CANADIAN FEDERATION OF INDEPENDENT BUSINESS
SIMCOE CENTRE INJURED WORKERS ASSOCIATION
CANADIAN AUTO WORKERS, LOCAL 303
CARPENTERS AND ALLIED WORKERS, LOCAL 27, AND THE TORONTO DISTRICT COUNCIL
DURHAM REGION INJURED WORKERS GROUP
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793
SERVICE EMPLOYEES INTERNATIONAL UNION
MUNICIPAL WCB USERS
GROUP
ASSOCIATION OF MUNICIPALITIES OF ONTARIO
CONTENTS
Tuesday 6 September 1994
Workers' Compensation and Occupational Health and Safety Amendment Act, 1994, Bill 165, Mr Mackenzie / Loi de 1994 modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail, projet de loi 165, M. Mackenzie
Power Workers' Union
John Sarginson, staff officer
Canadian Federation of Independent Business
Catherine Swift, executive vice-president
Judith Andrew, director, provincial policy, Ontario
Simcoe Centre Injured Workers Association
Les Barnett, president
Canadian Auto Workers, Local 303
Colin Argyle, benefits representative
John Sommerville, union counsellor
Ontario Trucking Association
David Bradley, president
Nick Sanders, chair, workers' compensation and labour policy committee
Michael J. Burke, research and policy assistant
Carpenters and Allied Workers, Local 27 and the Toronto District Council
Olga Crimi, WCB coordinator
Durham Region Injured Workers Group
Fran Standingready, president
International Union of Operating Engineers, Local 793
Richard Kennedy, president and assistant business manager
Ken Lew, legal and labour relations assistant
Marnie Niemi, workers' compensation claims assistant
Service Employees International Union, Local 204
Robert Davidson, staff representative
Alan Turner, staff representative
Municipal WCB Users Group; Association of Municipalities of Ontario
Michael Zroback, manager, corporate workers' compensation services, Municipality of Metro Toronto
Eric Gam, vice-chair, AMO fiscal and labour policy committee
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Président: Vacant
*Vice-Chair / Vice-Président: Cooper, Mike (Kitchener-Wilmot ND)
*Acting Chair / Président suppléant: Waters, Daniel (Muskoka-Georgian Bay ND)
*Conway, Sean G. (Renfrew North/-Nord L)
*Fawcett, Joan M. (Northumberland L)
Ferguson, Will, (Kitchener NDP)
Huget, Bob (Sarnia ND)
Jordan, Leo (Lanark-Renfrew PC)
*Klopp, Paul (Huron ND)
*Murdock, Sharon (Sudbury ND)
Offer, Steven (Mississauga North/-Nord L)
Turnbull, David (York Mills PC)
Wood, Len (Cochrane North/-Nord ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Arnott, Ted (Wellington PC) for Mr Turnbull
Hope, Randy R. (Chatham-Kent ND) for Mr Wood
Mahoney, Steven W. (Mississauga West/-Ouest L) for Mr Offer
Johnson, David (Don Mills PC) for Mr Jordan
Rizzo, Tony (Oakwood ND) for Mr Huget
Clerk / Greffière: Manikel, Tannis
Clerk pro tem / Greffière par intérim: Grannum, Tonia
Staff / Personnel: Yeager, Lewis, research officer, Legislative Research Service
The committee met at 1417 in room 151.
WORKERS' COMPENSATION AND OCCUPATIONAL HEALTH AND SAFETY AMENDMENT ACT, 1994 / LOI DE 1994 MODIFIANT LA LOI SUR LES ACCIDENTS DU TRAVAIL ET LA LOI SUR LA SANTÉ ET LA SÉCURITÉ AU TRAVAIL
Consideration of Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act / Projet de loi 165, Loi modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail.
POWER WORKERS' UNION
The Vice-Chair (Mr Mike Cooper): I'd like to call forward our first presenter for the afternoon, from the Power Workers' Union. Will you please come forward. Good afternoon and welcome to the committee. Just a reminder, you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd keep your remarks somewhat briefer to allow time for questions and comments from each of the caucuses. Could you please identify yourself and then proceed.
Mr John Sarginson: My name is John Sarginson. I'm a staff officer with the Power Workers' Union.
We, as the Power Workers' Union, represent approximately 15,000 members province-wide. Our members work at Ontario Hydro, Dryden Hydro, Kenora Hydro, Whitby Hydro and Atomic Energy of Canada Ltd and their job classifications include operators, technicians and clerical.
After careful analysis of the contents of Bill 165, we have decided to support the proposed changes. The basis for our support is that the positive aspects of the bill, specifically the bipartite board, the royal commission, improved re-employment provisions and the $200 increase to some 40,000 workers we believe represent significant improvements. It's also a step towards addressing the problem that thousand of injured workers are living on social assistance, paid for by the taxpayers instead of the companies who actually injured them.
The negative aspect of Bill 165, the clawback of benefits using the Friedland formula, we believe is an insult to injured workers. However, we believe it can be overcome if the companies and the corporations live up to the real intent of Bill 165, which is the prevention of accidents and true rehabilitative employment. If this happens, the Friedland formula will not be an issue, but if, as in the past, the companies and the corporations do not participate in true rehabilitation and re-employment, the so-called Friedland formula will become a major issue for any future government.
We recognize that your committee has heard from all interested parties regarding their problems will Bill 165. We would prefer to concentrate the rest of our brief on rehabilitation and re-employment.
First, some history of our experiences with our major employer, Ontario Hydro.
Prior to 1989, injured workers had to be capable of returning to the full duties of his or her pre-injury job or returning to the full duties of a lower job within his or her trade family. In other words, there was no thought of modifying the job, reducing hours, amalgamating duties of various jobs to create a job that was within the injured worker's physical and psychological restrictions and no thought of retraining the injured worker who could not perform the full duties of an existing job. These workers were left on compensation until benefits expired and then placed on long-term disability -- a total loss of years of experience and expertise to the company, to say nothing of the social and psychological impact on the injured workers and their families.
With the introduction of Bill 162, we convinced Ontario Hydro that its position was morally wrong for a crown corporation and made no business sense. The business argument was simple: Ontario Hydro, as a schedule 2 employer, has to pay the full cost of an injured worker, dollar for dollar, as paid for by the board, plus an administration fee and the cost of a replacement worker if in fact the injured worker did not return.
We identified the following advantages for the employer, Ontario Hydro, and the injured worker:
(1) The earlier an injured worker returned, even if initially to another job, the corporation saved money.
(2) If it was determined by the medical profession that an injured worker could return to his or her own job by modifying the job, again it could save money.
(3) If it was determined an injured worker could not return to his or her original job even with modifications, then the injured worker could be trained for a position within his or her physical restrictions, one which he or she found challenging, and again it could save money.
(4) If a worker could only return to part-time employment, it could save money, and
(5) If the employer continued to pay the worker his or her re-injury earnings, again it could save money.
At Ontario Hydro we negotiated a rehab and re-employment plan which we believe is second to none. A joint team at the injured worker's location meets and develops a plan, with the injured worker being a full participant. The plan also includes provisions where an injured worker received number one priority for vacancies, regardless of seniority. The one exception to that is when we have surplus employees.
The success rate, prior to the massive restructuring of Ontario Hydro, was that over 85% of injured workers returned to the workplace.
Perhaps this plan works because Ontario Hydro is such a large corporation and is able to accommodate injured workers, but we do not believe that that is the main reason. We believe it is because they're a schedule 2 employer and consequently have to pay the full cost of the WCB payments plus an administration fee. It just makes good business sense to get injured workers off compensation and back to work as soon as they are cleared by their doctor. It also means that every reasonable effort is made to help maintain meaningful employment for injured workers.
Other companies and corporations who make millions of dollars' profit are claiming the board is out of control and it costs too much money. Why does it cost too much? We suggest it's because the companies are not interested in injured workers who cannot perform the full duties of their pre-injury job. It is far cheaper for those companies to let the board look after the injured workers, even if their premiums do increase slightly. Fact or fiction? We believe the figures speak for themselves because we know that prior to 1990 a minimum of 40,000 workers never returned to work and we know from the OFL brief that 78% of injured workers who have been out of work for one year remain unemployed. We must remember that Bill 162 was supposed to force companies to re-employ. It is obvious from those figures that those companies are not living up to their obligation.
We believe the solution is simple: Make all employers schedule 2, including the banks and the insurance companies and all of the so-called service groups that are now not covered. Then and only then will the companies rehabilitate and re-employ injured workers, because if they don't it will cost them the full price of benefits plus an administration fee of 10% to 18%. That way the board can never get into further debt; it will operate on an administration fee only.
What about the unfunded liability? We suggest an employer surcharge per employee based on a sliding scale. For example, all existing schedule 2 employers plus all employers who are not covered will pay the minimum per employee and the companies with the worst accident frequency rate pay the highest surcharge per employee until the liability is fully funded.
At first glance, this may appear to be an off-the-wall suggestion, but we respectfully request that this committee have a group of experts, including labour representatives, carefully consider the feasibility of our proposal.
I thank you for the opportunity to present our views to the committee and I look forward to your questions.
Mr Steven W. Mahoney (Mississauga West): Interesting suggestion. There are a lot of people in the business community who would agree with that suggestion, perhaps for different reasons. But there are a number of groups that have been to see me to see if we would support them transferring into schedule 2. What do you do, though, in that kind of scenario with truly small business, bearing in mind that the purpose of WCB was to have collective protection of paying into an overall pot so that someone is not put out of business due to that? You know that the costs that can be associated with rehabilitating an injured worker can be just horrendous. So what so you do, recognizing that a huge part of our business community is not exactly in the same league as Ontario Hydro?
Mr Sarginson: I think to try and answer that question, as I said in the opening, we also represent Dryden, Kenora and Whitby Hydro, and it's very, very interesting to note that they could by definition be schedule 2 employers. But if we look at Whitby Hydro as an example, because they have a bad safety record they're determined to go schedule 1. If we look at Kenora and Dryden, they're determined that they would stay with schedule 2.
In answer to the first part of your question, with the smaller companies, I recognize that that perhaps may not be feasible, but then again it was a suggestion that, say, companies with fewer than 200 employees could in fact still be covered by the community obligation, if you will. But we believe that the other companies should pay the full cost, in fact.
Mr Mahoney: So you would define it by the size. Small business, technically, is defined in most provincial ministries as being fewer than 100 employees. That's not exactly small, but that's the threshold that is used, and you're suggesting anybody under 200 come into the collective liability program and anyone over that be given the option of opting out?
Mr Sarginson: I would certainly suggest that that would be the figure we should look at to start with, yes.
Mr Mahoney: The involvement of the medical profession: You've indicated here that Ontario Hydro deals fairly successfully, not to put words in your mouth, but just paraphrasing this that returning workers, whether it's due to their size or their status in schedule 2 -- can you tell us how the medical community works with injured workers in Ontario Hydro?
Mr Sarginson: It works excellently. I think perhaps the best example is if we go to Kincardine-Port Elgin, the Bruce site, as we refer to it. In that community, because the rehabilitation program was working so well, the joint team, both labour and management representatives of the team, met with all of the doctors in the community, made them aware of what was available at Ontario Hydro and that they would lay out a physical analysis of any duties that they wanted them to return to, and it's worked excellently.
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Mr David Johnson (Don Mills): Thank you very much for that deputation. We certainly appreciate it. I was interested to see the success at Ontario Hydro with over 85% of the injured workers returning to the workforce, and that's quite a credit. I'm just wondering if this was done during the period of time when Hydro was downsizing as well. Am I right?
Mr Sarginson: No, sir. No.
Mr David Johnson: This was before that time?
Mr Sarginson: Since we got Mr Strong on board we've lost more people, including injured workers. No, this was between the time frame of 1990 up to the middle of 1992, before the massive restructuring.
Mr David Johnson: Then my question is to you, during a time of restructuring, and many businesses in Ontario, large and small I guess, are going through this rather painful process, how can this be handled during such a period of time? Hydro, apparently, according to Mr Strong, has downsized by some 10,000 employees. So when you talk about vacancies, there are probably no vacancies at Ontario Hydro. As a matter of fact, they're looking to downsize even further, as I understand it. So in a situation like that, for example, would the union give priority to injured workers with seniority to be able to bump those with less seniority who are not injured?
Mr Sarginson: The way that it works is, I would say the largest percentage of the downsizing at Ontario Hydro was taken care of by two plans: the early retirement incentive and the voluntary separation package. So while there are certainly no vacancies, if you will, advertised to the outside community, there are still vacancies within the corporation because certain pockets of people took the retirement package, say, out of the Niagara region, which created openings there.
But as far as the injured worker getting priority, as long as there are no surplus employees, then for any vacancy that comes up, the injured worker gets number one priority. If in fact we have surplus employees in that particular classification, then the surplus employee gets number one priority. So the injured worker has it under normal circumstances.
Mr David Johnson: It's a little trickier during periods of downsizing --
Mr Sarginson: Of course it is.
Mr David Johnson: -- at any rate, to accommodate. That's the problem.
Going back to the surcharge that you've recommended to address the unfunded liability, I'm not sure I understand that entirely, but basically you're suggesting a surcharge on those employers with a poorer record, are you?
Mr Sarginson: No. I'm suggesting that -- because I truly believe that everyone should have been paying into that fund for a long period of time -- the banks, the insurance companies and so on -- so I'm saying that with schedule 2 employers, I believe that they have paid the full cost. They've paid the full cost of compensation. They have not created anything to do with the unfunded liability. So those employers, along with everyone that is not presently covered, should in fact be forced to be covered. They would pay the minimum surcharge -- they would still have to pay a part of it -- and the ones with the bad track record would pay a bigger surcharge.
Mr Randy R. Hope (Chatham-Kent): Thank you very much for your presentation. I wanted to focus on a number of things dealing with the re-employment; also where you made reference to putting everybody as schedule 2 employers. With the changes to Bill 165 that have been put in place to deal with re-employment and the enforcement of re-employment and make sure that there is a re-employment program in place, don't you think that would help alleviate that instead of changing everybody to a schedule 2, in your opinion?
Mr Sarginson: No, I don't, and simply because, as I said, I think the figures speak for themselves. We'd been told that with Bill 162 that in fact that would happen, and now we see that 78% of those who have been off for over a year are not being re-employed. So I think it needs a bigger stick, if you will. To me, the bigger stick would be that now you make them all schedule 2 so they have to pay dollar for dollar.
Mr Hope: So you're saying, instead of getting away from checking everybody's re-employment program, let's just make them all schedule 2 and then there will be the obligation to re-employ, is my understanding.
With the return-to-work process that happens with Ontario Hydro and your other ones, the information obtained from a doctor: There have been questions and concerns about the type of information that is going to be needed in order to make modified work available for somebody. In your opinion, what type of information is being required from the physician dealing with the restrictions of an individual in order to make modified work available for the employee?
Mr Sarginson: What they simply have is for each particular classification there's a physical demand analysis that is sent along to the employee's physician. It says: "These are the duties that we would like them to perform; this is the analysis that we've done on that particular job. Can this individual meet those demands?"
Mr Hope: With the re-employment aspect, has it ever been, in the time that you've been involved with WCB and representing the workers in your workforce -- I guess it's always been a question of mine, if they can't modify work then why would an employer want to be involved in the re-employment of an individual who no longer will work them for eventually? I'm having a hard time understanding some company saying, "We want to be involved in the re-employment but they're never going to work for us again because there's no re-employment for them to go to." Where is the real obligation on behalf of those employers?
Mr Sarginson: Again, just to draw the comparison, Whitby Hydro, as an example, employs 21 employees. Because they've had a record in the past, they decided to go schedule 1 because they know they can get away with $60,000-a-year premiums paid to the board as a schedule 1 employer. Now they have an employee who is a 15-year employee with the corporation who was injured on the job who cannot do the full duties of a lineman and they simply want to push him off to the board, if you will. What we're saying is, if you'd been schedule 2, you wouldn't have done that because you'd have had to pay for every single dollar of rehabilitation/ retraining that the board pays out for that individual.
The Vice-Chair: On behalf of this committee, I'd like to thank the Power Workers' Union for giving us their presentation this afternoon.
CANADIAN FEDERATION OF INDEPENDENT BUSINESS
The Vice-Chair: I'd like to call forward our next presenters, from the Canadian Federation of Independent Business. Good afternoon; welcome to the committee.
Ms Catherine Swift: Thank you, Mr Chairman. My name is Catherine Swift. I'm the executive vice-president of the Canadian Federation of Independent Business. I'd like to introduce my colleague, Judith Andrew, who is our director of provincial policy with special responsibility for Ontario.
Actually, we have provided a brief -- a brief brief. As you may know, the CFIB not only has been very involved in workers' comp policy in Ontario for quite a long period of time, we're also members of some of the various business coalitions, notably the Employers' Council on Workers' Compensation and various other committees connected with the PLMAC, for example, that have been involved in this process.
I'd just actually like to make a few brief comments and leave as much time as possible for questions. Twenty minutes, unfortunately, is a shamefully short period of time for such an important and complex piece of legislation but we think that probably the more questions, the better. Most of our statement is probably pretty much a reiteration of what some of the other business groups before you have said, so we won't belabour things that we believe have been adequately represented by others.
