Mr. Speaker, it is a pleasure to engage in this debate on the health care system and its future. I fear that with less than four minutes left in the time allotted I will not have the opportunity to address a lot of the issues that I would like to address, but I will try to address as many as possible.
On June 9 provincial and territorial governments issued an interim report on understanding Canada's health care costs. Let me first say that the Government of Canada very much welcomed such efforts. Health policy decision making in Canada needs to be informed by better evidence, a better understanding of the issues and a better understanding of the prospects we face. This report is a good step along the road to that better understanding. I know that federal and provincial governments and their officials will continue to work toward enriching our understanding of these issues.
I would like to start with what the report called the base cost drivers. The report takes a very broad cut at estimating what those drivers could be. It argues that health care costs in Canada will be pushed up by four key drivers: inflation, population growth, population aging and a catch-all category.
The first is general inflation. As the overall cost of living rises, so will the amount of money that needs to be spent on health care. The report pegs this pressure at about 2% a year, which is consistent with the policies of this government to keep inflation between 1% and 3% so as to keep interest rates low and the economy strong.
The second is population growth. As the number of Canadians grows so will the need for health care spending.
The third is population aging. It is well known that older Canadians have more health care needs than younger Canadians by a wide margin. They are more likely to have chronic health problems, those that persist and cannot simply be fixed by some procedure like setting a broken limb, and are more likely to need some ongoing form of care as health problems cost them some of their independence. The aging of Canada's population will thus inevitably add to health care cost pressures.
The report estimates that between now and 2026 aging will add around 1% a year to health costs, somewhat lower for the next few years, and more further out as the baby boomer generation moves into their sixties and seventies and beyond. One of the reasons there will be more older Canadians in the future is not only because we are living longer, but because we are healthier and indeed having more years of life in good health.
The last base cost driver the report mentions is a catch-all category. The report assumes that we will spend more on health care year in and year out between now and 2026 to cover off increases in the available health care technology and for a variety of other pressures.
Historically, health care costs in Canada have risen faster than just population growth, the effect of aging and general inflation. These four factors together, general inflation, population growth, aging and this other component, gave a base estimate that health care costs in Canada will rise about 5% a year from now until 2026.