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The cost of COVID-19 for Canadian companies

Occupational health · Jun 24, 2021

In the last year, COVID-19 statistics like new cases, infection rates and vaccination rates have become central in our lives. Understandably, the focus of this data has been the burden on Canada’s healthcare system. But what about Canadian companies? 

What do the figures say about the pandemic’s impact on employees? And employers? How should Canadian businesses react to ensure their workforces have the best working conditions in a post-pandemic world? 

Below, we investigate some of the key statistics and analyze what they mean for Canadian employers.

Employees’ mental wellbeing has suffered

In a recent survey, half of Canadian employees said their mental health had been negatively impacted by COVID-19.1 Relative to pre-pandemic levels, there has been a significant decrease in employees reporting excellent or very good mental health. Among those who continued working throughout the pandemic, this figure stood at 55% in July 2020 compared with 68% the previous year.2

The consequences of this decline in mental health have been significant. Those reporting poor mental health are up to 4 times more likely to engage in greater levels of substance abuse, with 16.2% of Canadians saying they have consumed more alcohol since the onset of the pandemic.3 

Mental health can also impact how employees perceive their place of work. While over 6 in 10 Canadians say their satisfaction, trust and level of engagement with their company has stayed the same since the pandemic, 27% say their collaboration with co-workers has decreased and 24% consider themselves to be less productive.4 Since the outbreak of COVID-19, those working for medium or large organizations (100+ employees) are more likely to say they are less engaged with their company than those working at smaller companies.5

To address this fallout, employers should consider offering more robust mental wellness programming, Preventive Health Assessments to screen for mental illness, and access to 24/7 virtual healthcare so that employees can get support whenever and wherever they need it. 

Most Canadian companies are actively supporting employees

Generally speaking, Canadian companies have reacted positively to the challenges of employee mental health. Since the beginning of the pandemic, 56% of employers have increased overall wellbeing initiatives for their workforce. Over a third have offered new resources and tools, while 19% have expanded existing wellbeing programs. And nearly one in five employers has increased support for its employees’ financial wellbeing.6 

Pre-pandemic, Canadian companies were already increasingly affected by mental health issues among employees. In 2019, 28% of US and Canadian organizations cited mental or behavioural health issues as one of their costliest healthcare conditions. Given such a cost, preventive action had become a priority for many Canadian organizations, with 79% offering mental health coverage in 2019 compared with just 40% in 2014.7 It is no surprise, then, that employee wellbeing initiatives have become even more important since the beginning of the pandemic.

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The cost of other health conditions is still to come

Since March 2020, the conversation around healthcare has been dominated by COVID-19. The burden on public health has been significant, with the average COVID-19 hospitalization costing almost $23,000 per stay.8 But there has also been a significant burden on those suffering from other health conditions because their treatments may have been delayed or ignored. 

In the long term, Canadian companies may have to bear the brunt of this cost.

In mid-April 2020, visits to emergency departments in Canada declined by almost 50%, representing 25,000 patients a day. Between March and June 2020, overall surgery numbers fell 47% relative to 2019. And in that same period, the number of patient visits to all physicians dropped by 13% to 33% in the three provinces where data is available (Nova Scotia, Ontario and Manitoba).9

At the same time, employer-provided medical benefit costs in Canada grew significantly faster than inflation last year. In 2021, they are expected to increase by 7%.10 Why such a rise? Because Canadians face multiple health risks, and therapies are increasingly expensive. Today, the top three conditions driving claims in employer-backed healthcare plans are musculoskeletal, cardiovascular and mental health. To mitigate these risks, employers need to address principal risk factors including occupational risk, poor stress management, excessive alcohol or drug use, and insufficient sleep.11 Many of these have been accentuated by the pandemic. 

How do we optimize working conditions post-pandemic?

Beyond healthcare, the pandemic has considerably impacted employees’ finances and lifestyle. Between February and May 2020, the employment rate in Canada fell by 12%, with low-income workers more affected by redundancies than any other group.12 Well over a third of Canadian employers adjusted their salary-increase plans in 2020, and 43% intend to do the same thing in 2021 because of COVID-19. Overall, 45% of companies plan to reduce raises, while 35% plan to suspend raises and freeze salaries.13 In this context, it is more important than ever for companies to address employee engagement. One proven way to help achieve this is through employee wellness offerings. Among companies providing wellness programs, 67% report increased employee satisfaction and over half note decreased absenteeism.14

The shift to telecommuting has been a defining characteristic of the pandemic for employees, too. From early 2020 to June 2021, full-time remote working more than tripled in Canada to stand at 72%.15 This trend is expected to be long-term, with 85% of employers planning to retain home working as an option for employees.16

While most Canadian employees now feel their company offers them the tools they need to succeed in their job, some 72% believe the “digital divide” will be accentuated by the pandemic.17 Access to technology-driven social wellness programs that bridge this divide (think company-wide fitness challenges, mindfulness programs and interactive cooking classes) is set to become a critical success factor for employees, making this yet another area where Canadian employers will be expected to step up and support their workforce in the post-pandemic world. 

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1 Leger and Teladoc Health. 2021. Follow-up study to 2019 International Mental Health Study.

2 Statistics Canada. 2020. Canadian Community Health Survey 2019” and Canadian Perspectives Survey Series 4.

3 Statistics Canada. 2020. Canadian Perspectives Survey Series 4.

4 Leger and the Institute for Public Relations. 2020. How Engaged Are Employees During COVID-19 Survey

5 Leger and the Institute for Public Relations. 2020. How Engaged Are Employees During COVID-19 Survey 6 Gallagher Canada Inc. 2020. Better Perspective: Benefits Strategy & Benchmarking Survey, 2020 Executive Summary & Strategic Insights | Canada Edition

7 International Foundation of Employee Benefit Plans. 2019. Workplace Wellness Trends 2019 Survey Report.

8 Canadian Institute for Health Information. 2021. COVID-19 Hospitalization and Emergency Department Statistics, 2019–2020 and 2020–2021. Ottawa, ON: CIHI.

9 Canadian Institute for Health Information. 2021. National Health Expenditure Trends, 2020. Ottawa, ON: CIHI.

10 Aon. 2020. 2021 Global Medical Trend Rates Report 

11 Aon. 2020. 2021 Global Medical Trend Rates Report

12 Canadian Poverty Institute. 2020. The Employment Impact of Covid-19 on Canada’s Equity Seeking Workforce

13 Gallagher Canada Inc. 2020. Better Perspective: Benefits Strategy & Benchmarking Survey, 2020 Executive Summary & Strategic Insights | Canada Edition

14 International Foundation of Employee Benefit Plans. 2017. Workplace Wellness Trends 2017 Survey Report

15 Gallagher Canada Inc. 2020. Better Perspective: Benefits Strategy & Benchmarking Survey, 2020 Executive Summary & Strategic Insights | Canada Edition

16 Gallagher Canada Inc. 2020. Better Perspective: Benefits Strategy & Benchmarking Survey, 2020 Executive Summary & Strategic Insights | Canada Edition

17 PWC. 2021. Canadian Workforce of the future survey

Authored by:
Care Centres Team
TELUS Health Care Centres

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