Without significant government intervention, a report by the Society of Actuaries and the Canadian Institute of Actuaries says that the Canadian healthcare system is not sustainable in its current form.
A key finding from the report, Sustainability of the Canadian Health Care System and Impact of the 2014 Revision to the Canada Health Transfer, is that, assuming there will be no governmental steps to curb healthcare expenditures, provincial/territorial spending on healthcare is estimated to increase at 5.1% real growth per year, increasing from 44% today to 103% of total provincial/territorial revenues by 2037.
Other key findings include the following:
- Even after assuming some governmental action to limit real growth rates to 3.5%, healthcare will still absorb 69% of total revenues available to provinces/territories by 2037.
- The proposed changes to the Canada Health Transfer will impact total revenues available to provinces/territories, reducing the federal government’s portion of provincial/territorial healthcare expenditures from the current 21% to 14.3% by 2037.
- The supply of physicians needs to increase by at least 46% over the next 25 years just to keep up with increased demand for services as a result of aging and population growth.
In summary, the research shows that, in order to safeguard the sustainability of its healthcare system, Canada has to significantly limit healthcare cost increases, or boost GDP growth, or raise taxes/fees, or substantially reduce, or cut altogether other government programs/services, or implement some combination of these.
“Unlike several previous forecasts on the future costs of the Canadian healthcare system, this report’s methodology applies actuarial techniques to directly capture the increasing healthcare costs associated with Canada’s aging population,” explains Stéphane Levert, the report’s lead researcher.
“Funding future healthcare expenditures is going to be very challenging for provincial and territorial governments.”
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