Globe & Mail: Provinces have so far failed to prepare for boomers’ medical costs, but it’s not too late

Originally published in The Globe & Mail on June 20, 2025

As the largest expense in every provincial budget, medical care digs deep into our wallets. Canadians are all too familiar with long wait times and health care professionals who report stressful working conditions. These problems won’t ease until we confront a root cause long that has been ignored: provincial governments failed to plan for the predictable rise in boomers’ medical costs.

No amount of efficiency can stop medical spending from outpacing inflation and population growth in the years ahead. Demand for medical care will continue to surge as boomers age through the system. A recent C.D. Howe Institute study estimates that provincial tax rates will need to rise anywhere from 16 per cent to 69 per cent over the next four decades to keep up.

Premiers should launch a pan-Canadian task force to develop sustainable funding plans for boomers’ care. These plans should move beyond the simplistic diagnosis of a “doctor shortage” and tackle deeper structural challenges.

Data from the Canadian Institute for Health Information show we now have far more doctors per capita than when boomers were young: 243 per 100,000 today, up from 144 in the 1970s. Family doctors in particular rose from 73 to 120 per 100,000.

This increased supply of doctors, however, is swamped by two forces: rising demand from an aging population and chronic underinvestment in the social conditions that keep people healthy.

Canadians use far more medical services after age 65. In Ontario, a 20- to 24-year-old typically uses $2,200 in medical care annually. A 70-year-old uses around five times more than that ($10,300) and a 90-year-old, about 15 times more ($34,000). That’s why Canada can have more doctors than ever – and still have a system that feels overwhelmed.

In 1976, Ontario’s median age was 29; today, it’s 40. Had the province retained that age profile, it would be home to barely half its 2.95 million residents now over age 64.

To estimate the cost of this demographic shift, I adjusted Ontario’s current population to reflect its 1976 age distribution. The result: Annual medical spending would be $20.8-billion, or 23 per cent, lower today.

This gap helps explain why millennials pay 20 per cent to 40 per cent more in income taxes toward boomers’ healthy retirements than boomers themselves paid to support seniors of their time.

It also helps explain why Ontario Premier Doug Ford tabled a near $15-billion deficit this year. If Ontario still had its 1970s age structure, the same budget might show a $6-billion surplus.

This isn’t just an actuarial footnote – it’s a profound failure of fiscal planning. Ottawa reformed the Canada Pension Plan in 1997 to collect more in premiums from boomers while they were working. Provinces made no comparable move for medical care. The $20.8-billion in medical spending added to Ontario’s current budget is effectively an unpaid bill left by past governments for today’s taxpayers.

Every province faces the same liability. Over the next 45 years, the C.D. Howe Institute projects aging will add $723-billion in Ontario health costs alone and $2-trillion nationwide.

It’s not too late to act. Provinces should launch a “Better Late Than Never” task force to develop adequate plans for funding boomers’ medical care.

This means confronting hard truths.

We must ask what medical care we owe one another, especially as our ability to treat illness increasingly outpaces many voters’ willingness to pay taxes. Research shows more doctors per capita can drive up costs in fee-for-service systems, since physicians are financially incentivized to order more interventions, particularly for older patients.

We also need to fix perverse staffing incentives. Many family doctors now prefer hospital roles, where pay is higher. Hospital managers often favour this for cost-cutting, because physicians bill the provincial plan directly, while nurses are paid from hospital budgets. This misalignment raises costs and reduces access to family physician care in the community.

More fundamentally, we must ask whether we’re spending health dollars in ways that pro-actively improve health. Medical care plays a limited role in overall well-being. Research that I’m leading shows investments in housing, child care, income security and a clean environment do more to promote health. Yet, provincial budgets have steadily diverted funds from these areas toward medical care.

The political challenge is clear: raise taxes or restrict access to care. Limiting access risks eroding dignity for those who fall sick, and accelerates the slide toward two-tier care that privileges personal wealth over universal care.

There is a better path – one rooted in generational fairness. Rather than disproportionately leave boomers’ medical bills to younger Canadians already squeezed by high housing costs and stagnant wages, governments should ask financially-secure boomers to contribute more to the care their generation will consume. Just as Ottawa rebalanced CPP in the 1990s, provinces must now modernize revenue plans for medicine to reflect today’s demographic realities.

Dr. Paul Kershaw is a policy professor at UBC and founder of Generation Squeeze, Canada’s leading voice for generational fairness. You can follow Gen Squeeze on Bluesky, Facebook, Instagram, and LinkedIn, and subscribe to Paul’s Hard Truths podcast.