What business needs to know: Changes to WSIB

The way employer premiums are determined under Workplace Safety and Insurance Board (WSIB) are changing. While in some respects the Proposed Preliminary Rate Framework marks a positive change from the existing rate setting process, the Ontario Chamber of Commerce (OCC) is concerned that the new rate framework could increase the premium rates paid by employers and, subsequently, the cost of doing business in the province.

The OCC supports efforts to modernize the workers’ compensation system in Ontario. Building a 21st century workforce is a core component of the OCC’s five year Emerging Stronger economic agenda. Keeping the province’s economy firmly on the path from recovery to growth will require changes to the way government and its agencies work. Ontario needs a workers’ compensation system that is both responsive to labour market needs and fiscally sustainable.

As such, the OCC has provided the WSIB with a written submission outlining 10 recommendations that the WSIB and the Government of Ontario should adopt to mitigate the impact of the proposed reforms. Over 25 chambers of commerce and boards of trade signed on to the submission.  The Peterborough Chamber of Commerce was one of the members of the OCC’s WSIB Taskforce and assures that considerable thought has been given to the proposed recommendations. 

“…the 10 recommendations that, if adopted will create greater certainty for employers and ensure that Ontario benefits from an effective workers’ compensation system,” explains Allan O’Dette, President and CEO, OCC. “The recommendations align with the key goals of the Proposed Preliminary Rate Framework, including its commitment to transparency, balanced rate responsiveness, and its efforts to fairly allocate premiums.”

The recommendations also align with the concerns of some members of the Peterborough Chamber of Commerce.   One member told me that under the current WSIB system a small self-employed business in the construction field must pay thousands of dollars into WSIB even if they currently have more comprehensive 24/7 coverage of their own.  While another member expressed concern about the unknown of the changes ahead, “am I going to see a rate increase or decrease under the new structure and when will I know exactly what the rate changes will mean for my business?”

Concern: The proposed rate framework will create savings for some employers, and create new costs for others.
Recommendation #1: The WSIB should provide a public and detailed analysis of how the propose rate framework changes will impact employers.

Concern: Employers with effective health and safety programs could end up subsidizing employers with high claim costs as a result of the proposal to stop surcharges.
Recommendation #2: The WSIB should implement a program similar to the Alberta PPS to encourage high cost employers to improve their health and safety management efforts and to ensure that the cost of poor performance is absorbed by poorly performing employers rather than other employers in their class. 

Concern: A limited number of classes risks grouping employers with very different risk profiles.
Recommendation #3: Expand the class structure to more accurately reflect the risk profiles of employers, while maintaining the predictability of industry classes and premium rate stability for employers.

Concern: The shift towards predominant business activity classification will increase the cost of doing business. 
Recommendation #4: The WSIB should reconsider implementing the predominant class model and continue to allow businesses to pay different rates based on their activities in different business areas.

Concern: The elimination of the Second Injury and Enhancement Fund would reduce reemployment opportunities for injured workers.
Recommendation #5: The WSIB should retain the SIEF to encourage the reemployment of injured workers.

Concern: The proposed claims experience ‘window’ to determine premium rates could result in employers being charged for risks that are no longer a feature of their
Recommendation #6: The WSIB should implement a weighted cost claims “window” based on employers’ claims cost history over the past three years rather than six years to ensure that the rate charged to employers is reflective of their recent commitments to health and safety.

Concern: The WSIB’s unfunded liability is a drag on Ontario’s competitiveness.
Recommendation #7: The WSIB should be subject to oversight by the Auditor General.

Concern: The WSIB Fatal Claims Adjustment Policy will be redundant in the new framework.
Recommendation #8: The Fatal Claims Adjustment Policy should be eliminated from the framework as soon as possible.

Concern: The workplace safety market should be opened up to competition.
Recommendation #9: The Government of Ontario should study the merits of introducing comparable WSIB delivery models including options such as full and/or partial privatization. 

Recommendation #10: The Government of Ontario should amend the Workplace Safety and Insurance Act to exempt construction employers who have obtained comprehensive 24/7 insurance coverage from coverage under the WSIB scheme.

The overall underlying concern throughout the submission is that any changes to the WSIB do not have a negative impact on the cost of doing business in Ontario.  The WSIB proposed changes are one of several examinations of legislation affecting workplaces.  The Peterborough Chamber of Commerce and the OCC are very aware that new legislation in the form of the Ontario Retirement Pension Plan and the Cap and Trade Program, along with increases to minimum wage and electricity prices are having creating a cumulative legislative burden on the business community.   

Read the full report, including the proposed breakdown of classes.

Comment through the "Peterborough Chamber" group of LinkedIn.

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