Harry Arthurs to chair financial review of province’s workers’ compensation board
Ontario’s Workplace Safety and Insurance Board (WSIB) is undertaking a year-long funding review to ensure the long-term financial stability of the WSIB.
The WSIB announced that Harry Arthurs, former dean of Osgoode Hall Law School and president emeritus of York University in Toronto, will chair the review. Arthurs is a familiar name to Ontario employers, as he led a review of pensions in the province that began in 2006.
The WSIB said the funding review will gather expert advice and input from workers, labour and employers on a range of public policy issues relating to the board’s financial future, including a plan on how to eliminate the WSIB's unfunded liability. Arthurs will have a small committee provide expert advice as the review proceeds. Members of the advisory committee include Maureen Farrow (external advisor on the WSIB board of directors’ investment committee and president of Economap), Buzz Hargrove (former national president of the Canadian Auto Workers union and a visiting professor at Ryerson University’s Ted Rogers School of Management), John O'Grady (chair of the Institute for Work and Health) and John Tory (former leader of the Progressive Conservative Party of Ontario and a radio host).
To provide business with certainty and stability during the course of these consultations, and in order to help slow the growth of the WSIB's projected unfunded liability (UFL), the average premium rate will increase by two per cent for 2011 and 2012, the WSIB said.
The UFL is the difference between the total cost of claims in the system and the funds in the system to pay for them. It has increased due to insufficient premium revenue, rising claims and health care costs and declining investment returns following the recent economic downturn. Currently the WSIB's projected UFL is more than $12 billion.
The WSIB is also making a number of internal administrative changes that will address the UFL while improving customer service and operational efficiency. This includes a value for money audit of the claims and adjudication process. These actions, along with the modest premium rate increases, will assist in balancing annual revenue with claim costs, it said.
"We are taking important steps in ensuring that the workplace safety and insurance system is financially stable now and for future workers and employers," said WSIB president and CEO David Marshall. "These steps, along with our continuing commitment to accountability and fiscal responsibility, will steer us toward our goal of achieving full funding, while preserving workers benefits and ultimately lowering employer premiums."
The average premium rate will rise from $2.30 to $2.35 for every $100 of insurable earnings in 2011 and to $2.40 in 2012. This is well below the average premium rate of $3 in the mid 1990s, according to the WSIB.
The increase is being applied to the average premium rate, meaning more than one-half of registered employers will see little to no increase, while other employers in high-risk industries with a history of costly injury claims may see increases of more than two per cent. Employers with good safety records will continue to be eligible for rebates under the WSIB's incentive programs.
