Nav Dhillon at her home in Vaughan, Ont., on Tuesday. Ms. Dhillon negotiated a mutual termination with her employer by raising concerns that her role responsibilities had materially changed after layoffs.Sammy Kogan/The Globe and Mail
Nav Dhillon learned about the layoffs on her team between diaper changes and juggling nap time for two young children. Just months into her maternity leave, the Toronto-based accountant was one of the few in her department whose position was left untouched.
But even after surviving successive rounds of layoffs, Ms. Dhillon, 33, said she still felt nervous about her footing with her employer.
“You see how the management starts speaking, more meetings happening,” she said. “Whispers about change coming … there was a lot of uncertainty.”
Instead of waiting around, she went ahead and asked for a mutual termination, and negotiated her own terms, which, alongside six months of emergency savings, allowed her family to stay comfortably afloat for at least a year. But this also required sacrifices such as postponing a house purchase, paying for a life-insurance policy out of pocket and slowing investments.
Many Canadians are finding themselves straddling the same shaky ground, holding onto their jobs while watching a growing number of people around them get laid off – a situation that brings distinct challenges and financial-planning hurdles.
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Nearly 40 per cent of Canadians say they fear job loss in their household, according to the quarterly MNP Consumer Debt Index published Monday – up about two percentage points from late 2025. It was one of few indicators that worsened across the index, which measures Canadians’ attitudes toward their debt and ability to pay their bills and stayed relatively flat over all compared with last quarter.
“Trade, global wars … people fearful that AI’s gonna take over their job,” said Grant Bazian, president of MNP’s insolvency practice. “People who are uncertain, get conservative – they just sort of hunker down and wait for the uncertainty to pass.”
Nearly three-quarters of survey respondents said they were cutting back on spending, and 84 per cent said they were more cautious about taking on new debt. The data were compiled on behalf of MNP by Ipsos from March 10 to 11 across a sample of interviews with 2,000 Canadians.
But while the first impulse for many people facing the prospect of a layoff might be to bulk up cash savings, being overly cautious can mean missing out on financial growth opportunities. This worry often stems from a lack of awareness about employment rights, which may result in passing up additional income.
“Most Canadians end up leaving money on the table,” said Tara Vasdani, an employment lawyer and founder of Toronto-based Remote Law Canada.
Many don’t realize that severance packages are typically negotiable, which can ease some anxieties. “The number on the page is often not their full settlement,” she said.
In Ms. Dhillon’s case, with most of her department gone, she realized she would be expected to absorb a massive increase in responsibilities upon her return from maternity leave. She negotiated a mutual termination by raising concerns that the role responsibilities had materially changed.
Instead of accepting the first offer, she negotiated for more money and adjusted the termination date, “which gives me more time to access work benefits and a smaller gap on the résumé,” she said.
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However, factoring business severance payments into an emergency fund is not always advisable. A three- to six-month buffer should be extended to nine months for more volatile industries, according to Owen Winkelmolen, a certified financial planner based in London, Ont.
“Businesses go bankrupt, and there isn’t a lot of money left for severance,” he said. While employees will generally receive at least the legal minimum, payouts might get delayed.
At the same time, Mr. Winkelmolen cautioned against being overly conservative when increasing cash savings. “Cash doesn’t provide a great growth rate,” he said, adding that the goal is to strike a balance between safety and continued investing in tax-advantaged accounts.
For some, saving three to six months of expenses isn’t feasible. Jackie Porter, a financial planner based in the Greater Toronto Area, recommended temporarily moving investment gains into cash within a registered retirement savings plan to create a buffer that isn’t exposed to market volatility, allowing flexibility if funds are needed.
She also advised putting severance pay into an RRSP when possible to maximize the tax benefits. Funds can later be withdrawn, often at a lower tax rate if income drops, she said.
While Ms. Dhillon was able to negotiate a larger severance and avoid pausing investments, it wasn’t an all-around win. Getting laid off – even on her own terms – meant having to postpone upsizing the growing family’s home. “You don’t have employment income to show when applying for a mortgage,” she said.
Agreeing to a termination also meant losing life-insurance coverage from her employer, which was a risk with young children. “We decided to buy life insurance separately so whatever happens at our job, we’re locking in a rate while much younger,” she said. Getting laid off also drove her to develop other income streams, including monetizing her social media by sharing tips for other moms navigating financial uncertainty.
But going through the layoff itself and knowing she can negotiate the terms of a layoff has given her long-term peace of mind. “You should always fight back,” Ms. Dhillon said.
