{"id":278752,"date":"2025-11-12T18:55:15","date_gmt":"2025-11-12T18:55:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/278752\/"},"modified":"2025-11-12T18:55:15","modified_gmt":"2025-11-12T18:55:15","slug":"no-emergency-savings-fund-your-employer-could-help-fill-the-gap-report-suggests","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/278752\/","title":{"rendered":"No emergency savings fund? Your employer could help fill the gap, report suggests"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Illustration by Sam Island<\/p>\n

Saving for emergencies \u2013 everything from a job loss to an unexpected car repair \u2013 has long been a cornerstone of personal finance<\/a> advice. A recent report from the Financial Wellness Lab at Western University is calling on companies to help Canadians contribute to emergency savings accounts. <\/p>\n

Researchers at the lab say many Canadians are living paycheque to paycheque, with little to fall back on when unexpected expenses hit. The white paper<\/a> found that more than 60 per cent of working-age Canadians couldn\u2019t cover a $1,000 emergency without borrowing or going into debt. <\/p>\n

The report offers guidance on how to set up employer-sponsored emergency savings programs. Contributions to ESAs would be automatically deducted from an employee\u2019s pay, much as they are with workplace pension plans. The money would be set aside in small amounts from each paycheque to cover short-term emergencies.<\/p>\n

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The white paper recommends a two-tier approach that starts with a \u201crainy day\u201d fund for small, unexpected expenses to encourage regular saving, and then builds toward a larger emergency fund for major financial shocks, such as a job loss or large-scale home repairs. <\/p>\n

\u201cCash coming in does not always match cash going out, and we need a safety net,\u201d said Chuck Grace, co-founder of Canada\u2019s Financial Wellness Lab. \u201cWhen employees are less distracted by financial stress, they are healthier, more focused, and more productive, which benefits employers as well.\u201d<\/p>\n

Only a handful of Canadian companies are currently piloting workplace ESA programs, says Kambiz Vatan-Abadi, chief innovation officer at CI Financial, which contributed to the report. <\/p>\n

One pilot under way at Ontario-based Mainstreet Credit Union is introducing the program to all staff. The goal, Mr. Vatan-Abadi said, is to create a \u201cwin-win solution\u201d that supports employees\u2019 financial stability while benefiting employers in the process.<\/p>\n

\u201cEmployees who are financially healthy and resilient perform better at work,\u201d Mr. Vatan-Abadi said. <\/p>\n

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The National Payroll Institute\u2019s 2025 Annual Survey<\/a> of Working Canadians found that financial stress costs Canadian businesses nearly $70-billion a year in lost productivity. <\/p>\n

Forty-one per cent of workers said financial stress made them less productive, the survey said.<\/p>\n

The online poll of 2,320 working Canadians, 75 per cent of whom were employed full time, was conducted between May 6 and May 20, 2025.<\/p>\n

Employer-sponsored ESAs can make it easier for employees to save while helping companies reduce hidden costs linked to financial stress, says Peter Tzanetakis, president and CEO of the National Payroll Institute. <\/p>\n

\u201cFor many years, employers have supported [their employees\u2019] mental well-being and physical well-being, now they need to support financial well-being,\u201d Mr. Tzanetakis said. <\/p>\n

The white paper found that employer-sponsored ESAs are becoming more common in the United States and gaining traction in Britain, but Canada has yet to follow suit.<\/p>\n

Automatic enrolment was found to be the most effective way to boost participation, according to the report. A British study<\/a> found that less than 1 per cent of workers opted in when they had to self-enroll, but participation jumped to 50 per cent once enrollment was automatic. <\/p>\n

Alina Kuimova, a research associate at the Financial Wellness Lab, says many workers hesitate to join employer-sponsored savings programs because of a tendency to prioritize immediate needs over long-term goals.<\/p>\n

Ms. Kuimova says automatic deductions help overcome those habits by setting aside a small portion of employees\u2019 pay before they receive it. Funds can be accessed at any time, and accounts have the flexibility to change or stop contributions when needed. <\/p>\n

To be protected against recurring financial shocks, the white paper says workers need about half a month\u2019s pay, or roughly $2,500 on average, set aside to be protected against occasional financial shocks. <\/p>\n

For many employees, especially those living paycheque to paycheque, reaching a savings goal can be challenging. According to the report, companies can help by matching contributions or offering a one-time incentive, such as a $50 bonus for completing account onboarding. <\/p>\n

Mr. Tzanetakis said the next step in Canada is gaining clarity from government and financial institutions. <\/p>\n

In the U.S., legislation such as the 2006 Pension Protection Act and the 2022 Secure 2.0 Act helped expand automatic enrollment to make saving easier for employees. The white paper says Canada lacks similar legislation, which limits the use of automatic enrollment in workplace savings programs.<\/p>\n

Mr. Tzanetakis said businesses need guidance on how contributions would be taxed, whether current employment-standards laws allow automatic deductions and whether the accounts should be structured as dedicated savings or investment accounts. <\/p>\n

Many companies are open to automatic enrollment, Mr. Tzanetakis said, but legislative changes are needed before these programs can become standard in Canada.<\/p>\n

As discussions continue over how employer-sponsored ESAs should be structured, Mr. Vatan-Abadi says the priority is ensuring that every worker has access to one to fall back on. <\/p>\n

\u201cYou fix the roof when there\u2019s sun, not when it\u2019s raining,\u201d said Mr. Vatan-Abadi. \u201cIt\u2019s about prevention \u2013 getting ahead of it, not hopping on once the crisis is already there.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Illustration by Sam Island Saving for emergencies \u2013 everything from a job loss…\n","protected":false},"author":2,"featured_media":267685,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132,136],"class_list":{"0":"post-278752","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-r-fp"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/278752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=278752"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/278752\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/267685"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=278752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=278752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=278752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}