Thousands of senior living units remain unoccupied in Canada as operators work to bring the industry closer to where it was before the onset of the COVID-19 pandemic.

The country's senior living occupancy rate hovers around 85%, according to the most recent published numbers from Cushman & Wakefield, still below the more robust rate of over 90% as seen in 2018.

Industry representatives expect some improvement in the numbers slated to be released next month with Cushman & Wakefield's annual Seniors Living Report. The industry has relied on the report since the Canada Mortgage and Housing Corp. discontinued its annual report in 2021.

In Montreal, the senior housing sector saw its 95.4% median occupancy rate in 2018 decrease to 84.5% in 2021 before rising back to 88.4% in 2023. Toronto's rate fell from 93.2% in 2018 to 85.5% in 2023, while Vancouver’s senior living occupancy rate dropped from 97.6% rate in 2018 to 90.9% in 2023.

Retirement housing companies in the neighboring provinces of Ontario and Quebec, home to about 60% of Canada's population, view the turmoil differently, according to interviews with representatives of their largest retirement home industry associations.

Quebec, considered by some as a model for retirement housing because of the popularity of such homes among a younger demographic, has seen some owners express grievances at a time when roughly 100 retirement homes closed last year, according to Hans Brouillette, director of government and public affairs for the seniors housing association known as the Regroupement québécois des résidences pour aînés, or RQRA.

Ontario, for its part, has expressed a more optimistic view, as reflected in an interview with Cathy Hecimovich, chief executive officer at Ontario Retirement Communities Association.

In Quebec, vacancies have been fueled by rising costs that have led more elderly Canadians to opt to stay at home rather than pay for a room in facilities, according to industry representatives.

“Inflation led our operating costs to rise to a breaking point and seniors cannot necessarily pay more," Brouillette said. "The government has also issued regulations that further raise costs."

Quebec officials recently offered $200 million in funding to stabilize the sector, but that has proven insufficient to prevent some senior housing owners from planning conversions to apartment properties. Some Montreal boroughs have responded by passing bylaws that intend to ban such transformations, leading the RQRA to challenge the new rules in court.

No other city bans conversions of retirement homes and the ban will prove counterproductive, Brouillete argues, as the restrictions could reduce the value of the property and exacerbate financing issues. The operators will then have to pass their higher financing costs onto the residents, Brouillette said, resulting in "the exact opposite of what the boroughs intend."

Quebec's senior housing sector has faced increased regulations since 2014, when 32 residents of a retirement home in Rivière-du-Loup died in a fire, prompting requirements for sprinklers and infrastructure upgrades. The industry also faced increased scrutiny during the pandemic when approximately 4,000 elderly residents perished in Quebec senior care facilities.

Ontario, meanwhile, has only seen one major senior living facility close — the 323-unit Chartwell operation in Mississauga — according to Hecimovich, the head of Ontario's retirement association.

Ontario has a “stronger match between supply and demand" than Quebec, according to Hecimovich.

Hecimovich also credits provincial Minister for Seniors and Accessibility Raymond Cho for Ontario's comparative resilience.

“He has been a champion of the sector. During the pandemic we got an unprecedented amount of funding, so that has really helped bridge through successfully,” she said.

Still, higher costs have become problematic, Hecimovich concedes.

“We have a similar situation across Canada and the (United States). The costs of construction have gone ballistic, the cost of operating like food and insurance has shot up," as well as labor, Hecimovich said. "We are paying our people more, as we should be, but all the costs have gone up dramatically. So have the costs that seniors have to pay.”

Ontario is also the only Canadian province with an independent body overseeing the sector: the Retirement Homes Regulatory Authority.

“It is a good thing to have an independent third party that comes and oversees and follows up on complaints,” she said. “We are proud of this because seniors and families can look to that and feel a sense of assurance and confidence, it’s not the wild west here. We are fully regulated and inspected.”