October 14, 2010
Workplace Safety and Insurance Board unveils premium rate hikes for 2011
The Workplace Safety and Insurance Board’s decision to conduct a funding review of its operations answers the call for such a measure by the WSIB Construction Industry Task Force.
“We are very pleased with the review announcement. The review is vitally important to the industry and we will have to be right there, participating fully on behalf of employers,” said Clive Thurston, task force chair.
The WSIB recently unveiled its premium rate hikes for 2011 and announced a stakeholder consultation will be held to help build “a long-term plan for financial sustainability” as the board continues to tackle its growing $12-billion unfunded liability. The task force has been requesting a review for over a year now because the status quo is not feasible, said Thurston.
The average premium rate increase is approximately two per cent, but construction employers, on average, will see a 4.4 per cent increase. The WSIB stated that close to half of all employers will pay the same rate for each $100 of their insurable earnings in 2011 as they are paying now. In 2011, the average rate for all industries is $2.35 per $100 insurable earnings and in 2012 it is $2.40.
WSIB’s construction advisory committee has requested a meeting with the board to discuss the premium rate increases.
“The way it is now, some people are going to be hit hard and it is only a matter of time before the rest of us get hit as well,” noted Thurston.
The construction group to be hit with the highest increase is masonry, with a nine per cent hike from 2010 to 2011, an increase from $11.15 to $12.15 in its premium rate. Electrical and incidental construction services are next, with an 8.6 per cent increase from $3.25 to $3.53 from 2010 to 2011. The construction premium rate groups to receive no increase whatsoever were mechanical and sheet metal work, ICI and homebuilding.
Roadbuilding and excavating will see an 8.1 per cent increase from 2010 to 2011, from $4.68 to $5.06. Heavy civil construction will also see a large increase of 6.2 per cent, from $6.34 in 2010 to $6.73 in 2011.
The Ontario Road Builders’ Association (ORBA) says that though it understands WSIB’s financial challenges, it is unfortunate that it considered increasing employer payroll taxes during a time of economic recovery.
“The roadbuilding industry ramped up its labour resources to respond to the stimulus funding that will end on March 31, 2011,” explained Karen Renkema, ORBA’s government relations director. “An increase in payroll taxes will only put further pressure on an industry that will experience a ‘lag’ next April. In addition, we would have preferred that the WSIB wait for the results of the financial and funding review before increasing rates.”
The funding review will consult with workers, labour groups and employers to provide feedback to the WSIB for a strategy to eliminate the unfunded liability by setting and achieving targets and timelines for full funding.
The WSIB will also introduce a “value for money audit” of its claims and adjudication process, which has been identified as a key driver behind the WSIB’s increasing $12 billion unfunded liability.
Renkema said that the review of the WSIB’s financial situation was needed.
“The WSIB has a $12-billion unfunded liability that is growing by about $1 billion a year,” she noted. “We are pleased to see that they have adopted the task force suggestion to commence a full ‘funding review’ that will assess the sustainability of the WSIB’s finances.”
The WSIB is inviting all construction stakeholders to a meeting at its offices on Wednesday, Oct. 20, starting at 1 p.m. to discuss the 2011 premium rates.
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