Proceedings of the Standing Senate Committee on
National Finance

Issue No. 34 - Evidence - May 30, 2017 (morning meeting)


OTTAWA, Tuesday, May 30, 2017

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

Senator Percy Mockler (Chair) in the chair.

[Translation]

The Chair: Honourable senators, welcome to this meeting of the Standing Senate Committee on National Finance.

[English]

I am Senator Percy Mockler, chair of the committee, senator from New Brunswick. I want to take this opportunity to welcome all those who are with us in the room and viewers across the country who may be watching on television or online. As a reminder for those watching, the committee hearings are open to the public and also available online on the Senate website at sencanada.ca.

[Translation]

All other committee-related business can be found online, including past reports, bills studied and lists of witnesses that have appeared before the committee.

[English]

Now I would like to ask each senator to introduce themselves, starting from my right, please.

Senator Neufeld: Richard Neufeld, British Columbia.

Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.

Senator Eaton: Nicole Eaton, Ontario.

Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.

Senator Oh: Victor Oh, Ontario.

[Translation]

Senator Moncion: Lucie Moncion from Ontario.

[English]

Senator Marwah: Sarabjit Marwah, Ontario.

[Translation]

Senator Pratte: André Pratte from Quebec.

Senator Forest: Éric Forest from the Gulf Region in Quebec.

The Chair: Thank you.

I would also like to introduce the clerk of the committee, Gaëtane Lemay, and our Library of Parliament analysts, Olivier Leblanc-Laurendeau and Sylvain Fleury.

[English]

They team up to support the work of this committee.

Today, we continue our special study on the financial implications and regional considerations of Canada's aging population. This is meant to be the last public meeting we hold on this topic before considering a draft interim report.

For the first part of the meeting, we welcome two individuals who are interested in the issue of aging.

[Translation]

First, the Honourable Sharon Carstairs, who was a senator from 1994 to 2011, after being a provincial politician, as leader of the opposition in the Manitoba legislative assembly.

[English]

She was the chair of the Special Senate Committee on Aging, which published a pivotal report entitled Canada's Aging Population: Seizing the Opportunity.

Senator Carstairs, thank you for being here this morning to share your views and vision of an aging population for Canada.

We also invited former premier of New Brunswick from 1999 to 2006, the Honourable Bernard Lord. Since September of 2016, he has been the Chief Executive Officer of Medavie.

Mr. Lord, thank you for accepting our invitation.

[Translation]

Thank you for sharing with us your vision on Canada's aging population.

[English]

Honourable senators, we will begin with Ms. Carstairs, who will make a presentation, to be followed by Mr. Lord.

Hon. Sharon Carstairs, P.C., former senator, as an individual: Honourable senators, the study on aging tabled in the Senate in April of 2009 laid out, in some detail, what was needed to be accomplished to provide better security for the aging in our society. It made recommendations with respect to security of their person, security in their health, security in their income and security in terms of their ability to age in the place of their choice.

Regrettably, little has changed. We are woefully unprepared to deal with our aging society in almost all of these areas and, most particularly, for those who live in Atlantic Canada, where the highest proportion of our aged live.

Not until such time as the Government of Canada makes decisions based on the demographic trends in aging and no longer on a per capita basis will we be able to make significant changes. For example, senior funding is based on the number of people who live in the province and not on the basis of the aging population in the provinces, which means it creates an unfairness in funding for those in the areas where there is the greatest need. This means that Alberta, with an aging population of only 13 per cent, gets more per capita funding than the Atlantic provinces with a 20 per cent aging population.

Many seniors in Canada live well, both with respect to their finances and their health. However, that is not the case with those whose incomes depend only on a combination of Old Age Security, the Guaranteed Income Supplement and minimum levels of the Canada Pension Plan. These seniors live below the poverty line. This leads these senior citizens to live in inappropriate housing, be forced to make choices between quality food and the drugs they require for their health and, frequently, to live in isolation as they lack the funds to participate in activities and, therefore, lack interactions with others.

Recent changes to CPP will be positive to seniors in the future but will have no effect on current seniors. It is time for Canada to examine the concept of a guaranteed annual income, and seniors who live below the poverty line are the best pilot group for such a program.

Security of health is much more complex. It should begin with healthy aging. The reality is that the more money you have, the more likely you are to live a healthy life. They can purchase quality food, they can acquire all of the medications they need, and they can participate in both exercise programs and cultural activities, which are frequently costly. Participation in such activities can prevent the social isolation that leads to negative health outcomes.

The federal government has a responsibility to encourage healthy aging but, to date, has been unwilling to act on even very simple recommendations of our report. For example, the aging report recommended that the federal ParticipACTION program, which encourages children to be more active, a noble objective, be extended to seniors to encourage them to be more healthy by being more active. Walking, for example, is the easiest and the least expensive of all exercises and one of the healthiest as there is no muscle strain involved. Seniors should be encouraged to walk outside in good weather and inside, perhaps in malls, in inclement weather. Joining groups to do so also encourages interactions, sadly lacking for many seniors. An advertising program promoting this would be positive. This was what our report recommended, but it has been ignored.

Prescriptions are very expensive in Canada, and few Canadians have drug programs to pay for them. Help with such drugs varies widely across the country but is particularly lacking in the have-not provinces for economic reasons. A national formulary with bulk purchases of major drugs — a list of about 4,000, for example, is employed in other countries — would make it easier for seniors to purchase the drugs they require for chronic diseases like diabetes, high blood pressure, high cholesterol and others.

I believe provinces would welcome the establishment of such a formulary. The Atlantic provinces, for example, have already taken some steps to purchase drugs together at significant reductions. However, the economy of scale would be far greater if all provinces and territories participated.

I believe in a national pharmacare program, but this will require much greater political will and will take years to negotiate and plan. A national formulary with bulk buying could be accomplished quickly and without the usual federal-provincial power conflicts and irritants. The federal government needs to take a leadership role in this area.

The government has taken a great step forward in negotiating a new health accord with designated funding for home care/palliative care and mental health. Health care in this country needs fundamental structural change with greater emphasis on keeping people out of hospital and in their homes whenever possible. This requires very significant changes to ensure that home-care services are in place to allow this change.

This is of particular importance to our aging population. We know that many seniors are housed in acute care hospitals because there are not sufficient supports in their homes and/or their homes are unsuitable places for them to live. We have a significant lack of alternative housing both in assisted living accommodation and long-term care homes.

An aspect of this problem that has been largely ignored is the health of the family caregivers. Often seniors with life- threatening or chronic health conditions are looked after by other seniors who frequently have their own health care issues. This aspect of caring frequently results in deteriorating health for the caregiver and it is not unusual to have two severely ill patients as a result instead of just one. It also places strain on the younger family members whose own family life and work engagement are impacted by the additional stress. This is why home care programs must more actively engage with caregivers to ensure the needs of the family as well as the patient are met. The goal of keeping seniors in their own homes is a good one, but it is not without problems.

The previous government made some strides in ensuring the security of the person for our aging population. Many seniors, particularly those who live in isolation, are subject to abuse. All too often that abuse is in the form of physical and financial abuse and it comes from a family member. Tragically, this is all too often the result of the additional stress placed on the caregiver. The advertisement program launched by the previous government helped raise awareness of this issue. However, I have not seen the ads recently and there is much more that needs to be done. Seniors are frequently the victims of scams on the phone, on the web and at their front door. Alerts by the federal government coupled with better investigation of such scams, including scams purporting to be from the Canada Revenue Agency, need to be quickly shut down to protect these vulnerable seniors.

Those of you who know of my work in palliative care will not be surprised to have me address this issue. While not exclusively an aging issue, the reality is that 70 per cent of all deaths in Canada occur to individuals over the age of 65. When I began my work on death and dying in 1994, about 5 per cent of Canadians who needed palliative care had access to it. That number is now closer to 35 per cent. However, there are still 65 per cent of dying Canadians not receiving quality end-of-life care. This means they are often dying in intractable pain, attached to machines they do not want or need and without the dignity they have the right to expect.