As you probably know, we represent small and medium-sized businesses. We have some similar difficulties as large businesses would have with workers' compensation policy but I think we also have some more unique ones. What we find troubling about Bill 165 generally is that our group and many other business and other groups, for that matter, entered into the process of workers' compensation reform with the belief that at least in part we were going to do something about the financial fiasco of the current workers' compensation system. We regret that this bill does nothing to address this, and indeed, in some aspects, may potentially even worsen the situation. That was certainly something that we felt was essential, both to give employers a little bit of confidence as well as ensure the future of injured workers.
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We do a lot of surveying of our members and some of our recent results are outlined on page 3, for starters, of our brief, for example. We did some recent surveying earlier this year and found WCB premiums listed as the most harmful tax or charge -- and this was limited to provincial charges and taxes, by the way -- to the our members' businesses. I should note that this was highly unusual. Workers' compensation is always an important issue, but we rarely see it up there as number one among our members and I think that just represents their growing concern with how out of control the system appears to be.
This concern has been increasing dramatically over time, as the chart on page 4 indicates. And as we see on page 5, the second most significant impact of the 1994 premium increase, preventing hiring, should be naturally of concern to all of us no matter where we come from, since I think we all want some job creation in this economy, and as you know, recent stats have shown that small and medium-sized firms are the only firms that are, on a net basis, doing any hiring these days.
Just to conclude, and again to try to avoid just repeating what others have said, we're quite concerned that the financial aspects of the system have not been addressed within Bill 165. We're particularly concerned, particularly from a small business perspective, about such things as the template of best practices, which we believe will end up an even worse administrative nightmare for small firms than, I think, large firms. That's a key difference between large and small firms.
We feel that elements of a proper review of the system have to look at goals such as a reduction in benefit levels to get rid of some of the current absurdities in the system of people actually netting more money when they're on workers' compensation than if they're working, and such elements as well as a regular value-for-money audit of the system by the Provincial Auditor.
We can't express strongly enough that, for a system that's fully funded by employers in this province, and that of course they initially were pleased to buy into because there were definitely tradeoffs involved that supposedly benefited all parties, there is virtually zero confidence in the system on behalf of small and medium-sized firms right now. This can't serve to anyone's advantage in the long run since there's simply the potential that businesses are going to want radical, radical reform and, given the financial instability of the system as well, this reform may have to take place in the future at a much more precipitous pace than if we try to get a grip on problems now.
We also feel that there has been announcement of the intention of having a royal commission in this area, and to undertake the kind of reform in Bill 165 we feel really properly should be the job of this royal commission, if this royal commission is to really have any true mandate.
As a result, our recommendation concurs with that of many other business groups, that we really should go back to the drawing board. We really do need to scrap this bill and undertake some kind of true reform that's balanced on both sides.
Judith, I don't know if you have anything to add at that point. Nothing in particular? We'd welcome your questions at this time.
Mr Ted Arnott (Wellington): Thank you, Ms Swift and Ms Andrew, I appreciate your presentation. I've got one question. You've given us some aggregate results of your surveys of your membership. I received a letter last week from one of my constituents; the man's name is Howard Frohlich from the Guelph Utility Pole Co. He employs about 40 people and they treat the large hydro poles. I'm not sure if they're one of your members or not.
He tells me that since 1990 he's paid about $242,000 to the Workers' Compensation Board over that four-year period and the claims for the company due to accidents were about $21,600. He's written me and he's asked this very simple question: "Where is the incentive to operate a safe company when the cost of the Workers' Compensation Board exceeds the claims by 91%?" And those are accurate numbers. Not only that, his rate of assessment has gone up 30% as of the first of the year. Is that fairly indicative of what you're hearing from your membership, that sort of a story?
Ms Swift: It is quite indicative. Of course, there's a lot of variation among different kinds of businesses and what not. I guess another problem we have repeatedly -- I was just talking to a Toronto Sun reporter before coming here today about problems within the administration of the board itself. So part of it is certainly policy-related and how the system operates from that perspective, but there are also massive administrative problems. Again, small firms don't have the resources. If you've got five or 10 employees, you cannot spend all your time on the phone with Workers' Compensation Board bureaucrats.
You're right about the seeming lack of linkage. For the longest time, businesses were told, "Improve your safety record; you will at least have a level of premiums that will be retained," and not be increasing by these drastic amounts like 30% when we see inflation running 1% to 2% and other costs of doing business not increasing anywhere near to the same extent. Obviously that linkage has been profoundly broken. Workers' comp has nothing to do, it seems, with safety in the workplace. Indeed, our concern again with Bill 165 is the whole potential gutting of experience rating, which again is presumably a very strong incentive to positive, safe workplace practices. So that's very indicative and I think it begs a lot of other questions on this issue.
Ms Judith Andrew: Just to add, if I'm not mistaken there was something in the order of 27,000 businesses that faced increases of that magnitude this past year. So that gentleman's complaint is not an isolated phenomenon. A 30% increase in one year is almost impossible for anyone to absorb in this economy. So it's no wonder our small business members are very irate and at wits' end, frankly, about what to do on this.
Mr David Johnson: I was interested to see your poll which indicated that workers' compensation costs were the number one concern now of your community. It reminds me of a couple of deputations that we heard in Sault Ste Marie last week. For example, it was pointed out that in the grain industry, and it's probably not one of your members, but they're comparing the assessment rate, which in that industry is 6.85% in Ontario versus 3.02% in British Columbia. They're indicating to us that the grain industry in Thunder Bay is in decline; a lot of the grain is going west rather than coming through Thunder Bay, and the impact that has on jobs and the local economy. We've heard other deputations. There was a general manager of Seamless Cylinder International who said something of the same thing. She indicated that she has to be competitive on a global basis; not just here in North America, but on a global basis.
I wonder if you could translate to us in any way the jobs that are lost when workers' compensation premiums go up -- and we have the highest I think in Canada right here in Ontario -- and what the impact of that is in terms of jobs lost and the people whom you represent.
Ms Swift: It's pretty impossible to quantify, because of course so many other factors affect hiring. I think the important point is that all of these factors, including workers' compensation among the array of other charges, taxes, costs of doing business that people face -- these days businesses are operating on a hair-trigger. Nobody is seeing enormous margins. Profitability I know in some people's minds is a dirty word, but of course profitability is a precondition to hiring, to surviving as an economy, and we see profitability still unfortunately very sluggish even though we are seeing some economic growth.
I think the important thing is, already in Ontario we have an incredibly high cost of doing business for all kinds of different reasons. Workers' compensation is one important component of that. It is also a very labour-sensitive component. Small businesses are more labour-intensive by nature than large firms are, for a range of different reasons. Anything that increases the cost of employing that extra person -- that one chart we have in there shows that about 30% of our members said it prevented them hiring. They resisted hiring as a result. Others had a lesser proportion, but others actually were looking at layoff situations because of it.
There just isn't a pot of gold there to be tapped for workers' comp as well as any range of other charges. Right now competitive pressures are more intense than we've ever seen them, again, not just domestically but internationally. But even if you just want to limit yourself to Canada, we are by far the highest in terms of average premiums. We're also by far the largest unfunded liability, and employers know darn well that is simply the promise of future premium increases.
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Ms Sharon Murdock (Sudbury): Thank you very much for your presentation. I wanted to talk about the classification system because it's been mentioned indirectly in other cities that we've been in. Obviously I think we all know that the higher-risk businesses pay higher premiums than the lower-risk businesses and that the employers have been involved with the Workers' Compensation Board for four years in trying to set up a classification system that would reflect the levels of risk in order for their payments. To your point earlier, that while a number of employers got increases, and significant ones which were subsequently frozen, there were 50,000 that got decreases from their regular premium as well. That has to be mentioned also.
But some have suggested in these hearings that a flat rate be applied, where everyone would pay the same, where it would -- obviously then, I presume, this is the way that would work: The ones that are paying lower would have to be evened out into a median kind of percentage per $100 of payroll. I'd like to hear your comments on that.
Ms Andrew: The notion of a flat rate maybe has some kind of appeal, but frankly it would be a disaster for the system overall because employers would no longer have any cost-based reason for trying to reduce accidents and so on. This is why we are so concerned about having a proper classification system and sensible experience ratings, so that firms are placed correctly within a class, within their peers, and their own experience is measured against those others in the same industry and they have built right in an incentive to reduce accidents and reduce time off work. If you put everyone to a flat rate, the high-risk industries would frankly not have that financial incentive any more.
I would also point out that there is a considerable majority of firms in this province who would see their rates go up. I think it's something like 70% are paying less than the average rate. So that would cause a tremendous outcry in the province.
I think what we have to do is look at getting the costs under control, and some of the things that Catherine suggested earlier in terms of the benefit levels and the entitlements -- we're not asking for miserly entitlements, but frankly, some of the entitlements go far beyond what is reasonable and what is sensible in terms of encouraging return to work. If a person is able to earn more money while they're off than if they return to work, that's a pretty poor incentive to go back and frankly is a disservice to that individual who's probably trying to recover from an injury and trying to make an effort and has to weigh the consequence of actually being financially worse off. That doesn't make any sense at all. From an insurance point of view it is not sustainable, and these are the kinds of reforms that are necessary to reduce the cost of the system overall.
I suppose there are some problems with the classification system. The new system has probably some quirks to be ironed out, but once those are ironed out, the issue is not really how you divide up who pays; the issue is how to get the overall costs of the system down so that we are competitive in this province vis-à-vis other provinces and so that injured workers are looked after fairly and so that there is a proper incentive for health and safety and that no one has to suffer unnecessarily because of the way we've designed the system.
Ms Swift: If I can just add something briefly, we've also heard some of the people who are promoting that notion of a more uniform rate. Part of the reason for doing so is to remove employers' incentive to challenge assessments, to challenge situations and so on, and that kind of reducing things to the lowest common denominator or whatever. It seems to fly in the face of the whole purpose behind having this kind of system in the first place, which is that you get rewarded for safe practices, and getting rid of that principle would be a fiasco, in our view.
Mr Mahoney: Thanks for your presentation. You didn't introduce the third member of your delegation.
Ms Swift: Well, she's making a lot of noise.
Ms Andrew: She's not pleased with Bill 165 either.
Mr Mahoney: I'm sure she's not, and in fact she'll have to suffer the consequences long after we're gone.
The issue of financial accountability: We've heard a lot about it from business groups. The group that you're a part of, the ECWC, came before us and expressed a lot of concern.
When you interpret the bill and you go to section 15, subsections (3.1) and (3.2), which deal with the board's responsibility to "evaluate," for example, "the consequences of any proposed change in benefits, services, programs and policies to ensure that the purposes of this act are achieved," and then you go back to the purpose section of the act, there's nothing in there other than the delivery of fair compensation, health care benefits, rehab and survivor programs. There's nothing at all that lays out in the purpose clause a requirement to take into account the costs.
Now, we've heard that from other people. Can you just maybe give us your position on that?
Ms Andrew: There was, in our view, a very balanced purpose clause that was drafted under the auspices of the PLMAC, and it did deal with the issue of business competitiveness in terms of any new programs and policies and so on being evaluated not only in light of generally accepted advances in health sciences and other things, but also in light of what it would do to the system from a business competitiveness point of view. That whole notion was taken out and it doesn't appear anywhere else in this bill. The purpose clause basically mandates the WCB to offer more benefits in all sorts of other areas without considering how they would be paid for.
Mr Mahoney: And we know we're talking stress --
Ms Andrew: That's right.
Mr Mahoney: -- ultimately, although it doesn't use that word.
I have a copy of a letter dated April 21 from the Office of the Premier, and you made reference to the PLMAC agreement. This is a letter to Jim Yarrow, chairman of the ECWC, and it's only four months old.
"Dear Mr Yarrow" -- and it's crossed off -- "Dear Jim" -- so I guess they know each other reasonably well. I'll quote a paragraph from this letter. It says -- and this is the Premier writing this letter -- "A `purpose clause' will be added to the Workers' Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility. This clause will also address the principles of fair compensation and benefits for workers, as well as enhanced rehabilitation and return to work." The Premier said that.
It does do the second part, without question, but he clearly said that they would add a purpose clause. This was talked about a lot at the PLMAC process between Jim Yarrow and the Premier on a first-name basis, and yet he's not done that.
Did the Premier -- was he wrong? Did he lie? What do you think?
Ms Andrew: He apparently reneged on what he said in that letter. Certainly, when the business leaders and the business steering committee and all of the committees supporting that effort came into this process, we were fully expecting that there would be some attention to the financial side. After all, there is presently an $11-billion unfunded liability. Everyone knows that eventually that has to be paid. The notion of doing it without bankrupting the businesses in the province and without shortchanging the workers in the province seemed to be appealing to the Premier, I think, and to everyone.
For some reason, we've ended up with a bill that's going to, on paper, save a modest amount, something like $700 million this year -- but I, frankly, doubt that -- but we'll see the unfunded liability rise over the period of time to 2014 up to $15 billion. So they're going to take it from $10.9 billion up to $15 billion. In our view, that is not getting a grip on the financial problem.
The purpose clause is really the touchstone, the notion that there was going to be some attention paid to both sides of the equation so that the security of injured workers' benefits was safeguarded, and it's not there.
The Vice-Chair: On behalf of this committee, I'd like to thank the Canadian Federation of Independent Business for bringing us their presentation this afternoon.
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SIMCOE CENTRE INJURED WORKERS ASSOCIATION
The Vice-Chair: I'd like to call forward our next presenters, from the Simcoe Centre Injured Workers Association. Good afternoon and welcome to the committee.
Mr Les Barnett: Good afternoon. My name is Les Barnett. I am the president of the Simcoe Centre Injured Workers Association. I represent pretty close to 6,000 cases we've completed in the last 10 years, plus we have 1,100 cases on our file right now.
I think I can speak through the knowledge that I've gained in the last 15 years of doing injured workers, and you're giving us something in this bill, but you're taking more than you're giving away. The bill is a step in the right direction, but it's two steps back, and we feel that amendments have to be made to this bill for the injured workers to support it.
The injured workers -- there are 35 groups in the province of Ontario. The standing committee as it stands right now is visiting four places only. Injured workers cannot afford to travel these great distances to come and make presentations in front of you. We are a major shareholder in the board and the policies and the bills that do come down. We are very strong in that, yes, the $200 for the older workers -- that covers me. I was a fireman in 1970. I got injured. I had to find another job, less pay. Right now, I'd be making almost $100,000 as a fire captain if I was working. I ended up finding another job, and I had another accident and got injured again.
I look at it as not just me, what about my family? What do they suffer when an injured workers suffers an injury? He can't do the things that he used to do with his family. He can't go where he used to go. There are a lot of things that when you represent an injured worker you represent a whole family, and a family eventually becomes a voting family, and every member sitting here will have to be accountable to a voting member, because when you're injured, you're not looking to get rich, but you'd like to keep a level of cost so that you could live comfortably. You didn't ask to get injured, and now you've suffered the repercussions, not only from the compensation board but from the parliamentarians who make the laws and sit for us.
We elected you here to do what we thought was right. I hear a lot of talk about money. No money can replace what an injured worker loses when he becomes totally disabled. He's on a fixed income by the compensation board. If he's lucky, he may get Canada pension. If his son needs a prescription for $90 or $110, he can't afford it. He's on a limited income because the compensation board says, "We only cover the injured worker."
There's got to be a little more compassion by all members of Parliament saying, "Hey, there's got to be help for the injured worker." The injured worker does try to get back to work. Nobody wants to sit at home. I've yet to meet an injured worker that says, "To hell with it; I'll stay at home." They want to go back to work, and there's no real guarantee that they can go back to work. There's no real job. There's deeming in Bill 162 that went out there, and "There's a little job." I could be the Premier of Ontario. I don't want the job, but by the same token, I could be deemed to have it, and I could be making $100,000, which means I don't get any compensation.
I feel it's time we started looking really at what the problems are. Bill 165 has some good points. But the good points are overshadowed by the bad points of it, and the bad points are, there are no permanent re-employment rights. This $200, if you're on the 147(4) supplement you would get this. It's not carte blanche on a pension that's an extra $200. It's got little ties to it, and we think that these little ties to it should be thrown away.
We feel, and I say "we" because I speak for a lot of injured workers, and over 7,000 cases I've been involved in, that's 14,000 or 15,000 people, husband and wife, not counting the adult children that are involved or the small children who are involved who don't have a mother or don't have a father that can do the things which are normal things, everyday duties -- pick up a baby to change it, sit and rock a baby. If you can't lift, how can you do any of these things? These are the things that we, the injured workers, would like to see this standing committee not only look at the small picture, but look at the big picture. There's a lot more there.
I hope I'm not boring anybody, but by the same token, I'm saying, "Hey, we need some help." As an injured worker, I can talk because I'm an 88% disabled worker. I worked for the government of this province. They told me I would not be hired back unless I was 100%, yet I saw a bill just passed the other day saying that the government must rehire. I see the opposite. There's nothing here.
I also represent a lot of tannery workers who died in Barrie; 86 people died because of chemical poisoning. I had a cabinet minister come to -- she wasn't a cabinet minister, she was in the opposition of that day, but she was the compensation critic, and she came and she said, "The government of the day, when this thing comes to a head, will not support you." It's come to fruition.
