How are future care costs calculated in a Canadian personal injury claim?
Future care costs are calculated as the present value of all projected future medical and personal care expenses. An occupational therapist or physiatrist prepares a Future Care Cost Report itemizing all anticipated treatments. An economist then applies a discount rate (typically 2–4%) to convert future dollars into today's dollars — because a dollar today is worth more than a dollar in the future.
What is included in a Future Care Cost Report?
Ongoing physiotherapy, chiropractic, massage, psychological counselling, prescription medication, home care attendant hours, home modification costs, adaptive equipment (wheelchair, lift, hospital bed), vehicle modifications, future surgeries, and recreational therapy. The report is prepared by a certified life care planner or occupational therapist and supported by treating physician letters.
What discount rate is used for future care in Canada?
The discount rate reflects the net rate after inflation. In Ontario, courts have used discount rates of 2.5–3.5% for future care costs. Other provinces vary. The rate is often contested by the parties' respective economists. A lower discount rate produces a higher present-value award.