Ontario Providing Financial Relief to Employers
HAMILTON – Ontario’s Workplace Safety and Insurance Board (WSIB) is cutting premium rates in 2022 by $168 million, bringing the total reduction in premiums since 2018 to $2.4 billion. In addition, the government is intending to introduce legislation that, if passed, would allow for a significant portion of the WSIB’s current reserve, currently valued at $6.1 billion, to be distributed to safe employers. This proposed change would help employers cope with the impacts of COVID-19. Details were shared today by Monte McNaughton, Minister of Labour, Training and Skills Development at Donut Monster, a local bakery in Hamilton whose WSIB premiums are being reduced next year. “We know shopkeepers and merchants on Main Streets across Ontario need help. That is why our government is taking action by modernizing the WSIB to support these employers and protect local jobs,” said Minister McNaughton. “This package will save employers hundreds of millions of dollars that can be reinvested in new jobs, technology, and health and safety protections. At the same time, injured workers will continue to receive the benefits and services they deserve.” The Ontario government is also proposing to enable the WSIB to work with the Canada Revenue Agency to streamline remittances for businesses. This change would reduce administrative costs and burdens by giving businesses an efficient one-stop-shop for submitting payroll deductions. “Supports like these go a long way to help keep businesses viable and competitive as we deal with the impacts of COVID-19,” said Heidi VanderKwaak, owner of Donut Monster. “The rate reduction means more money for employers like me to increase wages for frontline staff so we can remain competitive and fair while also investing in improving health and safety in the workplace. Today's announcement will help keep workers safe and small businesses open.” Lastly, closures in low-wage sectors due to the pandemic have resulted in a spike in Ontario’s Average Industrial Wage. As a result, the ceiling for worker benefits will be increasing by 9.45 per cent. To prevent some businesses from having to pay thousands of dollars a year in additional premiums, Ontario is capping the growth of premiums to an increase of 3.2 per cent (close to the normal range) through a regulation under the Workplace Safety and Amendment Act. Similar action was taken for 2021.
The Workplace Safety and Insurance Board covers over five million people in more than 300,000 workplaces across Ontario.
Today’s premium reduction is an average of 5% for employers, totalling $168 million that businesses can reinvest back into our economy.
Distributing surplus WSIB funds was a recommendation from the WSIB Operational Review that was released in November 2020.
Minister McNaughton recently appointed Pauline Niles as the Chair of the Office of Worker Advisor. The Minister restored this office that helps workers navigate the WSIB system and increased funding by $434,195.
Currently, the WSIB is not permitted to distribute surpluses to employers. New legislation intended to be introduced later in the fall would, if passed, require the WSIB to return excess funds to employers once the Board’s surplus reaches 125 per cent, with the option to do so earlier.
As of March 31, the WSIB’s insurance fund is at 119 per cent. Every percentage point represents an estimated $305 million in surplus funds.
The government is proposing to follow the Review’s recommendation to allow the WSIB to distribute surpluses when the fund reaches a 115% surplus and requires the WSIB to distribute funds when the surplus reaches 125%.
Quotes " At a time when Ontario is looking to stimulate recovery, lower operating costs will help businesses get back on their feet faster. Today’s announcement is welcome news for workers and employers in all corners of the province, as the savings can be better spent on job creation, new technologies, infrastructure, and safer workplaces. " - Rocco Rossi, President and CEO, Ontario Chamber of Commerce "For many years, CFIB has advocated for WSIB surpluses to be returned to employers and lower premium rates for Ontario’s job creators. With the pandemic continuing to create massive challenges for many small businesses, this is needed now more than ever. We thank Minister McNaughton for listening and acting on these concerns." - Dan Kelly, President, Canadian Federation of Independent Business "Ontario construction employers and workers have continually risen to the challenge of making worksites safe while building the essential infrastructure our communities rely on. The proposed legislation will allow Ontario's construction employers to invest in making their workforce safer. It also takes steps to secure the integrity and full funding of the Ontario workers' compensation system." - Giovanni Cautillo, President, Ontario General Contractors Association "We are pleased that the Government of Ontario recognizes the long-term commitment Ontario employers have made to the full funding of the WSIB. This proposal provides relief to workplaces during a difficult economic time while the system remains fully funded with no impact on taxpayers or at the expense of injured workers." - David Frame, Chair, Construction Employers Coalition
Learn more about O. Reg. 665/21: Calculation of 2022 Premiums
Read about the WSIB’s new rate reduction initiative wsib.ca/2022premiumrates
Visit Ontario’s website to learn more about how the province continues to protect Ontarians from COVID-19