Mr Daniel Waters (Muskoka-Georgian Bay): Hi, Les. I haven't seen you for a while. You mentioned the $200. Well, that is for life, by the way.
Mr Barnett: No. If you look at the way it's worded, if you're on 147(4), if you're on a supplement, you get that. I've never had a supplement. I've gone out and got a job, worked my fanny off to raise my kids. If I had to work two jobs, I worked two, even after I had an injury as a fireman, but you've got to have that supplement or you don't get it. Then it's attached to the supplement. It's not given carte blanche. As long as you get the supplement, you get the $200. And I don't think that's right.
Mr Waters: We've heard a lot of discussion about the $200. I guess I look at Bill 165 as the first step. I think the only way we're going to fix it is with the royal commission, and actually act upon what the royal commission comes down with.
Mr Barnett: I think this bill should be set aside till the royal commission does the work it should be doing, and that is addressing all the problems of injured workers, Dan. They're the ones that have the problems, and I would feel sorry for anybody here who is injured, because unless you're injured, you don't really know what it's like. You don't go through the pain, you don't go through the agony, you don't go through the mental stress. A lot of things happen in your life. A lot of things have changed my life because of my injury.
Mr Waters: We have an employer in our area who pulled out and moved to Mexico under free trade. I've heard from employers here almost to the point where it sounds at times, especially from some of my colleagues across the way, that the injured workers are the guilty people. I was wondering if you could quickly recap what that employer was saying to his people who were on compensation, the fear that he was trying to instil into the workforce.
Mr Barnett: I did the hearing this morning on one of those people from that company, and here was a company that employed 600 women. We have 103 of them off on compensation. Of that 103, the company brought them back to work, said they had modified duties for them; they couldn't do the modified duties; they fired them. Where do we go with them -- back to compensation? Do we bring them back on compensation?
The employer says: "No, you're fired because you can't do the job. Go on UIC. Go on social services." That's all they're doing, passing the buck. And this is the employer who has got a very big union, and the union won't even answer up for the employees. I'm not knocking the union. I'm just saying that certain things are done and you can't change them.
As Mr Waters so eloquently brought out, this was brought out in the newspaper by a cub reporter who tried to talk to the union and the union wouldn't talk to him, the company wouldn't talk to him, and 103 employees are now out of work, permanently injured. Where are they going to get jobs?
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Mr Waters: The number of people who apply for WCB -- I keep hearing more and more. Because you run the centre, maybe you can give me an idea in central Ontario as to how many people who should be on WCB, in your estimation, or who come to you who are living off of welfare or other forms of social assistance.
Mr Barnett: I would say about 75% of them, because an injured workers' group never gets the easy cases. They get the ones that the employer says, "Well, I'm not sure he did it at work." Or the doctor says, "Maybe it was caused by a work-related injury." These are the problems the injured workers get. They never get the ones that are: "Here. Paid. Thank You. Over."
We get the ones that are hard, that you got to dig on, you got to find out -- like the employer hasn't put in a form 7. The employer, because his assessment cost is high, he disputes the injury. I've had just about everything you can come up with.
As a matter of fact, I just recently had an employer fined because he sent in two form 7s on one girl. He said she had a car accident; that was her injury. But in fact she was lifting a patient at a nursing home with one other woman. The other, heavyset, woman lost her balance and took both girls over. One injured her back. The employer sent the board the form 7 saying she was in a car accident. When we sent her out to get the form 7, it came back that she was lifting a patient. We took them both down to the board. The board fined the employer $5,000. These are the problems we have.
Mr Mahoney: Les, I recall you spent some time with me in Barrie when we did our outreach, and I appreciated your input at that time. The question I'd like to ask, you made a reference to the union -- you weren't knocking them, but not being available to help or not able to help or whatever. Unlike Mr Waters who just made the remark that somehow we in the opposition don't care about injured workers, I think that's nonsense. I don't accuse anybody in the Legislature of feeling that way.
But we do have a serious problem. You see service delivery I'm sure on a daily basis and get frustrated on behalf of the many clients who you represent. It's not working. The current system is not working for the injured workers whom you're representing. The companies are complaining about the cost burden and so it's clearly not working for them. In the three-month outreach that I undertook I saw so many areas where we could improve just with common sense: the involvement of the medical community in making decisions on the level of injury, in return to work, in modified work, and doing all of that kind of stuff.
But the thing that's sort of underlying -- and I'd maybe like your opinion as an advocate on behalf of injured workers -- and I know you've represented thousands over the years: Why was it necessary to even start a Union of Injured Workers?
Mr Barnett: Well, Mr Mahoney, I'll ask you: Why do we have a food bank? Things aren't being done that should be done. I was a very strong Liberal when David Peterson got elected. As a matter of fact, I was president of the Liberal party in my riding. I stood up for him 100%. When he passed Bill 162, I joined the NDP. Now Mr Rae is doing the things he's doing; I'm tearing up my NDP card because I don't know who to believe any more. Everybody tells me something.
Bill 162 was the worst bill that David Peterson ever put forward. It was a bill that the Conservatives had put forward 20 years prior and was denied. Mr Peterson put it through. There are so many things you can change and help the injured workers. Here we sit as injured workers -- and believe me, I am an injured worker. I look like a strong, healthy guy but, by God, I couldn't bend down to pick up a pen off the floor. That's bad.
When you're my size and my height everybody figures, "He's a strong, healthy man." I've had three major back operations. I've got 18 inches of metal down both sides of my spine with three cross-pieces. I suffer. What do I suffer? I can't even afford to buy my son a pair of Reeboks. If I was working I most likely could, but I can't because compensation only pays for the injured worker. We got to look at the bigger picture here. Bill 165 is a start. The $200, if it's given carte blanche it would be a fantastic gift to injured workers. They do need it. But if they tie strings to it, then forget it, because you're taking our cost-of-living indexing away and that's like saying, "Nobody sitting in this room gets a raise."
I'm here because I believe in injured workers. I don't get paid to come down here. I come down here because I want to express the views of myself and the little over 1,000 active cases that we're working on right now. I believe that they're a strong voice. Mr Waters has been to one of our meetings and he'll tell you, we have 300 or 400 people out to a meeting and we're very, very strong in an association of injured workers who are trying to help injured workers. The changes --
Mr Mahoney: Let me interrupt you for a minute.
The Vice-Chair: Mr Johnson.
Mr Mahoney: Oh, that's it?
Mr David Johnson: Thank you, Mr Barnett, for your deputation and for your responses to the questions. Certainly, you've had a great deal of experience and I think when somebody with that kind of experience comes before us we really need to listen. The kind of message that you've brought, I think, is fairly typical of the sort of message I've heard from other injured workers as well. It's interesting that fairly unanimously, I'd say, the injured workers do not support the bill in its present form without amendments.
Mr Barnett: Not in the present form. There's got to be amendments to it to offset what you want to take away from the injured worker.
Mr David Johnson: Of course, you've heard from the Canadian Federation of Independent Business that was here just before, and I think they're very representative of the business community employers and they're opposed to it, and even some of the unions seem to be opposed, although I would think the majority of the unions are in favour, but there are some that are opposed. So it's interesting to hear people from different walks of life and there's a great deal of difficulty with Bill 165 that's before us, and your suggestion that it go back and either be amended or --
Mr Barnett: I think it should go back to committee and be amended and be brought back out in an area that you're not going to cut the arm off or the hand off that feeds you; you're going to cut the whole arm off, and the way the bill is now you're cutting the whole arm off. Take a finger, please; leave me the rest of the arm. I need it to work with.
Mr David Johnson: I understand where you're coming from and I think you do an excellent job on behalf of the people whom you represent. This whole area is a mess and it has been pointed out to us day after day in the committees. When you look at the unfunded liability, which I'm told is increasing by $1 million a day, which is somewhere between $11 and $12 billion -- now, some people say, "Don't worry about the unfunded liability," and I understand the people who say that because they're saying, "Worry more about the people; worry more about the injured employees." But when you look in the long run, the concern I have is that there has to be support for the injured workers not only today, not only next week, but years from now, decades from now. If there isn't fiscal responsibility put into the system and if the unfunded liability continues to grow, and of course this year for the first time there's a negative cash flow in the system, then don't we have concern with regard to the availability of resources to help people 10 years from now, 20 years from now, who need that help?
Mr Barnett: Well, let's put more emphasis on making the job more safe so people are not going to get injured, so they are not going to incur these costs. People and employers used to be loyal to each other. There's no loyalty any more. I could put 30 years in a company and, "Bye," I'm gone tomorrow with nothing, and I've seen this happen with injured workers. There are many ways of fixing it. I had somebody come up to me and say: "Well, what happens if every injured worker paid $1, everybody in the province paid $1? How soon would that liability go, that unfunded liability?"
It can go many ways. But for 20-some-odd years they never had a cost increase, the employers. When the Conservatives were in power many years ago they didn't increase to keep up with the cost of what was going on, and all of a sudden now we're at the crunch and we should have stopped long before we got to the crunch. We're at the crunch now. What are we going to do? Well, you can't take it out on an injured worker because nobody asked to get injured. You can't take it out on the employer because there are limitations to what the employer can pay. But by the same token, cost versus body; to me, body is more important, and I think the body should be taken care of. I'm sorry; I'm going longer than I should. I realize that, but I just had to express my opinion.
The Vice-Chair: That's fine. On behalf of this committee I'd like to thank the Simcoe Centre Injured Workers Association for bringing us their presentation this afternoon.
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CANADIAN AUTO WORKERS, LOCAL 303
The Vice-Chair: I'd like to call forward our next presenters, from the Canadian Auto Workers, Local 303. Good afternoon and welcome to the committee.
Mr Colin Argyle: Good afternoon. My name is Colin Argyle and my colleague is John Sommerville from the Canadian Auto Workers, Local 303. I'm here on behalf of the membership of Canadian Auto Workers, Local 303 to present my views and recommendations on this very important legislation.
I want to first thank this committee and the Ontario government for this opportunity to bring forward the opinions of the stakeholders who deal with the Ontario Workers' Compensation Board on a daily basis. It is only through open public hearings such as this that those involved can present to the government their ideas and recommendations for progressive change.
CAW Local 303 is an amalgamated union with an active membership of 3,500 members prior to the closing of the largest unit, the General Motors van assembly plant. It consists of three units: General Motors Scarborough, which ceased operations in May 1993; Manchester Plastics, which manufactures plastic components for the auto industry, and DEL Equipment, which manufactures large and medium-sized truck bodies. Each of these units is related to the auto industry in some respect.
As we know, the current workers' compensation system that we have in Ontario and in most other jurisdictions in Canada came about as a result of the in-depth study by Sir William Meredith around 1913. There were five principles on which the Ontario act was built: (1) security of payment was guaranteed, (2) it was to be a no-fault system, (3) employer-funded collective liability, (4) independently administered by a government agency, the WCB, and (5) injured workers could not sue their employer.
These five principles have guided legislatures in the past when attempting to improve the WCB system in this province. It is my view that past legislation, Bill 162, and this current proposal are beginning to deviate from these basic and very important principles.
Workers in this province gave up a very important right in order to receive income maintenance while recuperating from a work-related injury or disease. My experience in the field of WCB advocacy began approximately six years ago and was during the fiasco on the previous government's Bill 162, which, in my opinion and many others, I might add, was the most regressive piece of legislation dealing with workers' compensation in the history of this province. Although it gave injured workers the right to vocational rehabilitation and a limited obligation on employers to re-employ, it also created the practice of deeming. This unfortunately was not dealt with under this current proposal. If my memory serves me well, I can recall the NDP stating that it would be a priority of their government, once in power, to eliminate this unfair practice.
There are currently some 40,000 injured workers in this province relying solely on their meagre WCB pensions, social assistance or family members for their livelihood. Most of these permanently disabled people are living well below the poverty line. The present proposed changes attempt to address this issue by increasing the pension by $200 per month, but it has tied entitlement to this increase to the subsection 147(4) supplement. It is my opinion that this will result in more activity in challenging an injured worker's entitlement to this supplement.
The proposed section 54 amendment is a sound approach which will give the board the authority to determine if the employer has breached their obligation to re-employ those workers who are injured while in their employ. Unfortunately, this bill does not contain any proposals that would guarantee true vocational rehabilitation to those injured workers who cannot return to their pre-injury job and have no or limited transferable skills and very limited formal education. Immigrant women are especially affected by the narrow focus of the board's vocational rehabilitation staff.
A bipartite board of directors structure will ensure that all stakeholders have input into the administration and policy-making of the WCB. However, it is my opinion that the proposed subsection 58(1) puts the responsibility on a board of directors that could lead to further restrict the board of directors from implementing policies on entitlement or work-related occupational diseases that are known to be caused by workplace exposures. I believe that the employer community would use this section to stall the implementation of progressive policies. It is inherent with any corporate or government structure to adhere to the responsible running of the agency in which they are a director. I believe this goes without saying.
Subsections 53(2.1) and (10) propose vocational rehabilitation for employers. It is not vocational rehabilitation that employers require, in my opinion; it is more a need for education on the positive aspects of returning injured workers back to the pre-injury job or using their imagination when attempting to make accommodations to the workplace for permanently disabled workers. This proposed inclusion opens the door for unscrupulous employers to interrupt an injured worker's vocational rehabilitation. It is the injured workers in Ontario that require fair vocational rehabilitation, not the employers.
I have witnessed personally the negative effects that result by the actions of these types of employers. There is a growing industry of employer consultants whose only mandate is the challenging of injured workers' claims for entitlement to benefits under the act.
Section 51, as it reads, must not be included in the amendments. This violates the claimant's right to confidentiality between doctor and patient. It places the treating physician in an uncompromising position and may result in an injured worker returning to work too early and further injuring themselves or others. This proposal will also pave the way for further abuses of the system by those employers who feel that challenging a worker's claim is a cost-cutting measure. We must move away from the adversarial position in dealing with the WCB and injured workers, and focus more on employing those disabled members of society.
Experience rating was thought to be a way in which the board could measure an employer's accident frequency and to award those that showed improved accident prevention and penalize those that did not. However, what has resulted by this assessment-rate policy is this ever-increasing onslaught by employers and consultants in fighting workers' entitlement in every aspect, from initial entitlement to SIEF abuses.
To expand on experience rating will not prevent employers from continuing this practice of cost-cutting attempts. Employers' rates should be applied on a flat rate of the industry group which they are in. Experience rating is a reactive measure, not a preventive one. In order to apply prevention, the board must have the authority to inspect all workplaces and to levy penalties on those employers known to have unsafe work practices. Prevention is the key to a safe workplace.
Mr John Sommerville: I would like to supplement my colleague's presentation briefly. As a person who's represented workers in front of the Workers' Compensation Board for some 15 years now, I assure you I have seen many changes that the board has gone through, or supposed changes, and it occurs to me that when we got Bill 162 we got one of the strangest creatures in terms of administrative law ever invented by the human mind.
What we got was a thing called "deeming," which means that a worker whom I recently represented was deemed, because he had an educational background from Iran, as it turns out -- he was an immigrant worker and now a Canadian citizen -- and he was trained as an engineer, so the person evaluating this worker with a profound back injury decided that he could be deemed as being an engineer, which would have led to an increase in his wage rate. Unfortunately, his educational credentials, significant somehow for the Workers' Compensation Board, were insignificant for Canadian employers, so he had a tiny future economic loss because he was deemed as being able to be an engineer. This kind of abuse is not going to be addressed by Bill 165, unfortunately, unless profound amendments are made to that act.
I hope that one other particular pet peeve of mine, which happens in the area of hearing loss, is also addressed by an amendment. Under the old Workers' Compensation Act, the pre-Bill 162 act, a worker would be assessed for a hearing loss and it would generally be a small percentage, 2% to 7%, in that range, but it was 2% to 7% of his real wages. Under Bill 162 it became a non-economic loss award, which substantially reduced the benefits he received.
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If this body does its work well on behalf of injured workers, and I believe, perhaps too optimistically, that everybody here is committed to trying to improve the lot of injured workers, if you do something to correct these kinds of abuses, in particular this wild and crazy deeming process -- because you must understand that in the environment in which an injured worker is functioning, the person conducting the vocational rehabilitation is going to pay attention to the future deeming concept and they're not going to allow them educational entitlements that are contrary to what is indicated by what will be deemed their future economic loss award. So, please, put yourself to the work that is in front of you and correct these injustices and we'll all be very well served.
Mr Mahoney: Thanks very much for that. It is somewhat curious that there is nothing to address the deeming issue. We heard many examples in the outreach tour that I did that were somewhat wild, to say the least: the school janitor in Timmins who was deemed to do the job of an air traffic controller. The good news was, there were no jobs available in that particular situation; but just no common sense, and I understand that. I'm a Liberal talking about changing that and we recommend eliminating deeming and replacing it with a STEP program that I'd be happy to share with you.
You made the statement, though -- and I'm sorry I was late at the beginning, but at the end here you say, "Experience rating is a reactive measure, not a preventive one." Follow with me the example of automobile insurance, where you get three-, four- or five-star ratings which will ultimately determine your premium. Those ratings are acquired as a result of the number of tickets you get or don't get, the number of accidents that occur or the number that don't occur. Therefore, the insurance company, when it comes to look at you or it comes to look at me, will look at our driving record, our experience rating, determine where we fall -- into the three-, four- or five-star category -- and if you can hit a five-star, you're going to get it a lot cheaper than a three-star. Does that not make sense and is that not in essence a preventive or an incentive type of rating system?
