I Used to Think an Employee's Money Stress Wasn't My Problem

Written By Ashley Wesley

For a long time, when someone told me they were stressed about money, I quietly filed it under "not my department." Compensation, yes. Benefits, sure. But the credit card balance, the car loan, the rent that kept climbing faster than the raise I could get approved... that felt like their private business, not mine.

After some recent reflection, I’ve concluded….I was wrong.

What I learned is that the money pressure people carry does not stay home. It walks into work with them, sits at their desk, and shows up in the numbers any owner is paid to care about. Turnover. Absenteeism. Focus. Once I saw it that way, I could not unsee it. So this is written for the people who actually carry the risk, the small and mid-sized business owners and operators trying to run something viable while their people quietly go underwater.

My argument is not that you should feel bad about the cost of living. It is that it’s already your problem!

What the numbers are telling us

Start south of the border, because the American picture is the loud version of a quieter Canadian one. Reporting from PBS NewsHour this month put:

  • US credit card debt above a trillion dollars, up roughly 60 percent in five years.

  • Delinquencies are at their highest in fifteen years, and bankruptcies climbed about 12 percent in a single year.

The people getting hit hardest are often the youngest, with newer traps like "buy now, pay later" making it easy to spend without ever feeling the weight of it until the bill lands.

The part that stayed with me was how one economist in the segment, Mark Zandi of Moody's, described the shape of it. He called it a K-shaped economy. Real disposable income, what you actually have after inflation and taxes, is lower than it was a year ago for a big share of households. So people borrow to bridge the gap, then get caught paying twenty or thirty percent interest on money they only borrowed to survive.

And here is the uncomfortable hinge of the whole thing: the savings that fund that borrowing sit with the people at the top of the distribution. The deposits, the bonds, the stocks held by the upper class and business owners are, in a real sense, the credit the middle and the bottom are living on. We are already tied together, whether we like the arrangement or not.

The Canadian Mirror

I know what some you are thinking. That is America. We are more careful up here. I wish the data agreed.

  • Canadian consumer debt reached about $2.66 trillion in the first quarter of 2026, according to Equifax Canada, and insolvencies climbed to their worst level since 2009.

  • Statistics Canada reported the household debt-to-income ratio hit a record 179.6 percent, which means for every dollar of after-tax income, households carry roughly $1.80 in debt.

  • Credit card balances passed $124 billion, an all-time high, with the average balance per borrower now in the mid-four-thousands and Gen Z the fastest-growing and most delinquent segment.

Equifax also described something they called "two Canadas." Older consumers with strong credit scores are holding up fine. Younger people, and households in Ontario and much of the West, are slipping.

Ontario, in fact, saw the fastest acceleration in non-mortgage delinquency in the country. This is not a rounding error. It is a widening gap between people who are steady and people who are quietly going under, and the line between them is running right through this province.

Here in Ontario, the arithmetic is not hard to follow. The general minimum wage is $17.60 an hour as of January 2026, rising to $17.95 in the fall. The living wage in Toronto, the amount you actually need to cover the basics, is estimated at around $27.20 an hour by the Ontario Living Wage Network.

That gap, close to ten dollars an hour, is where a lot of the stress in this province is born. Average home prices sit near $890,000. A one-bedroom in Toronto still runs well over two thousand a month. Plenty of households are spending far more than the old thirty-percent-of-income guideline on housing alone. The credit card is not a luxury for these families. It is the thing filling the space between what work pays and what living costs.

None of this is legal advice, and I always treat employment law as general information rather than counsel. But it is worth remembering that the minimum standards in Ontario's Employment Standards Act are a floor, not a target. The law tells you the least you can do. It was never meant to describe the most.

The clearest proof that we rise or fall together

I said the K-shaped economy ties us together inside a country. Trade ties us together across one.

The Canadian American Business Council released it in August, with the modelling done independently by Oxford Economics, and it runs three scenarios for the Canada-United States-Mexico Agreement after the July 1 renewal deadline came and went without a deal. The conclusion is blunt.

A successful renegotiation would add roughly 98,000 Canadian jobs and 137,000 American jobs in 2027 compared with standing still. A full breakdown would do the reverse, about 102,000 fewer Canadian jobs and 214,000 fewer American ones. Cooperation creates work on both sides of the line. Breakdown destroys it on both sides. Same border, opposite directions.

Two details matter for anyone hiring in this province. The first is that Ontario is named among the most exposed, alongside Quebec, Manitoba and New Brunswick, because of how much auto, metals and machinery manufacturing we do. Ontario stands to gain the most if the talks go well and lose the most if they go badly.