Canada has strategies on diabetes, AIDS and cancer. Indeed, my last count indicated there were 13 national strategies. Yet we still fail to have a national strategy on palliative care. In my view, it is unconscionable, and despite excellent work in the Senate, successive governments have failed to act. Palliative care, for example, is still not a core service for our Aboriginal health mandate, an area of exclusive federal jurisdiction. Surely all Canadians are entitled to the very best care at the end of their lives. Many Canadians are denied this care and, in my view, this is a national disgrace.

Finally, I would be remiss if I did not state with emphasis that all of these problems are so much greater for our indigenous people. They have a shorter lifespan, significantly greater health problems and suffer from very poor housing. Their health for the most part is the responsibility of the federal government, and they have failed through successive administrations to ensure that these Canadians have equality of care.

I have laid out for you just some of the issues that need to be addressed, and I look forward to your questions.

[Translation]

Bernard Lord, Chief Executive Officer, Medavie: Thank you, Mr. Chair and senators. It is a pleasure to be here with you this morning, and I would like to thank you for inviting me to speak to you about the aging population and its impact on the community.

[English]

Thank you very much for the invitation. It is a pleasure to be here with you this morning, and I accepted your invitation because of your mandate to look at the financial implications and regional considerations of an aging population.

We at Medavie think that we can help. We have ideas, solutions and initiatives that we are implementing to deal with an aging population. This morning, I would like to tell you a little bit more about who we are, what we do and some of the ideas and initiatives that we are implementing to better care for an aging population.

I've shared with you a slide deck presentation. I'm currently on slide 2. So if you look at slide 2, who are we at Medavie? Medavie is an innovative health organization. We are a not-for-profit organization committed to providing innovative solutions to health care. Our purpose is really to provide easier access to quality care for better health outcomes, and that's true whether we do it through Medavie Blue Cross, Medavie Health Services or through the Medavie Health Foundation.

Let me tell you a bit more about each of those components, if you go to slide 3. Under "Medavie Blue Cross,'' we are the largest Blue Cross provider in Canada. We provide group benefits, individual benefits and we also administer federal and provincial government programs. Under "Medavie Health Services,'' we provide ground and air ambulance services. We are the largest private sector ambulance provider in Canada. We also have medical communication, clinical training and mobile integrated health solutions. And because we are a not-for-profit organization, we've created the Medavie Health Foundation.

[Translation]

We created the Medavie Health Foundation, which has three main objectives.

[English]

Our three main objectives through the foundation are to help with child and youth mental health; to help ease the burden of type 2 diabetes; and to support those affected by post-traumatic stress disorder, or PTSD, which is a new cause we have just launched.

If you go to the next slide, you will see Medavie covers 2.9 million Canadians through Blue Cross.

[Translation]

We cover 2.9 million Canadians through our Medavie and Blue Cross program. We have staff in eight provinces, but we offer our services across the country, from coast to coast to coast, and we employ over 5,500 people. We serve close to 2.5 million individuals as part of our emergency health services, administer over $3.5 billion in claims annually, and respond to over 350,000 requests for emergency services in Canada.

[English]

Our roots date back to over 75 years, and the values that were true 75 years ago, even before it was called Blue Cross Atlantic, namely, sharing, caring and being compassionate, are true today with Medavie. When we look at the challenges we all face with demographics and an aging population, I think it's important to keep those values in mind as a way to implement initiatives and solutions.

The next slide highlights some of the services that we actually provide. We have health services and benefits management, EMS and 911 public safety. I want to be clear. We actually run 911 systems in some provinces. We run the EMS system completely for certain provinces as well. We also have clinical training facilities. We, in fact, provide training for paramedics in both official languages, and we do so not only for our own paramedics but also for the Armed Forces of Canada.

[Translation]

We provide training to paramedics and members of the Canadian Armed Forces in both official languages, English and French.

[English]

We also have a primary health care clinic and we operate 811 tele-health services.

We've heard this morning already some of the challenges we all face. Collectively in Canada, we face some fiscal challenges. Governments from coast to coast are working hard, some harder than others, to balance the budget. We have economic challenges to make sure our economy can keep up with the changing realities of our world and the changing trade rules around the world. We have social issues, making sure that as we grow prosperity, that everyone can benefit from this prosperity. We have environmental and energy issues, but of course we have demographic and health issues.

Your committee is looking at the financial implications and the regional considerations of those demographic challenges and the impact they can have on the health of Canadians. Former Senator Carstairs highlighted in her remarks and in her report some of the real challenges that we all face in terms of demographics. Let me give you some very clear examples of what it means in Atlantic Canada, because one of your objectives is to look at the regional considerations of aging.

If you go to slide 7, you will see the population growth of Canada and Atlantic Canada for the last 15 years, from 2001 to 2016. You see that the population growth in Canada during that 15-year period was 17 per cent while in Atlantic Canada the population grew by just over 2 per cent. But when you look at the population of those who are 65 and older, that population grew by over 52 per cent across Canada and over 50 per cent in Atlantic Canada.

You don't need a PhD in demographic science to realize it's having a bigger impact in Atlantic Canada, that this part of the country is aging faster than the rest of the country. But I believe that's not only a challenge. I believe that's also an opportunity to find innovative solutions for how we can deal with this while at the same time providing the care that seniors in the population deserve.

[Translation]

Slide 8 shows the increase in health spending since 1976, in current dollars. You can see the curve, and you know it well. No doubt, I'm telling you things this morning that you already know, but it is important to remember this to understand the issue. There is a continuing trend in demand for health care, health care spending. Curves like these are often called the "hockey stick.''

[English]

The hockey-stick curve; that's what we're experiencing when you look at health care expenditures. I'd be happy to talk about my own experience when I was premier of New Brunswick about how much of our budget every year went to health care and how much more every year went to health care. If you ask me about that, I'd be more than happy to answer.

The next slide, slide number 9, shows Canada health expenditures. Yes, we have a very good public system in Canada, but we also have private sector spending, and in Canada it's a split that's about 70-30. Seventy per cent of health care expenditures are with the public domain, while 30 per cent are done from the private sector, either out of pocket directly from citizens or with private insurance, and 3 per cent for others.

If you go to slide 10, these are numbers that come from our own numbers. This is data from Medavie. We looked at how and where people spend the money. Where does the money go for their coverage through Medavie Blue Cross? You can see that 76 per cent of the coverage is health coverage; 24 per cent is dental coverage. So when you look at the pie that's on the left, you can see that 68 per cent of that is drugs, and then you have hospital for 2 per cent, vision 5 per cent, and this growing segment is the extended health care benefits. I'm going to talk about that in a second. The second pie, the one that's on your right, shows that dental accounts for 24 per cent of the overall, but of that 86 per cent is basic, 11 per cent major and 3 per cent is orthodontics.

In the next slide, slide 11, you will see extended health care benefits. This is one thing that we're seeing more and more. From the traditional services that people required, now Canadians are asking for extended health care benefits. Sure, they're getting coverage. Either they're paying on their own or using private health care insurance to get this. You're seeing massage therapy, physio, glasses, chiropractic. Everything is going up year after year. Every trend is basically the same. The reason for that is because patients are changing. I will get to that in one second.

Slide 12 is a very important slide. It shows the 2.9 million people that we cover, and most of the people that we cover are in Atlantic Canada, but not all. We cover people from coast to coast. You see in 2016, these are individual and group policies coverage and requests for people that deal with cardiac issues. You can see as people age, they tend to have more demands on cardiac issues. The same thing with asthma and COPD, and you can see the trend as well for diabetes. You can see Type 2 diabetes, that's the chart on the top right on page 12, the increase per capita growth over previous years. It's not just that there is more every year; it's the rate of growth of Type 2 diabetes is growing. It's growing from under 10 per cent in 2013 to 10 per cent in 2014, and over 15 per cent by 2016. That's the rate of growth of people with Type 2 diabetes. The one thing that we know about Type 2 diabetes is that it's preventable. Almost 80 per cent of Type 2 diabetes cases are preventable with some lifestyle changes.

[Translation]

If you go to slide 13, we have the evolution of the patients. This is important when we're talking about the aging of the population because it has an impact on the type of patient that the health care system has to deal with. When we talk about the Canadian health care system, and we think about the 1960s when it was created, the requests were often for a fracture or an injury. People had to go to the hospital, or had a disease that was contagious and went to see a doctor at the hospital. Now, we see patients who have long-term chronic diseases.