Mr Argyle: That would make some sense, I guess, if you took out of the analysis the adversarial aspect of it. We don't have employers, at least that I know of, that are working towards the positive aspects of preventing the accidents in the workplace whereby you could see the results of a true merit rating system. Right now, when you see the cottage industry growing in the consultant area and WCB fields -- merit rating is not going to solve the problem. Until we get employers that recognize that when you bring injured workers back to work and you make the proper accommodation to the pre-injury job, you're going to start employing workers in this province again -- and not only workers injured while in the course of their employment; people who are disabled in society.
Mr Mahoney: You make that suggestion, which is very good; move away from the adversarial position in dealing with the WCB. You're talking about the relationship between the worker and the employer but there's also the adversarial position in relationship to the politics of WCB, when you get a Premier putting in writing a commitment to a business group to include the financial responsibility section in the purpose clause, putting it in writing to them in a letter dated April 21, and then it doesn't show up anywhere in the bill. You have adversarial relationships between the politicians and between business, you get business angry with labour -- it's a lot more than just the worker and the employer who are fighting over this stuff. How do we get everybody pulling on the same rope instead of trying to push on the rope and take the adversarial section out of the entire process?
Mr Sommerville: Just an additional point: One of the problems with automotive insurance is that sometimes the actuarial systems that are applied in the insurance business are somewhat skewed. For instance, new Canadians, as I'm sure you're aware, are forced to pay artificially high insurance rates in the province of Ontario, one of the things which we had hoped might be corrected.
In any event, it seems to me that it's unlikely that the natural and wholesome adversarial relationship that exists in unionized working environments is going to disappear very soon. But we have to remember that at least 60% of the workers of the province of Ontario are at present unorganized. All the employer has to do to defeat the injured worker, particularly in those environments, is delay the process. They don't even have to win the case. They just have to stretch the guy out until his mortgage falls off the edge of the earth.
Mr Mahoney: WCB does that, though.
Mr Arnott: Thank you, gentlemen, for your presentation. It's good to hear from Local 303. While I was in university I spent one summer working at the Scarborough van plant and fully enjoyed the job, that summer experience that I had.
We're told that the unfunded liability at the Workers' Compensation Board is about $11.7 billion. We're told that it's increasing at a rate of $1 million. As two individuals who are very concerned, I think, about the long-term financial viability of the board, what do you have to say about the unfunded liability?
Mr Sommerville: If I might, the unfunded liability, of course, is something we hear about all the time now. It is important that any governmental institution be properly funded, but when you have an all-encompassing insurance program it's essential that all employers participate. But in the province of Ontario at present, banks, insurance companies and the underground industry, forced underground by some would say unreasonable taxation policies of various levels of government, if we take the most conservative statistics on the underground economy, there's probably 5% of the construction work in the province of Ontario that's being done unreported by workers who are not, alas, covered by workers' compensation in companies that don't pay premiums. The banks and the insurance companies have their own insurance policies which they cover their workers with, and those workers are, alas, unorganized to make proper complaint, although some work is being done to correct that injustice as well.
It seems to me that you cannot have a universal insurance plan without universal coverage. So if you folks really want to get serious about covering the unfunded liability, first get everybody in the house and make everybody pay a fair share. That means that a good employer who has a good, safe work environment won't have to pay as much as a sloppy and irresponsible management.
Mr Mahoney: It's called experience rating.
Mr Sommerville: That's what it's called.
Mr David Johnson: Just with the experience rating, most employers who have talked to us say that the experience rating the way it is today is an incentive to put in place programs that reduce injuries, that prevent injuries; and I think that's number one on all of our minds. But yet, you're saying that the experience rating the way it is today you don't support and it should be a flat one. That goes at odds with certainly what the business community and the employers are saying: that it's been a valuable tool for them in actually reducing injuries.
Mr Sommerville: I guess I understand the principle of profit, a little bit, anyway, not from much personal experience but theoretically. My sense is that if I was an employer I would probably want to harken back to that system as well, because they had a long holiday where they didn't have to pay their fair share, even those who were covered, and certainly in the 1980s there is good statistical evidence that they didn't pay their share. They didn't pay what the real cost was.
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Mr Hope: Thank you very much for your presentation today. Earlier today we heard from some employer groups, the independent business association I believe their name was, and they were making reference saying that the employers are saying that the benefits should be cut, that injured workers make more on WCB, they take home more than they would if they were working.
I guess in your experience -- because you went into a number of cases -- with injured workers, does this really happen that an injured worker takes home more than he would if he was working? I guess I was just wondering what your views are -- because I'm listening to the Conservatives and the Liberals -- on an 80% or 85% take-home versus 90% in benefits, what your position would be on that.
Mr Sommerville: My bank doesn't want 85% of its mortgage; it wants 100% of its mortgage. The grocery store doesn't want 85% of the grocery bill. The company which I bought the car from wants 100% of their bill. Why anybody would perceive that it was okay for an injured worker to function at 85% of what he was earning -- you'd have to assume that 85% of what he was earning was enough for him to live on. Trust me; in this day and age, that is not the case. That may also be your experience.
Additionally, just a few points about the older workers' supplement, which is what in the parlance of the Workers' Compensation Board the supplement is. The adding of $200 to that supplement, anybody who's dealt with an older worker who is receiving these benefits knows it's very welcome. It receives a sigh of relief. Unfortunately it's a sigh of relief that comes from somebody who knows that even though that's not adequate, it's better than nothing. I feel that in addition to increasing that supplement, it's necessary not to increase it as part of the supplement but increase it as part of a payment to a worker who is unable to work.
Because it's called an older workers' supplement, many relatively young workers who have suffered permanent impairments and are unable to work have great difficulty obtaining that supplement. So it's very important that we try somehow, if we're going to do something for injured workers who are unable to find work, we do so outside of the framework of that supplement, separately, just on the basis of the fact that they need money to live. Any reduction in benefits is trying to pay the unfunded liability on the backs of working people, which is absolutely absurd. It's blaming the victims. We've had enough of that in this world.
The Acting Chair (Mr Daniel Waters): Thank you, Mr Hope, and thank you, gentlemen.
Mr Hope: That wasn't three minutes.
The Acting Chair: Well, when I assumed the chair, I was told by the Chair --
Mr Hope: I just wanted to find out who was responsible for people when plant closures happened. How are the GM workers who are disabled and not --
The Acting Chair: Mr Hope, thank you. Thank you very much, gentlemen, for your presentation.
ONTARIO TRUCKING ASSOCIATION
The Acting Chair: Could I have the Ontario Trucking Association come forward.
Mr David Bradley: My name is David Bradley and I'm president of the Ontario Trucking Association. I'm joined by some colleagues today. Nick Sanders is director of personnel, safety, insurance and environmental compliance at MCL Motor Carriers in Oshawa, and probably a few other hats. They just seem to be adding to the title, but those kinds of things have happened in the last few years. Frank Paglia is director of accounting for TNT Canada in Mississauga. Michael Burke is also from the OTA staff.
It's getting a little late in the day and I know you've been hearing a lot over the last few weeks, so I've left a submission with you, but I'd really just like you to take a look at the two pieces of paper on the top for now. One is a chart that in my presentation will become quite self-evident in terms of what that tells us. The second is a press release from last week from the Premier of New Brunswick who has plotted a somewhat different course in terms of bringing his province's workers' compensation board under control.
I want to thank the committee for the opportunity of appearing here today to talk about Bill 165.
OTA is a founding member of the Employers' Council on Workers' Compensation, and through our ECWC membership, we were a member of the PLMAC business steering committee. I know this committee has heard from both the ECWC and the business members of the PLMAC on the first day of the hearings. I want to begin by expressing OTA's support for the views that were expressed by those two groups, and we want to repeat the deep concern that we have over the manner in which workers' compensation reform has unfolded in the province.
It's been our view that the Ontario workers' compensation is at a turning point -- in fact, I might say it's at a precipice -- and that its very survival is at stake. Those may sound like ominous words, but believe me, in the trucking industry we can see the warning signs. We've lost a lot of companies over the last few years, and it doesn't take a rocket scientist to look at the numbers and see where we're heading in Ontario with respect to workers' comp.
It was our hope that 1994 would see the beginning of a significant positive reform and change in the direction by which workers' compensation is delivered in this province. While OTA, like many within the business community, was optimistic when Premier Rae's labour-management advisory committee was assigned to review the system, we are disappointed with the results that we see in Bill 165. While the government has suggested that the genesis of Bill 165 was found in this labour-management accord reached last March, the reality is, I think, and I hope you understand this by now, that no such agreement exists, if it ever did. The very foundation of the government's initiatives, this accord, appears to have collapsed.
We want to make it clear that OTA does not support Bill 165 in its present form and we join with our business colleagues in calling for a withdrawal of this bill and a return to the drawing board.
The effective functioning of the Workers' Compensation Board and issues relating directly to that agency are of primary importance to us, and we represent 800 member companies in the province of Ontario. We also have a committee that deals with workers' compensation issues, and it has two primary goals in its mandate. One is to strive to ensure that injured workers do receive effective treatment, rehabilitation and eventual reinstatement through workers' compensation programs, because we think that's the best way to keep our costs down. In addition, it is equally important to OTA that workers' compensation is sustainable from an economic point of view and does not place an unfair burden on Ontario employers who are ultimately responsible for paying for it. OTA is concerned that the ability of the workers' compensation system to manufacture a realization of these two objectives may be in jeopardy.
You've heard I can't count how many times that with an overall unfunded liability of $11.7 billion, rising by $21,000 by the time I'm finished my presentation, that at the prospect within the trucking industry of higher assessment rates in spite of a declining accident rate, we're becoming increasingly pessimistic that real reform designed to ensure the sustainability of the system will emerge. In a labour-intensive industry such as ours, facing increased international competition, workers' compensation is a critical factor in the survivability not only of our members but of their employees' jobs.
The trucking industry is an industry that's playing and will continue to play a key role in the provincial economic renewal and I think it's important to just get an understanding of the context in which we come here today. Trucking is the dominant mode of freight transportation in Ontario. We haul 70% of all land freight. The Ontario trucking industry generates an estimated $3.3 billion in GDP. That's more value added than any other freight transportation mode and more than some of the key Ontario industries that you might first think of. It's also a major consumer of goods and services, and for every dollar of value added created by trucking, another 71 cents in GDP is created in other industries. Moreover, that's spread through all the regions of the province, not just any one particular location.
One quarter of Ontario's GDP is exported, with three quarters of that going to the US, and all of the major trading regions for Ontario are within a major truck drive of the province. Trucking hauls about 75% of our province's exports to the US and 83% of US imports into Ontario. So given the reliance upon trucking services by shippers of high-value-added products, which is what this province wants to produce, a competitive and viable domestic trucking industry is and will be central to economic renewal and vitality.
We are a labour-intensive industry. It's estimated that the total commercial trucking activity in Ontario creates employment for approximately 200,000 workers or almost 5% of the provincial labour force. Of that total, about 90,000 workers are employed in the for-hire and private sectors of the industry. This compares quite favourably with some of the other groups you would have heard from, such as the motor vehicle manufacturers at about 46,000, 65,000 in auto parts, 65,000 in electrical and electronics. Again, there the spinoff from our industry is quite significant. Every job in the for-hire trucking industry creates another 0.7 jobs elsewhere in the economy.
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According to some figures recently released by Statscan, wages account for about 32.5% of total operating costs of Canadian motor carriers, and that's the largest single component of our costs, and in some cases, depending on the fleet, it can rise as high as 50%. So, the purpose of all that is to say that that being the case, payroll taxes, including such things as workers' compensation premiums, impact labour-intensive industries such as ours much more harshly than capital-intensive industries.
In 1993, the trucking industry rate group was the third-highest industry group contributor in terms of total assessment dollars paid to the WCB. Specifically, the approximately 5,000 registered trucking firms in the province contributed over $93 million in assessment premiums to the board, and significant in that is that 148 trucking firms paid $50 million of that assessment. So there's quite a high level of concentration there.
For 1994, the average assessment rate applied to business in Ontario overall was approximately $3.01 per $100 of payroll. However, for trucking in 1994, the assessment rate was over twice that average at $6.58 per $100 of payroll, and that was a 10.6% increase 1994 over 1993. The WCB has set an even higher target rate for the industry, likely closer to around $7.30, which they would like to see reached within the next two years.
The assessment per worker has risen equally dramatically over the last several years. For 1994, at the maximum assessable earnings ceiling, every worker in trucking, and this is in the chart on the right-hand side of the page that I distributed to you, would cost about $3,500 in assessment. That's up from $2,100 in 1989, or a 64% increase over six years.
Throughout these years, the trucking industry has worked diligently to improve worker safety, inspired in large part by the new experimental experience rating, or NEER, program. Emphasis has been placed on both returning injured workers to the workplace and reducing workplace injuries, and the results, I think, speak for themselves.
Look at the chart again, the one on the left-hand side of the page. What it tells you is that in the five-year period between 1988 and 1992, the trucking industry saw its lost-time injury rate decline from 11.8% to 9.2%, a 22% reduction, and the number of lost-time accident claims in that same rate group reduced by a full 35% during that same period, from about 7,500 to about 4,800. So anybody who says that the business community, at least in this sector, isn't doing the job on safety, read 'em and weep. The numbers don't lie. However, despite the overall results reflecting the same trend, benefit expenditures paid out by the WCB during those years increased by a full 50%.
It's OTA's view that employers have accepted their funding obligations in good faith and have continued to do their part. The rising cost of workers' compensation cannot continue to be simply passed on to employers through ever-increasing assessment rates. Corporate competitiveness is critical to maintaining jobs and our standard of living. This is one program that is in urgent need of reform, and real reform. The WCB cannot continue to rely solely on assessment rate increases to resolve its financial difficulties.
Last year, the Premier of the province requested that business and labour work together to produce recommendations that would both provide fair benefit levels to injured workers and meet the objective of being financially sound. Much has already been said through other groups you've seen about the character of the accord that was reached, along with the government's decision to cherry-pick from that so-called accord.
Representing the interests of the business community on the newly established PLMAC advisory committee were the CEOs of five major Ontario companies, but they were supported by a lot of other people in the business community who put a lot of effort into this approach. There was a reference group of over 200 companies and associations created. There was a 16-member steering committee and 14 working groups to address particular issues of common concern, and OTA was a participant in those.
The 65 members of those 14 working groups represented the entire spectrum of all small, medium and large business across the province and they developed a series of position papers and recommendations for the CEOs. We repeat the counsel provided by the PLMAC business steering committee and encourage the committee to assess the extensive analysis that was undertaken at that time.
Our written submission, which you I'm sure will read at your leisure, details our views on the core elements within Bill 165. However, I wish to use our remaining time to address one subject of vital importance to our industry, and that's experience rating, which is a program that is fully supported by OTA and our membership.
The Ontario workers' compensation system sets an individual employer's assessment rate through an integration of the risk of the industry in which the employer is engaged. In 1984, the WCB introduced NEER, and it was designed to balance the requirement for collective liability -- in other words, the creation of a standard industry assessment rate -- with the objective of incorporating individual employer liability. The rationale at the time, and it remains to this day, was that if an employer is accountable for his workers' compensation costs, a motivation on the employer's part would be developed to maximize worker safety and keep costs at a minimum. This motivation translates into improved accident prevention programs and ultimately a lowering of the claims demands on the compensation system.
The effectiveness of NEER has been examined by the Workers' Compensation Board. They conducted a study in the last couple of years which was called New Experimental Experience Rating Program Evaluation, and the study revealed that the NEER program has been very successful in achieving its goals. This is a quote from the study:
"The results of the evaluation study indicated that NEER has been effective in generating a substantial incremental impact on increased health and safety initiatives by employers in the areas of prevention and protection. The study also found that NEER has also been effective in generating an organizational response to the program in terms of focusing more clearly the responsibility for health and safety issues and performance within the organization. Analysis of board data shows a relative decrease in frequency rates for NEER rate groups...."
The November 1993 report from the PLMAC business caucus provided resounding support for experience rating. They said that "experience rating has been an unqualified success and has achieved its primary goals of reducing the frequency and severity of workplace injury and enhancing the level of individual liability."
The foundation of experience rating is employer accountability, with assessment being linked to company accident performance. The principle's twofold: to ensure equity -- those that cost more pay more -- and to provide motivation -- fewer accidents contribute to less cost to the company.
OTA is of the view that without experience rating, the principle of employer equity would be compromised, as individual companies with a good safety record and those with a poor record within a particular industry rate group would eventually pay the same premium. However, with the application of NEER, a company with a good record relative to the average would receive a refund, while those with a poor safety record relative to the average would pay a surcharge. This incentive ensures that employers take an active role in reducing workplace injuries and returning employees back to work earlier.
The trucking industry was among the first to enter into the experience rating program. We did that in 1986. The following year the industry and the WCB worked together to develop positive enhancements to NEER which greatly improved its performance and understanding within the industry. Since that time, the industry's worked diligently to reduce its levels of overall workplace accidents and accident frequency.
