Article

Rate increases could be looming

0 44 Associations

by Journal Of Commerce

Labour Minister Chris Bentley will soon be announcing the installation of a new regime at the Workplace Safety and Insurance Board (WSIB), including a new chair, board members and chief operating officer.
Rate increases could be looming

Construction Corner

By David Frame

President, COCA

Labour Minister Chris Bentley will soon be announcing the installation of a new regime at the Workplace Safety and Insurance Board (WSIB), including a new chair, board members and chief operating officer.

Mr. Bentley will be instructing the new appointees to address the financial shortcomings revealed in the audit of the board commissioned by the McGuinty government.

One of the serious problems for construction under the new regime is that the industry is not paying its way. Construction’s ‘share’ of the unfunded liability is roughly one-third, or about $2 billion, and it is not being paid down.

WSIB gave construction $1.2 billion in 1999 with the proviso that the industry would fully meet its financial obligations thereafter.

WSIB invested the $1.2 billion and the proceeds actually helped to lower rates for a couple of years but construction has fallen far behind again as a result of the general downturn in the stock market.

There are many reasons for construction’s poor performance— not the least of which is the rampant “nonparticipation” by thousands of companies and workers.

Approximately 60 per cent of the construction workforce has assessments paid for it but 100 per cent of injured workers are eligible for benefits when injured.

COCA has been working with WSIB and the Ministry of Labour to correct these systemic problems and there is room for hope that improvements can be made soon. But these changes will not come soon enough to stop large increases in rates. Current estimates are that construction rates will be raised between six and nine per cent for 2005.

To Minister Bentley’s credit, he has embraced the position that all construction workers deserve WSIB coverage and is preparing to introduce legislation to require all independent operators to acquire coverage.

Another potentially huge problem is just around the corner and that is the imminent expansion of compensation for “industrial disease” by WSIB.

COCA is currently assessing the report of the Advisory Committee on Occupational Disease and will be submitting recommendations on behalf of the industry as soon as possible. It is clear, however, that potential costs could be astronomical for contractors.

Adding to the pressures to raise construction rates are the public musings of Minister Bentley to the effect that benefits to injured workers have decreased by 20 per cent over time while employer rates have dropped.

Ontario unions want even more. If the labour coalition’s recent demands (for full indexing of benefits, payment at 90 per cent of wages, lifetime pensions and new health and welfare benefits) are even partially met by the McGuinty government, the increases in employer rates will be measured in double digits for many years.

COCA has always supported the need to provide appropriate compensation to injured workers—but only at rates that are sustainable and do not place the very existence of construction companies in jeopardy.

The construction industry has many capable and dedicated practitioners who are willing and able to advise government and its agencies on ways to achieve their financial goals while promoting economic growth in the province.

COCA is always ready to offer the best advice of construction employers to Messrs. McGuinty and Bentley. We are prepared to meet at any time because there is no time when financial hardship for contractors is beneficial to the economy of Ontario.

David Frame is president of the Council of Ontario Construction Associations

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