[English]

They need medication as a treatment, mental health issues are growing and demand for disability management is growing significantly. That means the types of solutions that are required to deal with the population that we have today are different from what was needed 20 years ago or certainly 40 years ago, and we need more coordinated care delivery by a variety of highly skilled professionals in different settings. It's no longer one-size-fits-all, that everybody needs to show up to the hospital to get the care that they need.

On slide 14 you can see the evolution, the growth of population in the last five years and the increase in emergency service calls. We provide ambulance service completely for the provinces of New Brunswick and P.E.I., and you can see that there has been a 21 per cent increase in demand in New Brunswick and a 42 per cent increase in the province of Prince Edward Island in emergency service calls in the last six years. You can see the growth in the population as well, so you can see there is a trend with an aging population and more demand for emergency medical services.

In slide 15, you see the same numbers in Saskatoon. We provide emergency medical services in the province of Saskatchewan, in the region of Saskatoon, and you can see the same thing. There has been close to a 60 per cent increase in calls over the last six years, while there has been an increase in population over 65 of close to 20 per cent in the last five years.

Medavie is in the business of transporting people to hospitals.

[Translation]

One of the services we offer is transporting people from where they are — often their home — to the hospital. However, a better solution is to treat people where they are —

[English]

— to treat people where they live, where they want to be treated. When you think about that, it has an impact not only for the patient but it has a significant impact for their families as well. When we're talking about aging, we're talking about elderly patients, but the people who care for elderly patients, as Senator Carstairs has mentioned, are often elderly themselves. If you can avoid a visit to the emergency department and treat people at home, it's not only the patient who benefits from this but the whole family benefits from this.

We have decided to tackle this challenge, working with different health care professionals and different organizations. If you look at slide 16, we have implemented programs and initiatives, some pilot projects in different jurisdictions, from Nova Scotia to Saskatchewan, Ontario, even Massachusetts — we have operations in Massachusetts as well — and P.E.I. We have different pilot programs. You can see the benefits of these pilots where we have targeted a certain segment or group of individuals and it had significant impacts on the reductions of emergency visits. I would be happy to talk more about that in a second.

Slide 17 is another initiative we have in place where we want to coordinate the care of ambulance, home care, Telehealth and work with health professionals to provide greater benefits to patients and taxpayers. I would be happy to talk more about this when you ask me questions.

The Chair: Thank you both. Before we go to questions, I would ask the deputy chair to introduce herself.

Senator Cools: I am Anne Cools, and I am a member of the Senate. I had the distinct pleasure and privilege to serve Senator Carstairs in the Senate, and she was enjoying the distinct privilege of serving as Leader of the Government in the Senate.

Mr. Lord, I would like to thank you and underscore the important point that before us today we have a glorious opportunity because we have two people who are well-studied and equipped in this particular field. I hope colleagues will take the opportunity to question them heartily and heartfully.

Senator Eaton: I will start with Mr. Lord. Senator Carstairs, I am sure you have your own opinion on this as well. Should each province be given greater leeway in choosing their priorities, perhaps according to their demographics or population needs? Should we be continuing with a health care system where the federal government controls the priorities and one-size-fits-all?

Mr. Lord: That's a really good question, and I had lots of opinions on that before, and they are coming back.

One thing that is wonderful about a federation is that, with different provinces, we can have different ways to innovate. It is important in Canada to take advantage of the fact that we live in a federation and not everything has to be exactly the same in every province or region.

In fact, when we think about health care, this is one example where the fact that we lived in a federation where one province innovated 50 years ago and decided to do things a certain way that was different than what was being done in the rest of the country — of course, I am talking about Saskatchewan — they had a profound impact on the rest of the system across the country. Because the provinces looked at what was happening there and realized that this may be a good system, and this became the basis of the system we have today. It came from an innovative idea and solution that was implemented in one province first.

In a country as large as ours, with differences and diversity that we have from region to region and province to province, when we look at the aging population, the demographics, and Ms. Carstairs mentioned it, if you look at our own numbers, the situation is different in Atlantic Canada than in Vancouver, B.C., or downtown Toronto. Realizing that we need to adapt solutions that meet the realities of those regions and provinces is a better way forward.

That is the wonderful thing about living in a federation. A federation gives us the ability to let provinces innovate. If they fail in their innovation, I'm sure their voters will let them know.

Ms. Carstairs: That is the success of the Canadian health care system, the fact that innovation is going on in everyday places all across the country. From my perspective, the failure is those innovations aren't shared. That is a role for the national government which, quite frankly, hasn't been undertaken.

One thing we tried to do with palliative care was to not build a bureaucracy in Ottawa. God forbid we have one more bureaucracy. I wanted a clearinghouse of ideas and examples of best practice which could then be shared with other provinces. The tendency in this country is for everyone to reinvent the wheel. That is not efficient economically and certainly not effective when dealing with patients.

For example, Manitoba led the nation in developing the first home-care program. It was quickly picked up by New Brunswick in their Extra Mural Program. If provinces learn about what is going on in other parts of the nation, where they can not only deliver care but do it more efficiently and effectively economically, then that is the role which the federal government has, in my view, but it's not a role they have taken up the challenge to provide.

Senator Eaton: In your opening statement, you made the point that we have come from 5 per cent to 35 per cent in being able to offer Canadians palliative care. Could you give us some recommendations that we could put in our report as to how we spread this wider in a more timely and cost-effective way?

Ms. Carstairs: First, the majority of Canadians would like to die at home. Tragically for some, that will never be possible. They will have to die in acute care hospitals because of the level and the intensity of care that they require. For example, the federal government has never chosen to fund hospices, which is a much less expensive option than the acute care hospital system. That's why there are no hospices in Prince Edward Island, Newfoundland and Labrador or Nova Scotia. There are two in New Brunswick.

If the federal government is unwilling to accept some leadership role and changes in the way they look at funding and the way they orientate their support, then you aren't going to see the efficiencies of scale. To put it in perspective, if a person dies at home, we are talking about $80 to $100 a day. If a person dies in a hospice, we are talking about $350 a day. If someone dies in an acute care setting, it can be as much as $1,600 a day.

[Translation]

Senator Forest: Thank you for your very informative testimony because it is one of the major issues Canada is facing. When we look at our demographic curve, the significant concern of people aged 65 and older — me included — and especially their political weight, we become aware of a trend, be it at the municipal, provincial or federal level. There are seniors who have a good pension fund, who had a good career, who are well-structured and who can meet their needs appropriately and effectively. That's quite a change in the services available, because they want an active retirement, and so much the better. New services need to be offered.

What concerns me is that we also have a category of seniors who are very active, but less equipped in terms of knowledge or means, and who are often found in our senior citizens' clubs. During my former career in the municipality, I noted that there is a category of seniors who are isolated and marginalized, who are nowhere to be seen, either at municipal council meetings or at the senior citizens' clubs. These people are disadvantaged and are not in a position to claim their rights and would be most in need of support. They are often isolated and, when they can be identified, what they want is managing to eat every day and having shelter, often in a fairly limited space.

With that in mind, how do you see the responsibility of the federal government and that of organizations like Medavie? How can we manage to take action that targets this elderly clientele, which is the most fragile in our society?

Mr. Lord: Thank you for your question, senator. You are touching on a matter that's close to my heart. When we think of seniors today, it is very important to see the challenges we face as an opportunity. It's not just a problem; it's also an opportunity to give back to the people who built our society. It's sometimes easy to forget that all we have today is because of the people who came before us. Sacrifices have been made by many people who are now elderly and in need. They have helped to build the country we live in, which is clearly one of the best in the world. So we have a responsibility toward these people.

It is important to understand the dynamics that create these situations and how to establish services to help them wherever they are. One thing that's important to understand is that sometimes you have to go and see these people. When we look at our health care system, the desire for change, the recognition of need, is often present. We hear it in the committees of the Senate and the House of Commons. You can visit the capital of every Canadian province; people will tell you that changes must be made. However, these changes are sometimes difficult to make.

