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2009 premium rates to remain among lowest in Canada
Richmond, B.C., October 17, 2008 — Premium rates for B.C. employers will continue to be among the lowest in Canada during 2009, WorkSafeBC announced today.
The average premium base rate will remain at $1.56 per $100 of assessable payroll in 2009 ― the same as 2008 and the lowest rate in 30 years, down from a peak of $2.29 in 1996.
“Premium rates in B.C. are low compared to many other jurisdictions in Canada,” said WorkSafeBC’s Chief Financial Officer, Steve Barnett.
Premium rates charged to employers must be sufficient to cover the current and future needs of B.C.’s injured workers, some of whom will require financial and medical aid for the rest of their lives. To support those needs and maintain low and stable rates, WorkSafeBC invests a portion of the funds collected from employers.
Barnett explained that, in recent years, very strong investment returns, combined with safer workplaces, have made it possible for WorkSafeBC to maintain stable rates. However, those returns fell last year—to 4.4 percent following four years of double digit earnings.
“Earnings from long term bonds are now at historical lows, equity returns have fallen short of initial 2008 projections, and inflation increases are likely to impact real returns. While we expect rates to continue to be among the lowest in Canada, weak investment returns have caused upward rate pressure for 2009 causing many employers to experience modest increases, despite the average remaining flat to last year,” Barnett said.
To bolster employer premium rate stability during economic uncertainty, in 2007 the Board of Directors of WorkSafeBC established a Capital Adequacy Reserve based on the minimum capital risk requirements of private life and casualty insurers in Canada. “It’s designed to act as a buffer during turbulent economic times so that we can continue providing payment security to injured workers and rate stability for employers,” he said. “While upward rate pressure is likely in 2010, the Capital Adequacy Reserve will permit WorkSafeBC to shelter employers from the full impact of these times of financial uncertainty.”
Barnett added that employers can mitigate the potential for higher premium rates by improving health and safety at their workplaces and improving return to work outcomes. “Each percentage point of reduction in the injury rate means that approximately 600 fewer workers are injured and $10 million in claims costs is avoided.”
The average premium rate is a composite of rates in 67 individual rate groups, which function as separate mutual insurance pools for B.C.’s industries. Rates of individual industries strictly reflect the cost of injuries in each industry sector and move up and down in any given year primarily in relation to their injury costs. There is no subsidization of premium rates between rate groups.
For 2009, 40 percent of employers will see their base rates go up or down by 5 cents or less per $100 of assessable worker payroll; while 24 percent will see their base rates decrease by more than 5 cents; 29 percent will see their base rates increase between 6 and 25 cents; and 7 percent will see increases of more than 25 cents.
Rate decreases have been approved for commercial building construction (from $4.08 to $3.67), forestry (from $8.93 to $8.51), waterfront marine carriers (from $1.84 to $1.47), taxis (from $3.50 to $2.80), and barge operators (from $4.06 to $3.25).
Firms that will see their rates remain virtually unchanged or that will incur modest increases include those in general trucking (from $4.87 to $4.89), couriers (from $2.64 to $2.61), and house construction (from $4.06 to $4.03).
Industries whose rates will increase include oil and gas exploration, drilling, well servicing (from $1.92 to $2.34); large retail, convenience, furniture and flooring stores (from $1.01 to $1.21); shipbuilding (from $3.58 to $4.04); paper mills (from $1.30 to $1.46); greenhouses (from $3.07 to $3.40); restaurants and pubs (from $0.85 to $0.96); dentists and general practitioners (GPs), walk-in clinics, surgical centres, and community health (from $0.27 to $0.32); and warehouses (from $2.51 to $2.90).
Information regarding the 2009 rates is available on WorkSafeBC’s web site at WorkSafeBC.com. WorkSafeBC has also met with industry representatives to discuss the rates, to ensure employers have an opportunity to prepare budgets, consult with WorkSafeBC, and anticipate their costs for the coming year.
Serving about 2.2 million workers and more than 197,000 employers, WorkSafeBC is a provincial statutory agency governed by a Board of Directors and funded by employers. WorkSafeBC was born out of a compromise between BC’s workers and employers in 1917 where workers gave up the right to sue their employers or fellow workers for injuries on the job in return for a no-fault insurance program fully paid for by employers. WorkSafeBC is committed to a safe and healthy workplace and to providing return-to-work rehabilitation and legislated compensation benefits to workers injured as a result of their employment.
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| Donna Freeman |
Scott McCloy |