May 27, 2025
Ontario 2025 Budget
Ontario’s 2025 Budget has been released and there are several announcements that are relevant to employers and plan sponsors in Ontario. Here's what you need to know.
1. WSIB Premium Cuts & Rebates
The Workplace Safety and Insurance Board (WSIB) rates have been slashed to the lowest level in 50 years, amounting to a projected $150 million in annual savings for Ontario employers. In 2025, safe employers will also receive a share of $4 billion in WSIB surplus rebates.
2. Target Benefit Pensions
As of January 1, 2025, a new pension framework for Target Benefit Plans (TBPs) is in effect. These plans aim to provide predictable costs for employers while delivering lifetime income to employees. The mobility advantage is especially appealing for industries with high turnover, as workers can carry their pension contributions across employers within the same plan. Ontario is also exploring a Variable Life Benefit (VLB) option, offering retirees a flexible, investment-based income stream.
3. Ontario Fertility Treatment Tax Credit
Starting in the 2025 tax year, Ontario will introduce a refundable Fertility Treatment Tax Credit, offering 25% back on eligible expenses up to $20,000 (max $5,000/year). This includes IVF, fertility medication, egg/embryo freezing, and surrogacy-related costs. While not an employer-paid benefit, companies could leverage this policy in employee communications to boost inclusive benefits along with the employer sponsored offerings.
This credit will be in addition to the non-refundable federal and Ontario Medical Expense Tax Credits related to fertility treatments. See the example below from the Ontario budget:
Additional notes to keep in mind for this credit:
1. All services must be performed in Canada
2. Expenses that are reimbursed by insurance (i.e. private benefit plans) are not eligible.
4. Preferred Provider Networks (PPNs): Drug Plan Reform on the Horizon
The province is deepening its consultation on Preferred Provider Networks (PPNs) within employer-sponsored drug plans. The next phase will examine the possibility of an “Any-Able-and-Willing Provider” law, potentially allowing any eligible pharmacy to join a PPN. This could reshape how employers negotiate and administer prescription drug benefits—and may impact plan costs and employee access.
Full details on the Ontario budget are available here: 2025 Ontario Budget: A Plan to Protect Ontario
If you have specific questions or concerns about how the Ontario 2025 budget may impact on your benefits plan, please feel free to reach out to our team.
