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Labour ministry responds to WSIB funding review recommendations

By Mari-Len De Guzman
| www.cos-mag.com

The Ontario Ministry of Labour will establish a new regulation under the Workplace Safety and Insurance Act requiring the Workplace Safety and Insurance Board (WSIB) to reach gradual funding sufficiency that will see the WSIB at full 100 per cent funding by the year 2027.

The ministry is responding to recommendations contained in a report released earlier this month by Harry Arthurs, chair of the WSIB funding review committee and former dean of Osgoode Hall Law School.

The new regulation, according to Ontario labour minister Linda Jeffrey, sets a goal for the WSIB's insurance fund to reach sufficiency of 60 per cent funding in 2017, 80 per cent funding in 2022 and a full 100 per cent funding by 2027.

In addition, the province will increase benefits to injured workers on partial disability by 0.5 per cent in 2013 and another 0.5 per cent in 2014, Jeffrey said in a statement.

“We believe these actions will result in financial stability for the WSIB's insurance fund and as well, help address the needs of injured workers through benefit indexation increases,” the minister said.

The WSIB funding review committee is an independent third-party group appointed by the government, upon request from the WSIB, to conduct a review of the compensation board’s financial circumstances and make recommendations to put the WSIB on solid financial footing. During this yearlong review, the committee consulted with workers, employers, stakeholders and other knowledgeable experts on various policy issues relating to the WSIB’s financial future.

In her statement, the minister thanked Arthurs, members of his advisory committee, and stakeholders who took part in the review process.

Jeffrey stressed the government’s commitment to the safety and well-being of Ontario workers and to a fair and balanced insurance system for injured workers and their employers.

“A financially stable workplace safety and insurance system is vital to the economic and social health of Ontario,” Jeffrey said. “We know that funding must rest on sound principles and be carefully administered if it's to be seen as fair and balanced to employers. At the same time, a viable no-fault workplace safety and insurance system in Ontario must also provide injured workers with fair compensation and support in recovering and returning to work.”

According to Arthurs’ funding review report, WSIB’s current level of funding is estimated to be between 50 per cent and 55 per cent. It is facing a five per cent risk of reaching a “tipping point” — a crisis in which the WSIB could not, within a reasonable time frame and by reasonable measures, generate sufficient funds to pay for workers’ benefits — according to the report.

If the WSIB manages to bring up the level of funding to more than 60 per cent, the report said, the risk of tipping becomes minimal.

With a funding level beyond 80 per cent, on the other hand, the WSIB would enter a “comfort zone,” which in some ways would be the functional equivalent of full funding, the report said.

The report explained: “If the WSIB encounters financial difficulties while funded at 80 per cent or more, it will have a margin of time within which to correct the situation. If it wishes to initiate new policies, it will be able to fund the transition costs with relative ease. If government wishes to increase benefits or provide additional services to injured workers, it can do so without fear of pushing the WSIB back towards the tipping point — although of course it must always be mindful of the costs it is imposing on employers.”

In a joint statement, WSIB chair Steve Mahoney and WSIB president and CEO David Marshall thanked Arthurs for his report, saying the transparency of the funding review process allowed all participants in the workers’ compensation system to have the opportunity to “contribute and be heard.”

As for the recommendations, the WSIB officials said the agency will “carefully study” them and consider the integration of these recommendations into the WSIB’s strategic priorities.

“Further, as many of the recommendations require collaboration with the Ontario Government, we will work closely with the Ministry of Labour to determine how best to move forward,” the statement said. “The funding review opened some critical dialogues with business, labour and workers across the province and it is our intent to carefully consider which areas of advice may require further consultation before actions are taken.”

Download the full

Harry Arthurs report here.

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