Psychological health and safety — what Canadian employers need to know
Mental health costs in Canada have reached $51 billion annually, and $20 billion of that is directly tied to the workplace. Yet psychological health and safety remain one of the most overlooked areas of occupational health in Canadian workplaces.
Employee burnout, absenteeism, a high turnover rate, and declining productivity don’t appear out of nowhere. They’re often symptoms of unmanaged psychosocial hazards that have been sitting unaddressed for months, sometimes years. And while physical hazards tend to get the attention, psychological ones carry consequences that are just as real and often more costly.
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In this webinar replay, Citation Canada’s health and safety consultant Aaron Georges sat down to cut through the noise on psychological health and safety: what it means, what the law requires, and what Canadian employers can do about it right now.
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What is psychological health and safety? A Q&A with our expert
Adapted from webinar transcript
Why does psychological health and safety matter, and when does it become a legal issue?
KP: Aaron, before we get into the practical side, let’s start with the basics. What are we talking about when we say psychological health and safety?
Aaron: It starts with understanding what a psychosocial hazard is. The CSA defines an occupational disease as one that can arise from exposure to chemical, physical, biological, ergonomic, or psychosocial hazards. So the law already recognizes psychological harm as a legitimate occupational risk.
A psychosocial hazard is rooted in how work is organized, managed, and carried out. It can create conditions for psychological harm just by the way things are structured. A concrete example is a manager whose leadership style generates chronic fear through bullying, belittling, or leading with threats. That person, and that behaviour, is a psychosocial hazard. It also overlaps with workplace violence and harassment, which carries its own legislative requirements.
As an employer, you have a base-level duty across every jurisdiction in Canada to take reasonable precautions to protect the health and safety of your workers. That includes psychological health. The question is whether you’re treating psychosocial hazards with the same rigour you apply to physical ones.
KP: Is there specific legislation Canadian employers should be tracking?
Aaron: Most jurisdictions are still catching up, but Quebec is leading the charge. As of October 6, 2025, Bill 27 requires Quebec employers to have a formal program in place to identify and address psychosocial risks in the workplace. That’s a meaningful step and a signal of where regulation is heading across the country. If you’re operating in Quebec, that’s not optional. If you’re outside Quebec, it’s worth getting ahead of it now rather than waiting for your province to follow suit.
Psychological safety vs. psychosocial safety: understanding the difference
KP: These two terms get used interchangeably, but they’re not the same thing. Can you break that down for us?
Aaron: They’re related, but they’re distinct. Psychological safety is about the belief that you won’t face punishment or reprisal for speaking up, asking questions, flagging a concern, or admitting a mistake. It’s a state of trust. When a worker tells their supervisor, “This system is going to cause problems,” and that concern gets taken seriously with no backlash, that’s psychological safety working as it should.
Psychosocial safety is broader. It’s the ongoing management of psychosocial hazards to prevent psychological harm from occurring in the first place. That involves identifying those hazards, assessing the risk they pose, implementing controls, and evaluating how well those controls are working. Both matter. One is about culture; the other is about systems.
KP: Where do Canadian employers go for a framework to guide that work?
Aaron: In the absence of jurisdiction-specific legislation telling you exactly what your program needs to include, you default to standards. There are two major ones: CSA Z1003 and ISO 45003. Both take a systematic approach: identifying, assessing, and controlling psychosocial hazards to prevent psychological harm. If you’re not sure where to start, that’s your starting point.
The cost of getting psychological health and safety wrong
KP: You mentioned this is costly. What do the numbers look like?
Aaron: The Centre for Addiction and Mental Health has found that a psychological injury is typically more impactful to the worker and more costly to the employer than a physical one. Workplace disability leaves related to mental illness cost roughly twice what a physical illness costs. When you scale that up, the Canadian Mental Health Association and the federal government estimate the total cost of managing psychological health in Canada at $51 billion annually, $20 billion of which is directly work-related.
Those aren’t abstract numbers. That cost shows up in your turnover rates, your benefits claims, your lost productivity. And it comes out of everyone’s pocket: employers, employees, and the broader public health system.
KP: Who else does this affect beyond the individual employee?
Aaron: Everyone, if you think about it. When a worker is dealing with a psychological injury—potentially a long-term one—their quality-of-life changes. They might withdraw from co-workers, from friends, from family. The people around them notice that absence. Beyond the immediate circle, there’s a reputational dimension for the employer. If your workplace has a known problem and nothing is being done about it, that affects how customers and the community perceive you. And at the societal level, untreated psychological injury floods the healthcare system, which all of us fund.
Watch for the early signals: high absenteeism, rising turnover, declining motivation and productivity. These aren’t just HR metrics; they’re indicators that something deeper may need attention.
How to identify and manage psychosocial hazards: the RACE method
KP: What does a Canadian employer do? Where do they start?
Aaron: The good news is you don’t need to reinvent anything. The RACE method (recognize, assess, control, evaluate) applies to psychological hazards just as well as physical ones. The activities look a little different, but the method is the same.
Recognize: This looks different with psychological hazards because you can’t always see them. You might use surveys, anonymous questionnaires, group discussions, or individual interviews. Reviewing past incident reports, both internal and from other industries, also helps you build a picture. If workers feel safe enough to come forward, that’s your most direct source of information.
