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

Author

Listed:
  • Colin Busby

    (C.D. Howe Institute)

  • Finn Poschmann

    (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.

Suggested Citation

  • Colin Busby & Finn Poschmann, 2012. "The Hole in Ontario's Budget: WSIB's Unfunded Liability," e-briefs 132, C.D. Howe Institute.
    • Handle: RePEc:cdh:ebrief:132
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    File URL: https://www.cdhowe.org/hole-ontario%E2%80%99s-budget-wsib%E2%80%99s-unfunded-liability
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    More about this item

    Keywords

    Fiscal Policy and Tax Competitiveness; Province of Ontario; Workplace Safety Insurance Board (WSIB); unfunded liability; fair-value accounting;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • J8 - Labor and Demographic Economics - - Labor Standards
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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