Tuesday, September 23, 2025
During a recent webinar hosted by ReNew Canada—with support from Accuracy Canada—a panel of experts discussed how Canada can meet the challenge of scaling long-term care facility build projects to ensure our growing elderly population can age in safety with as much independence as possible.
Canada’s long-term care sector has faced a reputational challenge. Domestic, institutional investors don’t always participate due to perceived risks and attitudes about profiting from elderly care. What are the key factors we need to address to attract private capital into this space and how can we better demonstrate the stability and long-term value of these investments?
Melissa Di Marco (Accuracy Canada): I believe the key to attracting private capital really lies in reframing long-term care. It’s educating the population to understand that long-term care is a necessity. It is not just essential infrastructure, but it is important to the balance of our social needs as a nation. So, what does that mean? It’s stable, long-term cash flows, tied to government payments that could make projects far less volatile than originally perceived and there is a balance in order to get there. There is a balance in what private capital can bring to the market and what public initiative and policy can bring to the table to make these projects more viable.
Ralph DeSando (Yorkville Asset Management): Our group owns and operates over 60 long-term care homes in Ontario and our challenges over the last 13 years echo what Melissa said.
Long-term care has never been seen as essential social infrastructure. With respect to gaining investment for this sector there have been issues around reputational risks of being associated with long-term care investment. Taking that one step further, to this day, not every Canadian bank lends to the long-term care sector, which is surprising. I think the messaging at all levels of governments, not just the provincial government, but the messaging from the federal level should be that investing in this sector both from public and private sources is beneficial for everyone and that it can be done so that we are achieving the enhancements in improving elderly care, we’re achieving the fiscal responsibility that we need to achieve as a government, and such that all parties are successful.
Sean Morley (Fasken): I think at a high level the challenge to helping facilitate investor participation in these projects is aligning and defining what public policy goals are with respect to long-term care facilities, so that the right framework can be created such that the public sector is in a position where it can—in a defensible way—demonstrate that public policy goals are being achieved and the private sector is able to understand and deliver on those public policy objectives. I think therein lies the beginning of a partnership.
Canadian institutions can demand a high risk-weighted rate of return. How can we align investor expectations and create a more balanced value proposition where private capital sees long-term care investments as both fiscally and socially responsible?
Ralph Desando: In my experience, we’ve had a significant challenge in obtaining institutional investment in the long-term care sector, and it is the significant component of the reputational risk that is out there and what they want to avoid. Our approach is to focus on education and transparency with our investors and educating them that the risk-weighted rate of return is not going to be the same as say in the technology sector. With consistent messaging telling institutions it’s okay to be part of this sector, that it’s required for social infrastructure, you’ll see that the right institutions that have that investment profile and return profile who will enter the sector more often. We are starting to see some of that, but the messaging needs to go further. It really is working together to alleviate the pressure on our entire healthcare system. I think we will see that start to change by having boards and investment committees in Canada demand this type “social infrastructure” form part of their investment profile.
Sean Morley: I’d suggest that there’s already a track record in the healthcare sector of public-private partnerships working well. One only has to look at the number of hospital projects that have been delivered in the province of Ontario over the last 15 years, many of them done on a design build finance maintain model, making the participation of lenders from the private sector has been an important part of that delivery. So there are some obvious differences between a publicly-owned hospital and a long-term care facility that is going to have private interests at play, but some of the same framework I think can be used and I’d look at the performance metric systems, the requirements to achieve certain standards of care which has worked reasonably well in the hospital sector. So setting out clear performance standards that operators are required to meet with either incentives for achieving those metrics, or in certain circumstances, deductions for failing to achieve the desired outcome.
Melissa Di Marco: I would use the example from south of the border, where they view long-term care as part of a broader social infrastructure portfolio. And so, they assess it not just on the short-term return on investment but also on some of those ESG alignment criteria. There’s a long-term demographic demand, a stable yield, and I think Canadian institutions can really learn from that kind of holistic lens. There are also examples in countries like the Netherlands and France, who have managed to normalize these blended models, where in some cases the state remains the funder and the regulator, while the private sector builds and operates the long-term care homes, under very strict KPIs. And so Canada could adopt a similar framework that focuses on a performance-based contract as previously mentioned, that allows for there to be a much more stable perception for investors in the long term, eliminating the risk and return expectations, but using it as more of a holistic portfolio of a different asset class of social infrastructure.
While it’s important to ensure safety and quality through government oversight, too much interference can stifle innovation and efficiency. How can we achieve the right balance—reducing unnecessary delays without compromising the standards and oversight that guarantee quality care?
Sean Morley: As I said earlier, I think we already have a model that’s working well in the healthcare sector that we should look to, to borrow from to advance the construction of long-term care facilities and that is the P3 model, and you can look at it as either the traditional P3 model that’s been in the market for many years or the more recent and evolving progressive design-build model. You have to be careful about how that model gets brought over into the long-term care space because I think there are some problems that the traditional P3 model was designed to solve in the public sector space that maybe are not problems that need to be solved in the long-term care facility space, so you have to be careful about what parts of the model that you import. The basis of the traditional P3 model—was shifting risk to the party that can best bear it in order to have schedule certainty, price certainty, and demonstrate value for money for taxpayers. The equation in the long-term care space is perhaps a little bit different because ownership at the end of the day of the asset generally doesn’t rest with the public. So I think I would focus on what are the barriers to getting construction done quickly? And my hypothesis would be that that lies in reducing regulatory hurdles relating to permitting approvals. And then second, in terms of ensuring operational efficiency or perhaps more importantly that the public policy objective goals that are articulated by government, that they’re clearly articulated and that they’re capable of being measured.
Melissa Di Marco: The sweet spot is really it’s leaning into performance-based oversight. So instead of having the public micromanage design details, governments should focus on the outcomes: What is the quality of the care? What are the safety standards necessary to allow for these facilities to work better? When it comes to construction timelines for example, let the private partner innovate around how to get there, so we get there in terms of building some of these assets quickly. The private partner has the capacity, and this is where we put the risk in the right location. The most critical hurdles are inconsistent approvals associated with health and infrastructure regulations and long waiting times for licensing. Getting out of the way in terms of approval authority can fast-track the procurement and design review process and give the private sector the chance to innovate on how to get there quickly because there is a need, it’s coming quickly, and government doesn’t have the solution only on their own and neither does the private side for that matter.
Ralph Desando: We’ve been able to build five projects in under 24 months from start to finish and have three more projects in the ground today that are larger than the other ones and will be built and operational in 30 months all as a result of the removal of regulatory barriers by the Ontario government. And I consider in many ways what we do to be a P3, maybe not so much the traditional one that Sean discussed, but we are a public-private partnership. We have successfully built eight that are the standards of care that have been improved because of those new homes. When it comes to the efficiency that Melissa talked about, I totally agree. With the innovation that the private sector brings, coupled with the regulatory standards that are being set and met, there is value in that partnership.
John Tenpenny is the Editor of ReNew Canada.
[This article appeared in the September/October 2025 issue of ReNew Canada.]
Featured image: The six-storey Lakeridge Gardens Long-Term Care Facility in Ajax, Ont. was built in under 18 months. (Lakeridge Health)
