Employee Illness and Caregiving Gaps Cost Canada $100 Billion in 2025, Report Finds

Key facts

The report issued by Deloitte Canada evaluates the cumulative financial loss suffered by the domestic economy throughout 2025 as a result of health-related disruptions and unpaid family care responsibilities. According to coverage by Global News, the advisory firm determined that the aggregate price tag of these combined factors exceeded $100 billion over the 12-month period.

The study categorizes the economic drain into several primary mechanisms. First, direct health issues lead to traditional absenteeism, in which employees take temporary or extended sick leave, leaving positions unfilled or requiring costly overtime and replacement staffing. Second, the phenomenon of "presenteeism"—where staff report to work while physically or mentally unwell—results in diminished concentration, lower output quality, and higher operational error rates.

Beyond personal illness, the study highlights caregiving gaps as a primary catalyst for lost economic capacity. When formal support systems for children, aging parents, or chronically ill family members are unavailable or unaffordable, workers are frequently forced to assume informal caregiving responsibilities. This burden forces many individuals to reduce their billable hours, turn down promotions, take unpaid leave, or withdraw from the labor force entirely. The Deloitte study captures these compounding drag factors to illustrate how individual care challenges aggregate into a macro-level barrier to economic output across Canada.

Why it matters

A $100 billion annual loss represents a major drag on Canada's overall gross domestic product, which stood at approximately CAD $2.9 trillion ($2.1 trillion USD) in recent years. In an economy where labor markets remain tight across health services, technology, manufacturing, and construction, losing productive working hours to manageable health conditions and caregiving voids weakens national economic resiliency.

The findings carry severe implications for corporate earnings, tax revenues, and standard-of-living trajectories across the country. When employees reduce their participation in the workforce due to care obligations, personal household income declines, leading to reduced consumer spending and lower income tax collections for federal and provincial governments. Concurrently, businesses face increased recruitment costs, higher turnover rates, and reduced operational efficiency.

Furthermore, the economic burden of caregiving falls disproportionately on specific demographics, particularly women and middle-aged adults often referred to as the "sandwich generation"—those simultaneously raising children and caring for aging parents. When secondary support systems fail, these workers face long-term financial penalties, including reduced retirement savings and stalled career advancement. Addressing these issues is not merely a public health concern but a critical imperative for economic stability, as business leaders and governments seek ways to reverse stagnant labor productivity rates.

Canada operates under a publicly funded, single-payer healthcare system governed by the Canada Health Act of 1984, which guarantees universal access to medically necessary hospital and physician services. However, the system historically excludes coverage for long-term care, home care support, prescription drugs, and community-based mental health services unless supplemented by provincial programs or private employee health insurance plans. This leaves substantial gaps in non-hospital care services, placing the burden of care squarely on families.

The economic context is further complicated by Canada's demographic transition. Data from Statistics Canada shows that the country's population is aging rapidly as the large baby boomer generation—those born between 1946 and 1965—reaches retirement age. By 2030, nearly one in four Canadians will be aged 65 or older, dramatically increasing the demand for elder care services while shrinking the relative pool of active workers.

At the same time, Canada faces a widely documented productivity crisis. Senior officials at the Bank of Canada have repeatedly identified lagging labor productivity as a structural vulnerability for the nation's economy. While the United States and other G7 partners have seen steady productivity growth driven by capital investment and technological adoption, Canadian labor productivity has stagnated over recent years. Economic researchers have pointed out that lost working hours due to personal illness and unmanaged caregiving obligations directly compound this productivity deficit.

Recent policy efforts have attempted to address portions of the caregiving infrastructure. The Canadian federal government introduced a nationwide $10-a-day childcare initiative in partnership with provinces, aiming to increase female labor force participation. Additionally, recent amendments to the Canada Labour Code introduced 10 days of paid medical leave for federally regulated private sector employees. However, provincial labor codes, which govern roughly 90 percent of the Canadian workforce, vary widely in their statutory sick leave and personal emergency leave requirements.

Reaction

While Deloitte Canada's report provides a quantitative measure of the problem, economic and labor analysts are expected to push for distinct policy responses from both corporate leaders and government authorities. Business associations, such as the Canadian Chamber of Commerce and the Canadian Federation of Independent Business, typically emphasize the need for targeted tax incentives and streamlined regulatory environments to help small and medium-sized enterprises afford enhanced employee benefits and flexible work models.

Labor organizations and public health advocates are likely to frame the report's findings as evidence that governments must expand public social infrastructure. Unions have long campaigned for mandated paid sick days across all provincial jurisdictions, expanded long-term care funding, and increased public investment in home care assistance.

Policy experts within economic think tanks are expected to evaluate how Deloitte calculated the $100 billion loss, scrutinizing the balance between lost wages, direct business costs, and broader macroeconomic spillovers. Government ministries at both federal and provincial levels will face renewed questions regarding how health system reforms can better align with workforce productivity objectives.

What we don't know yet

Several key details remain unaddressed in the available reporting on Deloitte's analysis:

What to watch

In the coming months, several key indicators will reveal how governments and employers respond to these findings:

This report is based on original news coverage by Global News reporter Uday Rana.