We need to recognize that our health care system is very good in the sense that the people who work in it are excellent and dedicated, but the system's structure represents a population that is not the one of today. We have to accept that changes are made to meet the needs of the individuals you are talking about, those elderly people who are marginalized, alone, who don't know where to turn. There are people in rural areas whose children are in urban centres, sometimes thousands of kilometres away. They aren't there to offer the same support, as was the case a few generations ago. So we have to adapt our systems.

At Medavie, we're helping those who can adapt the system to do so, and our mission is to develop projects and initiatives to change the health care system by keeping the values we care about, while adapting the services and funding to meet today's needs. Let me give you an example: if we were to better co-ordinate extramural services, tele- care and emergency services, we could increase the number of home visits for a certain elderly population — and even the others — by at least 10 to 15 per cent in the first three years, and reduce visits to the emergency room by the same percentage. This is an example of better service at reduced cost.

Reducing costs gives us options: the government can then offer other services, reduce taxes or pay debts. The government has options, and that allows us to better adapt our services to the needs of the people you describe, who are often alone at home and don't know where to turn. We have to adapt the services to those people.

Senator Forest: In short, I am concerned that the only people aware of this issue are well-mobilized, well-structured people who have the means to communicate their needs, and that those who have fallen between the cracks represent precisely the clientele that really needs support.

[English]

Ms. Carstairs: The senator is absolutely correct. There are marginalized people who do fall through the cracks in very simple ways. Let me give you some examples of where some provinces have picked up the initiative to try to prevent that.

For example, Quebec has made a vigorous mandate to ensure that everyone who turns 65 is on the Quebec Pension Plan and is on the Old Age Pension. They go literally from door to door to door to make sure that is happening, but it's the only province in the country that does it. Money makes a big difference in the quality of the life experience of many of these seniors in our community. It is an important thing for them to do.

Recently, I have learned of something in Nova Scotia that I think is extremely positive. They are training their paramedics in palliative care. The paramedics, when they go to the home of someone who is at the end of their life, make it possible, because they have the knowledge and expertise, for that person to stay in the home. They are not transporting them to the hospital. If it takes an hour or an hour and a half or two hours for the paramedic to stay in the home and ensure that there is the appropriate pain medication, they do it.

That's the kind of experimental pilot programs that Mr. Lord spoke about that are first class, but they are not first class if they don't get outside of a certain bubble. They have got to be expanded to others.

Mr. Lord: That example is actually one of our programs.

Senator Marshall: I will start off with Senator Carstairs because she already answered my first question on the progress that we have made so far since the report was issued. We had spoken earlier. I take it from your comments that you are disappointed, at least in some aspects.

I would like your views and also Mr. Lord's views on why we aren't progressing further along than where we are. Is it cost, or is it because the volume of people going through, the baby boomers, is so huge that it is destabilizing the situation? When I read the report, there were a lot of things there that really are still the way it is today, for example, home care and access to pharmaceuticals. It seems that we haven't moved along very far.

I would like your views on that. Cost would be one thing, but also does government play the overarching role? Who should play it? It seems like we are just operating in silos. I have had some experience in home care, and it seemed like, once the program goes in, the cost blooms far beyond the capabilities of government to keep up with it. I would appreciate your views on that and also Mr. Lord's.

Ms. Carstairs: In my view, we need fundamental structural change in our health care system. As long as we don't attempt to move dollars from one type of care to another type of care in a significant way, nothing substantial is going to happen.

Mr. Lord made reference to when he was premier of the province and watching the health care budget increase. I sat as an MLA, Leader of the Opposition, in Manitoba a little earlier than him, and I could see the same thing happen in the Manitoba budget. If you are in a province like Manitoba or in the Atlantic provinces, you are now looking at 50 per cent plus of your entire provincial budget spent on health care. You have to find economies of scale. They are doing a bit of that in Atlantic Canada, in trying to do services together in order to make it more profitable for them, but it would be so much better if we could do some of those things on a national scale, such as purchasing drugs. The drug prices we pay in Canada are outrageous. You pay $37 for an inhaler that you can get in Cuba for $1.19. There is something drastically wrong with the amount of money that we are paying for our drugs. We have to find ways to bring those costs down.

Many of the recommendations in this report were not expensive, but they were requiring a rethink of the way we deliver care. One of the biggest obstacles, I would suggest to you, is that the whole health care system as it was envisaged in 1965 was an acute care hospital model system, and we no longer live in an age when the acute care is the only type of care that needs to be delivered.

Mr. Lord: If I can add to that last point, the system is designed for patients. We say "the system,'' but there are many components to it. The principal idea is designed for patients that lived 20 or 40 years ago. We now have patients that live longer — which is good news, by the way. Let us not lose sight of the most important thing: We are living longer as Canadians. That is great news, but we don't want to live without the care that we need. The downside of that is we have people living longer but with chronic diseases and often more than one. Rarely will you find a patient that only has one chronic disease; often they have two or three, and some have more. That means the level and the type of care that they need is very different than what is traditionally thought of in a hospital/doctor/nurse type of care, in an acute setting. We need to modify and adapt.

I want to get to your question about the pace of change. The reality is we are all spending more on health care than we have ever done before. You have seen the chart. Once in a while I joke to people who run for office: If you want to make sure you'll fulfill one promise, just promise you will spend more on health care. That is the easiest promise to fulfill. That will happen.

It is not just how much we spend but what we spend it on. In Canada today, we provide treatments and services that were not available 20 years ago. But what has grown even faster than supply is demand and expectations. Demand and expectations are growing much faster than the supply. That is why there is a requirement and a need to bring change, and there is change in the system, but we need to accelerate some of that pace of change. There is resistance because sometimes there is fear.

It used to be in Canada you would think of language as the third rail of Canadian politics. It is probably health care now. People don't want to touch it. They are scared to touch it because they will get fried, but we have to touch it. We have to find ways to improve the system, even if it means bringing in changes that are not always easy to implement at first.

Senator Marshall: My experience with the health care system and with the community care system, as a former public servant and politician, is that the health care system is so big that I don't have any confidence that there will be the structural change we need. I think there will be pockets of innovation maybe, but I don't have any expectation that there will be a structural change. I think that there will be little changes made along the way. A change will be forced upon us because we will not be able to keep up with the costs. But it won't be because the structure of the health care system is changed. It is like trying to turn an elephant around on a dime now.

Mr. Lord: I agree with you, but we don't need to boil the ocean all at once. If that is what we try to do, then we are destined probably for failure. I think it is more important to bring in incremental changes that have a significant positive impact on people. That can happen. It's happening now. We just need to encourage and facilitate it.

One thing I want to reiterate is the people who work in the health care system are extremely dedicated. They work extremely hard when they are with patients and they provide exceptional care. Talk to Canadians. When they get the care that they need, the care is very good. Sometimes the wait to get to that point is just too long.

Senator Marshall: But some of us would like to see it speeded up.

Mr. Lord: Count me in.

Senator Moncion: Senator Carstairs, I read your report and I thought it was a very good report. Everything has been touched on in that report. There are a few things on which I might not agree with you, and that is where my questions come from.

You speak of things that don't seem to be moving forward. What we have seen in many rural communities is people are getting together and they are working to provide home care because the need to do so is there. So there has been progression over the last seven or eight years on home care.

How do we work around the costs that are associated with that aspect of home care? That's where I see the most progression now. I see hospices that are being funded by communities. I see groups that are funding health care for older people. Most of them are older. There was a breakfast on this morning on the Hill for home health care. There are people all across Canada who do home care, and their logo is, "It's happening now.'' How do we work around this to make funds available to all these people so that they can take care of the people who are in rural areas where, I think, the services are very good.

Ms. Carstairs: Well, I think it would depend on what rural community you are in.

Senator Moncion: Northern Ontario.

Ms. Carstairs: I have been in rural communities where the services aren't so good.

Having said that, I would say rural communities generally tend to come together in a more positive way than urban communities because there isn't the same sense of isolation in a rural community as there often is in an urban community. I am hopeful that by providing funding to the provinces to enhance their home care and palliative care services, that those new dollars will be used to develop and support the kind of programming that you are specifically addressing.

