WORKPLACE SAFETY AND INSURANCE BOARD
The Vice-Chair (Mr. Phil McNeely): We’ll now proceed to the agency review of the WSIB. WORKPLACE SAFETY AND INSURANCE BOARD
The Vice-Chair (Mr. Phil McNeely): Ms. Witmer, Mr. Marshall and Mr. John Slinger, come forward. You have 30 minutes for your presentation. For the purposes of Hansard, just mention your name at the start of your presentation. You may proceed.
Mrs. Elizabeth Witmer: Thank you very much, Mr. Chair and members of the standing committee. I’m very pleased to be here today with David Marshall on my right, our president and CEO, and John Slinger on my left, our chief operating officer, as well as the staff from the WSIB who are seated behind me.
We very much welcome the opportunity to appear before the standing committee to review the operations of the Workplace Safety and Insurance Board. We also welcome the opportunity to describe the transformation of the board to a modern, sustainable and accountable workplace insurance system for workers and employers, a system that is very important to economic growth and productivity in our province and, most importantly, a system that is committed to the prevention of workplace injuries, illnesses and fatalities and the promotion of health and safety in the workplace.
Over the course of the next two days, you will learn more, as I have, about this transformation and about the dedicated and committed group of people comprising management and staff who are leading this change to a modern workplace safety and insurance system and establishing a strong foundation for future success.
When I accepted the appointment as chair of the WSIB, I did so knowing that the board faced many challenges but also knowing that the transformation was moving forward decisively under the capable leadership of president David Marshall and his team. This included a focus on greater transparency and on improved services and accountability to stakeholders. My mandate is to ensure sound governance and to oversee, with the board of directors, this transformation to a modern and fiscally accountable workplace insurance system. As future appointments are made to the board, they will be made based on specific skills, knowledge and experience to enhance the competencies of the board in order that it can provide good governance and strategic direction to the board as it fulfills its mandate.
In my recent meetings since I’ve become the chair, I have met with many stakeholders. They have included both employers and workers. They have acknowledged the positive and noticeable change that has occurred at the board during the past two years. They have acknowledged that there is more transparency, fiscal accountability and attention to improving the services for both the injured worker and the employer.
The staff I have met in Toronto and some of the regional offices I have visited throughout Ontario tell me the same thing. I would say to you that, for the most part, they have expressed great enthusiasm about the transformation that is taking place as they see it benefiting the workers and the employers.
Having said all this, we do face challenges such as the unfunded liability. However, we are moving forward decisively to achieve our mission more effectively and efficiently of helping injured workers return to work and to productive lives and to protect employers from financial loss through a collective liability insurance plan. In doing so, we can positively impact economic growth and productivity in Ontario and the lives of the workers and their families.
Let’s turn now to the WSIB as an agency. As an agency, the board is accountable to the Legislature of Ontario through the Minister of Labour. It is bound by and adheres to the agency establishment and accountability directive and to all additional requirements with respect to privacy, expenses and executive compensation. The Ministry of Finance in 2010 found that the board’s controls over administrative expenses were in very good condition. The audit is posted on the board website. The board is also in full compliance with the existing memorandum of understanding with the Minister of Labour, and I am in the process of currently updating that MOU with Minister Jeffrey.
Currently, we have a board of directors that meets regularly throughout the year. It is supported by several subcommittees, including a governance committee, an audit and finance committee and an investment committee, and we still have our health and safety committee. The Auditor General has a permanent representative on the audit and finance committee of the WSIB’s board.
Let me now turn to the important role of the WSIB in the economy of our province. Every year, tens of thousands of workers file claims with the board because of injuries they have suffered or diseases they have contracted in their workplace. At any one time, the board is responsible for about 200,000 workers who need help. That’s about 5% of the four million workers who are covered. The human cost to these workers and their families is substantial. I’m sure that as MPPs, most of you have had opportunities to hear first-hand about the cost to these individuals and to their families.
Also, of course, there is an impact on the productivity of the province at a time when we are short of skilled workers.
Of course, the amount of compensation that has to be paid as a result of injury and disease runs into the billions of dollars. The entire cost of compensation is carried by the employers, most of them small businesses, since the government does not fund the system. Thus, you can see that how effectively the board does its job does have a very significant impact on the economy of the province and, of course, on the lives of the workers and their families.
That is why this is such an important agency. It must constantly seek to do all it can to prevent workplace injuries and disease. It must do all it can to help workers get well and return to their jobs, and to provide stability for the businesses when serious injuries do occur.