The Acting Chair: If I might interrupt for a second, you're down to about three minutes left. I just want you to know.
Mr Bradley: Okay. I'll make it; I'll get there.
OTA remains committed to NEER, its principles and its method. It's in large part due to the fact of that commitment that we are concerned with any alteration at this point to experience rating. We're convinced that the experience rating program is to a significant extent responsible for the improved accident record of recent years. The motivation it provides for improved safety has served employers and workers and the WCB well. It's our strong opinion, supported by the findings of the NEER study and through our regular contact with our members, that NEER has been successful in achieving its stated goals.
Under the amendments proposed in Bill 165, refunds may be eliminated and surcharges increased through purely subjective investigation by the WCB. This undermines the integrity of experience rating and provides the board with unsurpassed interventionist powers. It's not needed, it's not warranted and it's not productive. This type of interference will further damage Ontario's competitiveness and will upset the most significant element responsible for the success of experience rating, and that's its predictability. The revisions to Bill 165 proposed by the Minister of Labour do not in the least resolve these issues.
In the interest of time, I will stop there, Chairman.
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Mr David Johnson: Thank you, Mr Bradley, for that deputation. I was very interested in your comments on NEER, because I've heard them before, and I think there's a great deal of merit in what you're saying.
You're referring to amendments, I think, that allow the board to introduce other factors in determining the experience: health and safety practices, some sort of analysis of employer programs, vocational rehabilitation practices, that sort of thing. From my point of view, it seems to introduce uncertainty so that the direct accountability may be lost. This actually could work counter to the positive aspects to the experience rating system that we've had over the past few years. I wonder what your comments on that would be.
Mr Bradley: Absolutely. There's nothing more certain for a business than the impact on the bottom line, and that's where NEER allows us to manage our businesses and allows us to manage our safety performance. To cloud that with as-yet-undetermined other factors is of great concern.
In the transportation industry, we have a whole pile of legislation trying to tell people how to run their businesses, and I'll tell you, it doesn't really work very well. What you have to do is give people the proper incentive. Let businesses manage their businesses and they'll do a much better job than the Ministry of Labour or the Workers' Compensation Board auditors could ever do.
Mr Hope: Two questions: Have you ever used investigators for WCB claims and have you ever appealed a case?
Mr Bradley: Have I? Personally, no.
Mr Hope: Well, you had specialists up there. I just thought maybe --
Mr Bradley: Well, that's a different question. I'll ask Mr Sanders to respond to that.
Mr Hope: Have you ever used investigators for WCB, and have you ever appealed a case?
Mr Nick Sanders: Yes.
Mr Hope: Yes to what? Both?
Mr Sanders: Yes, we've used investigators, and yes, we have appealed a case.
Mr Mahoney: We've had members of the government telling us that this bill is a result of the accord that was arrived at with the PLMAC process. We in fact had a person we consider to be an inside government adviser, in the person of Mr Gord Wilson, say last week in London that this bill "mirrors the accord." Those were the words he used, "mirrors the accord." And you've said here in your presentation that you hope finally people understand that there was no accord and that this indeed was not part of the agreement.
Do you have a comment on why they continue to perpetrate this fraud that there was some kind of an agreement that led to this bill?
Mr Bradley: Maybe it was a cracked mirror, but Mr Burke was on the working group, and I'll ask him to respond to that.
Mr Michael J. Burke: There seems to be some confusion as to whether or not there was an accord, or whether it was an accord or an understanding or a consensus or what have you. We do know that when the business representatives of the PLMAC committee presented their recommendations on March 10 to the business community, they said that it was based on an agreement that they had with their labour counterparts.
It did not appear, for a variety of reasons, that that agreement would survive much beyond the following weekend. However, when the Premier did get up and make his announcement with respect to reforms of the workers' compensation system, he said that he wanted to build on the consensus that was reached between labour and management which emanated out of this PLMAC process.
Mr Mahoney, I can only say that I tend to agree with your basic statement that there is some confusion as to whether or not there was an actual accord or an agreement or not.
The Acting Chair: Thank you very much, Mr Mahoney, and thank you, gentlemen, for coming in today and putting your views forward. You're in a unique industry, as we've found a number of other ones coming in who are in a unique niche in our overall industry perspective.
CARPENTERS AND ALLIED WORKERS, LOCAL 27, AND THE TORONTO DISTRICT COUNCIL
The Acting Chair: I would ask that the Carpenters and Allied Workers, Local 27, come forward and introduce yourselves for the sake of Hansard and the members.
Ms Olga Crimi: Good afternoon. I'm Olga Crimi. I'm with the Carpenters and Allied Workers Union, Local 27, and I basically handle our members' cases and appeals and basically the case load. I'm the WCB coordinator for the carpenters, Local 27, and the drywallers, Local 675. I'm here today also representing our members within the millwrights under the district council. The affiliates represent in excess of 12,000 members.
The majority of the union's membership is engaged in heavy construction as rough and finished carpenters performing form work, excavation, scaffolding, drywall installation, millwork, finished carpentry, trimwork and cabinetmaking. The locals represent employees across the entire construction sector and include employers under schedule 1 and schedule 2 of the act, including the municipalities and school boards.
I'll begin by saying that even with the reduction of accidents brought about by the revisions to the Occupational Health and Safety Act and the recent economic conditions which have been responsible for a general reduction in construction work, recent statistics from the Central Ontario Construction Unit have shown that from January 1993 to July 1994 new claims in lost-time and no-lost-time accidents averaged 800 new accidents per month. Clearly, workers are still being injured and we feel that many of these injuries could be prevented.
When injuries occur in the construction industry they are often very serious due to the nature of the working conditions on a construction site. Construction workers suffer from numerous repetitive-strain-type injuries, occupational diseases, such as white finger disease which is caused by continuous use of vibrating tools, hearing loss resulting from noise exposure, and lung diseases caused by asbestos and dust exposure, just to name a few. Clearly, working on a construction site can be dangerous.
The 1990 amendments to the Occupational Health and Safety Act expanded the rights and responsibilities of workers within the construction sector. Changing the working conditions on any job site requires cooperation between both workers and employers. Accident prevention in construction must be addressed. In order to do so, workers and employers must be up to date with technology. WCB staff must also stay abreast of changes in the construction trade if they are adequately to serve injured workers.
This brings me to the section of the act which addresses re-employment. When an injured worker suffers a work-related disability, they're not only faced with the initial trauma but also with the inability to turn to their pre-accident job. Not only does an injured worker and his or her family need to cope with the injury and the ongoing physical and financial burden that accompanies it, but also with the threat of not having a job to return to. So far, the re-employment provisions under section 54 of the Workers' Compensation Act and the vocational rehabilitation services under section 53 have for the most part failed the construction industry miserably on these counts.
The amendment dealing with section 54, section 10 of Bill 165, also fails to address the uniqueness of the construction industry. While Bill 162 saw the introduction of section 54 dealing with the injured worker's right to reinstatement, it took another two years to implement guidelines for the construction workers.
First of all, the construction industry is characterized by short-term employment where construction workers seldom work continuously for one employer beyond one year, and second, most contractors and subcontractors employ small crews with fewer than 20 employees.
If any re-employment rights do exist, the injured worker has had to initiate an application to the re-employment branch. Even when the claims adjudicator has made general inquiries regarding the obligation to re-employ, no follow-up action has taken place by either the adjudicator or the case workers.
Even more disturbing has been the growing trend to place injured workers in unproductive and unsustainable jobs with the accident employer on the basis that these jobs are deemed physically suitable. In most cases, our members have been placed in makeshift assistant positions or have been asked to do general cleanup. This goes back to the fact that construction workers are paid relatively high wages to perform specialized and strenuous work but yet have few transferable skills. The end result from the WCB's point of view is that that injured worker is deemed to be in a permanent job with no wage loss. Consequently, due to the provisions regarding future economic loss awards, injured workers are inappropriately deemed.
Employers, workers and their unions must collectively devise realistic alternatives that will satisfy all parties. Injured workers should not have to forgo benefits such as health and welfare plans and private pension plans which they have earned and are entitled to receive. Mediation services in this respect and expert ergonomic reports must be used to work out details of a worker's return to work with an employer, and the injured worker must, where available, be entitled to representation by his or her union or other designated representative who can play a key role in determining the availability and the viability of the suitable work.
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While there are elements of the legislation with which we agree, there are several proposed amendments which may be of a more technical nature but none the less cause us grave concern. Issues such as experience rating, the concept of jurisdictional compensation and the elimination of section 93 must be addressed thoroughly and reviewed in conjunction with employers, workers and unions.
With respect to the proposed amendments to subsections 53(10) and (15), we have serious concerns that an uncooperative employer could be in a position to interfere in a worker's vocational rehabilitation program. The case worker, in conjunction with the injured worker, must explore realistic and viable alternative work. The creation of phantom jobs, which have put injured workers and their families in a vicious spiral of poverty and chronic unemployment, must not be permitted. As an alternative to levying higher penalties on uncooperative employers, we would prefer to implement any necessary retraining required in order to return the injured worker to some gainful employment.
In regard to the new provisions under subsections 51(2) and (3), which obligate a physician to provide prescribed information about a worker's physical abilities with the worker's consent and will be based on an amendment to subsection 63(2) to create regulations which set out the prescribed medical information, we also have several concerns.
While the intent may be to facilitate early-return-to-work programs, we have some concerns as to which physician provides the information. Many times, when we talk about early-return-to-work programs, the injured worker has been seeing his or her family doctor or chiropractor for only a short period of time. While we believe in the concept of early intervention and being proactive in the medical treatment, at the same time these goals should not impede the healing process. Clearly, the WCB must play an integral part in approving all modified work programs. It is up to the board to provide the expertise regarding accommodation and suitability.
Most treating physicians have minimal occupational medicine expertise. Therefore, we must be cautious on how one uses medical information to assist one's recovery versus how any medical restrictions affect the worker's ability to perform his or her work on their return. Bearing in mind that in most cases the impairment has been caused by workplace activities, the intent and the use of the form brought about by section 52 must be thoroughly reviewed.
The spirit and the intent of the purpose clause is fundamental to the existence of the Workers' Compensation Board. Given that most injured workers cannot sue their employers for pain and suffering or for personal injury, the WCB must provide injured workers with fair compensation, health care benefits, rehabilitation services and re-employment provisions. Bill 165 provides a $200 monthly increase to the lifetime pensions of disabled workers who are unemployed and who were injured prior to 1990. Construction workers, as mentioned earlier, suffer personal financial losses when they cannot return to their pre-accident job. The proposed $200 increase is limited to workers who were unemployed prior to 1990 and who are still unemployed. We feel that any worker who was receiving a monthly pension and is aged 65 on or before July 26, 1989, should be included. Bill 165 makes no provision whatsoever for this group.
I wish to briefly comment on our displeasure with the process used to select participants in the Premier's Labour-Management Advisory Council discussions on the reform of workers' compensation, and specifically the fact that the construction industry was excluded from the process. It is unfair to be asked to either reject or accept the Friedland formula and the de-indexing of injured workers' pensions without giving all due consideration to the financial burden placed on injured workers.
If one looks back to 1914 when William Meredith first proposed the creation of a workers' compensation board, it was to offer loss of wages, vocational rehabilitation services, health care benefits and survivor benefits to those injured workers in Ontario in a just and timely manner. In turn, injured workers gave up their civil rights to sue their employer. We are greatly disturbed when injured workers must bear the burden of cost for work-related injuries instead of employers in the province of Ontario. All employers across this province, including independent operators, must be made responsible for these costs and should not attempt to negate their responsibility by not paying their assessments. If there is any justification for a cap on the Friedland inflation protection formula and levels of benefits, it must be addressed through a royal commission.
The sections within Bill 165 amendments that deal with the new bipartite governance structure are a welcome change from the present administration. The district council strongly supports equal representation at the WCB board of directors. Just as the WCB has recognized the separate needs of construction workers by creating a separate integrated service unit, so too should there be construction industry representation on the board of directors dealing with policymaking, rehabilitation and re-employment issues and to integrate awareness of accident prevention and education in the workplace.
Finally, we come back to the issue of the construction industry being excluded during the deliberations of the Premier's Labour-Management Advisory Committee. As a result, the concerns of construction workers, primarily on re-employment and rehabilitation, were overlooked, not to mention the general concern on service delivery and the horrendous delays in obtaining and appealing decisions at all levels of the board and WCAT.
Ultimately in less than 10 years, starting with Bill 101 amendments in 1985, the new Bill 162 in 1990 and now with Bill 165, it is obvious that the Band-Aid approach to dealing with the many complex problems with the WCB, be they injured workers' concerns or employers' concerns, is not the solution. With Bill 165 it seems once again we are putting the cart before the horse. If the construction industry is to support any of the amendments under Bill 165, which we do, the royal commission on the workers' compensation system must proceed with a mandate to hear from all sectors of the economy in the province of Ontario, including construction. It must address the entire compensation act and the associated policies and administrations of the board.
Thank you for this opportunity before the standing committee to speak on behalf of the carpenters and drywallers and the district council.
Mr Hope: I just want to refer back to the charts in the back of your presentation that you make. We heard through the presentations of other employers that accident rates are declining. I'm seeing numbers not substantially dropping. If you could explain those charts for me; I know they're not colour coordinated. So I wonder if you'd give us an explanation of the charts you have here.
Ms Crimi: Basically, as the chart shows, you're correct in what you're assuming here. I have similar concerns. While, as I said, there's been a decline in work availability in the construction industry, there are enough serious injuries still going on in construction that have to be adequately addressed.
Mr Hope: So the experience rating program that these employers have been coming and telling us how great it is and we get -- they forget to tell you the kickback they get. You know, they tell us how many millions they pay into WCB, but they always forget to tell us how many millions they get back in the process too.
We heard it constantly about experience rating, how great it's working. The charts you produced to us today say a little different than the story they've been hypothetically talking about.
Ms Crimi: I have to agree. In the four years I've been with the carpenters union, while again there have been some concerns about the availability of work in construction, injuries are still happening. They're serious; they are severe; they're not minor in nature. We have some serious concerns about NEER, the rating system and we have to augment or strengthen the re-employment provisions under the act.
Mr Hope: With the experience rating process, is it possible to hide accidents?
Ms Crimi: If they don't get reported, sure.
Mr Hope: So if an individual doesn't report an accident, it shows in the charts, making the charts look really good. But yet there could be a long-term injury that's there. It might not be one that's identifiable right away, but it could be a long-term --
Ms Crimi: Or they're covered under different benefits. Some injured workers, they themselves through good faith don't think it's a serious accident. They go on to apply for UIC sick benefits. They go onto their private long-term disability plans and do not go ahead, for numerous reasons, to report them to the board, thinking that it's better not to.
Mr Hope: Why would it be better not to -- fear of the job?
Ms Crimi: Yes, to some degree. Fear of the system.
Mr Hope: Fear of the system. How about investigators? I asked specifically the group before you if they've hired investigators and ever appealed. They prolong the system. They talk about an operating cost to the system. But yet when you find out through the numbers represented to us, a lot of them are appeals, investigations that are continuing.
I find it very ironic that you're using private investigators with video cameras to check out back injuries. I'm sure that back injuries are a repetitive occurrence that happens in the industry, especially around construction.
Ms Crimi: Well, if I can speak of a specific case of one of our members who recently called me. He was a 26-year-old gentleman who suffered a serious amputation to this right hand. He's fortunate enough to not only be able to handle his physical aspects of his trade as a carpenter, but has some supervisory capacities also, and was fortunate enough to find more suitable work with another employer. The accident employer has sent out an investigator questioning why this gentlemen does not want to stay, I guess, on workers' compensation or wait until they have some suitable modified work for him. He's gone on with his life and it's almost as if he's being penalized for it.
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Mr Mahoney: Thank you for your presentation. I'm interested in your comments on page 5 with regard to your displeasure with the process used to select participants in the PLMAC process. Many of those participants have been before this committee to comment on their disappointment, I guess, in the fact that the bill does not reflect the agreement. Mr Sid Ryan, Mr Buzz Hargrove both quit that august body over concern with the social contract implementation that Mr Rae and this government brought in against all public civil workers.
It's been suggested to me that the $200 a month that is basically being funded through de-indexing of injured workers' pensions -- so in other words, taking part of an injured worker's pension away and spreading it out among others -- is in fact the social contract for injured workers. What do you think of that?
Ms Crimi: I'm not privy to answer such a question. I certainly was not there at the Premier's Labour-Management Advisory Committee, how things came about. Certainly I support the concept of giving those injured workers who were denied proper vocational rehabilitation some increase in their monthly benefit. I mean, that's fundamentally what the intent is and that certainly I support.
Mr Mahoney: Clearly, though, the money is being taken away from other injured workers. The de-indexation, the Friedland formula does that. The original agreement in the PLMAC group was to use the funds, the $3.3 billion generated by the Friedland formula, to reduce the unfunded liability. Also, instructions --
Ms Crimi: But the Friedland formula came about through some collaboration or negotiations --
Mr Mahoney: Right. An agreement.
Ms Crimi: -- that went on at the committee.
Mr Mahoney: Exactly.
