The Progressive Conservatives (PC) under Tim Hudak say they will add an additional 5,000 long-term care beds on top of the 35,000 that are already coming on stream. There is no reason to suggest that Hudak will handle this any different than his predecessor Premier Mike Harris did.
Historically, the relationship between the Conservatives and the long-term care corporations has been very tight.
In 1998, when the government announced a $1 billion would be spent to create 20,000 new long-term care beds in Ontario, the PC’s received large campaign contributions from the top three private for-profit long term care corporations operating in Ontario: Extendicare, Liesureworld, and Central Park Lodges Real Estate Income Trust (CPL REIT)
In 2001 when the tenders were announced, two thirds of the new beds were awarded to for-profit operators. Extendicare, Leisureworld, and CPL REIT received 39.5 per cent of the contracts.
Upon the completion of construction, all the sites received the provincial per diem funding for all beds in operation just like the other facility operators but also continue to receive an additional subsidy of up to $10.35 per bed per day, payable for the next 20 years to offset the cost of borrowing and construction. That is $75,550.00 per bed over 20 years.
This was an unprecedented subsidy of the construction costs for the private sector. After 20 years the facility operators will own the new building with no further obligation to the taxpayers.
In 2001 the private for-profit nursing homes began to operate the majority of LTC home beds in Ontario.
In 2003, Chartwell Real Estate Income Trust (REIT) was formed by consolidating three other private long-term care home operations and according to its trust document was established for the purpose of investing in a portfolio of income-producing seniors facilities. It has grown into one of the largest private long-term care providers in Ontario.
According to information obtained by the Ontario Health Coalition in 2008 through a Freedom of Information request, the lowest level of care is provided in the for-profit nursing homes compared to the not-for profit and municipal facilities.
The latest available data shows Ontario pays 36 per cent more in accommodation rates for long-term care than other provinces.
Most of the large private for-profit operators are structured as a Real Estate Income Trust (REIT) so they don’t pay any corporate taxes.
There is a critical need for long term care beds in Ontario. To get the most efficiency for public funding, Ontario needs to invest in not-for profit and public long term care beds.