across the board, I wouldn't like that because there are some people that can afford to actually look after their parents, and probably are planning on doing that or their parents have actually saved money. Just give me an idea of how you would implement something like that so it works without a huge bureaucracy.

Ms. Choo: We absolutely don't want to create unnecessary management in the system. I believe in the Atlantic Provinces, and in Newfoundland in particular, they have certainly put something in place in terms of a caregivers' support tax incentive.

Do they have any kinds of initial challenges? Yes, they might have. But I think it has been the case for several years now that the system has matured in a way that will help address some of the administrative issues. I think that a system needs to be in place to address the issue you talked about, Senator Neufeld, of whom should be eligible and how that should be administered. As you said, some of them might not even want it. Some might say, "Yes, I do,'' because they have to change from a full-time job to a part-time job, hence they need some subsidy from the system to help with the financial burden.

I think those options need to be available for those informal caregivers. It's also a way to say, yes, we acknowledge your commitment to your loved ones, and at the same time, we acknowledge that they give more than they are being paid for, because many of our seniors are actually being cared for by their informal caregivers at home. If we don't look after them well, you know what will happen in the system. All of those people who need care will be going into the health system, which could potentially cost a lot of dollars in the long run.

The Chair: I have a question for Madam Choo. You talked about immigration to mitigate the effects of population aging. My question would be: When we look at mitigation, how can Canada and the provinces attract new talent to the sectors that will experience a labour shortage? I liked what you said earlier about Atlantic Canada. Can you give us a polarized snapshot of every region of Canada, based on your experience?

Ms. Choo: Certainly, with the express entry in the immigration system now in place, Canada as a country is looking for the skills that we need all over the world through our current express entry system.

Certainly, we have a labour shortage in some parts of our country, like the northern regions, which require a substantial labour force, as well as in Atlantic Canadian cities where we understand there is a shortage of people to fill jobs.

That's why the Minister of Immigration, Refugees and Citizenship Canada has just made an announcement regarding the Foreign Credential Recognition Program, making sure that pre-arrival people from all over the world will meet the needs of employers to address the labour shortage in, for example, the Atlantic part of our country.

Coast-to-coast, starting from the West Coast, we do attract a lot of immigrants from all over the world to address some of the labour needs, due in part to our birth rate, which is actually on the decline. We need people to support our system, not only from the trades side of the skilled labour force, but also from the tax perspective, to help our system in the long run.

Vancouver, Toronto and Montreal, are the popular cities for attracting immigrants, and Alberta, Saskatchewan, Manitoba, and Ontario, the largest province, are attracting a lot of immigrants and refugees. That speaks to the fact that we do look for the people with the right skill sets to actually generate our economy as well as to make sure the labour market situation is being addressed.

The Chair: Thank you, Madam Choo. I'll follow up on a question from Senator Moncion on natural caregivers. That said, some provinces do have programs in place now for tax incentives such as natural caregivers. Can you elaborate on what from your experience would be the next step? This would also follow up on Senator Neufeld's question.

Ms. Choo: Certainly the tax incentive for informal caregivers is something I think we really need to seriously look at as a country. It is important because the aging population in Canada is increasing, and there will be significant reliance on informal caregivers to look after their own loved ones. It's going to happen sooner rather than later. I think that it is important to look at the informal caregivers incentive because if we have those labour shortages in the health care environment at the same time, that could be a way to attract newcomers to those particular areas of Canada where we need labour to fill the gap in the health care situation.

When Canadians are no longer able to fill those gaps, I think immigrants might be able to help in that regard.

The Chair: Presently, the federal government has initiatives, under tax incentives. Do you have any comments? Are you familiar with those initiatives?

If not, please don't hesitate to add additional information to your presentation for the committee. Through the clerk, you can still do that. With the programs that we have now — some are provincial and some federal but I will ask you about the federal ones — do you have any additional comments on that?

Ms. Choo: For the federal program, we need to look at what are some of the areas of opportunity? We need to review it after it has been implemented for a while. What other opportunities could actually help the system? What are the outcomes that are being achieved? I think a whole evaluation would be helpful.

The Chair: On behalf of the National Finance Committee, Ms. Choo, thank you very much for appearing.

(The committee adjourned.)

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