As generous as citizens are, they can only give so much of their time, they can only spend so much of their dollar, and they can only put so many miles on their car to provide transportation. And transportation, by the way, in rural communities is huge. To get them to the hospital, to the hospice or to get the families anywhere is often an enormous burden.

The reality is that I'm hopeful that that new money will do that. Without some fiscal resources, it won't happen. By designating the fiscal resources for home care, palliative care and mental health, perhaps it can stir a bit of the breakdown of the silos.

Senator Marshall made a very good point. You're not going to change the system by which we have been operating since 1965 overnight. It isn't going to happen. You have people with significant vested interests, whether they be bureaucrats, hospital administrators or the doctor who has his specific specialty that he thinks is more important than any other specialty within the entire hospital complex. You won't change that overnight, so you have to change things by doing something innovative.

I don't think the federal government should be doing these innovative things. I think the provincial government should be doing those innovative things. But in the provinces, like my former province, Manitoba, or Nova Scotia, where I lived for 21 years, you don't do that with the present budget limitation that you have within that province. You have to have some outside money to help you make those changes effective.

Senator Moncion: We are looking at the federal government, but there are limits to what the federal government can provide to provinces. Because health care is a provincial mandate, it's very difficult for the government to mingle into provincial affairs. So there's always a battle between what provinces can do and want to do and where the federal government can intervene. This is a challenge that's there, and it has always been there. How do we work around this? Mr. Lord, you've been at that level. You were a provincial premier and you had to deal with these things.

Mr. Lord: Absolutely. It is a provincial responsibility, and it has to stay a provincial responsibility. I don't think health care should become a federal responsibility, and we can't decide that this morning anyway.

I think there will be more innovation coming from provinces than there would be from one national structure. The challenges that Senator Marshall talked about would be even greater on a national level than they are on a provincial level.

I tend to be optimistic by nature, and I think that public policy makers and elected officials will realize that Canadians deserve and want more. The pressure to adapt to the new reality is there and will continue to grow, and we will respond. We, as a company, will respond to help provide those innovative solutions, and I think policymakers will respond as well. Because if we don't, we're failing a generation.

Senator Moncion: Yes, I agree.

Mr. Lord: That's really not an acceptable solution. Therefore, when I think of how that can be done, everything in public life boils down to simple things. It's priorities and choices. Every week you sit on this committee or that committee and you go to the House of Commons. Demands on public funds and governments are limitless, but the capacity of the economy to sustain all those programs and services and the taxpayer to pay all these things is limited, and therefore we need to set clear priorities and sometimes make difficult choices to be able to provide that. Some of that is happening now. It was happening before, but we need more of it.

It's about encouraging provinces and governments that are willing to take that extra step to be innovative and to take up the challenges. Let's help them out. That's the role we want to play at Medavie. We are a not-for-profit organization, and we have a footprint in eight provinces. Our roots are primarily in Atlantic Canada, but we operate across the country. We believe as an organization that we can help bring those solutions to improve the care that is received by Canadians, because that's our purpose. The purpose of our organization is to provide easier access to better care for better health outcomes.

With that type of innovative idea, when you think of combining extramural care with emergency with telehealth, we can provide more care where people live. We can reduce the number of unnecessary transportations from home to the hospital. We can do more follow-up in the home than in an acute care setting. This is better for patients and better for families. That's what patients want. It also reduces the cost per person on taxpayers, and that is significant when you see the growth curve that we're facing.

Maybe it's my nature, but I'm an optimist. One of the things that is changing is that patients are not only changing in their needs but in their knowledge and expectations, and they will demand more. Canadians are very patient, but there will be a point where they'll want to see significant change because they will not accept that they are in a situation where they don't get the care they need or their loved ones don't get the care that they deserve.

Ms. Carstairs: I want to make a quick statement. I would disagree with both of you that health care is a provincial responsibility. The Canada Act makes it a joint responsibility. If one takes out the delivery of care to B.C., Alberta, Ontario and Quebec, the fifth-largest deliverer of care in this country is the federal government. It delivers care to our Aboriginal people. It delivers care to our military and our veterans. It delivers care to all incarcerated Canadians. It delivers care to refugees. To say there isn't a role for the federal government is simply not correct.

Senator Stewart Olsen: Thank you both for being here. It's two very different perspectives and most interesting. I have a question for each of you, and in fairness to my colleagues, I'll be as brief as I can.

Mr. Lord, your whole organization is a fascinating one, and one where I think health care is really going now. We're doing a study in the Social Affairs Committee — and I apologize, chair, for bringing that up — on robotics and the most fascinating advantages they can offer to provinces. I know you've spoken about telemedicine, but are you doing anything else to complement, and how are the provinces in their acceptance of robotics? It's a huge money saving thing.

Mr. Lord: Before I get to the question, I want to state unequivocally that there is a role for the federal government in health care. It is still primarily a provincial responsibility. There are ways to establish partnerships to make sure that works, and we're happy to facilitate those partnerships where it makes sense.

When you look at adopting new technology to provide care, that is essential. We are investing. We have invested significant amounts of money in analytics, as well, to identify and see where the patients are. One thing is that we funded, through our foundation, a small innovative program with the Canadian Diabetes Association. I showed you some charts. We see the increase of diabetes in all segments in the population, not just the aging population. It's throughout. We decided to fund a program for life coaches to help people who are pre-diabetic to not become diabetic and not have the symptoms at all, and that works.

Some of that comes from the analytics of using the data that we all have in our systems to help patients before they get to that critical point. By using that information, we can provide the care. Instead of waiting for people to be sick and come to our doors, we can help people identify the needs that they will have and hopefully make changes in their lifestyle and their life habits that prevent the disease and have fewer chronic diseases as they age.

Ideally, everybody would like to live healthily until they're 101 and pass away through the night dreaming. Unfortunately, for many people, most of us tend to be sick for a very long time before that happens. So let's ease that burden. And one way to do it is using analytics and data. Eventually, there may be a role for robotics in how we provide and support care. We're talking about how patients are aging, but the workforce is also aging as well.

Senator Stewart Olsen: That's interesting.

Ms. Carstairs, I think the points you make on the federal health care system are bang on. My thought, as I've been working through a lot of these committees, is that it's time — and I wonder if you would agree — for Health Canada to rethink its goals and objectives and how it functions.

I hear you in saying that provinces are responsible for health care. I also understand federal money and that you hand over money and the provinces won't let you say they have to come back to us and tell us how they spent that money. So for different programs, it becomes difficult.

What do you think about Health Canada having a real look at how they could best provide for the provinces the huge amount of money that they hand out and best provide information services?

Ms. Carstairs: Absolutely. We do a review of the military and military spending. We do a review of Foreign Affairs. We haven't done an essential review of Health Canada since its inception. Yes, with that kind of review, we may have different ideas about where we want that review to end up, but the bottom line is that yes, absolutely, that review needs to be done, and the sooner the better. Quite frankly, Health Canada isn't itself delivering the mandate it's supposed to deliver if you don't have palliative care as a core service for our Aboriginal people, for example.

But I want to pick up on the robotics question, Senator Stewart Olsen, because when I was trying to get the Canadian Virtual Hospice operating — those of you who have never gone on the CVH website should do so. It now gets 1.5 million hits a year. It's in both official languages, and it provides that kind of support within the home for information, grief support and interactions with others.

The first time I mentioned it at a public speech, a man got up and said, "I don't want to talk to a computer if I'm dying.'' Another woman got up and said, "Can I answer that question?'' I said, "Of course.'' She said, "I am living in Kelowna, British Columbia, and I have stage 4 breast cancer, and my best support is coming from a talk line I have with people in Gander, Newfoundland.''

So robotics is a thing of the future. They're going to happen. People will adapt and adjust to them, but absolutely, robotic surgery is going to replace the most invasive surgeries that we are currently doing, they're going to do it more effectively, and they're going to do it, quite frankly, at considerably less cost.

