Workers’ Compensation Overfunding: Where Provinces Stand on Rebates
Ontario’s Workplace Safety and Insurance Board (WSIB) is in the spotlight as it prepares to distribute a massive $2 billion surplus rebate to eligible employers in February 2025. While this is a significant development, surplus rebates are not new across Canada. Several provinces have already issued refunds in recent years, while others continue to evaluate their strategies for addressing overfunding.
This article provides a roundup of how provinces have managed their surpluses, what’s expected next, and what employers need to know.
Ontario: WSIB Announces $2 Billion Rebate for 2025
The WSIB’s February 2025 rebate will return $2 billion to employers in a surplus position, making it one of the most significant refunds in recent years. The surplus stems from overfunding in WSIB’s insurance fund, which exceeds the necessary reserve for its financial obligations.
Eligibility for the WSIB Rebate:
Employers must meet the following conditions:
- Active account with premium obligations as of November 1, 2024.
- Premium obligations in 2023.
- Compliance with workplace safety laws (no convictions or fatalities within specific timeframes).
- No affiliations with businesses that fail to meet compliance or eligibility standards.
Employers don’t need to apply for the rebate, as WSIB will automatically calculate and issue the funds. Learn more on the WSIB rebate page.
What’s Happening in Other Provinces?
While Ontario’s 2025 rebate is top of mind, other provinces have already distributed surplus refunds or implemented strategies to address overfunding. Here’s a look at what’s been done and what might come next:
Manitoba: Ongoing Rebates Through 2026
The Workers Compensation Board of Manitoba (WCB) has been proactive in managing its surplus. In May 2024, Manitoba employers received rebates equal to 50% of their 2023 premiums. The province has committed to issuing rebates through 2026 to reduce its funding ratio to 130%.
Notable Past Distributions:
- $118 million was refunded in 2024.
Learn more at the WCB Manitoba website.
Prince Edward Island (PEI): December 2023 Rebates
In December 2023, PEI’s Workers Compensation Board (WCB) distributed $21 million in surplus funds to employers. This followed several years of maintaining funding levels beyond the board’s target.
More details can be found on the PEI WCB surplus page.
New Brunswick: December 2024 Cheques
New Brunswick’s surplus rebate for 2024 will be issued as cheques in mid-December to eligible employers. To qualify, employers must meet specific criteria, including:
- A performance refund exceeding $100.
- No overdue balances of $100 or more as of October 31, 2024.
WorkSafeBC: No Direct Rebates
Despite being in an overfunded position, WorkSafeBC has not issued direct surplus refunds. Instead, the surplus has been used to keep employer premiums below the cost of funding the system. Between 2019 and 2025, WorkSafeBC estimates that $2.5 billion in surplus funds will have been applied to maintaining stable rates.
Why Surpluses Matter to Employers
Surpluses in workers’ compensation funds can be a financial windfall for employers, whether through direct rebates or lower premium rates. However, the benefits depend on how individual boards manage their funds and whether employers meet eligibility requirements.
What Can Employers Expect Next?
- Continued Rebates: Provinces like Manitoba plan to issue rebates for the next few years.
- Ongoing Rate Reductions: WorkSafeBC and other provinces may continue applying surpluses to stabilize or reduce premium rates.
- Potential Adjustments: Provinces that haven’t announced surplus plans may revisit their funding strategies as financial positions evolve.
What Should Employers Do?
- Stay Informed: Follow announcements from your provincial workers’ compensation board to understand rebate opportunities and eligibility requirements.
- Evaluate Compliance: Ensure your organization is meeting safety and reporting standards to avoid disqualification from surplus distributions.
- Plan Strategically: Use surplus refunds or premium savings to reinvest in health and safety initiatives, employee training, or operational improvements.
Surplus rebates, whether distributed as cheques or reflected in lower premiums, are an important way for employers to benefit from strong financial performance by workers’ compensation boards. By staying informed and maintaining compliance, employers can position themselves to maximize these opportunities.