July 21, 2005

WSIB Rates

COCA concerned over ‘triple hit’ premiums

Ontario rates already higher

PATRICIA WILLIAMS

staff writer

The Council of Ontario Construction Associations (COCA) has asked new Labour Minister Steve Peters to derail the Workplace Safety and Insurance Board’s “triple hit” on the construction industry.

In a news bulletin Monday, the association said the board proposes to raise assessment rates, pull millions of dollars of incentives out of the CAD-7 program which provides rebates to firms with good safety records and also establish a “cumbersome and ineffective” return-to-work regulation for construction workers injured on the job.

“Current construction assessment rates are much greater than those in most other provinces,” COCA said.

“With only 61 per cent of the industry paying premiums, any increase would only serve to enhance the attraction of evasion.

“In fact, any unwarranted rate increase would significantly impair the profitability of the construction industry as members would be forced to absorb any increase directly from their bottom line for existing contracts.” Decisions on the 2006 preliminary premium rates are to be made at a meeting this week of the WSIB’s board of directors.

However, COCA president David Frame believes assessment rate increases could average three per cent next year.

In its bulletin, the association said gutting the CAD-7 program will “not only undermine the business case” for maintaining safe workplaces “but also add a direct cost to each company’s profit or loss statement.”

The program applies to employers in the construction sector whose average annual premiums are more than $25,000.

The number and cost of a company’s claims are compared to the average for the rate group. The firm’s size is also taken into account.

If the frequency and cost are lower than would be expected, firms receive a rebate. Alternatively, if these two items are higher than would be expected, firms are assessed a surcharge.

COCA said the WSIB’s plans for a return-to-work regulation that closely parallels a re-employment program in effect in other industries “would not only penalize smaller construction companies that simply cannot accommodate a worker operating at less than capacity” but would also add to the administrative burden of dealing with the board.

In an e-mail interview, Frame said COCA agrees that workers must be returned to the job as quickly and safely as possible. But a formula that applies to workplaces with a fixed workforce cannot apply to construction, he said.

The association is continuing to press for a new return-to-work regulation, a zero-per-cent increase in assessment rates “that still allows the WSIB to retire its unfunded liability” and changes to the CAD-7 program that support accident prevention.

Clive Thurston, president of the Ontario General Contractors Association, said in an interview that his organization “fully” supports COCA’s opposition to the three-pronged WSIB initiative.

“It is just inconceivable that this has been put forward to the board,” he said, noting that COCA has proposed some “legitimate, logical and sensible” options that appear to have been ignored.

“One also has to wonder what happened to the war on the underground economy.”

Thurston expressed concern that higher assessment rates could have a “serious impact on delivery of the province’s infrastructure development plan, given that contractors’ increased costs would be passed onto owners, making their projects more expensive.”

“I can’t understand why one arm of the government (WSIB) is about to undercut another arm, the Ministry of Public Infrastructure Renewal,” he said. “This is just nonsense.”

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