Economic News/Trends and Analysis — July 2, 2009

More job losses & business closures expected if McGuinty government proceeds with mandatory WSIB coverage

    TORONTO, July 2 /CNW/ - According to the latest results of a survey
conducted by the Canadian Federation of Independent Business (CFIB), Ontarians
can expect huge ramifications if mandatory Workplace Safety and Insurance
Board (WSIB) coverage is imposed on the struggling construction industry.
Taking part in the study were owners of 852 construction firms from across the
province.
    The survey asked business owners to indicate which adjustments they would
need to make under the McGuinty government's Bill 119, which would impose
mandatory WSIB premiums on owners, executive officers and independent
operators in construction, and result in an average tax hike of $11,000 per
year. Allowing for multiple responses, 70 per cent of respondents indicated
that they would need to raise their prices, 34 per cent would take a pay cut,
25 per cent would cut employee wages, while 19 per cent said that they would
be forced out of business.
    "These grim prospects are devastating for the thousands of Ontario
families that rely on the construction industry for their livelihood," said
CFIB's Ontario Director Satinder Chera. "With the economy in recession, and
many Ontarians worried about their jobs and dwindling savings the last thing
we need is to make it harder for the job creators in the economy to survive
and grow."
    87 per cent of owners said that mandatory WSIB coverage will do nothing
to flush out the cheats in the underground economy. In fact, with this
increased incentive to hide - higher taxes - underground operators will likely
dive deeper. Making above ground operators subsidize the cheats is wrong. It
will do nothing to improve the system.
    "What we have here is a thinly veiled excuse for a tax grab that will be
detrimental to an industry in need of relief, not hindrance. With the
implementation of Bill 119 slated for 2012, there is still time for government
to withdraw this misguided policy and pursue other sensible strategies for
tackling the underground economy," said Chera.
    He concluded that Labour Minister Peter Fonseca says that he is
interested in what small businesses have to say. "For the sake of thousands of
small firms struggling to hold on to their employees and their livelihood,
let's hope that he is prepared to act on those concerns."
    To view the report in full, please visit: www.cfib.ca

For further information: To arrange an interview with Satinder Chera,
please contact Adam Miller or Meghan Carrington at (416) 222-8022

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