Published on: June 8, 2026

In 2026, WorkSafeBC is returning an estimated $564 million of surplus funds to employers through discounted premium rates.

By Mark Heywood & Chris Back

One of the most misunderstood issues we hear from business groups is about WorkSafeBC’s surplus. Specifically, many small business associations have been asking WorkSafeBC to rebate this surplus back to employers.

For background, WorkSafeBC has about $1.7 billion in surplus funds, largely due to higher investment returns in recent years. This surplus means our current funding level is greater than the target set by our Board of Directors.

Funding level refers to a ratio of assets over liabilities (on a funding basis). The Board has set a target funding level of no less than 130 percent of liabilities. This target is based on insurance industry best practice.

What isn’t always clear is the importance of meeting or exceeding this funding level target. Doing so ensures the long-term financial sustainability of the workers’ compensation system. It also means that we can avoid rate shocks for employers during times when the economy or our investments aren’t doing well.

Surplus funds returned to employers through premiums

Many may not realize that the way WorkSafeBC sets rates includes a built-in mechanism to return surplus funds to employers when the funding level exceeds the target. This mechanism uses the surplus funds to keep employers’ rates as low as possible, even when the costs of running the workers’ compensation system are greater.

For example, in 2026, the average base premium rate is $1.55 per $100 of assessable payroll. If WorkSafeBC were to set rates based on the actual costs of operating the system, the average base rate would need to be much closer to $1.83. That is a $0.28 difference, or a 15% savings, made possible by using the surplus to fund the difference.

Put simply, we’re using surplus funds to lower employer premiums below cost.

In this way, WorkSafeBC is returning an estimated $564 million of surplus funds to employers in 2026. Between 2018 and 2026, the amount of surplus funds returned to employers will total an estimated $3.2 billion.

The reality is that if WorkSafeBC refunded the entire surplus to employers, we would no longer be able to price premiums below system costs. This means rates would need to be raised in subsequent years and employers would face year-over-year rate volatility.

Prioritizing rate stability for employers

Keeping rates stable and as low as possible for employers is a priority for WorkSafeBC. Our sound financial position is how we have been able to keep the average base premium rate in B.C. flat at $1.55 since 2018. In fact, the average base rate is lower today than it was a decade ago when it was $1.65.

The surplus has enabled us to absorb costs related to legislated improvements in workers’ compensation coverage for injured workers, as well as the cost impacts of COVID-19 — all while keeping rates stable for employers.

The surplus has also allowed WorkSafeBC to be flexible during challenging economic times. We understand the struggles that many B.C. businesses are dealing with right now. That’s why we adjusted the maximum increases and decreases in 2026 rates for B.C. industries. Normally, these are capped at 20 percent. But for 2026, rate increases were capped at 10 percent and rate decreases were allowed to reach up to about 40 percent. This change provides greater rate stability for B.C. employers during a time of economic uncertainty.

Some key sectors benefiting from rate reductions in 2026 include sawmills (40 percent decrease), framing and residential forming (40 percent decrease), dairy farming (32 percent decrease), and restaurants (26 percent decrease). For a restaurant with $500,000 of assessable payroll, this means an average savings of $1,000 in 2026.

Looking ahead

Looking at the year ahead, WorkSafeBC is seeing that claim costs will likely continue increasing unless current trends change. In addition, as WorkSafeBC has used surplus funds faster than it can replenish them to discount premium rates, the surplus has declined year over year since 2021.

Our 2025 funding level is below 140 percent for the first time since 2016 as our rate model is designed to move us closer to our funding target.

If claim costs continue to rise and there is less surplus to reduce premium rates, there will be greater pressure to increase premium rates in the near future. WorkSafeBC will continue to closely monitor cost pressures and keep rates as stable as possible. The preliminary rates for 2027 will be announced in July of this year.

The workers’ compensation system is independently funded by employer premiums and investment returns. WorkSafeBC does not receive any funding from the provincial government.

Mark Heywood is the CFO and Head of Finance and Assessments at WorkSafeBC. Chris Back is the Director of Assessments at WorkSafeBC.

This article originally appeared in the Summer 2026 issue of WorkSafe Magazine.

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