Lower income Canadians and women spend the most time aiding
aging parents
TORONTO, May 8, 2017 /CNW/ - Caring for aging parents
already costs Canadians $33 billion a
year in direct out-of-pocket expenses and time off work, a number
that will only grow over time, finds a new report by CIBC Capital
Markets.
The report, Who Cares: The Economics of Caring For Aging
Parents, co-authored by CIBC Deputy Chief Economist
Benjamin Tal and Senior Economist
Royce Mendes, estimates the direct
and indirect costs associated with the elderly to mushroom by more
than 20 per cent in real dollars over the next 10 years due solely
to changing demographics.
"An aging population combined with longer life spans and
strained social services has in recent years seen more and more
Canadians taking on the role of caregiver for their aging parents,
and in the coming years, that tendency is only likely to
intensify," says Mr. Tal.
"Add in the fact that costs associated with the elderly are
already rising faster than the pace of inflation because of the
high demand for such goods and services, and you can see that this
will be a major concern for a growing number of Canadians in the
years to come," he says.
According to the Statistics Canada census, more Canadians today
are over the age of 65 than under the age of 15 for the first time
in the survey's history, and Centenarians (100 years and over)
represent the fastest-growing segment of the population. Moreover,
the working age population (15-64 years) is on the decline, now at
66.5 per cent of the total population, down from 68.5 per cent in
2011.
While the effects of Canada's
changing demographics will be wide-ranging from interest rates to
consumer preferences, some of the most direct impacts will be felt
by those who will be assuming a caregiving role for their parents,
the report says.
Today, close to two million Canadians, or 14 per cent of
those with parents over the age of 65, pay for care-related,
out-of-pocket costs, the report says, with those in the eastern and
western provinces facing the highest direct costs, compared to
those in Ontario and Quebec.
"On average that cost is $3,300 a
year per caregiver, translating into an annual cost of just over
$6 billion to the overall economy,"
says Mr. Tal, noting that research in the U.S. suggests survey
respondents usually underestimate how much they spend on
caregiving-related expenses.
Many of these direct costs are borne by those with lower
incomes. Canadians earning less than $50,000 per year spend on average 30 per cent
more than higher-earning Canadians, implying a much greater cost
relative to incomes, the report says.
However, the direct costs pale in comparison to labour-related
costs.
"Close to 30 per cent of workers with parents over the age of 65
lose roughly 450 hours per year of time off work to attend to the
care needs of aging parents, with the largest impact falling to
women and lower income earning Canadians," says Mr. Tal. "That
translates into roughly $27 billion
of lost income or foregone vacation time."
Beyond that, Mr. Tal notes that these figures don't take into
account the reduced potential for job mobility or promotion that
could be associated with taking time off work.
"It's worth noting that there is a clear gender story here, with
women taking 30 per cent more time off than men to care for an
aging parent," he says.
The report also highlighted that in 2016, costs in assisted
living and heavy care services, up 5 per cent and 8 per cent,
respectively, had risen significantly faster than average rent, up
just 2 per cent.
About CIBC
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SOURCE Canadian Imperial Bank of Commerce