Canada’s affordability crisis now extends beyond the cost of living to the cost of death.
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The financial burden of funerals and other end-of-life services has become so great that families are increasingly unable to give their loved ones a proper farewell. This is especially true for those whose faith requires ceremonies and customs to honour loved ones.
The Canada Pension Plan (CPP) Death Benefit — capped at $2,500 — was designed to help. Still, this sum, also considered a taxable benefit, has not kept pace with either inflation or the actual cost of funerals today. A growing number of unclaimed bodies in morgues across the country underscore this heartbreaking reality.
Ontario has seen the number of unclaimed bodies increase nearly tenfold from 130 in 2008 to 1,183 in 2023. This staggering rise reflects a broader crisis: Canadians increasingly cannot afford to die. In the past four years alone, numbers in major urban centres have more than doubled, with some cities like Hamilton experiencing a fivefold increase.
As a result, municipalities are often left with the responsibility — and cost —of ensuring these individuals receive the dignity of a proper burial. In Hamilton alone, the city spent $183,000 in 2023 on burial costs for unclaimed bodies. This financial toll on local governments is unsustainable, as the number of unclaimed bodies continues to rise.
Like many small business owners, funeral directors and cemetery operators work to keep their costs down, but rising inflation has made price increases unavoidable.
Further, according to our research, only 38% of consumers have a good idea of what they should expect to pay in end-of-life care. In addition to costs you might expect, like burial plots, caskets and memorial services, there are many unforeseen costs like legal and administrative fees such as will probate, executor fees, and estate administration, as well as estate and asset management costs like taxes.
Yes, even in death, there are taxes. In some cases, these figures reach $15,000 or more, especially for those whose faith requires ceremonies and customs to honour loved ones. Families without the means to cover end-of-life costs are left in impossible situations, even with assistance from the meagre CPP Death Benefit.
Before 1997, this benefit was $3,580 and indexed to inflation. In 1997, however, Jean Chretien’s federal government decreased it to $2,500, where it has remained for more than a quarter century. Had the benefit remained indexed to inflation, it would be approximately $6,000 today, covering most of what the average Canadian spends on end-of-life arrangements.
Tax is another consideration. With the CPP Death Benefit considered income to whoever claims it, it too is taxed. The government can and should eliminate that tax. And it should also stop charging GST/HST on funeral services.
There may be a perception that only a homeless individual estranged from family would go unclaimed, but that is simply not the case. These individuals are so much more than a faceless statistic; they come from all walks of life and are valued members of our communities.
Each one mattered to their loved ones, contributed to society in their unique way, and deserved to be treated with dignity in death. But there are very real costs associated with death, and those in a financially precarious position may worry about how much they would be taking on if they claim the body of a loved one.
It’s important to note the potential financial implications, for example, if an individual is on social assistance, the Death Benefit may be classified as additional income, triggering a clawback. This results in a reduction of their social assistance payments, effectively further reducing the benefits they receive and leaving them to shoulder more of the associated costs themselves.
Some provinces are making progress. Newfoundland and Labrador recently doubled its funeral benefits in response to the growing number of unclaimed bodies. If provincial governments can take action to ensure everyone receives a dignified burial, regardless of financial circumstances, so can the federal government.
The CPP Death Benefit must be raised to reflect modern end-of-life arrangements and funeral services should be exempt from taxation. These initiatives would alleviate the financial pressure on families, provide more options for loved ones and reduce the number of unclaimed bodies, while easing the burden on municipalities.
Canadians should not be left to wonder if they can even afford to die.
Canada must recognize the severity of this issue and raise the CPP Death Benefit to ensure every Canadian, regardless of financial standing, can receive a dignified farewell.
Increasing the CPP Death Benefit and eliminating taxes on funeral services would restore the basic human dignity that every person deserves.
Heather Kiteley is the president and CEO of Guaranteed Funeral Deposits (GFD)