The Hole in Ontario's Budget: WSIB's Unfunded Liability

Colin Busby and Finn Poschmann
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Colin Busby: C.D. Howe Institute
Finn Poschmann: C.D. Howe Institute

No 132, e-briefs from C.D. Howe Institute

Abstract: Ontario faces a $19.7 billion unfunded liability at its Workplace Safety Insurance Board (WSIB) based on a fair-value accounting approach. In the report, the authors say the WSIB, which levies employer premiums intended to fund benefits for employees injured in the workplace, has a problem that needs addressing: the WSIB's pace of revenue collection and asset accumulation has not matched growth in current and expected benefit entitlements. The report concludes that protecting taxpayers from bearing the costs of unfunded benefits will require fixing the WSIB's financing problems, through increased employer contributions - implying lower wage growth for employees - benefit adjustments, or both. To facilitate these changes, more stringent financing rules are required.

Keywords: Fiscal Policy and Tax Competitiveness; Province of Ontario; Workplace Safety Insurance Board (WSIB); unfunded liability; fair-value accounting (search for similar items in EconPapers)
JEL-codes: H25 H7 J2 J3 J8 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2012-03
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Published on the C.D. Howe Institute website, March 2012

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