Health-care costs threaten the intergenerational wealth transfer pt. 2

As Canada’s population continues to age and private costs escalate, clients will face increasingly difficult decisions about how to make ends meet in retirement. Advisors who can build long-term plans that reflect this new reality will add tremendous value (see pt. 1).

Meanwhile, there are policies that provincial and federal governments across the country can implement to make the system more sustainable. Our industry has an advocacy role to play in all of this.

1. Expand home and community care funding

Canada has committed more than $4.8 billion over four years to improve home and community care under the Working Together to Improve Health Care for Canadians Plan. Scaling this further, with federal and provincial support, would reduce out-of-pocket costs for families.

Options:

• Increase federal transfers earmarked for home care hours and community nursing.
• Standardize eligibility and service levels across provinces and territories to reduce the variability in personal cost burdens.
• Allow funding to follow the patient, giving families more flexibility in how they secure care.

2. Develop a national long-term care insurance or savings model

Long-term care (LTC) in Canada is increasingly financed privately, through family caregivers, private care and assisted living fees. Government-funded LTC services remain tightly rationed, with long waitlists. This would reduce the likelihood that seniors must liquidate home equity, still the largest asset in wealth transfers.

Options:

• Create a public LTC insurance program, like systems in Germany and Japan that pool risk and reduce reliance on personal assets.
• Incentivize private, tax-advantaged LTC savings accounts — like the TFSA or RRSP but dedicated to future care needs.
• Introduce mandatory or opt-out contributions during working years to ensure funding later in life.

3. Implement national standards and infrastructure funding for LTC

The Covid pandemic exposed deep problems in LTC, necessitating calls for consistent national standards and improved working conditions. It got so bad that the military had to step in.

Research highlights ongoing structural issues, including uneven provincial regulations, staffing concerns and the role of for-profit providers.

Options:

• Federal legislation enforcing minimum staffing levels and care-quality standards.
• A dedicated federal capital fund to upgrade aging LTC facilities, expand capacity and reduce waitlists.
• The federal government committed $1.7 billion over five years for personal-support worker wage increases and recruitment/retention supports, via bilateral agreements with the provinces and territories. This must happen.

4. Create a national strategy for aging in place

While most Canadians prefer to remain at home, the cost of modifying homes, hiring caregivers and increasing transportation services are not wholly covered through provincial plans. A national aging-in-place strategy would reduce private expenses.

Options:

• Tax credits or direct grants that are more reflective of the cost of home accessibility renovations and care.
• Income-tested subsidies for private home care services.
• National caregiver supports like paid leave, training and respite services.

5. Integrate health data systems

The federal government has committed $505 million to strengthen digital health tools and data standardization, enabling better decision-making and care coordination. More can be done to improve efficiency and reduce system costs.

Options:

• Accelerate the deployment of interoperable electronic health records nationwide.
• Build predictive analytical tools to anticipate care needs earlier.
• Reduce redundant tests and hospital admissions caused by incomplete patient histories.

6. Address health inequities for Indigenous elders

Indigenous elders face severe gaps in culturally appropriate LTC due to unclear federal and provincial roles and a lack of infrastructure funding. Many have to leave their communities for care, creating additional trauma and cost burdens.

Options:

• Provide federal authority and funding to build and operate LTC facilities in Indigenous communities.
• Expand culturally rooted home-care programs with stable long-term financing.
• Improve care options for dementia patients who may require Indigenous-language care.

7. Develop a sustainable funding model

Current LTC cost assessments vary across provinces and often consider income more heavily than assets. A fairer, more sustainable funding model would consider an individual’s full financial picture, reducing inequities and creating predictability for families.

Options:

• Implement asset test contributions with caps to prevent the catastrophic loss of home equity.
• Offer sliding-scale subsidies to preserve generational wealth for middle-income households.

8. Increase public investment in preventive health care and chronic disease management

Preventing chronic conditions reduces the cost of late-life support.

Options:

• Increase national pharmacare — we still lack uniform national coverage for contraceptives and diabetes devices and supplies.
• Design incentives for preventive screenings.
• Provide subsidized community wellness programs.

Canada has already embraced significant health-care investments, but demographic and system pressures require timely reforms.

Research continues to show that homecare and LTC are underfunded, indigenous elders face acute care access barriers and families are absorbing growing financial burdens as services shift outside the public system.

Policy changes that rebalance public and private responsibility, modernize care delivery and improve equity can help protect the wealth Canadians hope to transfer across generations.