Ontario is moving to increase WSIB income-replacement benefits from 85% to 90%, marking the first increase in these rates in nearly three decades. This legislative shift aims to provide injured workers with greater financial stability as they navigate recovery in an increasingly expensive economic environment.
The provincial government is positioning this change as a necessary update to a system that has remained static since 1998. For years, the Workplace Safety and Insurance Board focused on eliminating its unfunded liability, a goal it successfully reached in 2018. With the board now on solid financial footing and maintaining a multi-billion dollar surplus, the province is choosing to redistribute that stability back to the people who keep the economy moving. This is a significant moment for the Canadian labour market, signalling a transition from fiscal recovery to enhanced social protection for the workforce.
Expanding financial protections for the modern workforce
The decision to lift the Loss-of-Earnings (LOE) benefit rate to 90% of net average earnings is designed to put more money directly into the pockets of those sidelined by workplace accidents. When a worker is injured, the sudden loss of income can create a compounding crisis, making it difficult to cover essential costs like housing, groceries and transportation. By narrowing the gap between a worker’s regular pay and their insurance benefits, the government is attempting to reduce the “injury penalty” that has historically burdened Ontario’s labour force.
To put the impact into perspective, a worker earning $60,000 a year would see their annual benefits increase by approximately $2,411 under this new proposal. This isn’t just about a nominal increase; it’s about maintaining dignity and financial independence during a period of vulnerability. The move reflects a broader trend across Canada where SME employers and policymakers alike are recognizing that a robust safety net is essential for a productive and resilient economy.
“By proposing the first increase to income replacement benefits in nearly 30 years, our government is helping ensure injured Ontarians can focus on getting better,” explains David Piccini, Minister of Labour, Immigration, Training and Skills Development. “Ontario’s workers built this province, and we will always have their backs.”
This change also comes at a time when the cost of living has become the primary concern for many Canadians. Inflationary pressures mean that a benefit rate set in the late nineties no longer carries the same purchasing power. By adjusting these figures now, Ontario is acknowledging the reality of the 2026 economic landscape. It’s a move that seeks to ensure that a workplace injury doesn’t lead to a permanent cycle of debt or poverty.
Adapting insurance for older workers and shifting demographics
Beyond the headline increase in benefit rates, the proposed legislation addresses a demographic shift that is fundamentally changing Ontario’s workplaces. The average retirement age in Canada has climbed above 65 since 2023. In Ontario specifically, there are currently around 444,000 workers aged 65 and older who remain active in the labour force. These individuals aren’t just working for fun; many rely on their income to support their families or to continue building a nest egg for their eventual retirement.
Under the existing rules, WSIB Loss-of-Earnings benefits often automatically cease once a worker reaches age 65, regardless of whether they intend to keep working. The new proposal seeks to change this by giving the WSIB discretion to continue payments if there is evidence that the worker would have remained in the workforce longer. This is a crucial update that respects the reality of the multi-generational workforce. It ensures that an older employee who suffers a workplace injury isn’t forced into a premature or underfunded retirement.
“Workers should not be financially penalized as a result of being injured on the job,” Steve Chaplin, Senior Vice President of Health, Safety and Environment at EllisDon Corporation, argues. “We support increasing Loss-of-Earnings benefits so injured workers can focus on recovery, while also ensuring those who choose to work past age 65 continue to access the support they need.”
For SMB employers, these changes bring both responsibilities and opportunities. While the WSIB’s average premium rate is currently at a historic low of $1.23 per $100 of insurable earnings, rising benefit levels could increase the cost of claims. This makes proactive safety management and effective return-to-work programmes more important than ever. When employers invest in a safe work environment and support their team through recovery, they don’t just reduce their WSIB costs; they build a culture of trust and loyalty.
The province is also introducing measures to simplify the claims process for certain conditions, such as skin cancers in firefighters, by expanding the list of occupational diseases covered by the “presumptive” clause. This reduces the administrative burden on workers who have already sacrificed their health in the line of duty. It’s all part of a larger effort to cut the red tape that often slows down the delivery of essential support.
As Ontario moves forward with these reforms, the message to the business community is clear: a safe and supported workforce is the foundation of a healthy economy. These changes represent a modernized approach to workplace insurance, one that balances the financial health of the system with the actual needs of the people it’s designed to protect. Employers who lean into these changes by prioritizing worker well-being will find themselves better positioned to attract and retain talent in a competitive market. Moving the needle on benefits after 30 years is a bold step, but it’s one that reflects the evolving expectations of the Canadian workforce.
