Moderate increase in premium rates in near future a possibility, says agency
WorkSafeBC will return an estimated $570 million in surplus funds to employers in 2026 by deliberately setting average premium rates below the actual cost of running British Columbia’s workers’ compensation system.
For HR and finance leaders, that means a significant portion of next year’s workers’ compensation bill is effectively being subsidised by past investment gains and reserve strength, even as WorkSafeBC signals that this buffer is shrinking.
The board said its “sound financial position in recent years has enabled improvements in the workers’ compensation system for injured workers, while keeping rates stable for employers.” Its rate‑setting model includes “mechanisms to return surplus funds to employers when the funding level exceeds its target.”
Average base premium rates
In 2026, the average base premium rate of $1.55 per $100 of assessable payroll is being set 15% below the average cost rate of $1.83, “with the difference funded by the surplus,” according to WorkSafeBC. In practical terms, employers are not paying the full underlying cost of claims, health care, rehabilitation and administration this year; the gap is being filled from reserves.
Between 2019 and 2026, WorkSafeBC projects that $3 billion in surplus funds will have been returned to employers “by pricing premium rates below the cost to run the workers’ compensation system.”
Despite the flat average, individual employers will see movement in their industry base rates. In 2026:
- 39% of employers will see a decrease
- 47% will see an increase
- 14% will see no change
Upward costs, thinning surplus
Meanwhile, WorkSafeBC cautioned that the surplus is already under pressure from higher claims costs.
Looking at the year ahead, it said it is “continuing to see upward claim‑cost pressures and a continued reduction in the surplus.” If those trends persist, “it could lead to a moderate increase in premium rates in the near future.” The board said it will “continue to closely monitor cost pressures and keep rates as stable as possible.”
WorkSafeBC has also adjusted how far industry rates are allowed to move in a single year, citing “economic uncertainties facing the province.”
Rate changes are normally capped at 20% or down. For 2026, WorkSafeBC has capped rate increases at 10% and allowed decreases of up to roughly 40%.
“This change is intended to provide greater rate stability for B.C. employers during challenging economic times,” the agency said.
Sectors seeing the biggest reductions include:
- Sawmills (−40%)
- Framing or residential forming (−39.9%)
- Dairy farming (−32.2%)
- Restaurants (−25.6%)
- Prehospital emergency health care (−23.5%)
- Retirement homes (−13.4%)
Under the Workers Compensation Act, WorkSafeBC must set premium rates annually to fund the workers’ compensation system, covering “work‑related injuries or diseases, health care, wage loss, rehabilitation, and administration.” Preliminary rates for 2027 will be announced in July this year.
Employers must report any work-related injury or illness that requires medical treatment beyond first aid or results in the worker being unable to perform their job duties. This includes incidents that lead to temporary or permanent disability and, in severe cases, fatalities, according to Richard B. Johnson, co-founder and partner at Ascent Employment Law in Vancouver.
According to the Public Health Agency of Canada’s summary of the report The Cost of Injury in Canada, unintentional and intentional injuries in 2018 carried a total economic burden of $29.4 billion.
