Deloitte analysis links illness, caregiving and premature death to lost productivity
Poor health and related caregiving responsibilities cost the Canadian economy more than $100 billion in lost output in 2025, according to a new report from Deloitte Canada that argues health should be treated as a core part of the country's productivity agenda.
The health-productivity gap: Canada's untapped lever, uses what Deloitte calls a Health Productivity Gap framework to quantify the economic cost of poor health. It estimates that reducing health-related barriers to workforce participation by 25 per cent could recover more than $25 billion annually.
Michelle Theroux, national health leader at Deloitte Canada, said health is rarely considered part of the productivity agenda, despite productivity being one of the country's most pressing challenges.
Where the losses come from
Using a cost-of-illness framework, Deloitte measured lost economic output in three categories:
- Morbidity, or living with a health condition, was associated with $55.1 billion in lost economic value from time away from work
- Unpaid caregiving was associated with $48.5 billion in lost labour income.
- Premature death was associated with $1.1 billion in lost output during the "friction period" required to replace and train workers.
The report estimates that reducing the caregiving burden on families and informal carers by 25 per cent could produce economic gains of more than $12 billion. Easing the morbidity burden by the same amount could generate more than $13 billion in GDP gains, and eliminating avoidable mortality among working-age Canadians could add a further $250 million.
In support of those estimates, the report cites a study published in CMAJ Open estimating that about 40 per cent of disability-adjusted life years and 24 per cent of years lived with disability in Canada stem from modifiable risk factors, including diet, high body mass index, blood pressure and cholesterol. It also cites a Harvard Business School study of employers offering a care concierge benefit to help employees find and coordinate care, which found absenteeism fell by up to 50 per cent and employers realized up to a 72 per cent return on investment from caregiver support programs.
Declining health outcomes
The report points to a decline in several health measures over the past decade. The share of adults reporting very good or excellent mental health fell from 72.4 per cent in 2015 to 59 per cent in 2021. The share reporting very good or excellent overall health fell from 68.6 per cent to 56.4 per cent between 2015 and 2024. In both cases, the steepest declines were among adults aged 18 to 34.
Health-adjusted life expectancy, the number of years a person can expect to live in good health, has fallen by 3.5 years since its 2012 peak, according to the report. The median wait from general practitioner referral to treatment has risen from 9.3 weeks in 1993 to 28.6 weeks in 2025. The report cites a Fraser Institute estimate that waiting for care cost Canadian patients more than $4.2 billion in lost wages and productivity in 2025, an average of more than $3,000 for each of an estimated 1.4 million Canadians waiting for treatment.
Canada is spending more on health care than ever, likely about $400 billion in 2025, or 12.7 per cent of GDP, the report says, yet ranks below average on many health metrics.
Two gaps for health
Deloitte frames the problem as two gaps. The prevention gap reflects capacity lost to illnesses that could have been prevented. The participation gap reflects capacity constrained by chronic disease, mental health challenges and caregiving.
On prevention, the report notes that, according to the Canadian Institute for Health Information, more than half of total health spending in 2025 was projected to go to hospitals (26 per cent), physicians (13.8 per cent) and drugs (13.3 per cent). It cites Singapore as an example of a different approach: that country's mandatory MediSave personal health accounts, historically used for treatment, are being renamed "MediSave Chronic and Preventive Care" from 2027, with higher withdrawal limits and national insurance extended to cover certain preventive procedures.
On participation, the report says 46.1 per cent of Canadian adults lived with one or more chronic diseases in 2023, up from 41.2 per cent in 2015, and that chronic disease treatment accounts for roughly 58 per cent of annual health care costs. Mental health accounted for 40 per cent of long-term disability claims in 2024, and depression and anxiety claims in 2025 were up 33 per cent and 50 per cent respectively compared with pre-2020 levels. Nearly eight million Canadians provide unpaid care, and most working caregivers report reduced hours, earnings or advancement.
Proposed actions
The report outlines seven integrated actions for governments, health care organizations, employers and other stakeholders: making prevention proactive and personalized; removing barriers to receiving health care; giving individuals financial tools for prevention; creating capacity from existing resources; meaningfully digitizing health infrastructure; redesigning financing and incentives; and enrolling every Canadian in a "Health Home" that integrates primary care and prevention.
"There is no single solution to Canada's health-productivity gap, but there are practical steps we can take now that will pay dividends in both the near and long term," said Matthew Stewart, partner, economic cdvisory, Deloitte Canada.
"Better prevention, improving workforce participation and smarter use of existing capacity and technology could unlock billions in economic value and strengthen Canada's long-term growth."
Cost of living hurting mental health
New national polling from Mental Health Research Canada (MHRC) finds 46 per cent of people in Canada say the cost of living is hurting their mental health. Among those who had accessed mental health or substance-use support, 52 per cent ended care earlier than planned or needed.
According to MHRC, 37 per cent of respondents report trouble paying household bills in full and 35 per cent struggle to afford or keep stable housing. Another 44 per cent say global political events are harming their mental health, and 37 per cent say the same about climate change.
"Mental health is shaped by much more than what happens inside the health system," says Akela Peoples, CEO of Mississauga, Ont.-based MHRC. "People are trying to manage financial pressure, stay connected and find support that actually works for them. These findings reinforce why we need to look at the whole picture, not just whether someone is able to get through the door."
The MHRC poll surveyed 4,005 people aged 16 and older online between July 27 and Aug. 10, 2026. It carries a margin of error of ±1.5 percentage points, 19 times out of 20, with data collected by Pollara Strategic Insights.
The TELUS Health Mental Health Index for the second quarter of 2026 found 63 per cent of workers in Canada name cost of living as their main financial stressor, one in five say money worries have hurt their productivity and 28 per cent lack emergency savings to cover basic needs. The findings build on earlier TELUS Health research on financial stress harming worker productivity.
For employers, offering a benefit is not the same as meeting a need. Continuity of care, clear treatment goals and whether employees feel understood may matter as much as coverage limits. TELUS Health found 63 per cent of workers want more employer-provided resources on retirement, pensions or savings, but 27 per cent feel unsafe disclosing mental health issues to managers – a gap echoed by national research showing few Canadians disclose mental health diagnoses at work.
