There was almost universal good news for the construction sector recently as the Workplace Safety and Insurance Board (WSIB) announced significantly lower premium rates for construction employers in 2018 and that the board was moving swiftly to eliminating its unfunded liability.
The drop in rates for each of the 13 construction rate groups — ranging from the greatest reduction, 7.6 per cent for siding/outside finishing, formwork/demolition, heavy civil, roofing and roadbuilding/excavation, to a low of 5.0 per cent for partners and executive officers — surpassed the average premium rate reduction for employers across the province, announced at three per cent.
The unfunded liability (UFL) has been dropping since 2011, after provincial legislation mandated the WSIB get rid of its debt and attain 100-per-cent sufficiency by 2027.
Board chair Elizabeth Witmer announced Sept. 20 at the WSIB annual meeting in Toronto that the UFL is on target to be eliminated well ahead of schedule.
"We are nearing the end of the UFL chapter," Witmer told the audience.
"The UFL, which was at $14 billion, is now down to just over $2 billion. We are on track to reach 100 per cent well under our schedule and we anticipate getting there by 2020, and build a cushion to meet future challenges."
Construction stakeholders in attendance at the AGM offered congratulations and praise for WSIB management including Witmer and Tom Teahen, WSIB president and CEO.
"I received an indication that there would be good news but this far exceeds what I was expecting for the construction industry," said Ian Cunningham, president of the Council of Ontario Construction Associations. "Everyone I talked to here in the industry was ecstatic."
David Frame, director of government relations for the Ontario General Contractors Association (OGCA), also called the twin announcements good news. He acknowledged that the OGCA had complained in the past that in its pursuit of eliminating the UFL, the WSIB had forced the construction sector to pay more than its share, and that had been noted in a question that Teahen had fielded during the AGM question and answer session.
But, said Frame, with the end of the UFL in sight, that is hardly an issue anymore as rates moved to more closely reflect actual risks.
"Finally it looks like we have been moved to target so we are paying our proper rate, we are not subsidizing other rates," he said.
Cunningham made the same point.
"Construction has been paying more in UFL charges than perhaps it should have," he said. "But we’ll see the end of the UFL charges and that will be all behind us."
OGCA president Clive Thurston called the reduction in the UFL a "tremendous achievement." But he said with two years to go, it is not time to slacken efforts.
"The fear always is that when you start to save money and you get close to eliminating the deficit, somebody wants to pull out the credit card," he said. "We’ve got to eliminate it, period."
The stakeholders’ goodwill extended to how the WSIB is managing the introduction of chronic mental stress (CMS) as a condition for which compensation will be granted beginning next January.
The Workplace Safety and Insurance Act reform was approved by the Ontario legislature in May. Both Cunningham and Frame said issues remain to be resolved, including whether coverage would use the "predominant" workplace standard of causation or rather the more expansive "significant" test. Teahen said employers would receive information packages on CMS in early October.
"They didn’t give the WSIB a whole lot of time to get ready for the new coverage," said Cunningham. "As a result, the consultation process was a fairly short window. Everybody did their best and weighed in."
Commented Thurston, "There is a way to do this that works for everybody and we hope the WSIB follows the recommendations that our group has put forward."
The WSIB is also currently consulting with provincial employers on changes to the rate framework that classifies employers. The new system, now slated for implementation in 2020, reforms employer classifications, with five classes for the construction sector compared with the current 13 classification units.
While the changes seem vast, Cunningham said they "didn’t have a whole lot of significance for construction."
Frame noted that the OGCA was happy the consultation period, launched in 2015, was extended last spring from 2019 to 2020 because he said the package "still needs work."