Closing the gap
Where Canada is losing productivity due to health
To realize Canada's untapped productivity opportunities, it helps to think of two underlying components.
Closing these two structural gaps offers the greatest value: keeping people well, better supporting those already living with chronic conditions, and fostering higher workforce capacity.
The prevention gap
Capacity lost to conditions that could have been prevented.
The participation gap
Capacity drained by chronic disease, mental illness, and caregiving.
The prevention gap:
Shift upstream to prevention and well-being to avoid loss of productive hours
Upstream investments are most effective. These target the causes of illness, while downstream spending pays for hospitals, physicians, and treatments. The distinction matters. Preventing non-communicable disease delivers far greater social and economic returns than treating illness later, the OECD concludes. Avoidable chronic disease reduces participation, lowers productivity, and raises costs.21 The socio-economic returns for adult immunization alone, for example, are up to 19 times the initial investment.22
Yet Canada’s system remains biased toward downstream care. According to the Canadian Institute for Health Information (CIHI), over half of total health spending in 2025 will flow to hospitals (26%), physicians (13.8%), and drugs (13.3%).23 Most productivity, however, is gained or lost long before acute care is needed.
The call to shift care upstream is not new; it has been part of Canada's reform narrative for decades. What sets the opportunity apart now is recognizing that prevention is a productivity investment with a measurable return, and leaders' advantage lies less in how much they spend and more in how they design for it.
Singapore, for instance, builds prevention directly into personal health accounts rather than relying on public budgets alone. Every citizen holds a MediSave account, a mandatory personal health savings account that can be drawn on for care.24
Historically oriented toward treatment, these accounts are now being deliberately repurposed for prevention. From 2027, the scheme is being renamed "MediSave Chronic and Preventive Care," withdrawal limits are rising, and national insurance is being extended for the first time to cover certain preventive procedures.25 The design gives individuals a personal, portable stake in staying well, and makes prevention a standing feature of the system rather than a discretionary line that competes with acute care in every budget cycle.
The participation gap:
Tackle chronic disease, mental health, and caregiving to maximize wellness and keep people working at full capacity
Three forces combine to be the major productivity drag: chronic disease, mental health, and caregiving. Together, they reduce labour force participation, presence, and performance, and impair the quality of life for millions of Canadians. Currently, these pressures are trending in the wrong direction:
Chronic disease
The incidence of chronic disease keeps rising. In 2023, nearly half of Canadian adults lived with one or more chronic disease (46.1%), up from 41.2% in 2015.26 Chronic disease treatment accounts for roughly 58% of annual health care costs.27
Mental health
Mental health is the largest driver of long-term disability (40% of claims in 2024), with depression claims up 33% and anxiety claims up 50% in 2025 when compared with pre-2020 levels.28 Substance use compounds these impacts. In construction, for example, up to 33% of personnel in safety-sensitive roles report being impaired, hungover, or using substances shortly before or during work.29 (The broader impact of poor mental health costs the Canadian economy indirectly as well, from housing supports, to demand for police and correctional services.)
Caregiving
Caregiving adds a third burden. Nearly eight million Canadians provide unpaid care, and most working caregivers report reduced hours, earnings, or advancement.30 This represents the largest lever available for lifting workforce participation and output.
