The Knowledge Bureau Network: Decline in Life Expectancy is Eye Opening

From the Desk of Evelyn Jacks, President, Knowledge Bureau

Statistics Canada has reported Canada’s largest drop in life expectancy since 1921 – a seven-month decrease.  It is an eye-opening study that brings to mind the importance of new conversations about medical,  disability and estate planning during the busy tax season, especially for younger people. 

Specifically, average life expectancy in 2020 was 81.7 years, down from 82.3 in 2019.  And, while COVID was considered to be the main cause of the decline in life expectancy, it was not the main cause of death.   

COVID-19 was, in fact, the third leading cause of death in 2020. Cancer was first and heart disease second.  Unintentional accidents were the fourth leading cause of death.  The others included:

• Stroke
• Chronic lower respiratory disease
• Diabetes
• Influenza and pneumonia (which actually declined in comparison to 2019 to the lowest rate in over 20 years)
• Alzheimer’s disease
• Chronic liver disease

Seniors aged 65 and older accounted for over 94% of all pandemic deaths in Canada, which is a total of 16,151 linked directly to the disease.  More than half of all pandemic deaths occurred in those over age 84 and women died more frequently of COVID than men did.

It is shocking, however, that the mortality rate for those aged 25 to 39 was the highest in over 20 years.   Looking closer, however, only 50 deaths were related to COVID.  Increases in deaths due to other causes including substance-related death were observed. There were notable increases in deaths due to accidental poisonings including overdoses, alcohol – induced deaths and suicides.

It is a heartbreaking and stark reminder of the many issues to address at tax time this year, triggered by the pandemic losses:

• To remind family members that the costs of detox or rehabilitation care can qualify as a medical expense
• That the disability tax credit can bring financial relief for those markedly restricted by severe diseases listed above
• That funeral expenses are not tax deductible
• That CPP disability, and survivor benefits are available, as well as a lump sum death benefit
• That income relief may be available by way of EI Compassionate Care benefits or Canada Emergency Sickness or Caregiver Benefits
• That will and estate planning is as important for those under age 40, although traditionally, it is rarely discussed with this cohort

Tax and financial professionals who are on the front lines of essential financial services must have difficult, but important conversations about end-of-life planning.  They are easier to have when everyone is healthy.

Disability planning is as important.  We know that there are hundreds of thousands of backlogged surgeries for those living with cancer, heart disease and other serious illnesses.  There are financial implications during the long wait.  Access to tax deductions and credits can help families living with the stress of serious illness.   

Additional Educational Resources:  Coming next month! A newly updated course on Planning with Trusts.