Health care expenditures in Canada have been rising in absolute, per capita and percentage of GDP (CIHI, 2005). In 2003, total health expenditures in Canada were $123 billion and were forecast to reach $142 billion in 2005 (CIHR, 2005). Health expenditures on long-term care, however, were a fraction of total expenditures in 2003: 9.3% or $11.4 billion on nursing homes and other residential facilities (CIHR, 2005) and 4.0% or $3.4 billion on home care (CIHR, 2007).

Although the provinces have rapidly increased the funding for home and long term care, it has not kept up with demand. In Canada, home care expenditures have increased by 204% in the decade since 1991 and by 209% in ‘other’ health institutions which includes nursing homes and residential care facilities. Nursing homes and other forms or residential care still absorb 80% of the total public health care budget, however, the growth in expenditures for home care have been increasing at a faster rate than the budgets for residential care (MacAdam, 2004). The institutional share of the health care pie decreased slightly from 9.6 to 9.3% (CIHI, 2005) but more recently has risen to 10.3% in 2006, or $15.5 billion (CIHI 2008)(See Figure 1.1). In response to increasing costs, many home care programs have implemented cost containment mechanisms such as restricting the number of hours of care, the number of visits or services, changing eligibility criteria and training family members on how to provide care. There has also been a trend to using unregulated home care providers such as personal support workers or health care aides to perform many of the tasks done previously by nurses (Sharkey, Larsen & Mildon, 2003).

Figure I.1 Total Health Expenditure by Use of Funds, Canada, 2006 ($ Billions)

(source: CIHI 2008, National Health Expenditure Trends 1975 – 2008 p.15)