What the deductible is—and isn’t

If you sue for pain and suffering (non-pecuniary damages) after a motor-vehicle accident in Ontario, your award is subject to a statutory deductible unless it exceeds a moving monetary threshold.

Both numbers are indexed each January 1 by FSRA^[1] using the Canada Consumer Price Index^[2] or “CPI” (September-to-September).

For January 1–December 31, 2025, the monetary threshold is $155,965.54 and the deductible is $46,790.05; Family Law Act s. 61(2)(e) claims have a $77,982.13 threshold and $23,395.04 deductible (FSRA, 2025 Indexation Guidance, Appendix 1–2) (FSRA 2025 Guidance)^[3].

The authority to publish and index these figures comes from the Insurance Act s. 267.5(8.5) ^[4] and O. Reg. 461/96 s. 5.1^[5].

To even get to non-pecuniary damages, a plaintiff must clear the statutory verbal threshold (permanent serious impairment of an important physical, mental or psychological function). That test is in s. 267.5(5) of the Insurance Act^[6] and has been the battleground for decades^[7].

Where the deductible came from (and how governments changed it) 

Ontario introduced a statutory deductible during the 1990s auto-reform era. I was a young lawyer on Bay Street during this time and recently wrote a blog about those transformative years, “Policy, Practice, and the Potholes in Between: A Mediator’s Firsthand Journey Through 35 Years of Ontario Auto Insurance Reform”^[8].

In 1990, Ontario introduced the Ontario Motorist Protection Plan, which created the statutory verbal threshold restricting who could recover for motor vehicle injuries, though it did not yet impose a deductible.

Under Bill 164 (1994) the deductible was $10,000, then Bill 59 (1996) increased it to $15,000.

In 2003, the Regulation was amended to $30,000 (and $15,000 for Family Law Act claims), applicable to accidents on/after October 1, 2003; see historical version of O. Reg. 461/96 s. 5.1 stating “the amount of $30,000 is prescribed” (O. Reg. 461/96 – v2).

In 2015, the government tied the deductible and the threshold to annual CPI indexation and raised them going forward (O. Reg. 221/15)^[9].

FSRA now publishes the updated numbers each year; 2025’s indexation rate is 1.6% (FSRA 2025 Guidance)^[10].

What the appellate courts have said about applying it

The Court of Appeal’s Cobb v. Long Estate, 2017 ONCA 717^[11]and El-Khodr v. Lackie, 2017 ONCA 716^[12]decisions cemented how deductibles and collateral-benefit set-offs are applied to modern jury verdicts.

In Cobb, a jury’s non-pecuniary award of $50,000 was subject to the deductible of the day, slashing the recovery and, together with collateral-benefit deductions, drastically reducing the judgment^[13].

El-Khodr dealt with how to match and deduct SABs against tort awards, read alongside Cadieux v. Cloutier, 2018 ONCA 903^[14]. See my recent Substack, SABs, Silos, and the End of “Apples to Apples”: Lessons from Cadieux.  

Bottom line: even “successful” plaintiffs can see general damages reduced to nil if the award sits below the deductible figure applicable at the time of judgment.

Today’s numbers and the trajectory to $50,000

For 2025, the deductible is $46,790.05 (no deductible if the non-pecuniary award tops $155,965.54). Family Law Act numbers are $23,395.04 and $77,982.13, respectively (FSRA 2025 Guidance)^[15].

When will the deductible cross $50,000?

Each year FSRA adjusts the deductible based on inflation measured from September to September. If inflation stays close to the Bank of Canada’s 2% target^[16], the current $46,790 deductible will rise to about $50,000 by 2029. With the lower 1.6% rate used for 2025, it would reach $50,000 around 2030. In short, the deductible is in the high-$40,000s now and will likely cross into the $50,000s by the end of the decade unless inflation changes significantly.

A sober reality check for settlement strategy 

Two hard truths flow from the regime:

1. Below-threshold wins can still feel like losses once the deductible is applied, as Cobb makes painfully clear for jury trials^[17].
2. The deductible is climbing every January with CPI. With FSRA’s indexation formula and the Bank of Canada’s 2% midpoint goal, expect a deductible over $50,000 by 2029 (or ~2030 at a 1.6% path), absent a material shock to the economy.

That’s the landscape mediators and counsel have to navigate: push for evidence that moves the case over the threshold and, where warranted, over the threshold number—or recognize that below-threshold valuations will be discounted by tens of thousands of dollars before ink hits judgment.