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Growth in health-care costs affecting Canadians' well-being: study

Canadians are better off than they were 30 years ago, but rising health care costs are slowing them down, a new study suggests.

The Centre for Living Standards says since 1981, there's been a dramatic increase in per-capita consumption and wealth across the country.

But that's being held back by declines in economic equality and security, says the Ottawa-based research institute's 2010 index of economic well-being.

What's posing the greatest risk to Canadians' financial security is changing, the study's authors conclude.

"Canadians became more secure (between 1981 and 2010) in terms of the risk from single-parent poverty and old-age poverty, but these gains were more than offset by the fall in security from the financial risk of illness and of unemployment," wrote Lars Osberg and Andrew Sharpe.

They note that while the financial risk of illness is lower in Canada than it is in countries without universal medical care, private expenditure on health care in Canada has doubled as share of disposable income since 1981.

"This development can be considered a deterioration of the economic security of Canadians," they wrote.

"Increased private health expenditure imposed by poor health thus represents a growing financial burden for low income Canadians."

The index was developed in 1998 as a broader way to measure well-being than the more commonly used per-capita gross domestic product figures.

By taking into account a number of variables in the domains of per-capita consumption, wealth, economic security and economic equality, it's a more accurate reflection of how individuals are doing, the centre says.

The index took a tumble during the recent recession, as wealth, economic security and equality fell, though consumption continued to rise.

The index is now growing at a faster pace than GDP, although both are only recovering slowly.

In 2010, the index for Canada was at 97.7 per cent of its value in 2008, while real GDP had only recovered to 96.5 per cent of its 2008 value, the study says.

"Whereas the recovery has seen an increase in wealth, the slow pace of this recovery can be attributed to stagnation in economic security," the study says.

The study found Alberta and Newfoundland had the highest levels of economic well-being in 2010, while Nova Scotia and New Brunswick had the lowest levels.

"As in the case of Canada as a whole, however, growth in economic well-being was held back by declining economic security," the study says.

While all provinces saw their indices rise since 1981, British Columbia recorded the slowest rate of growth.

B.C. also saw the largest decrease in its index of equality and in 2010, its score in that domain was the lowest among the provinces.

A companion study of index rates among OECD countries found that in 2009, Canada ranked ninth out of fourteen countries, with Norway taking the top spot.

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