On January 1, 2012 the Liberal government officially approved and proclaimed into law amendment changes to Ontario’s Workplace Safety and Insurance Act. Independent operators and small business owners in construction have to register themselves to begin paying WSIB premiums for office staff, managers, and business partners starting in January 1, 2013.
The Canadian Federation of Independent Business (CFIB) said the change will cost the average small construction company $11,000 a year and could force them to raise prices, cut jobs, or go out of business. The Workplace Safety and Insurance Board (WSIB) stated the new rules will improve health and safety in the construction sector and “ensure everyone is paying their fair share under the collective liability system.”
The Progressive Conservative labour critic, Randy Hillier stated these moves on the part of WSIB are to find new sources of revenue to trim the board’s unfunded liability – so they have decided to attack construction firms. “Forget all the pretext of safety or whatever…the real purpose here is to capture more people within the WSIB net and take on people who have a very low likelihood of ever making a claim – but the premiums are very, very high – and reduce the unfunded liability that way” says Hillier.
The WSIB provided third-quarter figures to their stakeholders and the figures showed the fund has a $12.3 billion unfunded liability, down from $14 billion.
The WSIB report breaks down the change of the WSIB condensed consolidated interim balance sheets. In the report, “Cash and cash equivalents decreased $10 million or 1% reflecting a decrease of 33$ million attributable to an excess of operating costs over premiums received, 17$ million is attributable to an increase in collateral used for investment partially offset by a decrease in cash held for investments and a 6$ million increase in cash held for the Loss of Retirement Income Fund. Unfunded liability decreased 106$ million or 0.9% ”
Further into the report under Premium Revenue Risk, the report states
The WSIB sets premiums on an annual basis to cover a portion of its anticipated operating costs. Actual factors, many of which are beyond the control of the WSIB, can change between the time of premium setting and the fiscal year to which the premium relates, causing premiums to be insufficient to cover annual operating costs and leading to an increase in both the size of the unfunded liability and pressure to increase future premium rates.
The CFIB also believes the WSIB’s huge unfunded liability is behind what it says is a huge tax grab on small businesses. The CFIB also stated, that independent owner-operates in construction already pay for private business insurance – but will now be forced to pay for workplace insurance as well. Satinder Chera, Vice-President for Ontario with the CFIB said,
“Do I give up my business liability insurance and now buy government insurance, but if I do that I’m only covered from 9-5, whereas my private insurance covers me for 24-7?…So why am I being forced to pay for this additional insurance product that I don’t need and I don’t want?”
However, NDP critic Taras Natyshak, a former construction worker, had a different view on the matter. He said, “When all is said and done, construction as a whole is a difficult industry, the nature of it puts you into scenarios where you are at risk almost every day…it doesn’t seem fair that smaller firms should be treated any differently, and back to the workers, that they should be precluded from any additional coverage through WSIB.”
Independent owner-operators in construction already pay for private business insurance, but will now be forced to pay for workplace insurance too, said the CFIB.
The WSIB will increase premiums for everyone by two per cent Jan. 1. 2012, from $2.35 to $2.40 for every $100 of insurable earnings, and WSIB benefits will also increase for the fifth year in a row, by 0.5%. To put things into perspective, WSIB benefits have increased by more than nine per cent since 2007.
Pressure against the WSIB has been mounting, and has even led to Paul Murphy and several other groups to Occupy WSIB. Afrequently posting member on their website page, Kevin Jones, recently held a protest outside the office of MPP Chris Bentley. A video of his protest can be found here: Protest on W.S.I.B. Outside MPP Chris Bentley’s Office On 01-06-12
Here are several individuals with criticism towards the WSIB:
Here is a video from the WSIB: