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Have fewer injuries resulted in lower WSIB premiums?

Lindsey Cole
Have fewer injuries resulted in lower WSIB premiums?

The Workplace Safety and Insurance Board (WSIB) acknowledges significant improvements have been made in health care, recovery and return-to-work outcomes.

It states 92 per cent of workers returned to work with no wage loss and the percentage of workers still off the job after one year, because of illness or injury, has fallen by 50 per cent since 2009. The number of work injuries that resulted in a chronic or permanent impairment has also dropped 50 per cent.

While this is encouraging, some industry employer stakeholders can’t help but ask why this hasn’t translated to lower premium rates for companies who are making the effort and are at the heart of these statistics.

"My members generally are concerned that the WSIB rates are among, if not the, highest in Canada and the rates generally aren’t responsive to good performance, good health and safety and good return-to-work outcomes," says David Frame, director of government relations with the Ontario General Contractors Association (OGCA). "Normally an insurance company or a government mandated organization like the WSIB would be required to respond with lower rates and they’re not."

According to the WSIB, 2016 premium rates will be maintained at current levels for all employers.

Both Frame and Patrick McManus, chair of the Ontario Construction Employers Coalition (CEC), state part of the reason why rates haven’t decreased is because the WSIB is continuing to pay down its unfunded liability (UFL) debt by "overcharging employers."

The WSIB states, ideally, revenue from employer premiums and investment revenue should form a fund that is "equal to or greater than the actual costs of the system."

But, over the last 25 years, the money collected from employers and the income from investments has been less than the cost of funding the system to the point where it’s "outpaced" premium revenue increases by five per cent each year since 1999.

"The UFL represents the shortfall between the money needed to pay the future benefits to workers for all established claims, and the money that is in the accident fund," reads a report.

As a result, the provincial government has legislated a plan for reaching 100 per cent funding, which means the WSIB must reach at least a 60 per cent funding level by 2017; an 80 per cent funding level by 2022; and 100 per cent funding by 2027.

The WSIB states there were "strong operating results for 2014" which reduced the UFL by around $2.4 billion to $8.9 billion.

"I think it’s important for me to say, speaking from the Construction Employers Coalition on these WSIB issues, we’ve actually supported this. We’ve supported the ‘job number one’ being pay down the unfunded liability and we’ve understood since 2010 that’s going to mean that premium rates are going to be kept artificially high in order that they over collect, in order to pay down this debt," McManus explains.

"2016 will be year six of this financial crisis collection of premium rates. We’re not as supportive as we once were in keeping rates artificially high. For construction, almost 50 per cent of the premium rate that’s collected goes towards unfunded liability payments. That’s a huge chunk."

McManus adds the plan has been working very well to pay down the debt, as the UFL once stood at more than $14 billion. With a target pay off date of 2027, he says there’s plenty of time to contribute to the UFL, while cutting rates for employers.

"We still agree with the idea that all extra monies collected should go to pay off the UFL, however, the level of over-collection is growing to unacceptable levels," McManus explains, which in effect may drive business out of the province.

"It’s all been placed on the backs of the employers right now. Now is the time to see some of this money come back. If they’re collecting $2 billion additional funds, why can’t you give 10 per cent of that back?"

Frame states the WSIB can keep rates frozen and not reduce them because there isn’t a "huge cry of outrage" from the employer community.

"If rates were going up they would attract more attention," he says, echoing McManus’ comment that the cost of WSIB and doing business in Ontario is something more and more companies are taking into consideration.

"It gets entered into the economic equation when someone decides to build. When WSIB is much more expensive in Ontario, other jurisdictions end up with an advantage."

Frame states discussions will continue with the WSIB about this issue and the impact it is having on the industry.

"Some companies, in the end, when all the assorted costs are added in, decide not to build because they cannot afford it," he adds.

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