Concerned with the quality, access and affordability of long-term care options, more Canadians are wishing to age in place at home, but that goal is financially unrealistic for many. Without additional savings, the high cost of care combined with the increase in life expectancy, could mean unmet demands for many Canadians.  

That is the conclusion of a new report by Rebekah Young, Head of Inclusion and Resilience Economics at Scotiabank. The report — titled Rethinking Retirement in an Age of Longevity — says a new policy framework is needed, one that “breaks down silos across healthcare, long-term care, and financial security and is backed by a credible fiscal plan.”

Fixing “fragmented and siloed” healthcare and long-term-care systems, which focus on the most expensive yet least desired forms of care and don’t help people stay in their homes, would be a start, the report says.

But it’s just as important to rethink retirement income systems that force people to spend their savings sooner than they might want to, even though they are living longer than ever before. Existing social safety nets help, but they are spread too thinly and would not support aging in place or renters. As government coffers are stretched against aging demographics, greater means-testing for broader supports could increase pressure to save on those who might no longer be eligible, the report adds.   

The aging of the Canadian population and longer average life expectancy are well documented, as are the health-care costs for an ever-older populace (while seniors constitute 19% of the population, they consume about 45% of healthcare spending). But the Scotiabank Economics report goes deeper, looking at the amount of additional care people might need to age at home, and the potentially astronomical cost of that care, for which most are financially unprepared.

According to a survey cited in the report, less than a third of Canadians expect to experience a disability later in life, even though almost half of those over 75 years old report having a disability. Meanwhile, almost half believe in-home care would cost less than $1,100 a month.

“That would buy less than an hour a day of support based on agency rates of about $40 per hour,” the report says. “The Canadian Medical Association benchmarks 22 hours per week as a level of care consistent with keeping patients at home instead of in a long-term-care setting. That would roughly translate into $3,500 per month — this is likely a floor since it reflects only general support, not healthcare services. At an extreme, continuous care in the home would run closer to $30,000 per month.”

According to the same survey, less than a third of Canadians consider long-term-care needs when thinking about retirement, and only one in 10 have actually set aside funds to pay for it.  Many may need to use their home as an asset in retirement and lifetime renters are likely to reach retirement with little or no equity of any type.


Aging in place is mutually beneficial to households and governments alike, but policy biases skew in the most costly direction.”

Rebekah Young, Head of Inclusion and Resilience Economics at Scotiabank

“The majority would default to government supports – financial, health, and long-term care – despite perceiving major failings in the level, access and quality of care,” the report says.

Meanwhile, demand continues to intensify. The Canadian Medical Association projects that the cost to governments of long-term care (both institutional and in-home) will increase to $60-billion per year by 2031, from the current $33-billion. These figures don’t account for the 75% of in-home needs that are met through informal support, such as that provided by family or friends.

“Unmet support services in the home are boosting demand for institutional care,” the report continues. “[The Canadian Centre for Health Information] estimates that 10% of long-term-care residents could be cared for at home with appropriate supports. In turn, chronic unmet demand in long-term-care homes is pushing more seniors into hospital settings. In Ontario, for example, over 15% of hospital beds are occupied by alternative-level-of-care seniors.

“Aging in place is mutually beneficial to households and governments alike, but policy biases skew in the most costly direction.”

Absent major policy reforms, most Canadians should consider a financial plan that takes their health into consideration to preserve the option of aging in place, the report says.

Read the full Rethinking Retirement in an Age of Longevity report.