Ms Crimi: Again, I was not privy to those discussions; no one in the construction industry was.
Mr Mahoney: I appreciate that. We've had representatives of both management and labour in construction here before this committee two weeks ago. The suggestion came, actually, from the labour group, from the international labourers' union, of setting up a separate committee that would deal specifically with construction issues around workers' compensation. The people from COCA were here as well, and they agreed with that idea. Have you or people in your organization talked about that and do you see some advantage to doing that?
Ms Crimi: Again, we haven't been approached by anybody. I think it may be the only alternative to deal with the uniqueness of the construction industry, to bring those players who are familiar with the industry together to discuss the issues of prevention and re-employment and reinstatement rights. In that respect, it may come to that, that we will have to set up our own separate committee. But again, we've not been approached.
Mr Arnott: Thank you very much for your presentation; we appreciate it. I remember sitting on this committee about three years ago and we dealt with the WCB service delivery problem, and the member for Sudbury, I know, remembers that very well.
Ms Crimi: So do I.
Mr Arnott: And in those days, the New Democrats still had their idealism and their sense that if only they could grapple with the problems the problems would disappear. But in spite of their best efforts, after four years, it appears that there are still fundamental problems with workers' compensation. I think the fundamental problem is there's still too many accidents taking place. If we could reduce the number of accidents, we would reduce the stress on the system. Pretty simple, and I think it's desirable public policy that we encourage the reduction of accidents in the workplace.
We hear from employer groups that the best way to do that is through the experience rating system. This bill will change the experience rating system to bring in a more audit-based approach, away from the practical results that used to be the standard. Do you think that's a good idea?
Ms Crimi: No, I think we have to keep experience rating in order to be able to assess how successful we are in prevention and in health and safety. Certainly we have to encompass the Occupational Health and Safety Act when we are also dealing with workers' compensation, but experience rating is needed in order to assess the successfulness and severity; at the same time, we have to address the issue of re-employment.
Interjection.
Ms Crimi: I'm talking experience rating, absolutely; not NEER.
Ms Murdock: Oh, I see.
Ms Crimi: There's a difference.
The Vice-Chair: Thank you for your presentation this afternoon.
DURHAM REGION INJURED WORKERS GROUP
The Vice-Chair: I'd like to call forward our next presenters, from the Durham Region Injured Workers Group. Good afternoon and welcome to the committee.
Ms Fran Standingready: My name's Fran Standingready. I'm an injured worker. I'm the president of the Durham Region Injured Workers Group and I'm a member from the vocational rehabilitation advisory committee.
My summation to the standing committee on resources development on Bill 165, An Act to amend the Workers' Compensation Act:
Before the creation of the Ontario workers' compensation system, workers who suffered work injury had little income protection. As well, very few health and safety advances existed for workers. Workplace accidents caused huge numbers of deaths and major disabilities to workers. Employers were not required to look after their workers who were hurt in their factories. Once workers were no longer able to do the job they were hired to do, they were fired. The disabled workers and the spouses of the deceased workers were often left without any way of supporting themselves. The usual result of a major injury was lifelong poverty.
Very few workers or survivors could successfully sue their employers, even though most accidents were the fault of the employers' unsafe working conditions. Most workers could not afford the cost of lawyers that would let them take their employer to court. Even if they got to court, the courts of old were not a friendly place for workers.
These injustices, along with low wages, long working hours and poor working conditions, led to the expansion of unions in Ontario. These unions fought to improve laws to protect workers.
The first attempt to deal with the problem in Ontario was to pass the Workmen's Compensation for Injuries Act in 1886. This act modified some of the defences available to employers but severely limited the amount that a worker could recover in damages. The act also placed some other limits on the right to sue.
Employers had difficulty with the act because it made it easier for workers to sue successfully, and if a worker's action was successful, it could bankrupt the company. Workers and others were unsatisfied with this act because most injured workers still were not compensated. Even those who were eventually successful in suing had to wait a long time to recover their money, and a great deal of the money recovered ended up being spent on legal fees.
The pressure was on the government of Ontario to do something. In 1912, the Ontario government commissioned Sir William Meredith to study ways to deal with workplace-related disabilities and deaths. In his final report in 1914, Meredith proposed that the workers' compensation system be set up in Ontario.
After listening to the demands of employers and labour, Meredith made his recommendations. Most of these recommendations were a victory for labour. Meredith proposed a compensation system based upon the following principles. Most of these still apply today.
Security of payment: The worker was guaranteed compensation for as long as he was impaired.
No-fault system: It would not be necessary to prove negligence in order to receive benefits.
Employer-funded liability: The vast majority of employers would contribute to the fund from which benefits would be paid. This protected small firms from potentially high costs of serious accidents.
Administration by an independent agency: This was the way of the beginning of the Workers' Compensation Board, or the Workmen's Compensation Board as it was referred to then. Only in exceptional circumstances were the courts to have any role. Workers were to be spared the expense and delay of litigation.
Injured workers could not sue their employers: In exchange for the establishment of workers' compensation, workers gave up the right to sue their employer. This is often referred to as the historical trade-off. Eventually, this limit on suing was expanded so that most injured workers could not sue most employers either. This means that workers' compensation is not welfare; workers' compensation is a right. Workers fought for this right and we gave up valuable rights to win this.
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The present Ontario Workers' Compensation Act is based on the model created in 1915 as a result of the Meredith report. Over the years, the act has been amended several times and benefits and services available have changed. Much of the framework remains unchanged, but certain changes, particularly under Bill 162, have created some major changes to the benefits structure.
This brings us to April 14, 1994, and the recommendations made in the Legislature and why we are here today, to speak on the changes to the act and the effect on injured workers today and in the future.
We all remember the Holocaust and the human tragedy that the Jewish people suffered. We remember how they were lined up and shot, gassed and tortured in concentration camps, and we think of how wrong this was and how horrifying it was. Injured worker face their own holocaust of sorts. Although our suffering may not compare, injured workers also suffer the death of the human spirit. We are the living dead. The injustices we have suffered at the hands of the WCB have left us this way.
What am I talking about? I'm talking about a system that thinks injured workers are liars and fakes. I'm talking about a system that thinks that injured workers are lazy and unwilling to work. I'm talking about a system that thinks our doctors lie on behalf of workers on WCB forms and letters. This is the one person whom we entrust our lives and our families' lives to. I believe that our doctors should have the final say in deciding the course of injured workers' futures. These are the professionals who first see us upon getting injured and these are the ones who care for the injured worker throughout our disability. They are the ones who know our physical and emotional disabilities. They see us on a regular basis. They know when we are ready to go back to work, vocational rehabilitation, and what form of vocational rehabilitation is best suited for our disabilities. The board doctor rarely sees us, and only then for a few minutes. Again, more transportation costs.
Injured workers are stuck between our doctors' restrictions and the board's policy of cut-off for so-called uncooperative workers. If I follow my doctor's restrictions, I'm called uncooperative, but if I follow the board's suggestion and go back to work before I am ready, then I stand a good chance of becoming permanently disabled. Where's the no-fault in that?
This from a system that doesn't have to face any consequences for its actions. Under the WCB act we cannot sue anyone at the board for wrongdoing, but we as individuals can be sued and our doctors can be sued.
I believe that the board should be accountable for the decisions it makes. They are dealing in human lives. What about the bad decisions made by the board? What about the cost to correct these decisions? We are talking about millions of dollars and, most importantly, human suffering to the injured worker and his or her family. We need accountability at the board now. We need accountability for the actions of board doctors, adjudicators and vocational rehabilitation workers. I want anyone handling an injured worker's file to be accountable.
When the board, as an employer, fails to train its workers properly, how can you expect the workers to make good decisions and act in a professional manner? Board workers have a lack of training. Six to 10 weeks of training for a board adjudicator is not enough. Why not train injured workers to work at the board? We are smart enough, some of us are physically capable of doing the job, and who better to understand what injured workers are put through?
The WCB hasn't worked in many years. It is the only system that I know that doesn't turn to its experts for help. The system doesn't work. If your sink is plugged, you don't call a gardener; you call a plumber. Then why are injured workers not called upon for their expert advice? The Ontario Network of Injured Workers Groups has experts to deal with the problems at the WCB. When the PLMAC sat down at the table to discuss the WCB reform, there were no experts at the table. Injured workers were not asked to the table.
We do know what's wrong and we do have solutions. All we need is to be heard, and right now we're not being heard. So the problem goes on and everyone suffers: injured workers suffer, adjudicators suffer from overwork and lack of training, and business suffers because of the costs of overturning decisions. We need to make the right decisions in the first place.
Who wants to be on compensation in the first place? Who wants to suffer the loss of their family, the loss of their home, the loss of their health? Who in their right mind would want to suffer these indignities?
The important thing in my life is my personal dignity and my family. Without my dignity, I have nothing. Without my family I have nothing -- they are blended together. When you strip a human being of their dignity, you create emotional problems. This is why in the beginning of my time with the board, because of the treatment by the WCB and the loss of my family, the only solution that I could see was to kill myself. I placed a .303 rifle in my mouth and was ready to kill myself. This was the third attempt. I lost everything. I will never be the person I was again; never.
Am I to be punished for it or am I to be compensated for it? This is the decision that the board makes: to punish me or to compensate me. The board cannot give me back my lost time with my children, the lost time with my husband. The board can never give me back the moments that I've lost with my family; they are lost forever. No one has the right to take my dignity away because I became injured.
You ask the question, why do injured workers commit suicide? Well, let me tell you why. You have stripped us of our human dignity, that is why.
Within the Durham Region Injured Workers Group we did a survey of 200 workers. Of these workers, 87% had suicidal feelings as the result of injury and dealing with the board. If the system was conducted in a professional manner and we were treated as human beings, if we weren't treated as a piece of meat as the meat chart suggests, maybe you wouldn't have the human tragedy that you have at the board today.
The injured workers' movement has been my salvation. This is where I found my dignity once again. I have gotten my family back. Injured workers are my people. They understand what I am going through. They understand my pain. They have helped me to find myself again. They suffer the same indignities as I did and they suffer the same injustice as I have. I regained my dignity by working with injured workers for injured workers and I began to dream of a system that would treat people as human beings, that treated us with respect and dignity, a system that had people working for them who conducted themselves in a professional manner, that had resources. I dream of the day when the system is fair and just for all injured workers, employers, government and WCB staff.
Right now, they are trying to put a wedge between injured workers in de-indexing us. Does the act not say full compensation for all? Am I not equal to the man or woman beside me? I cannot support de-indexing because it is not fair and just to all injured workers, past, present or future. Some of us will get an increase of $200 and some of us won't. Some of us had the supplement but we have had it taken away. If the $200 is tied to the supplement, some of us on pensions will not receive the $200.
We are below the poverty line. Our incomes are below the incomes of people on welfare. Many of us are going to suffer if the increase is tied to the supplement. Many of us will lose the supplement because the board will deem we're employable. Is this right? Is this fair? Is this just? All the people who are on pensions should receive the $200 supplement. There are those of us who are on pensions who are not working that will not get the $200 increase.
I receive $315.53 per month for a 25% disability. Can you live on that? And there are some of us who get less than that. As a single person on welfare, I would get $620 a month. Even though I have a family I am below what a single person on welfare gets. I once got the supplement, yet because the board has deemed me fit to work, I will not get the $200. The board says that I am fit to work, but the doctors and specialists I deal with know that I am not fit for employment.
Even with my pension of $315.65 and the $200 increase attached to the pension, I would still be below a single person on welfare. I'm asking you, is this fair? I believe that all on pension should receive $200 with or without the supplement. The $200 should be attached to the pensions.
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We have all heard employers talk about the phantom unfunded liability. Well, what I hear when the employers talk about unfunded liability is that they don't want to take responsibility for their injured workers. Then who is responsible? It is because I was working for an employer that I became injured. I wasn't born this way. It is time that all employers in Ontario accepted the consequences of injuring their workers. I believe that all employers in the province of Ontario should be paying workers' compensation premiums. The way the system is right now, only some employers are paying premiums. I do not feel that it is fair to the employees of those companies that are not paying workers' compensation their fair share. I believe we need one system for all injured workers.
How do you fix the system? With prevention. Let's stop talking about unfunded liability and let's start looking at ways to prevent accidents and injuries from happening. The best solution to the whole problem is to stop injuring, maiming and killing workers on the job. Here are some suggestions towards that goal.
Let's stop talking about unfunded liabilities and let's start looking into investing in prevention. Business can make millions of dollars in cutting deals and making more profit. Well, let's take some of this money and spend it in fixing the problem. Let's start with hiring more health and safety investigators, more professionals in ergonomics, paid for by the province, and more health and safety committees in the workplace which train the employees in safety issues. Instead of talking about health and safety, I want to see action around health and safety. We have health and safety provisions now, but there's not enough enforcement. We need stricter enforcement of the existing laws. Let's look at making the current provisions work and look at ways of improving on what we already have.
Let's get rid of the duplication in the system. For example, let's eliminate the duplication system of doctor and satellite vocational rehabilitation programs in the community. Instead, give injured workers' groups more money to design and staff vocational rehabilitation programs. Who better to do the job? With this system you really get injured workers back to work.
Vocational rehabilitation staff should be trained and supervised by those who are knowledgeable in the field. For example, someone with knowledge in the field of construction should be there to train staff on the functions of their field and whether it is suitable for an injured worker to return to this type of job with his or her specific injury. There should be accountability to someone within the WCB who has the expertise in vocational rehabilitation and understands not only the service but also the injured worker community and vocational rehabilitation itself.
There should be access to up-to-date labour market information and retraining programs. We should develop province-wide labour market information and establish links with community organizations such as regional trade union councils. They best know what's going on in their market in their community.
Adjudicators and vocational rehabilitation workers are now overworked. With their present case load, how can they be expected to do a good job? The case loads of the board workers should be reduced, and we should have only one person handling injured workers' files from beginning to end instead of the current practice of going from person to person with nothing really happening to a file. As it stands right now, there is no time for the adjudicator of voc rehab worker to help the injured worker get back to work.
Vocational rehabilitation staff should have a higher profile within the board. Right now voc rehab people are at the bottom of the WCB hierarchy. They should be in more positions of authority at the top level of the board. Vocational rehabilitation holds the key to returning us to the workplace and finding meaningful employment, because all injured workers really want is to go back to work.
Mr Mahoney: Thanks for your very detailed presentation. You make a number of suggestions in here on -- I guess the pages aren't numbered, but you talk about accountability for the actions of the board doctors, adjudicators and voc rehab workers. You talk about better training for adjudicators; you talk about elevating the position of voc rehab workers, all of which are around the service delivery section to deal with injured workers.
Do you see anything in Bill 165 that does even one of those things that you've suggested?
Ms Standingready: Not really. The only thing that comes to mind is the re-employment part of it, which I think is not too bad, but I could see that being strengthened even more, because employers simply do not bring us back. If they got the ergonomics into the factories and into the offices and they looked at designing these offices and factories in a little bit better manner than what they do today, maybe some of us injured workers could get back to some of these offices and some of these factories. Unless employers sit down with us, the injured workers, service delivery at the board isn't really going to change things. They have to talk to us.
Mr David Johnson: I too would like to thank you for your deputation, obviously born of personal experience and your emphasis on prevention, and your suggestions in terms of making the system more efficient certainly.
To go back again perhaps to your comments about the adjudicators, it seems that in the deputations that I've heard from injured workers the role of the adjudicator comes up again and again, and the impression that I'm getting is that, in terms of injured workers dealing with the system, that's the friction point or that's the point of most concern. It may not be because of the adjudicators themselves; it may be because they lack experience or they haven't had enough training. I'm not sure. But is that what you're trying to convey to us, that the adjudicator is the real friction point?
Ms Standingready: Yes. Voc rehab people will put us into a voc rehab program that is for an individual person. I can give you a very quick example.
We had an injured worker who was put on a voc rehab program, who went out and found employment, asked for an extension on his voc rehab because the employer was willing to modify the job for the worker but he needed an additional period of time to train him on the specific job. Voc rehab approved it; the adjudicator overturned it. This man has no job and is now cut off his benefits. Had they listened to voc rehab in the first place, he would be in a viable job today receiving a good salary and would no longer be needing the services of the WCB.
Mr Hope: First of all, I'd like to thank you for your presentation today. It expresses the viewpoint of an injured worker, the frustrations you go through with the board. If it was fortunate enough that the employer had created a safe working environment, you would have never had this experience nor your human dignity destroyed or stripped from you.
In an earlier presentation made by the independent business association, they clearly say that what we need to do is cut benefit levels of injured workers and it will get them back to work. They don't want to work; they make more money on WCB than they do take-home pay from working.
These are the kind of comments that are coming from a business community who is supposed to be acting as a part of a process of rehabilitation, getting people back to work, and this is the approach that they're taking. They're saying the unwillingness on the part of people to return to work -- if I'm reading the presentations properly -- is that the injured worker can make more money at home than he can by going back to work.
I read your comment very clearly. It said: "Who wants to suffer the loss of their family, the loss of their home, the loss of their health? Who in their right mind would want to suffer these indignities?" I listened to Ms Swift and other who have come forward from the business community saying, "Just cut your benefits; we'll get you back to work sooner." I'd just like your opinion.
