OTTAWA — The Harper government is overhauling how it manages disability in the public service as depression, stress and other mental illness account for nearly 45 per cent of all claims.

Treasury Board quietly kicked off the initiative several years ago and is expected to have a business plan ready for cabinet within the year. The plan is a critical first step in turning around the escalating number of mental health claims that are taking employees off the job.

It’s developing a “workforce wellness” strategy that aims to promote prevention, takes the stigma out of mental illness and gets those suffering from depression treated and back to work as quickly as possible.

It marks the biggest shift in disability management since the plans were introduced 40 years ago.

Stress, burnout, anxiety and depression are rampant in all workplaces, especially in time of economic uncertainty. The federal public service, however, ranks among the worst.

Disability claims in Canada are climbing and between 40 and 50 per cent of them are for depression. In the public service, mental health claims doubled between 1991 and 2008 to 45 per cent, half of which were for depression.

Many are braced for those numbers to climb as the squeeze of the Conservatives’ new three-year operating freeze is felt, dumping more work on fewer workers. The freeze, announced in the federal budget, also leaves deputy ministers little room to manoeuvre in running departments so getting people, who are on paid sick leave, treated and back in their desks will be critical.

“It’s the right thing to do for employees and it’s most cost effective,” said one official. ‘We have to pay them whether they are at work or not so why not give them more support and get them back.”

Bill Wilkerson, the co-founder of Global Business and Economic Roundtable on Addiction and Mental Health, has long pressed the government to develop a mental health strategy to deal with what he called its “toxic” workplace.

He has called depression an epidemic sweeping the public sector among bureaucrats, nurses, teachers, police and military that should be tackled as a national “public health crisis.”

“We have to push for a new generation of benefits design that emphasizes prevention and recognizes than brain skills are the most important skills in the federal government and for 85 per cent of all jobs in the economy, “ said Wilkerson.

“Only two per cent of the people off for a year ever return to work and the return rate goes down like a roller coaster after being off for six months. You have to get people motivated and supported and back to work within six months.”

Treasury Board is taking its overhaul a step at a time. The initiative is headed by a project team with input from senior bureaucrats across government. The plan will unfold in three stages over three years.

So far, the Conservatives haven’t decided whether to redesign its various disability plans with some of Canada’s largest insurance companies and throwing them open for re-tender. The plans have not been re-tendered since they were created 40 years ago.

Treasury Board’s reforms are aimed at prevent injury and illness at the workplace. It wants managers actively supporting workers who are off on sick leave, ensuring they get early care and back to work as quickly possible.

The stressed, burned out and depressed who go on sick leave often get lost in the system and are left to flounder with little effort and encouragement from managers to find ways to reintegrate them into the workforce. The more sick leave employees have banked, the less likely efforts were made to get them back to work.

This means managers will now have to do more to ‘accommodate’ workers, whether it’s with new technology, rejigged workloads, fewer hours, or even a new position to ease them back to work.

This combination of prevention and accommodating workers could significantly reduce disability benefits being paid out.

Treasury Board officials said 10,560 public servants received disability benefits since last April. About 3,000, however, aren’t permanently disabled and managers are trying to bring them back.

With managers taking a bigger and more active role in managing disability and encouraging employees back to work, Treasury Board estimates it could shave three per cent off the premiums the government pays for disability plans to insure public servants and executives.

But others say that’s drop in the bucket compared to the millions that could be saved by reducing absenteeism, the cost of replacing workers, prescription drug costs, short and long term disability costs.

Treasury Board documents show the government paid about $331 million in 2007-08 in premiums and fees to the insurance companies that manage its disability plans. About the same time, it paid $436 million in salaries for workers on sick leave. Public servants get 15 days for every year they work, which they can bank over a career.

Mental illness, left untreated, has a multiplier effect that drives up costs. People with depression use the health care system four times more.

The most vulnerable are workers in their prime, between the age of 30 and early 50s. Public servants using anti-depressants through the drug plans are more likely to be treated for pain, hypertension, diabetes and other ailments.

Prime Minister Stephen Harper put mental health on the agenda when he created the Mental Health Commission, headed by former senator Michael Kirby, to help develop a mental health strategy. In the last budget, the government promised to examine ways all compensation costs, including benefits, could be better managed to save money.

Many argued for years that the government’s approach to disability is obsolete and out of sync with modern practices and attitudes about mental illness and the way people are managed.

The existing plans were born 40 years ago for physical injuries and illness related to the job. The nature of work has shifted dramatically since then to more ‘knowledge’ based jobs.

That’s when illnesses like stress, anxiety and depression took hold and workers ended up being off longer because of poor treatment and the isolation of being at home, away from friends and colleagues, which often makes depression worse.

Critics say the various plans are inconsistent and have no incentive to get people back to work quickly. They have different definition of disability; the amount of benefits vary; its unfair to workers who haven’t worked long enough to bank enough sick leave while older healthy workers can bank two years of sick leave in a career.

The government has three types of disability: Workers Compensation for illness and injury related to the job; paid sick leave for non-work related injury and long term disability.

There are four separate plans covering nearly 352,500 employees — a long term disability plan managed by Sun Life for unionized public servants and another run by Industrial Alliance for executives. Great West Life manages the RCMP’s disability plan Manulife runs the military plan.

The government negotiates premiums with the insurers based on the expected and current costs of claims. Public servants kick in about 15 per cent of the premiums and the government pays the rest. The government pays 100 per cent of the premium for executives.