The second is scale. Because our manufacturing leans so heavily on cross-border trade, the report finds the sectoral hit from tariffs often falls four to six times harder on Canada than on the US. We are the smaller partner, so the same shock lands harder here.

And it does not stay in the factories. The report is clear that the damage spreads outward, that thinner disposable income pushes households to spend less, which pulls demand out of the service work, the construction, the professional jobs the rest of us do. In household terms, it puts the difference between a good outcome and a bad one at roughly C$846 per Canadian household a year, with tariff-driven inflation expected to linger for a decade after a breakdown. That is the same cost-of-living squeeze I have been describing, arriving through a different door.

I am not naive about the politics here, and none of it is settled as I write this. Negotiations are still live, and the numbers are projections, not prophecy. But strip the politics away and the structure is the one I keep running into. Our livelihoods are wired together, across income levels and across borders, and pretending otherwise does not make it less true. It just means we are surprised when the bill arrives.

Why this is on your P&L, not just theirs

For years, I treated all of this as macroeconomics, someone else's file. Then I started paying attention to what it costs employers directly, and the mistake I had been making became very concrete.

Research from the National Payroll Institute and the Financial Wellness Lab at Western University now puts the cost of employees' financial stress at roughly $69.5 billion a year in lost productivity in Canada, more than double what it was four years earlier. More than half of employees, 51 percent, admit to spending work hours worrying about money. A smaller group loses more than ninety minutes a day to it. That is not a wellness poster problem. That is capacity walking out the door.

It compounds. Financial stress feeds turnover, and turnover is brutally expensive. One Canadian estimate puts the average cost of losing an employee near $29,000 once you count rehiring and lost productivity, and replacing a skilled or senior person can run well past a full year of their salary. So the manager who shrugs and says an employee's debt is their own business, the way I used to, is quietly absorbing that cost anyway. We just pay it in resignations and rework instead of seeing it on a line item.

That was the shift for me. Financial stress is not a personal failing that happens to spill into work. It is a business risk that starts at home. Once you see it as a risk, you start managing it.

The reflex answer is "pay people more." It is also the wrong place to start.

Here is where I have to be careful, because the easy version of this argument is the one that gets an owner to close the tab. Just pay everyone more. If you run something on thin margins, you already know that either you cannot, or you can, but only by moving the stress from your employee's kitchen table onto your own. Telling a stretched owner to simply raise wages is not a plan. It is a wish with a payroll attached.

So let me lay out the order I have come to believe actually works. Three moves, and the sequence is the whole point.

First, get more competitive. The Bank of Canada has been almost pleading about it. Its senior deputy governor called the country's weak productivity an emergency, in her words "time to break the glass," and the Bank has since put it more plainly still. Canada's affordability problem is, underneath, a productivity problem, and the way to raise incomes is to raise what an hour of work produces. If our productivity had kept pace with the rest of the G7 since 2000, output per person would be roughly seven thousand dollars higher today. That gap is not abstract. It is the raise your people are not getting.

This is where small and mid-sized businesses come in, because the Bank pointed a gentle finger at us. Smaller firms tend to invest less in the machinery, the equipment, the software, and the know-how that make each hour of work produce more. That is the opening, not the indictment.

AI is the most accessible version of that investment I have seen in my career. Not as a way to cut your team, that is the tired framing, but as a way to get far more out of the team you already have. The quote that used to eat an afternoon, the scheduling puzzle, the first draft of every proposal, the reconciliation nobody wants to touch... a lot of that can now be handled in a fraction of the time. When each person produces noticeably more value in the same day, you have done something a raise alone can never do. You have created the room to pay for one.

Second, pay livable wages, once you can afford to. Efficiency is not the point. It is the means. The point is what you do with the margin it frees up. In Ontario the legal minimum is $17.60 an hour, headed to $17.95 in the fall. The estimated living wage in Toronto, the amount that actually covers the basics, is around $27.20. That gap, close to ten dollars an hour, is where the debt in this piece is born. The floor set by law was never meant to be the target, it is the least you are allowed to do. So as competitiveness gives you room, close the gap on purpose. Not all at once, not past what the business can carry, but as a plan rather than a someday. A worker who is not drowning brings a different person to work, and you have already seen the number attached to the one who is.