Ms Standingready: What part of my $315.53 is too much money? I'm below welfare. Welfare is classed poverty line, and I'm below that. What part of my cheque each month is too much?
The Vice-Chair: On behalf of this committee, I would like to thank the Durham Region Injured Workers Group for their presentation this afternoon.
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INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793
The Vice-Chair: I'd like to call forward our next presenters, from the International Union of Operating Engineers, Local 793. Good afternoon and welcome to the committee.
Mr Richard Kennedy: Good afternoon and thank you for allowing us to make this presentation. My name is Richard Kennedy. I'm the president and assistant business manager of Local 793. I have two people with me, Ken Lew and Marnie Niemi, who both work on a personal level with our compensation claims with the members.
Local 793 is a provincial union. We represent in excess of 10,000 members. The majority of our membership are engaged in the operation, repair and maintenance of cranes, shovels, bulldozers, similar heavy equipment throughout all sectors of the construction industry. We also represent employees across the entire employment spectrum, including employees in municipalities, scrapyards, industrial cleanup and cleaning contractors and waste disposal companies.
On an industry-wide basis, construction is Ontario's second-largest employer of workers, next only to the retail trade industry. Based on 1991 Canada census data, 658,000 workers make their living from construction in the province. This includes tradespeople, engineers, architects, suppliers etc. This works out to roughly one out of every eight Ontario workers. Also in 1993 almost $33-billion worth of construction work was performed in Ontario, more than any other province, and made up more than a third of all construction work purchased in Canada.
Without a doubt, many Ontario workers derive their employment either directly or indirectly from the construction industry. Consequently, the effect of Bill 165 on our industry will be significant.
In order for this committee to fully appreciate the impact of the proposed changes on our members and other construction workers in the province, it is necessary to sketch briefly the unique characteristics of our industry and how it differs from the industrial sector. We believe this is particularly important, especially in view of the fact that construction industry representatives were not part of the original negotiations which eventually formed the basis of Bill 165.
In 1962 the Royal Commission on Labour-Management Relations in the Construction Industry of Ontario identified three ways in which construction differed fundamentally from manufacturing:
(1) The construction industry was subject to seasonal and cyclical fluctuations in the economy;
(2) The workforce was characterized by mobility, flexibility and the specialized ability to perform construction industry tasks; and
(3) The products generated by the construction industry were not easily transferred from place to place so that typically, workers moved from job site to job site. In the manufacturing industry, the location of the work does not change; it is the product that moves.
These characteristics remain as true today as they were 32 years go.
With this framework in mind, we would like to begin the presentation by applauding the provincial government in recognizing that the workers' compensation system is one in need of a major overhaul. Bill 165 captures the main areas of consensus reached by the Premier's Labour-Management Advisory Committee. More importantly, it makes a good attempt at balancing the Workers' Compensation Board's twin challenges: maintaining costs and making the system fairer to injured workers.
In terms of achieving real fairness in the system, we particularly favour the purpose clause, section 0.1, as it will be of benefit to our members in their dealings at all levels of the board. This clause finally addresses what many of our injured workers have been denied for years; that is, reasonable compensation and equal access to rehabilitation services. Having this purpose enshrined in the legislation itself will give injured construction workers some leverage in their claims and the confidence that fair treatment lies at the heart of the board's mandate.
The bipartite board is an amendment which also pleases Local 793 in its attempt to placate both labour and management, by giving each an equal voice in determining the Workers' Compensation Board's policies. The bipartite structure is commonly used in our industry with great success. Health and safety committees, grievance arbitration boards and many government tribunals such as the OLRB all have adopted this format. In fact, the trustees of Local 793's pension and benefit plans and training trust fund are jointly represented by labour and management. With the bipartite board both labour and management will be on equal footing to make the system more effective and responsive.
Since we live in a dollars-and-cents world, we'd like to discuss what for us is perhaps the most important amendment for our members.
Subsection 147(14) allows an additional $200 a month to injured workers on pensions who are in receipt of the equivalent of old age security. We feel that this is an issue of primary concern for the members of Local 793.
To understand why this particular change is so important, the committee must appreciate the incredible injustice that the system put upon our permanently disabled members who were injured prior to 1990. Through no fault of their own, these members have been financially devastated simply because they worked in construction. Why? This goes back to the unique characteristics of our industry as noted earlier. When those characteristics are combined with the fact that our members are paid relatively higher wages to perform specialized and strenuous work but yet have few transferable skills, the end result had the effect of automatically denying them access to rehabilitation services because they, according to the Workers' Compensation Board, could not approximate their pre-injury earnings if the Workers' Compensation Board was to offer training.
In other words, when the Workers' Compensation Board deemed that our injured worker could only earn, as an example, $9 an hour as a parts assembler, and that this didn't come close to their previous wage, they were consistently cut off the system with no other help. Instead, they were simply given a subsection 147(4) supplement, presently at $387.74 per month, and a small pension, nothing else.
Clearly, the system failed them terribly. These members can no longer work at their trade because of their permanent injuries; many have families to support; and like all of us have bills to pay. Yet the Workers' Compensation Board closed the door shut on them. I ask you, where is the fairness in this?
The $200-a-month pension increase is in Bill 165 to right this past wrong. In no way will this rectify what the system has put them through, but at least it will provide some financial relief and give hope to their standard of living.
The next point I'd like to address is the Friedland formula. This is another aspect of Bill 165 that will dramatically affect the income of our members. Subsection 148(1) deals with the de-indexing of pensions to 75% of the CPI minus 1%, with a cap of 4%. This is problematic in several ways.
First, most of us will collect our pensions from work at the age of 65. When we retire, we only have approximately 20 more years to live. What about the worker who was 40, 30 or 20 years old when they were awarded a pension? To de-index permanently disabled workers to a lifetime of increasing poverty is anything but fair compensation.
Second, to put a limit of 4% indexing is frightfully unjust. This low percentage will continue to penalize further in times of high inflation. As the cost of living rises, injured construction workers will be caught in a downward spiral year after year. This aspect of the amendment is most certainly not in keeping with the purpose of this act as outlined in section 0.1.
We are well aware that the Workers' Compensation Board is struggling financially and changes must be made to get the Workers' Compensation Board back on its feet. Cutting benefits by implementing the Friedland formula is not the answer. Pure and simple, this approach would be reforming the system on the backs of those who need help the most and that's the injured workers. In our view, the answer lies in strengthening those sections in the act that address prevention and re-employment. Preventing accidents must be the number one priority. Only when total accident frequencies begin to decline, and those who are injured get re-employed by their employer more quickly, will you achieve a true balance between fair compensation and fiscal responsibility.
In short, we agree with certain aspects of the legislation which have been outlined for you. However, there are amendments of a more technical nature which cause us concern. These are the experience rating, the concept of jurisdictional compensation, the absence of union representation in the vocational rehab process, and the fact that the re-employment obligations of employers have not been strengthened for the construction industry. How can we attempt to lower the unemployment rate of injured workers, which currently stands at 40%?
Further, in our view, several other problem issues need to be addressed in the proposed legislation. The deeming provision as it applies to future economic loss serves only to further reduce income of workers who have not returned to a phantom job and continues to be a punitive measure which hurts more injured construction workers than it benefits. With regard to experience rating, there need to be stronger provisions which penalize employers who fail to fulfil their obligations to re-employ injured workers fully. In fact, employers who encourage their employees to collect private disability insurance and not file Workers' Compensation Board claims are doing so at an alarming rate. Many employers are exploiting loopholes in the legislation to avoid higher assessments and rely on the board's slow administrative process and inaction to levy penalties.
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The current funding ratio of 37% would be better addressed if these employers paid their fair share. Section 103.1 of the proposed changes is a move in the right direction in terms of closing existing loopholes. Strict enforcement of the experience and merit rating programs, however, will be crucial if the programs are to be truly effective. We trust these matters will be the focus of the royal commission, and Local 793 looks forward to discussing them in the future so that labour, management and government can work together in developing a fairer compensation system, one which more accurately reflects the needs of the construction industry and our society as a whole.
We have attached an appendix which details our position concerning these and other changes contained in Bill 165, and again, I thank you for your time.
Mr David Johnson: Thank you very much, Mr Kennedy. I certainly appreciate your deputation today. I'm just flipping towards the end of the deputation. You mention that workers are being returned to a phantom job. This is the second time today, and I guess many times it's come up during the course of the hearings about the concept of the phantom job. Why, in your estimation, are phantom jobs being created by the employer, as apparently this is your view? I'm just wondering why you feel this is happening, as opposed to employers creating -- well, I shouldn't say "creating," but as opposed to the employers returning an injured worker to a real position.
Mr Kenneth Lew: First of all, it's not always the employer that's designing the phantom job. In many cases it's the process at the board and the vocational rehabilitation services that are available that create the phantom job.
Our position is that in many cases, because of the uniqueness of our industry and the characteristics of our workers and the skills they have, in most cases there is no phantom job or there is no job, period, and in many cases, and what Richard explained is, that phantom job in most cases does not approximate the pre-injury earnings of our workers. That again is a result of the uniqueness of our industry. So to that effect, regardless of whether the phantom job is there or not, with the way the board processes right now, they're automatically denied rehabilitation services.
Mr David Johnson: You have some very unkind things to say about Bill 165, particularly the Friedland formula. You call it "anything but fair," "frightfully unjust," and "reforming the system on the backs of the injured workers." You must have gone through a lot of soul-searching to be able to support Bill 165, which you apparently do, even with comments like that. I personally don't understand how you can support Bill 165, given your views particularly on the Friedland formula.
Mr Kennedy: Sitting in the back there, I've heard the word "negotiations" and so on and so forth. In negotiations you always have to accept what's there sometimes that has happened through the process, and we think that Bill 165 is a step in the right direction. However, we would like it strengthened in certain aspects.
Mr Waters: The phantom job thing that Mr Johnson brought up, I think it's section 54 or something of the act where they can deem jobs. That's what you were getting at, wasn't it, that part where we always have these phantom jobs, whether they're there or not? I thought that's what you were after.
I've sat and listened to a number of people come before the committee and they've talked about the NEER payments and I've listened to some of the construction people, and I'm trying to understand. Are the payments based on historical assessment or on bodies working at that day? I think what's happened in the construction industry, if I'm hearing a number of the deputations correctly, is that the employers received a lot of dollars back but really their employees weren't working during the recession, so no wonder their numbers were down. I'm wondering if that is indeed the case, or is it on today's figures?
Ms Marnie Niemi: If I can address your question, you are indeed correct when you state that their numbers are not indicative of actual accident rates happening out there, specifically because we've seen already today, in today's deputations, varying degrees of accident frequencies. For example, the carpenters showed in their statistics, which came directly from the construction integrated service unit, that construction's accident rates had not decreased despite what we have seen earlier on today generally within other industries as well.
I think the point of that, you've made it quite clearly, is that it's simply a matter that people aren't working, that the numbers aren't there and that the results that we're seeing are not indicative of what's actually happening. As you've heard further in our deputation earlier today, there are loopholes within the system through which employers continue to abuse the experience rating system as it exists right now in that they do not report all accidents as they're occurring. We've seen that happen time and time again at quite an alarming rate.
Mr Waters: So the misuse of the loopholes are, shall we say, feeding the dollars back through NEER when you really didn't have people working and all of that.
Ms Niemi: That's right.
Mr Waters: I understand last year it was $150 million out of direct operating, so wouldn't that affect the unfunded liability of the WCB? Wouldn't it drive it up?
Ms Niemi: One would hope so, depending on how you look at it. I think what we're seeing with regard to the proposed changes is we're looking at the broader picture in terms of employers paying their actual fair share and it being reflective of what is actually happening within their workplaces. I think the proposed legislation is definitely a step in the right direction as it addresses other issues within the actual work site, be they health and safety records, participation in return-to-work programs and cooperation with vocational rehabilitation services.
Mrs Joan M. Fawcett (Northumberland): Thank you for your presentation. I've been listening carefully over the past two weeks because there have been numerous presentations, as you are aware, from the various unions and locals around, and most would say that there are serious flaws in the bill. We have the famous one where there were 17 changes, and some of the language is pretty strong, where you would be against the bill. Yet I'm assuming that you would be going along with all of the others who are in support of the bill basically, that you would support the bill yet you have all of these things that you'd like to see changed.
I'm just wondering, are you supporting the bill because you feel confident that the government is going to accept your changes? Is that why you would support a bill that would be so flawed, according to most? I'm just trying to understand. Is it because you feel confident that the government is going to support the changes, or are you guessing, along with the rest of us?
Mr Kennedy: No. I've been through this process before, making presentations to numerous committees; I look around the room and see several of you who have sat on it before. Any one presentation I don't think is going to sway anybody. You have to weigh the odds of everything that comes in. But, no, I don't have any specific confidence that any one specific group or a specific building trades group's suggestions will get taken along. There have been some suggestions made that a separate building trades unit be struck, a construction unit I guess is probably the proper word, and we would support that. I think that kind of dialogue coming out would have a significant impact on a committee, but whether we have any confidence that anything's going to get changed, that's in you people's hands. You are a committee and we have to live with that, but again, it is a step in the right direction and we think it's a progressive step, despite our criticisms of it.
The Vice-Chair: Mr Mahoney, a brief question.
Mr Mahoney: It's actually not in our hands, Richard; it's in the majority government members' hands, whether or not they accept --
Mr Kennedy: I have faith in democracy.
Mr Mahoney: -- anything you've got to say or we've got to say, and with the arrogance that they show, we don't expect it.
On page 3 you say that you're happy with the purpose clause because it includes reasonable compensation and equal access. Would you agree that that still will require a subjective decision and whether or not it's stated in a purpose clause it's open to interpretation, that there's nothing in this bill to deal with better training of adjudicators or other staff in the WCB, or to smooth out the service delivery system in the board?
Mr Kennedy: We have been working through the integrated services board to try and do that for the construction industry on an ongoing basis.
The Vice-Chair: On behalf of this committee, I'd like to thank the International Union of Operating Engineers, Local 793, for your presentation this afternoon.
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SERVICE EMPLOYEES INTERNATIONAL UNION
The Vice-Chair: I'd like to call forward our next presenters, from the Service Employees International Union. Good afternoon and welcome to the committee.
Mr Robert Davidson: Good afternoon. My name is Robert Davidson and my colleague is Mr Alan Turner and we're staff representatives with the Service Employees International Union.
To begin, we'd like to take the opportunity to thank the committee for the opportunity for us to present our views on Bill 165. The Service Employees International Union currently represents approximately 45,000 employees or workers in the province of Ontario. Approximately 27,000 of those are in the health care field in nursing homes and in hospitals. A further 11,000 of them work in homes for the aged and municipal homes for the aged.
On Bill 165, the Service Employees International Union is an active participant in the standing committees of the Ontario Federation of Labour, namely, the health and safety committee and the workers' compensation committee, and we support the presentations already made before us by the Ontario Federation of Labour.
The Service Employees International Union also welcomes the setting up a royal commission to look into the problems of the workers' compensation system. The SEIU also supports the legislation's commitment to moving the board to a bipartite organization, and we see it as a positive move.
We represent workers, as we see, in the low end of the economic scale, and in this day and age it takes all of our efforts and energies to keep the members employed and living above the poverty line. If a worker becomes ill through work-related circumstances, it is essential that an adequate safety net is available to them. At this current time, our members on average earn approximately $25,000 annually -- and that's before taxes. At 90% of net, those individuals would be clearly below the poverty line.
In the areas where our members are employed, mainly in the health care industry, these particular members, if you look at the Occupational Health and Safety Act, which now requires core certification training, require three weeks of core certification training. Hence, that would give some idea of the type of work, or the hazards involved in the work being done, by those individuals.
The reform of Bill 165 is a start in the right direction, as far as the Service Employees International Union is concerned, but there is still this characteristically annoying tendency to shut out some of the people who are meant to receive benefits from this bill and who are not going to receive those benefits.
Bill 165 provides for a $200-per-month increase in lifetime pensions for disabled workers who are unemployed and who were injured prior to 1990. However, it excludes workers who were over 65 when Bill 162 was passed and are now over age 70. If anything, this group needs it more than most and should not be denied some additional comfort at this time in their lives.
Although Bill 165 provides for a $200 pension increase for 40,000 disabled workers, and 100% CPI inflation protection for 45,000 workers who are unemployed and not likely to return to work and their survivors and dependants, it still puts a cap on the pension of 134,000 workers who receive WCB disability pensions and have returned to work, and workers injured after 1990 who have access to the strengthened return-to-work and vocational rehabilitation provisions.
If I might, just to summarize, we understand that we need to make the process economical, but shutting out a smaller number of workers or reducing their benefits is a case of being penny wise and pound foolish. Experts around the world agree that cutting benefits would not make the compensation system healthy. There are only two proven methods of doing so and that's prevention and re-employment.
In all the years that this union has been negotiating for its members, one message has come clear constantly: that they want to work. Hence has come the issue of re-employment.
Just as an example, if I may at this point in time, in the nursing home industry where I am actively involved in negotiating contracts and also dealing with workers' compensation issues, we have a constant battle with the employers on the issue of re-employment. The argument that we receive from the employers time and time again is that they're on a fixed budget, they only receive funding which grants them a certain amount of hours per day for staffing and they don't have the funds available to re-employ injured workers, hence creating a larger unemployed population. I have numerous cases that I handle personally where I have workers who have been deemed fit to return to work by the board who have not been returned to work.
