SHERI SOMERVILLE
Normally, an organization like the Atlantic Chamber of Commerce concerns itself with issues related to the economy and taxation, advocating for an environment that encourages investment in the local businesses that create jobs and contributes to improved quality of life.
But elections have a way of expanding the dialogue to issues that are critical for our communities, provinces and our region.
One issue that has been noted repeatedly but has difficulty maintaining public attention is the impact of Atlantic Canada’s aging population on the cost of providing health care. The four Atlantic provinces rank the highest nationally in median age, six to nine per cent higher than the national average, and face a baby boomer retirement wave that will fundamentally impact the cost structure for our provincial governments as they strive to provide quality education and health services. It’s been estimated that by 2038, more than 30 per cent of our population in Atlantic Canada will be seniors.
This greying of our population will have a huge impact on the ability of the Atlantic provinces to fund health care. Current health-care expenses average over 40 per cent of provincial budgets in Atlantic Canada and continue to grow, while reaching only 35 per cent in Alberta last year. The point to note is not all provinces face the same challenges.
The problem is that health services for seniors are much more expensive. The Canadian Institute for Health information estimates that the cost of providing health care to a person over 65 is four-and-a-half times the national average, and eight times for a person over 80. It is simple math that a province or region with an older population will experience a higher growth in the cost of providing health services. National health system funding should take this into account.
The differing demographic realities due to age and rural population warrant different funding models, yet the federal government allocates funding via the Canada Health Transfer on a per capita basis.
On this basis, a growing provincial economy will attract young people to work there, increasing the size of the provincial health transfer, while provinces like ours will see their costs increase and their funding remain stagnant. In the short term, let alone the long term, this situation cannot continue without materially affecting the quality of health care or requiring tax increases.
The baby boomer phenomenon will affect our region for a more than a decade, and as the first of the baby boomers reach the age of 75 in 2021, the demand for more health services has already ramped up. If our national government is to expect provinces to guarantee universal, comprehensive and accessible health services, a strong case can be made for change in how health transfers are calculated.
Our provincial governments have made great efforts to fund the health system and balance budgets in the face of the retirement tsunami. But there are limits to what can be done when federal funding does not reflect the reality of enormous and unavoidable increases in health spending for an aging population. Further increases in taxes are no longer an option in this region, as the Atlantic provinces already rank highest in overall tax burden.
Universal health care is at the bedrock of Canadian identity and equitable funding should be an issue of national unity. Our Atlantic elected officials have a fundamental responsibility to call for demographic accommodation in the design of the Canada Health Transfer to ensure the survival of our health-care system. Our future prosperity depends on quality services to attract and retain working-age people to Atlantic Canada.
Sheri Somerville is the CEO of the Atlantic Chamber of Commerce, a nationally accredited organization representing the network of 93 chambers, 25 corporate partners, and more than 16,000 businesses in Atlantic Canada.
