Financial stress is taking a massive toll on Canada’s economy — costing employers nearly $70 billion in lost productivity every year. Now, researchers at Canada’s Financial Wellness Lab at Western University believe they’ve found a practical solution: employer-sponsored Emergency Savings Accounts (ESAs), delivered directly through payroll.
The proposal, outlined in the newly released Building Financial Resilience Through Employer-Sponsored Emergency Savings whitepaper, was developed in partnership with the National Payroll Institute and CI Wealth. It presents a roadmap for transforming widespread financial fragility into financial resilience — and, in the process, helping Canadian businesses reclaim billions in lost productivity.
“Financial fragility seeps into all aspects of life for those who are struggling,” said Chuck Grace, Co-founder and Advisory Chair at the Financial Wellness Lab. “Our research shows that workers with even modest savings are dramatically less likely to fall behind or turn to high-interest credit. Canadians don’t need more financial advice — they need a tangible solution. We believe we’ve found it.”
The Hidden Cost of Financial Stress
The data is alarming. According to the National Payroll Institute, more than one in four Canadians are living paycheque to paycheque and couldn’t cover even a one-week delay in pay. The stress doesn’t end at home — 51% of employees admit to worrying about money during work hours, with 6% spending over 90 minutes each day distracted by financial concerns.
That distraction translates into a staggering $69.5 billion in lost productivity annually, more than double the cost recorded just four years ago.
“Financial stress comes to work with your employees,” said Peter Tzanetakis, President and CEO of the National Payroll Institute. “It’s costing businesses billions in lost productivity, absenteeism, and turnover. Employers must start treating employee financial strain as a business problem — not just a personal one.”
Emergency Savings Accounts: Turning Stress into Strength
The whitepaper’s solution is both simple and scalable: Emergency Savings Accounts (ESAs) integrated directly into payroll systems.
Since payroll already reaches 85% of Canadian workers, this model allows employees to automatically divert a self-selected portion of their pay into a dedicated savings account each period. The accounts remain fully employee-controlled — funds can be withdrawn anytime, without penalty.
Employers can enhance participation by matching contributions, offering incentives, or embedding ESAs into existing HR and benefits platforms.
To help Canadians overcome behavioural barriers to saving, the report recommends legislative updates to allow automatic enrollment in ESA programs, similar to workplace retirement savings plans.
A Two-Tier Model for Financial Resilience
The whitepaper proposes a two-tier ESA framework designed to address different levels of financial vulnerability:
-
Tier 1: A starter emergency fund — around $2,500 or half a month’s income — to cover short-term shocks such as car repairs or medical bills.
-
Tier 2: A longer-term buffer — at least four months’ income — to cushion extended disruptions like job loss or major life events.
This stepwise approach allows employees to gradually build meaningful financial security, while employers benefit from improved productivity, retention, and morale.
“Just as auto-enrolment revolutionized retirement savings, applying the same behavioural design to short-term savings could be a game changer,” said Chris Enright, EVP and Co-Head of Wealth at CI Financial Corp. “ESAs are simple, cost-effective, and deliver tangible impact for both employees and employers.”
A National Blueprint for Financial Resilience
As the first Canadian whitepaper to combine empirical evidence with behavioural finance insights, the study offers a policy and business roadmap for addressing the financial stress epidemic head-on.
“Financial stress costs are not theoretical — they’re real, and they’re growing,” Tzanetakis concluded. “Supporting emergency savings is a strategic investment. ESAs offer a clear ROI for organizations that prioritize financial wellness as part of their workplace strategy.”
Join thousands of HR leaders who rely on HRTechEdge for the latest in workforce technology, AI-driven HR solutions, and strategic insights
Business Wire, a Berkshire Hathaway company, is the global leader in press release distribution and regulatory disclosure. Public relations, investor relations, public policy and marketing professionals rely on Business Wire for secure and accurate distribution of market-moving news and multimedia. Founded in 1961, Business Wire is a trusted source for news organizations, journalists, investment professionals and regulatory authorities, delivering news directly into editorial systems and leading online news sources via its multi-patented NX network. Business Wire’s global newsrooms are available to meet the needs of communications professionals and news media worldwide.
Business Wire, a Berkshire Hathaway company, is the global leader in press release distribution and regulatory disclosure. Public relations, investor relations, public policy and marketing professionals rely on Business Wire for secure and accurate distribution of market-moving news and multimedia. Founded in 1961, Business Wire is a trusted source for news organizations, journalists, investment professionals and regulatory authorities, delivering news directly into editorial systems and leading online news sources via its multi-patented NX network. Business Wire’s global newsrooms are available to meet the needs of communications professionals and news media worldwide.
