Ontario WSIB Notes Year-Long Funding Review

Ontario's Workplace Safety and Insurance Board (WSIB) announced that it will undertake a year-long funding review to tackle its unfunded liability, which is currently projected at more than $12 billion.

Chaired by Harry Arthurs, the former dean of Osgoode Hall Law School and president emeritus of York University in Toronto, the review's advisory committee will gather expert advice and input from workers, labor and employers related to the WSIB's financial future, including a plan on how to eliminate the unfunded liability, according to a WSIB release. (WCxKit)

Unfunded liability refers to the difference between the total cost of claims in the system and funds in the system to pay for them, the WSIB explains. It has increased to over $12 billion due to "insufficient premium revenue, rising claims and health care costs and declining investment returns following the recent economic downturn."

To help slow the growth of the unfunded liability, the WSIB has decided to increase the average premium rate by two percent for 2011 and another two percent in 2012. Now, the average premium rate will rise from $2.30 to $2.35 for every $100 of insurable earnings in 2011 and to $2.40 in 2012.

The WSIB stresses that the increase is being applied to the average premium rate, meaning more than half of registered employers will see little to no increase, while other employers in high-risk industries with a history of costly claims may see increases of more than two percent.

But Satinder Chera, vice-president for Ontario with the Canadian Federation of Independent Business (CFIB), questions the necessity of a review. "If you are going to do a review, then the last thing you want to do is to predispose what the outcome will be, which is essentially what they've done by increasing rates," he contends. "What's the point of the review if you've already decided that you are going to have to increase rates?"

For CFIB members, the "payroll hit" will make it more difficult for employers to grow their businesses, Chera argues. "What it will mean is some will have to delay hiring while others may be struggling just to hold onto the employees that they do have."

While Chera understands that the increases affect the average premium rate, he argues that certain industries will see a much greater increase over the next two years.

The WSIB acknowledges this, noting that the premium rate for 2011 will increase by 20 percent over this year's rate for the 'motor vehicle fabric accessories' sector; 19.5 percent the poultry farms and agricultural services sector; and 19 percent for the fruit and vegetable products sector. Workplaces such as gold and nickel mines, machine shops and foundries, on the other hand, will see no increase. (WCxKit)

Christine Arnott, a media relations specialist with the WSIB, says that if a company's health and safety performance has been good or better than the rate group average, they may still be eligible for performance rebates under the WSIB's incentive-based experience rating programs. But the lack of reduction

Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing.
Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.

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