Senator Pratte: The focus of our study is the financial implications and regional considerations of our country's aging population. One idea that has been discussed is that of adjusting the equalization formula to the age profile of the population of each province. I wonder whether you would agree with such an idea and whether you think it might open up the equalization formula to other ideas which we may not agree with. Other provinces might say, "Why don't you also take into account how large a province or territory is?'' or other kinds of things, which I worry a little bit about. Once you open the formula up, who knows what other ideas might come around.

Ms. Carstairs: I'll take that first, because it was one of the recommendations in our report, and if you don't think equalization came up, you're wrong. It did, and we rejected it. We rejected it in place of a special fund which would top up for provinces with climbing demographics which were disproportionate to the rest of the country. It's because of the difficulties. Opening up the equalization formula is a bit like opening up the constitution. It's a very complex issue.

Mr. Lord: It's an interesting conversation that I've had the pleasure to be involved in for several years, and I'm glad I did.

I think it's important to take into account the different types of transfers that are made to provinces. My recommendation is if the federal government wanted to take into account the aging population, which is a more significant situation in some provinces than others, it should be done outside of equalization but as part of the other federal transfers.

You could have a situation where a province doesn't receive equalization but has an aging population and, therefore, should receive additional compensation, or additional support I should say, not compensation, as part of a health transfer or a social transfer.

There are a lot of misconceptions. I'm not speaking here as the CEO of Medavie, even though I am. I'm going to take a break from that job and put my hat on as a former elected official.

There are a lot of transfers from the federal government to every single province. Equalization is not just given to some provinces. That's true for equalization, but there are transfers to every single province from the federal government. Equalization is another payment that comes from the federal government and is in the Constitution and found its way into the Constitution because of the work, primarily, of a lot of premiers, including the chair who worked very closely with it, Premier Richard Hatfield of New Brunswick, and who made sure it was in the Constitution.

The idea is one that you can basically simplify as we're all Canadians no matter where we live.

Senator Pratte: I wonder if you can elaborate on this thought, which was discussed in the book that the chair promoted very enthusiastically on the idea of two Canadas. In the Atlantic provinces, the population is aging very rapidly. You alluded to that in your presentation, Premier Lord. In some especially the Atlantic provinces, the population is aging rapidly, and if nothing is done, those provinces would be left behind not only because of aging but because with aging comes slower economic growth and so on. There's a risk for the whole country there.

Mr. Lord: Yes, there is a risk, and the Atlantic provinces are a precursor to what could happen in other parts of the country. No one should believe they're immune to an aging population. It's just the rate and pace of change is different from one region to the next.

Before I precisely answer that question, and if I can indulge you a little bit, I think it's important for Atlantic provinces to do their part as well. It's not just a question of coming here, or anywhere else, and saying, "Give us more; we're aging.'' I think Atlantic Canada has to strengthen its economy and adapt to that changing reality as well. It's not somebody else's problem. I live in Atlantic Canada. It's our challenge, but I think it is also a Canadian challenge. We think of Atlantic Canada, but go to rural Northern Ontario, Manitoba and some parts of Saskatchewan. It's very similar as well. There are certain parts outside Montreal, Quebec.

[Translation]

In the regions, at home, in the Saguenay, the demographic challenges are very similar to those in the Atlantic provinces. We must recognize this difference, this reality, and the need to adapt to it. If people want things to be as they were in the past, it will be difficult to meet those needs. However, there is an adaptation that must be made, and we have to recognize that there is an evolution at the demographic level that ensures that systems and structures adapt as well.

[English]

I mentioned the aging population in New Brunswick. If you increase by about 2 per cent the population in the last 15 years, there is over a 50 per cent increase of people aged 65. If you look at how many people are working in New Brunswick, there is less than one person working for one person not working. As the population ages, you will eventually get to a rate where it's one person working for two people who are not working. They may be in school, or they may be seniors, and that creates a lot of pressure on that one person who is working.

We're going to say the only way to solve this is to raise taxes because we want to pay everybody. Eventually, that system doesn't hold, so I think it's important that the questions you're asking yourselves here are fundamental to the future of the country and will have a significant impact on how we deliver health care, how we provide other services and how we fund all the things that we need.

That's why I accepted the invitation, because of all the questions that we need to answer, the ones that deal with demographics — sometimes we say, "Let's bring more people in. Let's hope that works.'' But you can't rely on that as the solution because if that doesn't work, you're left with the problem. That's why it's so important to adapt our thinking and systems to the fact that we are aging and living longer, which in itself is a good problem to have. Let's not lose sight. This is a good challenge, not a bad one. I'm just happy to provide some ideas and, in my day job, to provide some initiatives to deal with it.

Senator Ngo: Thank you for giving such great information. My question has been touched on here by all the other senators. Should Canada move forward by concentrating more on the Internet and social media as the future reality to help the baby boomers? As we are talking, we're all getting older every minute. With a small population and the vast region of Canada, could that shape the future for cost cutting in health care and improve quality of life?

Mr. Lord: Using every tool at our disposal, including social media, analytics and robotics in the future will be necessary to adapt to this new reality. To me, it's not a question of cutting costs; it's how we can better use the investments that we make and the taxes paid by taxpayers. We should never forget as we disburse public funds that somebody had to work to provide that money in the first place. Somebody worked to pay those taxes. As the government receives the tax and disburses the tax, we have an obligation to find the best way to do it. If that requires change and innovation and using new technology, then we should.

Ms. Carstairs: Technology is here to stay, even though some of us tend to be more Luddite than others and fight it every step of the way. I'm thinking in particular of my husband who fights it with every breath in his body. It is the way of the future, but we must not lose sight of the fact that there are people now in their 80s and 90s who will, for the most part, not adjust to that technology. So it can't be all technology.

The frustration that some people face at 95, when they get on a phone and they listen to this voice mail and then that voice mail and another voice mail — you've all been there and you know what it's like. So they drop the phone and they don't deal with the issue they need to deal with.

There always has to be a balance between our use of technology, which is absolutely essential as we go forward, but also a recognition that for some human beings they're not quite there yet.

Mr. Lord: If I can add to that, when we pay claims on behalf of the people we serve, we cover close to 3 million Canadians through our Blue Cross plans at Medavie, and we have different groups. There are some people who want to see someone to get their claims paid. They actually come to our Quick Pay office and want to see an individual. They come in with their paper bill and be reimbursed and want to leave with a cheque. We actually provide that service. We have other people who never want to see anyone, never want to touch a piece of paper, and they want to do it all from their phone. We also provide that service.

It's important to adapt to the different groups we have at the same time, and it's not just one-solution-fits-all for everyone. How do we provide the best solution for those that want it? You can say one costs less than the other, but it's important to satisfy the need of that individual.

Senator Marwah: Senator Carstairs, you mentioned that there were 13 national strategies and yet we still have to arrive at a national strategy in palliative care.

Premier Lord, I agree with you. I don't think this is going to be solved with a hundred small steps that are needed to reform the system, but I thought a strategy of palliative care is a glaringly obvious first step in figuring out how to resolve this.

Why hasn't this been the focus of every successive government? They are not stupid. It's not a threat to a care provider, a doctor or anyone. So why the reluctance to come up with a strategy? It's a glaringly obvious problem.

Ms. Carstairs: I don't know. We got almost to the point of a national strategy in 2005. The government that came into power decided that was not the way it wanted to go. I never got an explanation for it. I don't know why they chose not to have a national strategy in palliative care. As I once said at a cabinet table, we're all going to die, and we may die of diabetes, heart failure or Alzheimer's, but we're all going to die. If we can have strategies on everything else, I don't understand why we can't have a strategy on how to help people in Canada die in dignity.

Mr. Lord: All I can say to that point is our organization would be more than happy to support and participate in the development of such a strategy. We have solutions that we are implementing right now. Some of our people are doing real work today providing real care to patients in their home, helping them through this transition, in some cases the last phase of their lives. We would be more than happy to assist, whether it's a provincial government or the federal government, to answer these questions. They are fundamental questions to who we are as people.

Senator Eaton: I have a very quick question. Is there room in the Canadian health care system for a larger private system?

Mr. Lord: It depends on what we define as a private system.

Senator Eaton: Or a system where people can pay if they can get a service more quickly?

