Authors:
Olga Morawczynski – PhD, Founder of Heal-3 and CSA Public Policy Fellow
Kathleen Dobson – PhD, Associate Scientist, Institute for Work & Health
William A. Howatt – Ph.D., Ed.D., RP, RTC, Founder of Howatt Human Resources Consulting
Summary
This report estimates the economic cost of poor mental health in Canada at $180 billion annually. This high cost is driven largely by reactive and downstream spending, meaning only after serious mental health challenges have escalated and spilled into systems never designed to manage them. These include housing supports, police services, correctional services, and emergency departments. Decades of policy choices, including chronic underinvestment in prevention, narrow interpretations of medically necessary care and persistent trans-institutionalization have shifted mental health costs to the most expensive and least effective parts of the public sector. This report estimates that if Canada continues on its current trajectory, the annual cost of poor mental health is expected to rise to $600 billion by 2050, driven by worsening prevalence, increasing pressure on public systems, and continued reliance on crisis-based responses.
This growing burden will further strain productivity and limit Canada’s potential for long-term economic growth. It will also deepen the impact on employers, who already absorb roughly $110 billion of the current $180 billion burden, and are the single largest payer for poor mental health in the country.
To reverse this trajectory, the report identifies two essential reforms:
1. Achieving mental health parity so that mental health receives funding, coverage and accountability equal to physical health
2. Reorienting the system toward prevention by shifting resources upstream to reduce incidence, and expanding meaningful mental health support into the places where people spend most of their time—schools, workplaces, primary care and community settings
Although these reforms will require substantive changes to the healthcare system and to how mental health
is managed, they represent the most necessary and effective path to containing the escalating financial burden and addressing the human suffering behind
the numbers.
Full report:
https://www.howatthr.com/wp-content/uploads/2026/10/CSA_Public-Policy_Economic-Cost-of-Mental-Health_Accessible_04.16.26-Howatt-Co-Author.pdf