Issue link: http://clhia.uberflip.com/i/354923
Association (CLHIA), three quarters of Canadians (74 per cent) admit they have no financial plan to pay for long-term care if they needed it. Most worrisome is that the polling also shows that 55 per cent of Canadians believe government health care programs cover half or more of the cost of their long-term care needs. 2. ENCOURAGING CANADIANS TO PREPARE FINANCIALLY FOR LONG-TERM CARE Provincial governments in Canada all face acute fiscal challenges to simply sustain their existing program spending. Not only would significant tax increases to address the looming long-term care funding shortfall impact economic competitiveness and growth, it would also represent a significant additional burden on the younger working age population. As a result, the CLHIA believes that the funding shortfall for long-term care will need to be addressed with a balanced approach of increased direct government support and individuals taking more personal responsibility to prepare for their potential future long- term care. While there are existing incentives in the Tax Act to save for the future, (e.g., RRSPs) these are currently being under-utilized. Ultimately, we believe that it is better to stimulate additional actions by Canadians to prepare for their potential long-term care expenses through a more targeted incentive and communication program. Recommendation: In order to incent and provide financial assistance to Canadians to prepare financially for their potential long-term care expenses, the CLHIA recommends that government introduce a tax credit against the long-term care insurance policy premiums of qualified long-term care insurance. Such a tax credit would also act as an important signal from government to Canadians about the need for them to take financial responsibility for their potential long-term care expenses. 3 The following is the proposed structure for a long-term care insurance tax credit: • Individuals purchasing qualifying long-term care insurance would be eligible to receive a non- refundable 15% federal tax credit and the provincial equivalent. 3 There is precedent for such an approach. For example, the U.S. currently provides tax credits for long-term care insurance in order to provide incentives and support to U.S. citizens for their long-term care coverage needs.