Business in Vancouver | Mark Heywood & Chris Back | March 9, 2026
WorkSafeBC is returning an estimated $570M of surplus funds in 2026 to employers by pricing premium rates below system costs
When it comes to WorkSafeBC, one of the most misunderstood issues we hear about from business groups is the surplus.
Specifically, many small-business associations have been calling on WorkSafeBC to rebate the surplus back to employers since our funding level is above target.
For background, the funding level is simply a ratio of assets over liabilities on a funding basis.
WorkSafeBC’s Board of Directors has set a target funding level of no less than 130 per cent of liabilities, based on sound insurance industry practice. This has proven to be a fiscally prudent measure to ensure the long-term financial sustainability of the system, and to avoid rate shocks during economic and/or investment downturns.
WorkSafeBC has been above this target—largely due to higher-than-required investment returns in recent years—which is equivalent to about $2 billion in surplus funds.
Returning surplus funds to employers
What is also not well understood is that WorkSafeBC has been returning significant amounts of surplus funds to employers annually to keep rates both stable and below the actual costs of the system.
That is, WorkSafeBC’s rate-setting approach includes mechanisms to return surplus funds to employers when the funding level exceeds its target. In 2026, WorkSafeBC is returning an estimated $570 million of surplus funds to employers by pricing premium rates below system costs. Between 2019 and 2026, the cumulative amount of surplus returned to employers will be $3 billion.
The average base premium rate of $1.55 per $100 of assessable payroll in 2026 is 15 per cent less than the average cost rate of $1.83, with the difference funded by the return of surplus.
The reality is that if WorkSafeBC refunded the entire surplus to employers—as requested by several small-business groups—we would no longer be able to price premiums below system costs, meaning rates would have to be raised in subsequent years, and employers could expect year-over-year rate volatility.
Rate stability amid economic uncertainty
Rate stability for employers is a priority for WorkSafeBC. The average base premium rate in B.C. has been flat since 2018 at $1.55, and the average base rate is lower today than it was a decade ago ($1.65).
WorkSafeBC’s sound financial position in recent years has also enabled us to absorb the costs related to legislated improvements in workers’ compensation coverage for injured workers—and the cost impacts of COVID-19—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 WorkSafeBC made changes to the maximum increases and decreases in 2026 rates for B.C. industries that have normally been capped at 20 per cent. For 2026, rate increases were capped at 10 per cent, while rate decreases were allowed to reach up to approximately 40 per cent. This change was intended to provide greater rate stability for B.C. employers during a time of economic uncertainty.
Some key sectors benefiting from rate reductions in 2026 include sawmills (down 40 per cent), framing and residential forming (down 40 per cent), dairy farming (down 32 per cent) and restaurants (down 26 per cent). For a restaurant with $500,000 of assessable payroll, this means average savings of $1,000 in 2026.
On the horizon
Looking at the year ahead, WorkSafeBC is seeing continued upward pressure on claim costs.
In addition, WorkSafeBC has seen a year-over-year decline in its surplus since 2021 with the 2025 ratio projected to be below 140 per cent for the first time since 2016. This decline is a result of a strategy of returning surplus funds to employers through discounted premium rates.
If claim costs continue to rise and there is less surplus to reduce premium rates, it then could lead to a moderate increase in 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 2026.
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.