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Mental health challenges are costing the Canadian economy hundreds of billions of dollars a year – most of which is paid by businesses – but there are small steps employers can take to lower their bills.
According to a new study conducted by the CSA Public Policy Centre, mental health challenges cost the Canadian economy $180-billion annually, up from an inflation-adjusted $67-billion in 2011. The report also projects costs ballooning to $600-billion by 2050, at which point it would represent 20 per cent of Canada’s projected GDP.
“This is a conservative estimate,” says Dr. Olga Morawcynski, CSA Public Policy fellow and chief executive officer of Heal-3 Inc., a Toronto-based company that provides employee mental health programs.
Researchers arrived at that number by tabulating the direct costs of mental health supports and the indirect costs paid by employers, the health care system, emergency services, homelessness supports and the criminal justice system.
Of the estimated $180-billion annual mental health bill that Canadians pay collectively, the study suggests 61 per cent, or $110-billion, is paid by employers in the form of disability leave, workplace accommodations, legal, compliance and other related costs.
“I think that number alone should really get us to question what role workplaces should play moving forward in supporting mental health and well-being, because there’s quite a clear business case,” Dr. Morawcynski says. “That role should be far more significant than it is right now for many employers.”
According to the study, 86 per cent of what employers spend on workplace mental health challenges is allocated to managing problems after they arise, with the remaining 14 per cent put toward prevention.
“What we included in this bucket is things like mental health training, psychological health and safety programs, EAP [employee assistance programs] and benefits,” Dr. Morawcynski says. “These are the types of supports that could decrease the risk of mental harm or provide the supports necessary for employees not to have to go on leave.”
A 2019 Deloitte study on the preventative mental health supports of seven companies found each dollar invested had an average return of $1.62. A 2016 World Health Organization study showed that employers saw a $4 return for every $1 invested in anxiety and depression treatment.
“If we account for inflation in [mental health care] costs, it’s probably higher now,” says Alex Boross-Harmer, manager of mental health promotion and training for the Canadian Mental Health Association (CMHA) Toronto branch, which administers preventative mental health training programs at Canadian workplaces. “Trauma-informed cultures of care, building more compassionate workplaces, those are some of the workshops that we provide at CMHA Toronto.”
Employers have always had to bear at least some of the burden of mental health challenges among their staff, but Mx. Boross-Harmer says those costs are skyrocketing because of inflation. They explain that rising costs are creating more of a mental health strain on individuals, while creating more financial barriers to accessing care.
“When you can’t afford diapers, eggs, milk, feeding your kids, you’re going to have more stress, and that’s not necessarily showing up in a therapy bill, but that might show up in absenteeism, presenteeism, disability leave, disability claims and employee retention,” Mx. Boross-Harmer says.
A growing number of Canadian employers are offering support to staff experiencing mental health challenges, but the data suggests those programs seek to address existing problems rather than prevent them in the first place.
“I am seeing an increase in employers having employment access programs or disability supports,” Mx. Boross-Harmer says. “What that ultimately looks like is a Band-Aid for a gaping wound, where employees are being told to go seek their EAP or access mental health services, when instead what we would love to see as a mental health organization is more cultural changes.”
Instead, the research suggests employers stand to save in the long run by investing in more preventative measures.
“Many organizations still view mental health supports as a ‘nice-to-have’ thing and a perk rather than a necessity,” Mx. Boross-Harmer says. “The reality is it’s a core business and workforce sustainability issue – not nice to have, but essential.”