By Andrea Hansen, President, Sutton Benefits & Pension Inc.
Canadian businesses are facing continued pressure in 2026. Trade tensions, tariffs, and shifting supply chains continue to drive costs higher, while economic growth is expected to slow. Canada’s GDP is projected to grow by just one per cent in 2026.
The BDC’s economic outlook for 2026 is cautious. Businesses are expected to continue grappling with labour shortages, particularly outside major urban centres.
“Caught between cost pressures and a slowing economy, businesses will have no choice but to increase productivity to maintain profitability,” says Pierre Cléroux, vice-president, research and chief economist with BDC.
When growth slows and labour is scarce, productivity becomes one of the few levers businesses can still control.
Productivity isn’t just about working harder; it’s about removing the barriers that prevent employees from performing at their best. Many of those barriers are health related.
When employers invest in the right benefits, they can improve day-to-day performance, reduce injury-related downtime, and retain experienced employees.
Improving focus and daily performance
Absences are a clear negative signal, but productivity challenges can also show up as presenteeism: employees working while distracted by pain, fatigue, or untreated health issues. The result is slower work, more errors, and reduced focus.
Some of these performance barriers are hidden or hard to identify. Stress, burnout, and untreated mental health conditions can be invisible and can affect concentration and decision-making. When employees have access to counselling and mental health resources, they’re better able to stay engaged and productive.
Financial stress can also affect employee wellbeing and performance. The 2025 Benefits Canada Healthcare Survey found plan members with poor financial health were significantly more likely to report poor mental health. Financial wellbeing programs can help address this challenge. In fact, about 77 per cent of plan sponsors already offer at least one registered workplace savings program to support employees’ long-term financial security.
Reducing injuries and recovery time
Chronic pain and musculoskeletal problems are widespread. In settings with repetitive motions or heavy lifting, these can escalate into serious injuries, leading to extended absences, safety risks, and lost output. The Canadian Physiotherapy Association estimates that musculoskeletal disorders drive nearly a third of Canadian workplace injuries, costing billions in lost productivity and WCB claims.
Early intervention is a clear winner, however. Research cited by the Canadian Physiotherapy Association suggests that early physiotherapy can return up to three dollars in health care and productivity savings for every one dollar invested. A Workers’ Compensation Board of Manitoba analysis found that early physiotherapy reduced claim durations by roughly two per cent.
Comprehensive paramedical coverage (like physiotherapy, chiropractic, massage, and mental-health counselling) reduces absenteeism, presenteeism, injury risk, and turnover in a tight labour market. By proactively supporting employee health, employers see stronger safety records, fewer claims, higher engagement, and sustained productivity.
Retaining experienced employees
Retention is also a productivity issue. When experienced employees leave, companies lose institutional knowledge and spend months recruiting and training replacements.
Employees are now expecting strong benefits plans as well. According to the 2025 Benefits Canada Healthcare Survey, four-in-five plan members say it would be unacceptable for their employer to reduce benefits, and a similar share expect their employer to support their health and wellbeing beyond simply offering a basic benefits plan.
Many employers already see benefits as a competitive strategy. According to the same Benefits Canada survey, employers are more likely to add or improve coverage than reduce it, with plan competitiveness and the health of plan members ranking among their top priorities.
Strategic benefits aren’t just a cost of doing business; they’re a practical way to support employee health, reduce lost productivity, and strengthen your organization for the long term. The right benefits strategy helps your organization stay resilient, productive, and competitive, no matter what the economic cycle brings.
