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On October 6, 2021, Ontario’s Minister of Labour, Training and Skills Development announced reduced WSIB premiums for 2022, as well as proposed WSIB-related changes that would provide financial relief to Ontario employers as they continue coping with the impacts of the COVID-19 pandemic. The Ontario government plans to introduce legislation to enact the proposed changes this Fall, which would come into effect afterwards, if passed.

Details on the reduction of WSIB premiums, as well as three proposed WSIB-related changes are set out below.

Reduced Premium Rates

Ontario has announced that the Workplace Safety and Insurance Board (“WSIB”) will reduce WSIB premiums in 2022 by an aggregate amount of $168 million. As a result, the premiums that WSIB-covered Ontario employers will be required to pay in 2022 will be reduced by 5% on average, providing them with much needed financial relief as the pandemic continues.

Distribution of Surplus WSIB Funds

In order to provide further financial relief to employers, Ontario has proposed legislative changes that would allow, and in certain circumstances require, the WSIB to distribute a significant portion of its surplus funds to “safe” employers.  However, Ontario has yet to provide any details about which employers would be considered “safe” for these purposes.

Currently, the WSIB is not allowed to distribute surplus funds to employers. If the proposed legislation is passed, the the WSIB would have the option to distribute surplus funds to employers once the fund reaches a 115% surplus, and it would be required to return excess funds to employers once the surplus reaches 125%.

These proposed changes are based on a recommendation from the WSIB Operational Review that was released in November 2020. Notably, the WSIB’s reserve of surplus funds is currently valued at $6.1 billion. This represents a surplus of approximately 120%, given that every percentage point of surplus is estimated to be about $305 million.

Streamlined Remittances for Businesses

The Ontario government has also proposed changes to reduce WSIB-related administrative costs and burdens for employers by providing them with a “one-stop-shop” for submitting payroll deductions. This would be accomplished through legislative amendments that would enable the WSIB to work with the Canada Revenue Agency to streamline remittance processes for businesses and organizations.

Capping WSIB Premium Increases

Additionally, Ontario plans on capping WSIB premium increases to 3.2% for 2022 to prevent WSIB-covered employers from experiencing an anticipated spike in their WSIB premiums. This cap on premiums would be enacted through a regulation under the Workplace Safety and Amendment Act.

Unless this proposed change is legislated, WSIB premiums are expected to spike because of an increase to Ontario’s Average Industrial Wage caused by business closures in low-wage sectors during the pandemic. This increase to the Average Industrial Wage will increase the ceiling for workers benefits by 9.45 percent, which in turn would result in thousands of dollars in additional premiums for many employers unless WSIB premiums are capped.

Takeaways for Employers

The $168 million reduction in WSIB premiums for 2022 and the proposed WSIB-related financial relief measures that Ontario has announced are great news for WSIB-covered employers in Ontario.  After weathering more than a year and a half of a global pandemic, many if not most employers are in need of some financial relief. Moreover, these savings may allow employers to invest in the health and safety of their workplace, in the growth of their business, and in attracting and retaining the best talent.

However, it is important to note that the proposed changes discussed above have yet to be enacted through legislation, and it is uncertain whether such legislation will ultimately be passed. Similarly, it is unclear which employers would be considered “safe” and therefore eligible to receive surplus funds from the WSIB, if the proposed changes are enacted.

As always, we will continue monitoring all COVID-19 related developments that are relevant to employers and promptly post updates as they occur to keep you In the Know.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.