Without metrics, capital will continue to be allocated toward business models that prioritize profit, argues Heal-3 CEO Olga Morawczynski
Each month at BPM, we offer a slate of articles and content pieces that go deep on a particular topic. This December, we’re exploring employee and plan members' well-being - and its link to mental health.
Financial stress is no longer a fringe issue for Canadian households but the backdrop to a daily healthy life.
That's the picture emerging from the Canadian Standards Association (CSA)'s latest report on financial well-being, which finds a clear decline in both individual and household financial resilience.
Olga Morawczynski said the report largely confirmed what she expected but the full data set also underscored just how severe the situation has become for Canadians. Overall, she believes “things aren't looking very good in terms of individual and household financial well-being in Canada,” with extensive statistics showing widespread money stress and many people even losing sleep over their finances.
“It seems there’s a lot of financial instability and a lot of financial stress,” said Morawczynski, CEO and co-founder of Heal-3 and CSA public policy fellow. “People are starting to make financial decisions on how to handle that stress and that will compromise their financial well-being tomorrow. We saw people pulling money out of their RRSPs or deferring RRSP payments. We saw people pulling money out of long-term savings, right? That, to me, signifies that this problem will only get worse. If you're starting to now tap into your tomorrow reserves, which is such a critical part of your financial wellbeing as well, then I think we're going to see continued kind of degradation of financial wellbeing into the future.”
One recommendation from Morawczynski’s report is to establish and monitor financial well-being metrics. Morawczynski argues meaningful financial well-being metrics have to go beyond simple counts and focus on three broad dimensions: access, usage and impact. In Canada, she argues the real gap is around impact. The issue is whether financial products - like bank accounts - are delivering and making an impact improving people’s lives.
Her concern is that the incentives of the financial sector often run in the opposite direction, with institutions benefitting more from customers who stay in debt than from those who build up savings. That's why she believes the system needs robust impact measures that track what happens after people use financial products – including effects on housing stability and mental health. Without that, she suggests capital will continue to be allocated toward business models that prioritize profit even when they undermine genuine financial well-being.
Morawczynski points to employer-backed emergency savings as a practical way to ease financial strain. She describes one organization that helps companies set up dedicated savings accounts where a small slice of each paycheque - even one or two per cent - is automatically diverted and then matched by the employer.
Over time, that creates a modest buffer employees can use for unexpected expenses or future investments. What makes it powerful, she noted, is that “you don’t have to think about it, it's just happening,” so people build resilience without having to make constant active decisions.
From her vantage point of running a mental health company, she underscored the business case as to why plan sponsors should care. When they examine personal factors driving poor mental health at work, “you can probably guess what's coming up as the top stressor. It's finances. It's money,” she said.
“If your people are profoundly stressed about money, they're going to bring that into the workplace, and it's going to impact how they perform and they might also take other jobs. It hugely impacts how people show up for work and whether they leave.”
She argues that companies can and should measure this. While they can’t peer into employees’ bank accounts, they can use engagement surveys to track perceived pay equity and financial stress. That means asking whether people feel fairly paid for their role and industry, and how stressed they are about money right now. Watching these scores move over six, 12 or 24 months -and noticing how they respond to inflation or policy changes - gives employers a live read on how their workforce is coping.
Additionally, Morawczynski frames financial well-being as a multi-layered problem. On one level, it can be seen as an individual issue, where personal decisions and behaviours influence people’s financial health. On another, it is deeply tied to broader economic conditions such as wage stagnation, job quality and inflation, which make it harder for households to stay stable.
Still, Morawczynski argues that employers can’t focus only on short-term financial tools like emergency savings accounts; they also need to help workers build real security for later life. She sees pensions as central to that.
“Pensions do need to come back,” she said. “We're making decisions today that are going to impact our tomorrow. If we also look at some of these longer-term mechanisms that also support us to retire one day and to have a decent retirement, that's going to be such an important part of a good benefits package. That will also secure that longer term financial well-being piece.”
Fixing Canadians’ financial well-being requires shaking up how the market works, not just tweaking existing products, Morawczynski underscored. She believes there needs to be “more competition in the market to allow these players to come in and really innovate… so that these needs are better served and that people have better financial outcomes.”
In practice, that means backing the kinds of fintechs and community players that design products for people big banks ignore, noting that can “unlock domestic capital for their growth,” whether by incentivizing early-stage angel investors or redirecting a portion of Canada’s roughly $2 trillion in pension assets that are currently invested largely outside the country.
By channelling more of that money into local innovation, she sees an opportunity to build solutions that can consistently match Canadians’ day-to-day financial realities.
