Head to head: Are employers responsible for employee mental health in an uncertain economic environment?

Even during a challenging labour market, it’s important for employers to invest in employee mental-health support, says one expert, while another calls it a shared responsibility, highlighting how workers can be proactive in managing their own mental health.

While employers often look for ways to cut spending and reduce costs during uncertain economic times, it’s more important than ever to continue to invest in employee mental health and psychological health and safety. This may seem counterproductive — why should employers invest in mental health when the labour market is retracting and employees become more disposable and easier to replace?

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Research we conducted for the Mental Health Commission of Canada in 2018 found a significant return on investment when employers attend to their employees’ mental health and addiction needs. These returns come in the form of lower turnover, higher intent to stay with an employer, improved productivity and lower rates of absenteeism and sick leave. Intangible benefits include improved satisfaction with work and work-life balance, as well as improved organizational citizenship and worker commitment.

Furthermore, cutting back on mental-health supports and reducing efforts to improve psychological health and safety could offer some short-term savings for an organization, but can also negatively impact its reputation as a quality employer and business, threatening its capacity to recruit talent and build capacity in the future. The costs and the risks far outweigh the potential savings. Our research suggests the potential ROI in addressing the mental-health needs of employees could be between two- and 12-fold.

Employers that want to build a productive and innovative workplace with a competitive advantage will want to maintain their focus in psychological health and safety by attending to the mental health of their employees. They’ll take steps to create a flexible and inclusive workplace culture where diverse employees can thrive and ensure employees feel appreciated and valued at work.

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Attending to employees’ mental-health needs provides substantial returns and should be preserved, regardless of the state of the economy and other labour force adjustments.

Dr. Lisa Votta-Bleeker, chief executive officer, the Canadian Psychological Association

In short, not solely. Employees’ mental health in times of economic and political uncertainty is a shared responsibility between employers and employees.

Uncertain economic times, marked by high living costs, inflation fears and job insecurity, create significant stress, leading many workers to prioritize financial stability and demand greater employer support. These stressors can directly impact mental health, how people work and an organization’s overall productivity and bottom line.

To this end, most employers can do more in terms of providing adequate evidence-based mental-health coverage to their employees. According to the 2025 Benefits Canada Healthcare Survey, among employers that provide mental-health coverage, 47 per cent have an annual maximum lower than $1,000, while 40 per cent have a maximum between $1,001 and $4,999 and 13 per cent exceed $5,000. The CPA’s recommended level of coverage is between $3,500 and $4,000 per year, which can allow employees to get the care they need when they need it and contributes to an earlier return to work.

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For issues not related to the workplace, employees can consider talking to their employer as a problem arises. Employers may then be able to offer short-term leaves, reduced work hours or adjusted workloads. Employers should be committed to creating a workplace culture that empowers and supports staff — and employees can also look for ways to build positive relationships and contribute to the culture.

Outside of the workplace, employees can also be proactive in addressing their own mental health. Are they getting enough sleep? Do they have support? How is their work-life balance? Recognizing signs of stress and setting boundaries can allow people to better deal with issues and prevent them from worsening.