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Small-business owners in Ontario are struggling in a mental-health “echo pandemic” and lack the resources to deal with employee and self-burnout, a report from the Ontario Chamber of Commerce has found.

Mind the Gap, released on Tuesday, examines the economic effects of COVID-19 and how a lack of mental-health program funding has affected small businesses.

“Many of the small-business owners in the chamber network feel that they have been left on the front lines of the mental-health crisis after the pandemic,” said Simranzeet Singh Vig, senior policy analyst at the OCC and author of the report.

With over 494,000 small businesses in Ontario, the sector employs more than four million people, or 71 per cent of the private-sector work force in the province, the OCC says.

According to the chamber, which advocates on behalf of approximately 60,000 businesses across the province, 45 per cent of small-business owners said they felt “overwhelming stress” dealing with effects of the COVID-19 pandemic, including inflation, supply chain issues and employee retention. Two-thirds of small-business owners also said they were closer to burning out after two years of COVID-19-related stress, according to a survey conducted last year.

Christina Fuda, a mental-health first aid co-ordinator at the Ontario Shores Centre for Mental Health Sciences, describes burnout as a state of mental, emotional and sometimes physical exhaustion that comes from feeling overwhelmed for a period of at least six months.

“Coming out of the pandemic, small-business owners should really be focused on regaining their footing,” Mr. Singh said. However, owners are instead now faced with the challenge of rebuilding their businesses while dealing with an increased demand for employee mental-health supports, he said.

According to the paper, more than half of small-business owners (54 per cent) were aware of employees struggling with mental-health-related challenges last year – up from 35 per cent in 2020. The OCC also found that 78 per cent of businesses in Ontario recognized the importance of investing in mental-health care support, but only 37 per cent had established a formal strategy.

In contrast to larger companies, the OCC says that small businesses lack the capacity and resources to address the workplace impact of the pandemic.

Along with its report, the OCC proposed 21 recommendations that tackle the challenges being faced by businesses, communities and health care systems in the province. One of them urges small businesses to develop a mental-health strategy and to offer mental-health and addictions support programs for employees.

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But programs can be expensive. “Unfortunately, mental-health training is not subsidized through our health care funding,” Ontario Shores’ Ms. Fuda said.

Among its recommendations, the chamber suggests the government of Ontario introduce tax incentives to encourage small-business spending on employee mental health.

Mr. Singh points to U.S. tax credits like Small Business Health Care Tax Credit, which gives businesses with fewer than 25 full-time workers tax incentives for contributing toward employees’ health care premiums.

“Implementing something like that in Canada would encourage businesses to invest in employee well-being and support, and whatever their expenditure is, they can claim it as a tax credit,” Mr. Singh said.

“We need to focus on a holistic approach,” Mr. Singh said. “Both the public and private sector needs to work together to improve mental-health outcomes for the province.”

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