Ontario workers injured on the job could see higher loss-of-earnings benefits under legislation Labor Minister David Piccini plans to introduce in what would be the first increase to income-replacement rates in nearly three decades.
Piccini said Workplace Safety and Insurance Board (WSIB) loss-of-earnings benefits would rise from 85% of a worker's take-home pay to 90%, reversing a cut made in 1998. The change would apply to workers covered by the province’s no-fault workers’ compensation system and is being framed as a response to cost-of-living pressures.
The planned reforms would also remove the automatic cut-off of wage-loss benefits at age 65. Injured workers who intended to keep working beyond 65 would be able to continue receiving supports, instead of having payments stop on their 65th birthday, subject to WSIB rules and eligibility.
Piccini is expected to table a broader package of labor-law changes in the coming days. The government has already announced plans to extend mandatory WSIB coverage to healthcare and support staff in privately run retirement homes and group homes, widening protection in a sector where many workers have historically lacked coverage.
Ontario last reduced income-replacement benefits in 1998, when reforms lowered loss-of-earnings benefits from 90% to 85% of net average earnings as part of a package aimed at addressing the board’s then-significant unfunded liability.
The current proposal comes at a very different point in the funding cycle. After several years of premium-rate reductions and surplus rebates, WSIB’s Insurance Fund remains above its statutory sufficiency target. The board reported a sufficiency ratio of 116.5% as of June 30, 2025, above its 110% to 120% target range, and has distributed multiple rounds of surplus rebates to employers in recent years.
In late 2024, WSIB’s board approved a further $2 billion surplus distribution to eligible Schedule 1 employers and cut the average premium rate for 2025 to $1.25 per $100 of insurable earnings — the lowest in about half a century. According to a 2025 review by the Canadian Federation of Independent Business, WSIB’s funding ratio left the system slightly above its long-term target but broadly in line with its policy corridor.
WSIB is funded entirely by employer premiums and investment income, not general tax revenue. Raising wage-loss replacement from 85% to 90% of net earnings will increase the cost of new and ongoing claims, particularly in industries with higher injury rates or more long-duration claims.
Over time, that may translate into higher average assessment rates, especially if investment returns weaken or if further benefit enhancements follow.
Employer groups have largely welcomed recent rebate checks and lower premium rates but have also warned that using surpluses for one-off givebacks can create future volatility if benefits or claim volumes rise. Moving the replacement rate back toward historic levels is likely to revive debate over how WSIB balances benefit adequacy against premium stability.
For private-sector insurers, changes to public workers’ compensation design can have knock-on effects. More generous WSIB wage-loss benefits can modestly reduce demand for some employer-sponsored short-term or long-term disability top-ups, but they can also simplify coordination of benefits and reduce the share of income that must be replaced by group plans when a workplace injury occurs.
Commercial writers active in accident and sickness, employer liability and wrap-up cover will be watching how the reforms interact with existing wordings and subrogation provisions.
Extending WSIB coverage to staff in privately operated retirement and group homes could also change the risk and premium profile for operators that have historically relied on private coverage or self-funding for workplace injuries. Some exposure may shift from the private market into the public workers’ compensation system, while injured employees in those settings gain access to WSIB rehabilitation and return-to-work services.
Key details, including the effective date of any increase, whether the 90% rate will apply to existing claims, and how the change will interact with the maximum insurable earnings ceiling, have not yet been released.
For 2025, Ontario’s maximum insurable earnings under WSIB are $117,000, with current benefits calculated at 85% of net income up to that cap.
WSIB’s 2024 to 2028 strategic plan commits to keeping the funding ratio within a 110% to 120% range, suggesting that any benefit enhancement will need to be calibrated against that goal and may influence future premium-rate decisions.
For now, the proposed move signals a shift in emphasis: after several years focused on premium relief and surplus rebates for employers, Ontario is signaling a tilt toward higher statutory benefits and broader WSIB coverage. How that rebalancing between employer cost relief and worker protection plays out will be central to the province’s workers’ compensation landscape - and related insurance markets - over the rest of the decade, according to the report.
