Employers will have access to a portion of the Workplace Safety and Insurance Board’s (WSIB) reserve, valued at $6.1 billion, according to Monte McNaughton, Minister of Labour, Training and Skills Development, who announced the Ontario government’s intention to introduce new legislation in the Fall of 2021 to amend the Workplace Safety and Insurance Act.
Currently, the WSIB is not permitted to distribute surpluses to employers. Following its review of the WSIB’s operations, the Ministry’s final report, released on November 6, 2020, see our prior In A Flash Long-Awaited Ontario WSIB Review Report Released by MOLTSD, recommended that the government adopt a regulation that establishes parameters for surplus distribution, namely that the WSIB should consider surplus distribution when the insurance fund exceeds 115% and that the WSIB be required to distribute surpluses if the sufficiency ratio hits or exceeds 125%. Consistent with this recommendation, the government’s announcement proposes that the new legislation would allow the WSIB to distribute surpluses over 115% and would require the WSIB to return excess funds to employers once the WSIB’s surplus reaches 125%. As of March 31, 2021, the insurance fund was at 119%.
At its AGM this week WSIB Chair Elizabeth Witner and President / CEO Tom Bell also announced that the WSIB will reduce the average premium rate for Ontario businesses. The WSIB intends to cut premium rates in 2022 by an average of 5.1%, for a total of $168 million. While the reduction may bring savings to many employers, it is not clear that such savings will be shared equally across all classifications.
However, the ceiling for worker benefits would also increase by 9.45%, which would increase the premiums for employers with high wage earners. Interestingly, in 2021, the maximum insurable earnings and benefit limit for workers was reduced by 5.3% by the WSIB (from $102,800 to 97,308).
To mitigate this concern, the Ontario government proposes to cap the growth of premiums to a maximum increase of 3.2 per cent. Such a step, however, could lower the prospects for future surpluses.
The Ontario government is also proposing to enable the WSIB to work with the Canada Revenue Agency to streamline remittances for businesses. The proposed change would aim to reduce administrative costs and burdens by providing businesses with an efficient model for submitting payroll deductions.
The Minister’s announcement did not provide a date for introducing the legislation.