Ask the Actuary

Present-value damages, explained

The questions about turning a future loss in a personal-injury claim into a single figure in today’s dollars.

Written by Shimmy Katscher, ACIA, ASA and Mike Austin, FCIA, FSALast reviewed Sep 4, 2026

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Present value
Sep 4, 20269 min read

How present-value damages are calculated in Canada

Why a future loss is worth less than the same dollars today, worked through with a $10,000 cost and real figures.

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The method

What gets valued

Loss of income and future cost of care are the losses; the discount rate and life expectancy decide what they come to in today’s dollars.

Loss of income
Sep 4, 20268 min read

How loss of income is calculated in a personal-injury claim

What the plaintiff would have earned, less what they still can, over the past and the future. Plus the contingencies that reduce it.

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The rate

Why the rate matters

Lower the rate and the figure goes up, which is the opposite of what most people expect. The example beside it is illustrative: one stream, three rates, nothing else changed.

Where the rate comes from
3.5%
$723,000
2.5%
$789,000
1.2%
$890,000
Between the highest and the lowest$167,000

$50,000 a year, age 45 to 65, discounting only. Rounded to the nearest thousand.

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7Part series

Ask the Actuary

Short explainers on how a future loss becomes one figure, from Shimmy Katscher, ACIA, ASA and Mike Austin, FCIA, FSA.

Watch the whole series

Reference

Run it on your own file

The PV multiplier is free and needs no account.

Open the free tool