May 1, 2025 from Canadian HR Reporter
Canadian employers are facing an urgent challenge: mental health disorders have become the leading cause of long-term disability (LTD) claims. A recent report from Sun Life shows that in 2024, mental health diagnoses accounted for nearly 40% of all LTD claims — the highest of any category.
Adjustment disorder and generalized anxiety disorder have seen the most dramatic growth. In 2024, these two conditions made up over 40% of mental health-related LTD claims, a steep rise from just 25% in 2019. The increase reflects a larger shift in how Canadians experience and respond to mental stressors, particularly those tied to work and life transitions.
According to Mental Health Research Canada, two in five Canadians have been diagnosed with a mental health disorder in their lifetime. The Centre for Addiction and Mental Health (CAMH) reports that one in five Canadians experiences a mental illness each year, and by age 40, one in two will have faced mental health challenges.
Understanding the Impact of Adjustment Disorder and Anxiety
Adjustment disorder is often overlooked, but its effects can be severe. It occurs when someone experiences emotional or behavioral symptoms in response to significant life changes or stressors.
Clinical psychologist Rubin Khoddam has previously noted that the consequences of untreated adjustment disorder are far-reaching. Individuals may feel trapped in a cycle of emotional turmoil that interferes with personal, professional, and social functioning.
This growing mental health burden affects more than claim costs. It impacts employee productivity, morale, and workplace relationships — and has become a defining issue in Canadian workforce health.
Addressing Mental Health Needs in the Workplace
Employers have an opportunity — and a responsibility — to create environments that support mental well-being and reduce the risk of long-term disability. Sun Life’s report emphasizes the importance of early access to care, noting that employees who receive timely treatment for anxiety disorders see a 40% reduction in absenteeism compared to those who delay care.
Equally important is ensuring a complete course of treatment. For individuals with depression, research shows that 15–20 therapy sessions are typically required to achieve positive outcomes.
Workplaces can also encourage long-term resilience by helping employees adopt healthy habits, including:
- Building social connections
- Finding purpose and meaning
- Prioritizing health and wellness
- Practicing positive thinking
- Seeking help when needed
Culture, Strategy, and Leadership
Workplace culture plays a key role in whether these efforts succeed. William McPeck, a workplace wellbeing consultant, has pointed out that knowing about mental health isn’t enough — organizations must translate knowledge into action. To be effective, mental health strategies must align with organizational values and culture.
Earlier this year, the Canadian Centre for Occupational Health and Safety (CCOHS) released two new resources to support mental health in the workplace. These tools can help employers address immediate needs while building longer-term policies that support psychological safety and health.
As Sun Life’s data shows, mental health isn’t just a personal issue — it’s a business priority. Addressing it with urgency and compassion can reduce claims, boost performance, and support the well-being of the Canadian workforce.
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