WorkSafeBC Reports Financial Strength but Warns of Potential Premium Rate Increases Amid Economic Challenges

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WorkSafeBC's 2025 Annual Report highlights a strong financial position but cautions about rising claim costs and potential premium rate increases due to economic uncertainties.

RICHMOND, B.C. — The recently published 2025 Annual Report and the 2026-2028 Service Plan from WorkSafeBC indicate that the organization is currently enjoying a robust financial status, having returned a substantial $564 million of surplus funds to employers in 2026. Some key highlights from the report for 2025 include: At the close of 2025, WorkSafeBC's funding level, calculated as assets over liabilities, stood at 139 percent, surpassing the target of 130 percent, although it was a decrease from the 141 percent level recorded in 2024. This funding level translates to surplus funds amounting to $1.7 billion, a reduction from just under $2 billion in the previous year. The report notes this was the first instance since 2016 where the funding level fell below 140 percent.
WorkSafeBC's approach to rate-setting incorporates mechanisms that allow for the return of surplus funds to employers when the funding level exceeds the established target. In 2026, the average base premium rate was set at $1.55 per $100 of assessable payroll, which is below the anticipated average total cost rate of $1.83, with the surplus covering the difference. It is estimated that between 2018 and 2026, approximately $3.2 billion of surplus funds will have been utilized to maintain stable premium rates that are lower than the operational costs of the workers' compensation system. For 2025, the premium income reached $2.4 billion, reflecting an increase of $75 million compared to 2024, attributed to a rise in assessable payroll, as the average base premium rate remained unchanged for the past year. The average base premium rate has remained flat since 2018.
In terms of investments, WorkSafeBC reported a portfolio return of 7.5 percent in 2025, outperforming the long-term required rate of return of 5.2 percent. Total claim costs for the year, excluding administration, amounted to $3.6 billion, marking an increase of $392 million from 2024. This rise in costs was driven by more extensive benefit entitlements for injured workers, increasing claim complexity, and a notable upward trend in long-term disability claims. The report indicates that claims associated with chronic pain and psychological injuries rose from 10 percent of all claims in 2019 to 14 percent in 2025, contributing to higher costs and longer durations for claims.
The provincial time-loss claims rate for 2025 was recorded at 2.04 per 100 workers, which is approximately one percent higher than the 2024 rate of 2.03. This increase was primarily due to a rise in time-loss claims within the health care and social services sectors, as well as in transportation and related services, though it was somewhat mitigated by a decline in time-loss claims within the general construction sector.
The annual report highlights that WorkSafeBC is experiencing ongoing economic uncertainties and upward pressures on claim costs, particularly relating to psychological injuries and chronic pain claims, alongside a reduction in surplus funds. Concurrently, businesses and workers in British Columbia are grappling with challenges stemming from trade tensions, geopolitical factors, and monetary policy, all of which could affect return-to-work outcomes for injured workers. Furthermore, the financial results and funding levels of WorkSafeBC may also be influenced by the volatility currently observed in global investment markets. Should these trends persist, there could be cost pressures leading to increased premium rates in the near future.

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