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The Real Retirement: Why You Could Be Better Off Than You Think, and How to Make That Happen by Bill Morneau, Fred Vettese

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3

Understanding the Foundation—Health Care

One might well ask why a book on retirement also looks at Canada's healthcare system. The answer is that health care is such a big-ticket item that expected increases in the cost of health care may very well crowd out spending by governments and employers on pensions. This was one of the reasons given by the government in its 2012 federal budget for upping the retirement age for OAS and GIS benefits to 67.

Canada pays much more for health care than it does for pensions. Even if the OAS program was totally eliminated, and it won't be, the government would still have to make extensive cuts in other program spending or impose a series of punishing tax increases to fund the healthcare system in the future if it remains in its current form. We need to understand better what is happening to the healthcare system before we return to retirement issues.

Early Days of Health Care

Whatever we do, we know we are not going to turn back the clock on the notion of a universally accessible and virtually comprehensive system of health care. Just as Canadians were expected to be self-sufficient in securing their retirement needs a century ago, they also had to pay for whatever minimal health care they received. Services provided by local physicians were often paid for with chickens, apples, or whatever other produce the patient could furnish. Most hospitals were charitable institutions, operating to the extent that contributions permitted.

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