A Bold Solution to Financial Stress: Payroll-Delivered Emergency Savings Accounts

Financial stress is costing Canadian employers nearly $70 billion in lost productivity each year. A bold new idea introduced by researchers at Canada’s Financial Wellness Lab based at Western University could hold the key to reversing that trend.

Released today, the Building Financial Resilience Through Employer-Sponsored Emergency Savings Whitepaper, authored by Canada’s Financial Wellness Lab in partnership with the National Payroll Institute and CI Wealth, lays out a roadmap for how Emergency Savings Accounts (ESAs), delivered through payroll, can transform financial fragility into financial resilience for millions of working Canadians.

For years, Canadians have been feeling the stress of falling further, and further behind financially. While wages have tried to keep pace, expenses, debt and interest costs have surged further ahead. According to recent data from the National Payroll Institute, over one quarter of Canadians are living paycheque to paycheque and would be unable to cover a one-week delay in pay. And unfortunately, this financial stress doesn’t rest when they clock in at work.

“Financial fragility seeps into all aspects of life for those who are struggling,” explains Chuck Grace, Co-founder and Advisory Chair at Canada’s Financial Wellness Lab. “But our research shows that workers who have even modest savings set aside are dramatically less likely to fall behind on debt or turn to costly last-resort measures like high-interest credit cards or RRSP withdrawals. Unfortunately, financial literacy and reminding Canadians of the importance of saving isn’t helping them get a better handle on their finances,” Grace adds. “They need a tangible solution, and I believe we’ve found it.”

Financial Stress is a Costly Workplace Problem

When employees are struggling with their finances, their work can suffer. Further research from the National Payroll Institute finds that over half of employees (51%) admit to spending work hours worrying about money, and six per cent spend more than 90 minutes a day preoccupied with personal finances. This distraction translates into $69.5 billion in lost productivity annually, more than double the $26.9 billion cost recorded just four years ago.

“For too long, the financial strain faced by Canadian households has been treated as a personal problem,” says Peter Tzanetakis, President and CEO of the National Payroll Institute. “The truth is: financial stress comes to work with your employees. It’s increasingly costing businesses billions in lost productivity, absenteeism, and turnover. Employers need to start embracing solutions that treat the root causes of employees’ stress, or they will continue to pay the price. Payroll-delivered ESAs present a practical, scalable solution to strengthen both employees’ financial well-being and employers’ bottom lines.”

How the ESA Model Turns Stress into Strength

Emergency Savings Accounts are a concept, meant to serve as “rainy day funds” for employees. The whitepaper proposes integrating these savings programs directly into existing payroll systems, which already reach 85% of Canadian workers. This approach enables employees to automatically divert a small, self-selected portion of their paycheque into a dedicated savings account each pay period, while retaining full control of the funds—making withdrawals as necessary without penalty, with the option to opt out at any time. Employers can also choose to match contributions, offer financial incentives, or integrate ESAs into existing HR and benefits platforms to encourage participation. Through these automatic contributions, workers can steadily build a financial safety net without needing to take extra steps or make ongoing decisions.

To make this system effective across the economy, the whitepaper recommends legislative and regulatory updates to allow automatic enrollment in employer-sponsored emergency savings programs, similar to how some workplace pension contributions function today. This change would help overcome common behavioural barriers to saving that prevent many Canadians from setting money aside on their own.

The whitepaper outlines a two-tier ESA model designed to help Canadians through varying scales of financial emergencies:

• Tier 1: A starter emergency fund equivalent to about $2,500 or half a month’s income, enough to cover the most common financial shocks like car repairs.
• Tier 2: A larger buffer, equivalent to at least four months’ income, for extended disruptions or major life events, like temporary income loss.

These tiers allow employees to build resilience gradually, achieving meaningful financial security over time while employers benefit from a healthier, more productive, and more stable workforce.

“Just as auto-enrolment has revolutionized retirement savings through RRSPs and pensions, applying the same behavioural design to short-term savings can be a game changer,” adds Chris Enright, EVP and Co-Head of Wealth, CI Financial Corp. “ESAs are simple, accessible, and cost-effective for employers to implement, and the impact could be transformative.”

A Call to Action

The Whitepaper is the first of its kind in Canada, combining empirical evidence with behavioural finance insights to present a practical blueprint for policymakers, payroll professionals, and employers to combat financial stress and improve workplace productivity.

“Financial stress costs are not theoretical. They’re real, and they’re growing,” concludes Tzanetakis. “Supporting emergency savings and employee’s financial wellness is a strategic investment. ESAs offer a clear ROI for organizations that prioritize the financial resilience of their employees.”

The Building Financial Resilience Through Employer-Sponsored Emergency Savings Plans Whitepaper is available for download at https://financialwellnesslab.ca/initiative/emergency-savings-in-workplace.

About Canada's Financial Wellness Lab

Canada’s Financial Wellness Lab, based at Western University, is dedicated to developing quantitative finance and data analytics solutions that help Canadian households strengthen their financial resilience. Financial wellness and resiliency are complex topics studied across many disciplines. To date, research has been limited by the inaccessibility of high-quality data, with much of it proprietary and often analyzed through a particular agenda. The Lab addresses these challenges by leveraging a broad range of granular historical and real-time data. Using advanced analytics and machine learning, our researchers examine these data sources to uncover new patterns and insights that have not previously been studied and we then bring a multi dimensional view to the conclusions in order to find solutions that will stick.

About the National Payroll Institute

The National Payroll Institute champions payroll in Canada as being vital to the health of businesses across Canada by setting THE professional standard of excellence and sharing critical expertise. We provide the knowledge and resources that more than 45,000 payroll professionals need to realize their potential, 1.4 million employers depend on for the annual payment of $1.35 trillion in wages and benefits, and that governments rely on to receive $469 billion in statutory remittances to fund critical programs each year. The Institute's designations are recognized as the gold standard for expertise and professionalism, and the only such designations for payroll in Canada.

About CI Wealth

CI Wealth is the Canadian wealth management division of CI Financial Corp. and includes CI Assante Wealth Management, Aligned Capital Partners Inc., CI Private Wealth, Northwood Family Office, CI Coriel Capital, CI Direct Investing, CI Direct Trading and CI Investment Services Inc. CI Wealth provides an innovative and comprehensive selection of wealth management services to individuals, families, corporations and institutions, and advises on and administers approximately $144.2 billion in client assets (as at June 30, 2025).

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