Article

Experience rating programs achieve "spectacular" results, Surplis says

0 102 OH&S

by Construction Corner

Ever since the creation of a workers’ compensation system in Ontario (now with the name Workplace Safety & Insurance Board, WSIB), there has been tension between employees’ interest in creating the highest possible benefits and the employers’ interest in paying the lowest possible premiums.
Experience rating programs achieve "spectacular" results, Surplis says

David Surplis

Ever since the creation of a workers’ compensation system in Ontario (now with the name Workplace Safety & Insurance Board, WSIB), there has been tension between employees’ interest in creating the highest possible benefits and the employers’ interest in paying the lowest possible premiums.

This tension boiled over in 2008 because of WSIB’s program of premium rebates and surcharges based on a company’s experience with accidents in the immediately prior year or years. According to employers, experience rating (called CAD7 for construction) has produced a huge reduction in lost time incidents and has thereby and reduced premiums.

According to organized labour, experience rating has produced massive fraud and harm to workers. The Ontario Federation of Labour (OFL) and the NDP at Queen’s Park have called for the elimination of experience rating and WSIB has commissioned a study to determine who is correct.

The implementation of experience rating programs at WSIB was based on the notion of reward for excellence: If your company could work accident-free for a year, then you deserved to have a significant rebate of the premiums you paid to begin the year. The rebates were clearly an incentive to perform well. Experience rating programs were the carrot relative to the stick of prosecution for bad behaviour. And the carrot prevailed. Companies soon realized that health and safety could pay dividends and they adopted safer techniques, hired safety consultants and generally became much more safety conscious.

The results of experience rating programs like CAD 7 have been spectacular. Lost time incidents (LTIs) in construction have plummeted in the last twenty years and Ontario has become one of the world’s safest jurisdictions for working in construction. According to the latest statistics from Construction Safety Association of Ontario (CSAO), lost time injuries have dropped from 10.92 per 200,000 hours worked in 1985 to 2.15 per 200,000 hours worked in 2006. This is a spectacular result and while it cannot be ascribed to experience rating per se, it is more than a coincidence that experience rating began in 1986.

Experience rating is under furious attack. OFL and NDP leaders claim that the system leads to the “hiding” of injuries simply to facilitate the collection of a rebate. They also claim that experience rating induces companies to force workers to return to work before their recuperation is complete. They also decry the fact that a company can receive a rebate of premiums in the year it has a serious accident or death, although rebates are based entirely on previous years’ experience. The chair of WSIB reacted to the OFL claims in a purely political fashion, saying that he would ensure that any company “responsible” for a fatality would not be eligible for any rebate. The “rebate debate” rapidly got out of control but was petering out almost as rapidly when the NDP put forward a motion at Queen’s Park to kill experience rating at WSIB.

Experience rating programs such as CAD7 have benefited Ontario workers, their employers, the Ontario economy and the general public for many years. There are certainly places where improvements can be made in those programs and those will surely come to light with a thorough and professional assessment. Proverbially, now is not the time to throw the baby out with the bathwater. Based on construction’s great achievements under experience rating, the whole system deserves a fair examination followed by structural and procedural improvements. COCA will be participating fully in WSIB’s study and will be contributing our own arguments via an independent study being commissioned by Ontario Business Coalition, a huge group of employer associations supported by COCA and chaired by myself.

David Surplis is acting president of the Council of Ontario Construction Associations.

Leave a comment

Or register to be able to comment.

Copyright ConstructConnect TM. All rights reserved. "ConstructConnect" is a dba for CMD Holdings.
The following rules apply to the use of this site:
Terms of Use and Privacy Statement