Assess: This uses the same risk assessment format you’d apply to a physical hazard: how likely is this to cause harm, and how severe would that harm be? The inputs are different.
Control: Involves a mix of tools: training, policy and procedure development, clear communication of responsibilities, and consistent follow-through. The worst outcome is committing to an action and still not having taken any steps three months later. That’s not just a management failure; it can constitute a breach of your legal duty.
Evaluate: Means revisiting your controls at least annually. Are they still working? Did anything change: a new manager, a restructuring, an incident? If something changed, reassess.
KP: Are there specific risk factors employers should be looking for?
Aaron: There are many, and not all of them are obvious. A few common ones: a workplace that tolerates poor behaviour, workload that’s chronically too high or too low, unclear job expectations or instructions, and lack of role clarity. It’s also worth recognizing that not all risk factors are internal. Employees bring external stressors related to finances, relationships, or health conditions that can affect their psychological state at work.
Physically, a deteriorating workplace environment—poor housekeeping, damaged equipment left unfixed—can also be a signal that safety culture is slipping in a broader sense.
North American Occupational Safety and Health Week: a practical window to act
KP: This webinar aired during North American Occupational Safety and Health (NAOSH) Week. How can employers use that week to make meaningful progress on psychological health and safety?
Aaron: I put it into a simple acronym: REAL.
- Reflect. Go back and look at past incidents and costs: yours and other industries. What trends are you seeing? What have you spent on safety in the last year? Are things better or worse than the year before?
- Evaluate. Look at your hazard and risk assessments. Have you done them at all? When did you last update them? At minimum, they should be reviewed annually, more often if something in the workplace has changed.
- Allocate. Safety costs money, time, and attention. If you’ve been running on autopilot, use this week to decide where those resources are going this year. That could mean fixing something that’s been broken for months or finally budgeting for training you’ve been putting off.
- Learn. Training, policy reviews, infographics, safety talks, anything that puts relevant information in front of your team. It’s not enough to have a policy. The people it applies to need to know it well.
Ministry of Labour blitzes: what Canadian employers need to know right now
KP: Before we get to questions, there’s an Ontario Ministry of Labour blitz happening this year that affects specific sectors. Aaron, what should employers know?
Aaron: Ontario’s Ministry of Labour, Immigration, Training and Skills Development publishes an inspection blitz schedule annually. This year, a few areas are in focus.
Farming and agriculture: Inspectors will be looking at safe equipment use (tractors, forklifts, machine guarding), as well as heat stress prevention, worker training, and high-risk activities like electrical hazards and lockout/tagout procedures. It’s not purely enforcement; inspectors will also be sharing information and guidance on meeting those obligations.
Retail: The focus is musculoskeletal disorder prevention: specifically falls from ladders, struck-by hazards, and injuries related to manual handling. Inspectors will be onsite to connect employers with resources and raise awareness of common retail hazards, not just check boxes.
Noise compliance: This one applies across all sectors where hazardous noise is present. Inspectors may show up unannounced and will be looking at how you’ve identified noise hazards, what controls are in place, and how you’ve documented that process.
If you’re a Citation Canada client, reach out to the health and safety team with questions. If not, the ministry website has the full blitz schedule, and the ministry itself is approachable and willing to help employers understand their obligations.
Would your business be ready if an inspector showed up at the door tomorrow?
We understand how much work it can take for a small business to prepare for a workplace inspection that might never happen, which is why our health and safety consultants created a guide detailing what employers need to know about ministry inspections.
Psychological health and safety questions answered
Q: How do we handle a stress leave when an employee says the stress is caused by a disciplinary process or a conflict with their manager?
Aaron: This is a layered situation, and the right answer depends on the specifics. What I’d recommend at a high level: investigate. Was the report from the manager made in good faith? Is there a history between these individuals of previous incidents, complaints, or a pattern that points toward something more systemic? Or is this an isolated situation that needs a direct conversation to get to the root of?
If there’s genuine evidence of something happening between the manager and the employee, escalate. Bring in HR and upper management. Don’t try to manage that at the supervisor level alone. These situations can carry significant risk if they’re not handled properly.
Q: What role does the joint health and safety committee play in psychological health and safety?
Aaron: The same role it plays in everything else: it’s involved at every level. JHSC members should be part of your risk assessments, involved in identifying and controlling hazards, and included in ongoing evaluation. If a worker is dealing with a psychological safety concern, having a JHSC member present in those conversations ensures the worker has a voice and a representative.
If you’re a manager or supervisor dealing with something in this space, your first call should often be to your JHSC member. Get them engaged early. That’s how these situations get handled properly.
Final takeaways from our psychological health and safety expert, Aaron
Aaron: We don’t reinvent the wheel on safety. The same methods that protect workers from physical hazards apply here; you just must be willing to apply them. Psychological health and safety isn’t a soft issue. It has legal weight, actual cost, and a measurable impact on your people and your business. The standards are there. The tools are there. The question is whether you’re using them.
KP: And that’s why we run these sessions. There’s so much to learn about psychological health and safety. Thank you.
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Psychological Health and Safety Webinar Replay
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