Ontario Minister of Labour Monte McNaughton announced an end to the WSIB’s unfunded liability charge in Toronto Sept. 24, a savings of $607 million to Ontario employers he said could be reinvested in new jobs, new technology and health and safety programs.
Or, McNaughton pointed out, employers could take the lead of Eastern Construction, the host of the Bloor Street jobsite media conference.
When Eastern Construction’s management learned last year that premiums would drop an average of 30 per cent across the board upon the retirement of the unfunded liability (UFL), they wrote a safety dividend cheque of $600 to each employee.
“Worker safety is my top priority,” McNaughton said. “So I’m proud to stand today with Eastern Construction to celebrate their innovative commitment to safety culture.”
In 2009 it was determined that the WSIB’s UFL — the shortfall between future obligations to pay injured workers and the funds available to pay them — had reached a critical stage. In response the Liberal government enacted legislation requiring WSIB action. The UFL stood at $14.2 billion in 2011.
At last year’s WSIB annual meeting, WSIB chair Elizabeth Witmer announced that the UFL had been eliminated years ahead of schedule. The resulting drop in premiums represented a redirection of $1.45 billion back to employers.
Construction was paying double and has paid double right up until this point,
— Clive Thurston
Ontario General Contractors Association
Eastern Construction’s senior management soon hatched the idea of letting their 130 employees benefit, explained the firm’s president and CEO Bryan Arnold.
“We thought it was a wonderful idea because we continually try to reinforce to the employees that it’s them who work safely and we thought, what better way to show them that there is a reward to working safely,” he said, noting that senior management did not participate in the bonus plan. “We thought it was just the right thing to do for the employees.”
The feedback from the employees was tremendous, Arnold said, with many sending thank you emails or personally expressing their appreciation.
The elimination of the UFL last year enabled the WSIB to reduce but not eliminate the past claims cost, which is the component of premium rates employers have paid each year to reduce the UFL. As announced by McNaughton, as of January 2020, the charge will be eliminated with future premiums reflecting only new claims and administration.
Ontario General Contractors Association president Clive Thurston called it a “great day” after McNaughton’s announcement and suggested Ontario construction employers made a huge sacrifice to contribute to slashing the UFL almost 10 years prior to the original target.
“We all knew we were paying way more in our premiums than we should have been,” he said. “In fact, construction was paying double and has paid double right up until this point. But we agreed to continue paying to get rid of the UFL. And the commitment was we would get the reduction in the rates. So, this was the fulfillment of that promise that was negotiated 10 or 11 years ago.
“We are very pleased to see that. It was earned by our industry and our people.”
McNaughton noted that the WSIB would be holding its annual meeting the next day, Sept. 25, when it would be making further announcements of future premium trends as well as unveiling the latest details of an upcoming change to rate groups, referred to as rate framework reform.
Asked why his ministry would make a major WSIB announcement a day before the WSIB meeting, he explained, “The rate framework will be announced tomorrow at the WSIB annual general meeting, we are all excited to learn about that, but this is important to highlight outstanding companies like Eastern Construction and the $607 million that will remain in Ontario’s economy.”
Follow Don Wall on Twitter @DonWall_DCN.
Allan Wolfson (president WSIB) stated in 1989 that the UFL would be eliminated by the year 2014. Who would have thought 2014 would come so late? pffffff!