Let’s take a look for a moment at how the agency is doing so far.
As I indicated at the outset of my remarks, there has been great progress made during the past two years, and the stakeholders have acknowledged that that is positive. So if we step back and ask the fundamental questions, you will notice two things. The first: If you take a look at the compensation which is required by legislation, you will see that for a worker injured in Ontario, it is comparable with all of the other provinces in Canada. Also, if you take a look at our board, we currently have one of the lowest costs of administration among all of the provinces in Canada. So you can see that there is this objective of making sure we are fiscally accountable.
By 2011, as a result of the changes that the board has made in its operations, the agency is getting 91% of all workers who were injured back to work with no loss of pay within one year or less of their injury. That is a big improvement from where it was at just three years ago.
Employers, through all the ups and downs of the economy—and we’ve certainly had lots of those in the last few years—do pay their premiums, and they are protected, as a result, from being sued by the workers. They pay into a collective insurance scheme, and they don’t have to qualify for insurance each year or face being cut off from the insurance. It’s there for them.
So the system is working, and it is delivering good value for the majority of workers and good value for the employers of this province. Indeed, Professor Harry Arthurs, in his recent report, Funding Fairness, quoted one critic who made the point to him this way: “[D]espite its many shortcomings, the WSIB is a valuable public institution that in most cases actually performs the important ... functions it was established to perform.” Professor Arthurs went on to say that several other individuals “also expressed optimism about current developments in the WSIB’s policy and/or practice.” Again, that’s what I have been referring to: There is positive change occurring.
In that regard, the Auditor General of Ontario, in his follow-up to his 2009 report, said that the WSIB has made progress in introducing a number of initiatives to address the unfunded liability.
I’d like to now touch briefly on the unfunded liability of the board, because it’s always a topic of discussion, and some of the recent changes in board policies and practices.
What is being done to address the unfunded liability? Well, I can personally assure you that the senior management team and staff are taking decisive action to reduce and eliminate the UFL, as they have been asked to do. First of all, there has been a very thorough and evidence-based analysis of where the money is going, what value is being provided for workers and employers, what the costs are, and what best practices are and how things can be improved. A strategic plan as to how the UFL can be retired has been developed so that the board can help play its part in increasing the productivity and economic growth of Ontario.
As well, the board now has a 2012-to-2016 strategic plan that is available on the website. It describes the transformation of the board into a modern, sustainable and customer-focused provider of workplace compensation. Importantly, the strategic plan is supported by specific projects and regular measurements, and these are carefully monitored by the board of directors each quarter.
In order that we can be open and transparent to all of the stakeholders, the WSIB is publishing quarterly financial reports that include the current UFL and the board’s progress towards addressing it. The board’s strategic plan sets the agency’s vision—to be the leading workplace compensation board in Canada and North America. In short, that is our goal. In order to achieve that goal, obviously, we need to continue to focus on prevention, we need to continue to focus on keeping our workplaces safe and healthy, and we need to ensure that, as we move forward, we take a look at this plan and that it provides direction as to how the board can deliver better service to the workers and employers in a financially responsible way. It shows the commitment to change, change that will preserve strong and sustainable workplace compensation for generations to come. That, of course, has to be our goal.
Let me share with you some of the operational changes that have taken place at the board over the past two years and how improvements have been made to the delivery of services. A new service-delivery model has been introduced, a new medical strategy is in place in order to speed up access to health care for injured workers, and there is a new return-to-work strategy in place that is supported by 300 staff whose sole focus is helping to get the injured workers back to work safely.
I’ve had a chance to visit some of the regional offices. I’m going to complete those visits in September. I have been so impressed by the people who are working so diligently and so compassionately with the injured workers to ensure that they can be returned to work safely.
At the same time as these changes in service delivery have occurred, in 2011 the government passed legislation requiring the board to be sufficiently funded and making the board more independent. The management and board of the WSIB have responded. It was necessary to raise premium rates for two years in a row, 2011 and 2012, and they also chose to reduce the refunds that they provided to employers. This was necessary in order to stabilize the finances of the insurance fund. Obviously, you need sufficient funding in order to provide fair funding to those who are injured on the job.
These are very significant improvements, and they are delivering positive results. At the end of 2011, for the first time in 10 years, the board recorded a surplus of revenues over expenses. This is a very important milestone in achieving our goal of reducing and eliminating the UFL, which, of course, we are now required to do.
