April 17, 2008

Construction association head skeptical that WSIB’s unfunded-liability plan will work

COCA’s Surplis says target fails “test of arithmetic rigour”

VINCE VERSACE

staff writer

The Workplace Safety and Insurance Board’s plan to eliminate unfunded liability by 2014 is ambitious, says the Council of Ontario Construction Association’s acting president.

“Unfunded liability was reduced from $11 billion to $9.3 billion between 1992 and 2008. Now their [WSIB] target is to eliminate the $9.3 billion in just six years. I do not think this stands the test of arithmetic rigour,” says David Surplis, acting president at COCA.

The WSIB recently released a draft of its funding framework to its board of directors. The framework calls for maintaining average assessment rates at $2.26 for at least six years, reports COCA. The framework also reaffirms the year 2014 as the target date for eliminating the WSIB’s unfunded liability. Surplis says the framework’s goals meet COCA’s but he is still concerned about how WSIB plans to achieve them.

The WSIB is counting on a 35 per cent reduction in lost-time incidents, an unspecified reduction in claim persistency, a return on investment averaging 7 per cent, a substantial reduction in health care costs and general savings through new WSIB’s service-delivery models in its funding framework

Surplis notes that the WSIB’s goal of reducing claims persistency will be difficult on its own because a general slowdown in the economy tends to cause claims to last longer.

Steve Mahoney, chairman of the WSIB, recently spoke at the Ontario General Contractors Association symposium in Collingwood. During his “bear pit” session with symposium attendees Mahoney addressed the WSIB’s funding goals such as the unfunded-liability reduction. Strong partnerships between the WSIB and industries and a “buy-in” by industries such as construction are integral, added Mahoney.

“We are really raising the bar in reducing unfunded liability but if you do not buy into it, we are dead in the water,” said Mahoney.

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