Third, let people share in what they build. This is the move most owners skip, and it is the one that closes the loop. If your people help create the gains, give them a real stake in the gains. That can be as simple as profit-sharing tied to results everyone can see, or a bonus pool that pays out when the business wins. It can be stock options where your structure allows. And in Canada there is now a succession-scale version worth knowing about. Since 2024 we have Employee Ownership Trusts, where a trust holds the company on behalf of the employees, financed out of future profits so workers put in no money up front, with a federal capital gains incentive for the departing owner on qualifying sales. That matters more than it sounds, because roughly three quarters of Canadian small business owners plan to exit within the decade (including myself). Selling to your employees rewards the people who built the thing, keeps the company rooted where it is, and hands your staff a source of income beyond their wage. As always, the tax and legal mechanics here are involved, so treat this as general information and get proper advice before you act.

And none of this is charity dressed up as strategy. The evidence runs the other way. Research out of Harvard Business School and long-running programs in the UK and US finds employee-owned firms are more productive, hold onto people better, and are steadier in downturns, laying off fewer workers and cutting pay less often. UK studies put the productivity edge in the range of eight to twelve percent. People who share in the upside tend to create more of it. That is the whole argument in one sentence.

What this looks like when someone actually does it

The cleanest recent example ran the whole sequence in order. Fibrebond, a family-run manufacturer in Minden, Louisiana, spent years as an ordinary maker of equipment enclosures until it made a risky bet, roughly a hundred and fifty million dollars, to pivot into power enclosures for the data centre boom. That is the competitive move: investing in doing something the market suddenly needed badly, and it worked. Sales climbed nearly four hundred percent in five years, which is exactly what draws a buyer. In 2026, the company was sold to Eaton, a power-management firm, for about $1.7 billion.

Here is the part worth stealing. When the owner, Graham Walker, negotiated the sale, he made one condition non-negotiable. Fifteen percent of the proceeds had to go to his employees, none of whom held any stock. That came to about $240 million, split among 540 full-time workers, averaging roughly $443,000 each and paid out over five years, with the longest-tenured people receiving far more. One worker who had started at $5.35 an hour nearly three decades earlier used hers to pay off her mortgage. Walker was almost blunt about the logic I have been describing. His people were the reason there was anything to sell, so his people should share in the sale.

You do not need a billion-dollar exit to borrow that logic. In Canada, we now have a structured, everyday version of the same idea. A company called Paradigm completed its conversion to an Employee Ownership Trust at the start of 2026, one of a small but growing group of Canadian firms using the new rules to give employees a stake without asking them to buy in. Same principle as Fibrebond, just built to run year after year rather than only on the day the company sells.

The wage step sits in between, and it is not a leap of faith either. The same body of research on employee-owned firms finds that they tend to pay higher average salaries while keeping turnover down, which is the sequence proving itself in miniature. Value gets created, then shared, then reinvested in the people who create the next round of it. The point is never the size of the company. It is the order.

Why this is the "better together" part

Notice what that sequence does. It does not ask the strained to wait for someone else to rescue them, and it does not ask the owner to give away margin they do not have. It grows the pie through competitiveness, then splits it more fairly through wages and ownership, and each step pays for the next. The Bank of Canada calls fixing productivity a virtuous circle and says the quiet part out loud: that no single institution or group fixes it alone; everyone has to play a part.

That is the same thing the trade report was saying, one scale up. A more competitive North America is worth jobs on both sides of the border. A more competitive business is worth wages and wealth for the people inside it. The K-shaped economy I opened with, where the savings of the comfortable are the very debts of the strained, only stays stuck if we treat those as two separate stories. They are on one balance sheet. We can keep pretending otherwise, or we can build businesses that widen who gets to prosper, on purpose, because it turns out… is also how you build a business that lasts.

What I changed, and what it might do for you

What I changed was the order of my own thinking. I used to jump straight to "pay more," or worse, to "not my problem," and both were wrong. Now I start with competitiveness, because that is the honest foundation, and I treat wages and a share of the upside as what you do with the gains, not as a cost you apologize for.

The result, in the businesses I have watched do this well, is not a softer bottom line. It is lower turnover, fewer of the Monday absences, people who bring their whole attention to the work because the fear has come down a notch, and an ownership mindset you cannot buy with a slogan. It is the return you would expect from treating your people as the engine of the business rather than a line item to shave.

No single business fixes the cost of living. That is bigger than all of us, and it will take governments, lenders and communities pulling the same way. But "too big to fix" is not a reason to sit still in the one place you actually control. If our livelihoods are wired together anyway, across income levels and across borders, we may as well wire them to pull in the same direction.

That is the correction I am still working on. Maybe it saves you the years I spent starting in the wrong place.

References

Note: the CABC/Oxford Economics figures are scenario projections, not settled outcomes, and negotiations are ongoing. Refresh before publishing.

Ontario employment law is referenced here as general information, not legal advice.

Ashley Wesley
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