In terms of our new service delivery model, workers are getting decisions on their claims faster than ever before, and they are then able to get back to work faster than they have for over a decade. In fact, 91% are now getting back to work with no loss of wages within a year or less of their injury. As you can well understand, this is beneficial for both workers and employers, and obviously it is good for the productivity of Ontario businesses.
Benefit costs have come down, and more workers, as a result, are able to lead productive lives.
Moreover, employers now get 90% of their calls answered by a live operator in one minute or less, and several new electronic services available 24 hours a day, seven days a week, have been introduced to simplify and speed up transactions with the board. As I say, we want to make sure that all stakeholders can easily access the board and the board’s services.
I’d like now to touch briefly on the insurance premiums required to pay for the system and their impact on competitiveness.
I have heard from many employer groups that the premiums in Ontario are among the highest in Canada. I do acknowledge this, and I will tell you that this issue is being addressed. However, there is no simple solution. This has been an issue for many years. However, employers, or at least their industry representatives, already know that the board today is doing everything it can to contain the costs, and I will repeat that the board today has one of the lowest costs of new claims and one of the lowest administration costs of all the provinces. This is an indication that we are on the right track.
The reason the premiums in Ontario are higher than in the other provinces is because the employers today have to pay for the cost of carrying an unfunded liability which is there as a result of what has happened in the past and which most of the other provinces do not have. So it’s not the current costs of the board that are the problem, and there is no way to reduce the premiums currently if you’re going to pay off that unfunded liability.
The good news is, as I mentioned before, we have already stabilized the finances of the board, and the board has turned a page. That is a very good start.
The government, based on Professor Arthurs’s report, has enacted a law that requires the board to achieve at least 60% funding in five years and full funding in 15 years. Based on extensive analysis and some quite conservative financial projections, we are very—and I should stress this, “very”—confident we can achieve these goals. Other provinces have been able to maintain full funding, and there is no reason Ontario cannot do the same. Obviously, then, it will start to reduce the premiums.
Another important change at the WSIB is that stakeholder consultation has been increased and is valued. The extensive network of worker and employer advisory committees called chair’s advisory committees that were set up by my predecessor, Steve Mahoney, are working very well. I have met with the co-chairs and members of some of these committees, and the feedback I have received is that they are a valuable mechanism for stakeholder consultation. They provide early information, feedback and transparency about the decisions being considered by the board. They provide an excellent sounding board for the changes we are introducing.
Our support for the Injured Workers’ Outreach Services group, which represents vulnerable workers in communities across Ontario in dealing with the board, is also producing very good results.
We also fund the Office of the Worker Adviser, the Office of the Employer Adviser, and the Fair Practices Commission. To facilitate the prevention of injuries and provide enforcement of legislation within the system, the board also provides $200 million to the Ministry of Labour. As you maybe know, or don’t know, the prevention mandate has been transferred to the Ministry of Labour.
In terms of the future, I would like to take this opportunity to thank Professor Arthurs, who I know is going to appear before this committee, for the outstanding services he has rendered to this province by analyzing and recommending improvements to the board to address the UFL and the financial stability of the workplace insurance system. His thoughtful recommendations are going to guide many of the initiatives going forward.
Clearly, there is no room for complacency. The challenges the board faces are enormous, and they go well beyond just overcoming its current financial hurdle. The system will continue to face growing costs and challenges from many other sources. These are going to include more occupational disease claims, which will in turn place increasing demands on the system.
So, although there are challenges and there are tough decisions that need to be made, not the least of which is a decision about future insurance premium rates for employers over the next few years, I would say to you that I am confident that we can meet the challenges and we will be able to make those tough decisions. We can do so if we work with all of our stakeholders, and certainly that is what we are endeavouring to do, to consult with them and to get their feedback. We are committed to conducting our business with fairness and with integrity, and we are engaging in more consultation with our stakeholders than ever before. I would say to you that I think those committees that Steve Mahoney, my predecessor, set up are having a very positive impact in that we are now able to get feedback before decisions are made. In the case of the appeals process and the consultation, we made changes based on input that we received.
In conclusion, I trust that this overview of the WSIB and its transformation to a modern workplace insurance system based on sound business principles has provided you with a greater understanding and appreciation of our efforts to better meet the needs of employers and workers. We do look forward to responding to your questions. Thank you.
A013 - Wed 4 Jul 2012 / Mer 4 jui 2012
The Vice-Chair (Mr. Phil McNeely): Good morning. We’re here to conduct the agency review of the Workplace Safety and Insurance Board.