Surplus helps keep premium rates stable
Between 2019 and 2025, $2.5 billion of surplus funds will have been used to keep premium rates stable and below costs.
By Chris Back, Director of Assessments at WorkSafeBC
B.C. employers fund the workers’ compensation system and care about fair and stable premium rates.
In recent years, some small-business associations have expressed concerns about WorkSafeBC’s funded position and asked why over $2 billion of surplus funds are not being returned to employers through a rebate.
The reason is simple: WorkSafeBC is already using the surplus to benefit employers annually by keeping premium rates lower than the actual costs of running the system.
WorkSafeBC’s funded position
To stay financially secure and reduce rate volatility during economic or investment downturns, we keep a reasonable level of assets over liabilities. The Board of Directors has set a goal to have at least 30% more assets than liabilities.
Our surplus is based on the ratio of assets over liabilities. At the end of 2023, WorkSafeBC exceeded its target funding level at 142%, representing $2.1 billion in surplus funds.
Surplus funds help employers
Employers fund the workers’ compensation system by covering the full cost of workplace injuries in the year they occur. However, we have been using surplus funds to keep premium rates stable and lower than the actual costs of running the system.
For example, this year’s average premium rate is $1.55 per $100 of payroll, even though the actual cost is $1.78. The surplus makes up the difference. Between 2019 and 2025, $2.5 billion from the surplus will have been used to keep premium rates stable and below the costs of the workers’ compensation system.
If the surplus funds were rebated directly to employers, rates would need to rise the following year to cover costs.
Fair and stable rates are the primary goals
In recent years, we have supported improvements to the workers’ compensation system for injured workers while maintaining stable rates for employers. This has been made possible, in part, by higher-than-required investment returns.
The average base premium rate has been flat in B.C. since 2018. And the average base premium rate in 2025 ($1.55) is less than it was a decade ago ($1.70).
But there are challenges ahead. We are seeing upward claim-cost pressures and a reduced surplus.
The cost pressures are driven by enhanced benefits for injured workers, and more complex claims, such as psychological injuries and chronic pain, which require longer recovery times and more healthcare services.
The good news is that WorkSafeBC remains financially sound. Looking ahead, we will continue to closely monitor cost pressures and keep rates as stable as possible.
This information originally appeared in the Spring 2025 issue of WorkSafe Magazine. To read more or to subscribe, visit WorkSafe Magazine.
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