Pursuant to our Insurable Interest bulletin of May 2, 2013 advising that the discount rate was being reviewed, the Chief Justice has lowered the discount rate to 2% for cost of future care (from 3.5%) and 1.5% for future income loss (from 2.5%). The new discount rate takes effect immediately.

The legislation that enacts the new discount rate is Law and Equity Regulation (BC Reg. 74/2014). It replaces BC Reg. 352/81 which set the previous discount rate in 1981.

You can read the practice direction here.

The implication of the reduced discount rates for insurers is that damages awards will be going up.

If you have any questions about the changes to the discount rate or any other insurance matter, please contact Raman Johal (604.643.3145 or rxj@cwilson.com) or any other member of Clark Wilson’s Insurance Group.