Mr. Lord: There are places now where people do pay in the system. There are words that are used from time to time. They're used as weapons of fear, if I can say it that way. "Why hasn't change happened?'' Sometimes it's the resistance. Then people throw around words like privatization, Americanization and two-tiered health care. That can create a lot of fear and that creates resistance. The fear is not only in the minds of the people, the fear is in the minds of elected officials. The elected officials get scared when they hear those things.

Whether they have private insurance, I think the Canadian public realizes there is some level of care. The system is far more complex than it used to be. There is a role for the private sector in Canada. Whether it's a role in the hospital, that's another question that I don't want to enter today because I don't want that to be the focus of everything we've said today.

Senator Eaton: As a formal elected official, you don't have anything to say?

Mr. Lord: I have a lot of things to say, but I also represent a company. There is a role. We provide private sector support. I think there is a role for individuals and organizations like ours to contribute. It's not a question of privatization. Sometimes it's coming in with a better solution that actually costs less for taxpayers.

Let me rephrase it this way: The government can be the funder, so the single payer, but they don't have to be the single provider of everything. In allowing other organizations, even if it's private sector, not-for-profit organizations to come in and deliver some services and hold them accountable, that is a way to ease the burden on the system.

Ms. Carstairs: I think we're already seeing large private sector participation, and we're going to see more and more of it. Fundamentally, I believe that all Canadians are equal and that all Canadians are entitled to equality of service. I fear for the equality of service when it's up sometimes against for-profit. The kind of organization that Bernard Lord is talking about, which is a not for profit, wonderful work, significant work, they'll be doing more and more work. I am leery of the for-profit sector in the delivery of health care.

Senator Marshall: I'm intrigued by Senator Carstairs' reference to the 13 strategies. Would you be able to provide that to us? I think that would be helpful when we write our final report. I'm inquiring whether that could be made available to the committee.

Ms. Carstairs: I currently don't have that list. I do know of the AIDS, diabetes and cancer strategy, but I'm sure your research staff in the Library of Parliament can look up all the other national health care strategies with no difficulty at all.

The Chair: This brings us to eleven o'clock. We thank you for sharing your comments, vision and suggestions to the committee.

Honourable senators, the second panel is the presentation from Statistics Canada to present us with a snapshot of the demographic situation in Canada, including some projections that should show us some of the challenges stemming from the aging of the Canadian population.

[Translation]

We have with us Laurent Martel, Director of the Demography Division. Mr. Martel, we thank you for accepting our invitation. The floor is yours.

Laurent Martel, Director, Demography Divisions, Statistics Canada: Thank you. It's a pleasure to be here today.

[English]

Thank you for this opportunity to highlight some regional trends associated with population aging in Canada.

My point today with you will be to show that the national average hides some major regional differences. You might tell me, "Well, this has always been the case; it's not new.'' That's true, but there are reasons to believe that regional differences in Canada are currently increasing when considering demographics simply because immigration and internal migration have become key drivers of population growth in many regions of this country. Some regions are benefitting from immigration and internal migrations; some regions not so much. This is leading to differences not only in the rate of growth of the different regions but also differences in the age structure of these different regions.

First, I would like to remind everyone here today that, when we compare Canada to other G7 countries, Canada still has one of the youngest populations when considering the share of seniors. This share is lower here than anywhere else except in the United States. The United States shows a lower share of seniors than Canada simply because fertility levels there have remained higher in recent decades than in Canada. The number of children per woman in the United States stayed, on average, two children per woman — so it is about the replacement rate — over the last two decades, while, in Canada, it has been an average of 1.6 children per woman, so lower fertility in Canada than in the U.S., leading to a lower share of seniors in the U.S. than in Canada.

Japan stands out among all G7 countries as the country with the largest share of seniors, with one in four people aged 65 and over in Japan. The combination of very low fertility, the highest life expectancy in the world and close to zero immigration explains why Japan has an older population than elsewhere and a population that has been declining in numbers in the last 10 years.

However, population aging in Canada accelerated in recent years. For example — and this is one of the key results from the 2016 census — for the first time in census history, more seniors were enumerated in Canada than children. This is a graphic on the top of your slide. This is a generational shift in Canada, and there is likely no turning back. According to population projections, the difference between the number of seniors and children is likely to increase in the future.

The number of seniors increased rapidly between 2011 and 2016 in Canada simply because the first baby boomers born after the Second World War reached age 65 in the last five years.

As a result of the rapid increase in the number of people aged 65 and over, the share of seniors exceeded also, for the first time, the share of children in Canada. That's the graphic at the bottom of the slide.

The increase in the proportion of seniors between 2011 and 2016, so in the last five years, was the largest observed since 1871. That's a clear sign that the Canadian population is aging at a faster pace than ever before. In 1871, four years after Confederation, more than two in five Canadians were less than 15, and only 4 per cent of the population was 65 and over. Of course, at that time, the life expectancy of Canadians was much lower, about 40 years of age, and only one in three people could expect to reach the age of 65. Now, in Canada, the life expectancy is 82 years of age, more than double what it was in 1871, and 9 in 10 people can expect to reach the age of 65.

In addition to the baby boomers getting older, these lasting changes are also due to two other trends that are likely to continue in Canada: increasing life expectancy of Canadians, of course, is gradually bringing up the number and proportion of seniors, while continuous low fertility rates since the 1970s limit the number of children and drive down their share in the overall population.

Sustained immigration has a significant impact on the rate of growth of the Canadian population — I'll be back, in a few minutes, on this — but only a marginal effect on the population aging process, partly because our immigrants arrive in Canada in their 30s, an age that is close to the mean age of the Canadian population.

Immigration cannot significantly slow down population aging, but immigration can explain, in part, differences between regions as those regions that are receiving immigrants are not aging as fast as the other ones. I will be back, again, on this in a few minutes.

Seniors outnumber children in Canada, but not everywhere. This is also a key result from 2016. It is our first indication of the large differences that exist between regions of this country. The territories and the Prairie provinces were the only jurisdictions in 2016 where more children than seniors were enumerated.

In Nunavut, about a third of the population is aged less than 15, and only 4 per cent of the population is aged 65 and over. Population aging in the territories is also slower than everywhere else, with the proportion of seniors only increasing by 0.5 per cent in the last five years, the lowest increase among all provinces and territories. A large proportion of the people living in Nunavut identify themselves as Inuit, and fertility levels of Inuit are much higher than those of the rest of the population. Life expectancy in Nunavut is also lower than everywhere else, mostly related to the life conditions there that are different.

The share of children is also higher in the Prairie provinces, with close to one in five people. On the opposite side, almost one in five people in the Atlantic provinces were 65 and over in 2016, the highest share among provinces and territories. To give you an example, by comparison, the proportion was only 12 per cent in Alberta, so 8 point percentages lower than it was in the Atlantic provinces. There are large differences, again, between regions of Canada.

On slide 6, I will switch to French.

[Translation]

There are differences between the provinces, and we can look at the gap between the provinces with the highest and the lowest proportion of seniors. It can be seen here on the graph with the black bars around the red line. This red line represents the growth of the proportion of seniors from 1851 to 2061. We are using Statistics Canada's population projections to extend the period to 2061.

The red line shows that the country's demographic aging has been going on for a long time, and the trend isn't new, but we also see that the country has just begun the quick phase of the increase in this proportion, a rapid increase that would continue until 2031. Eventually, in 2061, in 45 years, one in four Canadians could be 65 years of age or older, which would bring us back to the current proportion in Japan.

The bars show the percentage difference between the provinces with the highest and lowest proportion of seniors. This difference in 2016 was eight percentage points. During the second half of the 20th century, it was five percentage points. As can be seen in the chart, this difference could be as high as 15 percentage points in the coming years, showing that the age structure of Canada's regions is likely to become increasingly different in the future. That was one of the main messages I wanted to convey to you today.

These differences across regions of the country are related to the growth factors of the provinces and territories, which are different from one region to another. In demography, regions that grow rapidly often have younger populations, and regions that grow more slowly, older populations. This is the case in Canada, where there is rapid population growth and younger populations in the western part of the country and in the north, and weaker population growth and older populations in the east. For example, from 2011 to 2016, the three Canadian provinces with the highest population growth were the Prairie provinces, shown by the bars in dark blue on the graph. Demographic growth was much lower in the Atlantic provinces.

Nunavut and Alberta had the highest demographic growth among all provinces and territories, with rates more than double the national average. Conversely, there was a slight decrease in New Brunswick's population between 2011 and 2016. So, you can see the extent of the situation because some provinces have very high population growth and others, mainly in the Atlantic provinces, much lower growths, and in some cases, negative ones.

Regional differences stem from factors underlying this demographic growth. I will show them on the slide on page 8 of the document.

This graph is interesting because it breaks down the population growth of different regions, and demographic growth is illustrated by a small black bar. This growth is decomposed according to the three main factors of demographic growth. There is natural increase, which is simply the balance of births and deaths that we see in orange. There is the increase in international migration, which is the balance of immigrants minus the emigrants, represented in grey on the graph, and there is the interprovincial migratory increase or the balance of internal migrants, represented in yellow for each province and territory.

The first thing to notice is that, in Canada, two thirds of the country's population growth is due to international migration, as shown in the first bar on the left. Only a third of Canada's population growth is because of what is called natural increase, simply the difference between births and deaths. You can see that, in the Atlantic provinces, the natural increase, shown in orange, is almost non-existent. The Atlantic provinces have almost no orange at all. Recently, some of the Atlantic provinces have recorded more deaths than births, which is a first in Canada.

This deficit of births to deaths will increase in the coming years because of the aging population. You can well understand that, given that situation, population growth and the future development of the age structure in certain parts of Canada can rest only on the ability to attract international migrants or to retain the people who already live in those areas. There must be attempts, for example, to keep young adults in their regions and prevent them from leaving for other parts of Canada.

Still on that table, but in reverse, natural increase in orange remains a very significant factor in population growth in the prairie provinces and the territories. The Prairies also attract many international migrants, and Alberta is the major beneficiary of migration exchanges with the other provinces, including an influx of young adults who go there to work. As natural increase becomes less significant in the coming years because of the aging population, population growth in the regions of Canada will depend more and more on their ability to attract migrants or to retain their own population. The regions that succeed will see higher increases and younger populations than elsewhere.

On the next slide, you can now see the situation across the large urban centres, which also helps us to better understand the link between population growth and the aging population. Each point on this graph shows the position of an urban centre or a rural area plotted against two factors: population growth on the x-axis and the proportion of seniors on the y-axis. It therefore shows the degree of population aging in those various areas.

On the bottom right of the graph, you see the regions that are growing rapidly and where the proportion of seniors is very low. Seeing a city like Iqaluit, the capital of Nunavut, there is not surprising, but also the major urban centres on the Prairies.

Conversely, on the upper left of the graph, you see the regions that are growing very slowly, or are even decreasing, and that show a higher population of seniors, indicating a higher degree of population aging. The regions there are essentially rural and located in the Atlantic region. The blue line crossing through the graph shows the direction of the relationship that exists between the aging population and population growth.

Taken together, these points all clearly show the wide range of situations in the regions of Canada in terms of population growth and aging. It is quite possible that, in the future, the gaps between all those points will widen, as migration, both from outside and from inside, will take on a significance in the population growth of different regions of the country.

In the next slide, you can see that an older population also means a more female population, expressed here by the number of men per 100 women in the total population. On the left, you see the national trend from 1871 to 2016 and, on the right, you see the differences between the provinces and territories for 2016. The left-hand side shows that, as the population of Canada has aged, the number of men per 100 women has decreased. In 2016, there were 96 men for every 100 women, a national situation tied to the fact that women enjoy a longer life expectancy than men. So you find more older women. It's just arithmetic: as the population ages and as that older population becomes a larger proportion of the entire population, the population automatically becomes more female.

On the right of the graph, you can see that, in 2016, only the territories and Alberta went against the trend in terms of the national average. That is to say, in the territories and in Alberta, we see the opposite: more men than women.

A much more significant proportion of the population of the territories is made up of young people. A third of the population of Nunavut is under 15 years of age. Clearly, there are more young men than young women. That explains the difference. In Alberta, we also see the effect of internal migration, meaning that the province attracts many more young adults because they are enticed by its labour market that is more encouraging than elsewhere.

[English]

To conclude my presentation, there are a few key points I would like you to keep in mind for your work in this committee.

A greater variability in population growth between provinces and territories is likely to happen in the coming years as international and interprovincial migration becomes the sole driver of population growth in many regions of Canada. From that, shifts in the population share of the eastern and western provinces are likely to continue.

Differences in the labour force among provinces and territories are likely to increase in the coming years. We could see labour shortages and higher dependency ratios in the Atlantic, a higher population diversity among the working- age population in Quebec, Ontario and B.C., provinces that attract a large number of immigrants every year, and a younger labour force as well in the Prairies.

The rural population living in Canada is likely to decrease in some areas. For some it has already started, mostly located in the Atlantic provinces.

Important differences between the provinces and territories in terms of the presence of specific groups of population requiring targeted services and programs might be more frequent. I am thinking here about seniors — the Atlantic provinces have a higher share of seniors — and immigrants and their children. Aboriginal peoples are more located on the Prairies, and this is a fast-growing population. It was not part of my presentation, but we have projections related to the Aboriginal people in Canada and it is a fast-growing population. As for the population needs for public services, social programs and infrastructure, I am thinking here about housing and public transportation. These are likely to become more specific to different regions in Canada simply because our demographics are different.

I would finish by saying that the data I have shown today, namely, the census data, the population estimates and the projections that are produced by Statistics Canada are likely to become more important and relevant in the design of public policies simply because we are seeing increasing differences between the different regions of Canada. Thank you.

The Chair: Thank you for a revealing presentation. You have touched on a variety of things, looking at all the regions of Canada. It was well presented and very professional. What are the major risks for these regions of Canada when we look at the total network of population aging?

Mr. Martel: That's a very big question. What are the major risks related to population? The first thing is to realize to what extent this country is changing. I often talk about the emergence of two Canadas. When we were in the baby boom period, all regions of Canada were growing simply because there were a large number of births occurring in all provinces, so the differences in the growth of the different regions were not so high in the 1950s, 1960s and 1970s. This era is now over. The contribution of natural increase in the growth of the Canadian population in the different regions is declining, so growth is now related to immigration and to the capacity of the different regions to attract migrants or to keep their population or prevent them from migrating elsewhere.

Regarding the risks, if the provinces are not succeeding with immigration and internal migration, they will likely grow much older, and to some extent it has links to the economy. An older population has different needs. Their consumption habits are not exactly the same. An elderly population does not require the same services. These are the risks of having different needs for different populations. For the federal government, one-size-fits all policies might be more difficult to achieve in the future because you will define policies that will be relevant for one part of the country but in another part of the country the demographics are different. You will have to adjust for the different demographics.

The Chair: As we conclude, the last question will go to Senator Neufeld.

Senator Neufeld: Maybe I don't understand your slide, but on slide 9 you talk about large urban centres and rural areas in Canada — I come from British Columbia —and you have Victoria and Vancouver on there, which are large urban centres. You also have Abbotsford and Mission. Is that what you consider in this slide as being rural?

Mr. Martel: No, on this slide we used the concept in the census called "Census Metropolitan Areas''; it's the 35 largest urban centres. They are mapped on this chart, and we have also mapped the regions that we call "non-CMA'' that are located outside these large metropolitan centres. That is why you will see that Abbotsford and Mission are one of the 35 CMAs of Canada, just like Toronto, Montreal, Vancouver and Victoria. It is a region with 100,000 or more inhabitants. It is the large urban centres of the country. We have also identified regions located outside these large metropolitan centres, and they are mostly located on the top left of the chart. It shows that for rural regions, the growth and population aging are completely different than for some large urban centres, such as those located in the Prairie provinces. This is how we constructed this slide. It is based on the standard geography within the Canadian census called "Census Metropolitan Areas.''

The Chair: Honourable senators, please be reminded this afternoon we will continue at 2:15, room 2, Victoria Building. Before I adjourn, I would like to take this opportunity to thank the stenographers and interpreters for their support to this committee.

With that, the committee is adjourned.

(The committee adjourned.)