One of the central points to our presentation is the issue of coverage. The Service Employees International Union currently represents approximately 1,100 workers in the racetrack industry. Just to give you some idea of the locations: Local 528, which is at Flamboro Raceway, represents approximately 639 workers; local 204, which is in Metropolitan Toronto, approximately 300 workers; Local 532, which is also in Hamilton, approximately 30 workers; Local 639 in Windsor represents approximately 150 workers, and Local 210, which is also in Windsor, approximately 50 workers.
All of these workers are deemed to have fallen under the agricultural workers' act. Hence they are excluded from the Workers' Compensation Act as far as coverage. Interestingly enough, all these workers fall within the jurisdiction of the Ontario Labour Relations Act, which also excludes agricultural workers.
In conclusion, workers who become ill or injured are one of the most vulnerable groups in our society and there is an obligation on all of our parts to ensure that they are treated in a just and fair manner. There will always be too many workers on compensation -- one is too many -- however, if that is the attitude, the cause of the problem must be sought and solved. The injured workers must not be penalized.
Workers are becoming ill and injured at an alarming rate and this must be remedied. Health and safety must be taken seriously, laws must be made even stricter and must be vigorously enforced. At SEIU we have been waiting 14 years for health care regulations and we are currently fighting another attempt to shelve them.
If this government wants to cut back on workers' compensation payments, then here's one glaring opportunity: put the regulations into effect. Stop the curtailment of health and safety inspectors and start using them to enforce instead of educate. This is the way to cut down illnesses and injury, not by limiting pensions and entitlement.
This is respectfully submitted by the Service Employees International Union.
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Ms Murdock: Thank you for your presentation. In all of the places that you represent, do any of them have a return-to-work joint committee? We've heard from other locals that have joint return-to-work committees that have been working very well and I was just wondering whether or not you had any at all.
Mr Davidson: Our experience in the health care industry, no, we do not have joint return-to-work committees. We do have language within our collective agreements that protects workers' return-to-work rights for a maximum of 30 months in the hospital industry; 24 months in the nursing home industry. But an actual committee struck within the workplace, there is none.
Ms Murdock: So all of your others, in terms of cemetery workers, racetrack workers, day care workers, maintenance and cleaning workers, none of those either.
Mr Davidson: No.
Ms Murdock: This afternoon we had a presenter telling us -- and, actually, I don't disagree -- that people who are off on workers' comp claims should not be earning more money than they would have been if they were at work. And we've heard this from other groups as well. I don't know whether or not -- you know, you're always taught in law school you never ask a question that you don't know the answer to, but I'm going to ask it anyway.
Are there any workers in your experience, in that you deal with workers' comp, who, if they were off on a workers' comp claim, would be receiving more money than they would have if they were working?
Mr Alan Turner: No, it's not our experience at all. Actually, a lot of our workers work at two different facilities and sometimes even more, so when they are injured at one facility, it cuts their income off from all facilities. It also creates a further problem in that it becomes somewhat difficult in determining, when you have not necessarily the same employer -- because you do have change in the nursing home industry -- if you don't have the same employer, it becomes difficult in getting actual earnings to submit for the injured worker to get what their entitled to. Employers tend to contest that in the nursing home industry.
Mr Davidson: If I may also augment his comment, as I indicated, our members earn on average $25,000 gross; this is before taxes. The current maximum in WCB is well beyond that.
Ms Murdock: It's $53,200, I think.
Mr Davidson: It's well beyond; it's twice that amount. So even at 90% of net, the workers that you were speaking about, where they would earn more on WCB if they were just earning WCB benefits only, they would have to be earning well over the $53,000 which is the maximum in order to still go 90% from the board, on their benefits, and still be more than their earnings. To get 90% from the board --
Ms Murdock: To maximum.
Mr Davidson: -- to maximum, to go over the maximum, I would say. Like, it's still a reduction for those workers.
Ms Murdock: So the board wouldn't be paying more than their maximum.
Mr Mahoney: Just to follow that a little bit further, I understand during the PLMAC discussions there was agreement, and I believe Gord Wilson -- he'll correct me quickly if this isn't the case, but I'm pretty confident it is -- agreed that for an injured worker on 90% of net for, let's say, a six-month period, and then working for six months, there were examples where people were being overcompensated because of their tax bracket. So it wasn't a matter of them earning more than they were earning when they were actively working; it was a matter that because of taxation and problems in calculations there were examples of workers who were, at the end of the day, getting 105% or 110%.
Mr Wilson agreed, in a conversation that I had with him, that he does not support anyone profiting from workers' compensation. I think the issue is not so much, are there workers out there who are gouging the system and getting more than they were earning before, but if there are workers who --
Interjection.
Mr Mahoney: I think you had the floor a moment ago. Thank you.
If there are workers who are indeed being paid more than they were earning before, would you support some kind of a system -- and I can't figure it out; it needs an actuarial calculation -- that would flat-line it to ensure that at no time did any workers exceed 90% of their take-home pay?
Mr Turner: The act is currently set up to provide an income while somebody is off work or working on shorter hours or modified jobs if they have attained an injury at work. We support the changes in the bill that would ensure workers get an adequate income when they're off work injured or when they're forced to work less than regular hours.
Mr Mahoney: But there's nothing in the bill that addresses the problem that I've highlighted to you. If you deny that the problem exists, then I'd appreciate you saying so. There are some situations where, due to the taxation level of workers, they will receive in excess of 90%.
Mr Turner: Mr Mahoney, obviously you weren't listening to what was said. Most of our members earn around $25,000; 90% of that is what the poverty level would be. So I doubt if any of our members are being plused-up or taking vacations in Hawaii. At least I would think not.
Mr Mahoney: Don't put words in my mouth. I made no such suggestion. I asked you a generic question. If a worker is in fact getting more than 90% of their net pay, would you support the position of Mr Gord Wilson and the Ontario Federation of Labour that a system should be devised to cap it at 90% of their net pay, no more, no less?
Mr Turner: I would support a system that pays injured workers adequately.
Mr Mahoney: The comment that you make about "Workers who become ill or injured are...vulnerable groups" etc, your conclusion, and you say that -- of course I quite agree -- "There will always be too many workers on compensation; one is too many. However, if that is the attitude, the cause of the problem must be sought and the injured workers must not be penalized."
The $200-a-month supplement: There are two issues. There's the justice of the $200 a month; there's the funding of the $200 a month. Do you support de-indexing injured workers' pensions in order to redistribute the money to other injured workers?
No answer?
Mr Davidson: No.
Mr Mahoney: No, you don't support it?
The Vice-Chair: Thank you very much.
Mr Davidson: No, we don't.
Mr Mahoney: Pardon? I didn't hear the answer, I'm sorry.
The Vice-Chair: He said no.
Mr Mahoney: You don't support it? So then the next question is --
The Vice-Chair: Thank you, Mr Mahoney. Mr Johnson.
Mr David Johnson: I appreciate your deputation as well. I must check into this business about receiving 105% a little more deeply. My suspicion is -- and it has to do with tax brackets -- that it's people at a higher tax level than the members whom you're talking about in your organization.
But at any rate, you mentioned re-employment. I found a few interesting comments that you made. Representing hospital employees and employees from homes for the aged recalls to me a conversation I had on the weekend with the head of a hospital. Of course, those associated with hospitals feel that they're underfunded by this particular government, have a very restricted budget and, far from having opportunities to re-employ injured workers, are in the process of downsizing in many hospitals at the present time.
Secondly, having been involved with the Metropolitan Toronto government, I know that in the homes for the aged -- again a very tight budget -- the money has to either come from the provincial government or the municipal, which is the provincial taxpayer or the municipal taxpayer. I can tell you that neither taxpayer wants to pay more money. As a matter of fact, from my experience at the municipal level, people, certainly here in Metropolitan Toronto, think they pay way too much in taxes already.
A couple of years ago, my recollection is that the provincial government actually reneged on the funding level for homes for the aged and put some sort of a cap on it, so that the Metropolitan Toronto government actually didn't get the amount of provincial funding that was due to it. I think that's been rectified now, but that was a problem back there.
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So I just wonder, since you're being told, and I think rightfully so, that there are fixed budgets, either in hospitals or homes for the aged, and as a result you're being told that it's difficult to re-employ injured workers because there just isn't money for it -- it's a very difficult situation all the way around. I wonder what sort of solution you might have. What would you recommend would answer these problems?
Mr Davidson: In regard to the re-employment issue, as we all know, the current system of funding nursing homes, retirement homes, homes for the aged, charitable homes and municipal homes for the aged, they are funded on a system of -- which is called a case-mix index system. There are various envelopes which the home is funded under. When the home speaks to the union representative or the Workers' Compensation Board on its ability to re-employ, they're speaking only with regard to the nursing and personal care envelope. They never speak of the accommodation portion, which is a separate envelope.
I'm not an expert on this particular issue, but as I understand it, that's the portion where we call the hotel portion of their funding, where they are paid for the actual accommodations that they provide. There is an ability for some funds, dollars, within that envelope which aren't earmarked for any particular purpose. If you are a nursing home operator in this particular province and you are compliant, meaning that your building is up to code, you have no mortgage, you are paid incentives through the accommodation portion.
The Vice-Chair: Thank you. That's it. On behalf of this committee, I'd like to thank the Service Employees International Union, Local 204, for their presentation, and if I may, I'd like to acknowledge the guidance and support that was given to me by Brother Turner in my early days when he was a rubber worker.
Mr Davidson: Thanks a lot.
MUNICIPAL WCB USERS GROUP
ASSOCIATION OF MUNICIPALITIES OF ONTARIO
The Vice-Chair: I'd like to call forward our next presenters, from the Municipal WCB Users Group. Good afternoon and welcome to the committee.
Mr Michael Zroback: My name is Michael Zroback. I'm the manager of corporate workers' compensation services for the Municipality of Metro Toronto. I'm speaking here on behalf of the Municipal WCB Users Group as well as the Association of Municipalities of Ontario.
Mr Eric Gam: I'm Eric Gam. I am here on behalf of AMO, the Association of Municipalities of Ontario. I'm vice-chair of its fiscal and labour policy committee and I'm representing the chair of that committee, Michael Power, mayor of the town of Geraldton, who is also a member of the executive of AMO. This presentation was endorsed by the full AMO board at its meeting August 21.
Mr Zroback: The Municipal WCB Users Group, because it's not a very high-profile group, I would like to just spend a few minutes talking about. We are the WCB managers and coordinators in the municipalities. We have about 65 members. Our purpose is professional development as well as responding to various initiatives from the Workers' Compensation Board, whether it's on policy or from the government on matters of legislation such as this. We have made numerous presentations in the past and we're going at it one more time.
We have an overall message regarding Bill 165 and it's one you've likely heard before, but I feel a real need to reiterate it. Workers' compensation in Ontario is in big trouble and it does need to be changed very quickly and appropriately, in the appropriate manner. The right things need to be changed in the right directions. Just going willy-nilly and changing things is not going to be the answer.
There are a number of symptoms that compensation is in trouble here. We have the highest cost per lost-time claim of any jurisdiction in Canada, we have the longest duration on benefit, and we have the second-highest average rate of assessment, and that is despite a decreasing accident frequency. As you can see, the axiom of accident frequency and costs are not linked any more. We have the second-lowest level of funding of any jurisdiction in the country.
The board currently assesses employers and compensates workers on the highest maximum earnings of any jurisdiction in Canada. They have an unfunded liability of thereabouts of $11.6 billion, and it is increasing at an alarming rate, and that is very frightening to the smaller, schedule 1 municipalities in this province.
We see a lack of accountability and responsibility at all levels of the board, we have experienced political interference which has led to a very poor administration in the board, and as the last discussion showed, we see that the 90%-of-net-pay formula has led to overcompensation in some instances as a result of the tax structure, and in our view, clearly Bill 165 does not address these concerns.
We also have some concerns directly about the proposed legislation. We see a purpose clause that does not address the financial accountability or the security of the workers' compensation system. We see that there is no financial responsibility framework for decision-making and operating of the system. We see that the purpose clause in Bill 165 does not enable the government to be the final organization accountable for the system.
We see Bill 165 introduces unprecedented and, in our view, unsupportable new direct intervention powers for the government for one year after proclamation of Bill 165. The Minister of Labour will be calling the shots for a year.
We see that Bill 165 significantly alters the currently successful experience rating programs by emphasizing process rather than results. Programs are working fine, yet Bill 165 would seek to change these.
We see that the powers of the workers' compensation in the areas of vocational rehabilitation and reinstatement are being increased, and in choosing the penalty approach, in our view this unnecessarily clubs employers into toeing the line and this will almost surely lead to a lot more disputes with the Workers' Compensation Board and in our view is not consistent with service excellence.
The workers' compensation will have the authority on its own initiative to determine whether or not the employer has breached the re-employment obligation, regardless of whether or not there is a worker complaint. It is no longer a complaint-driven system.
We see that the exceptions to the Friedland formula and that the pension increases will increase the unfunded liability. Bill 165 is not dealing effectively with the unfunded liability, and it is a very, very serious matter.
We have some recommendations along these lines. When it comes to the purpose clause, we would recommend that the PLMAC clause be used. It was an excellent purpose clause. We would suggest that this be used instead of the Bill 165 purpose clause.
When it comes to the Minister of Labour's powers to direct WCB policy, like most other employers we would urge you to withdraw that section. We see no need for it.
When it comes to experience rating programs, we would urge you to continue with the current ones and withdraw the proposals for implementing new ones. The current ones are working very well, by anybody's reckoning. If it isn't broken, we don't need to fix it.
When it comes to vocational rehabilitation or re-employment, again we would urge you to withdraw the penalty approach. In its place we would ask that you propose incentives. When you reward people or reinforce people for doing what you would like them to do, chances are they will do it. It is in their interest to do it.
We've come to the unfunded liability. We would ask that there be no exceptions to the Friedland formula. We would also urge you to carefully reconsider the worker entitlement to the pension increases. I don't say in all cases they're ineligible, but again I would urge that the entitlement be very carefully reconsidered.
When it comes to a written submission, we are supporting the M.C. Warren and Associates Inc submission that you people have heard before. That would conclude the verbal portion of our presentation. Thank you very much for your attention.
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Mr Mahoney: Thank you very much. Once again I would have to say that we finally see some common sense and it's got to come out of the municipal sector. As a former director at AMO I'm not surprised at that, because when you deal with the grassroots you get to understand the problem.
You're not the big business that some of the government members like to take on at these hearings; rather, coming from a lot of experience. In fact, when I conducted my outreach tour, there were two places where we had extremely positive meetings on WCB reform; one of them was Ottawa, when we met with the people from the city of Ottawa, and the other was the city of Winnipeg. They have excellent return-to-work programs, they understand prevention and they put a lot of effort into that.
I'm afraid your call for incentives, however, will be falling on deaf ears. They would rather implement a system that had WCB police rather than incentives and rewards to reduce the number of accidents.
My first question to you would be: How would you feel about it, the possibility -- and if you complain too loudly, it might happen to you -- that this government might decide all schedule 2 municipalities should be moved into schedule 1?
Mr Zroback: That is our version of hell, quite frankly. We with every fibre of our being would resist that. We do not want to see that happen. When that was under active consideration we went to man the barricades and did battle as best we could. That would not be in our interest at all.
Mr Mahoney: Are you aware of the letter -- I've referred to it on numerous occasions, but I think it's so vitally important -- you referred to the PLMAC process and the purpose clause, which I have here which includes the FRF, the financial program, financial accountability. This is a letter on the letterhead of none other than the Premier of Ontario dated April 21 to Jim Yarrow, chairman of the Employers Council on Workers' Compensation, and he says in there, and I quote, Bob Rae says, "A `purpose clause' will be added to the Workers' Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility."
That was the agreement that was entered into at the PLMAC; the Premier has acknowledged that in this letter, he's put it out. He's either been bullied by somebody in his government or he was lying to Jim in the first place. I don't know which. I would like to think he was not lying, but this information in black and white is very, very clear, that the Premier supported the exact position that you and others have articulated in establishing a purpose clause with financial accountability. Do you have any comments on that?
Mr Zroback: It's very unfortunate that it didn't come out in Bill 165 as that and we regret that tremendously. I agree with you; I would like to think that he was telling the truth when he wrote that, and I am at a loss to explain it.
Mr Mahoney: Maybe we should send him a letter and ask him if he was telling the truth when he wrote that.
Mr David Johnson: I appreciate your deputation. It brings me back to old times as the mayor of East York and going through the budgets on an annual basis and watching the payments for WCB going up and up and up. It seemed in many years that the increases were huge, and sort of pulling out my hair because of course the taxpayers demand, as you people know, the lowest possible rate that you can get and the municipal taxes in Metropolitan Toronto right now are under severe fire. Every component of the budget had to be looked at and WCB is an important component, and anything that would raise that is a real problem.
You mentioned the unfunded liability and severe concern with the unfunded liability, and I agree with you. But we've had other deputations today and through the past couple of weeks who've referred to it as the "phantom unfunded liability" and said it's a little bit of a mortgage that we shouldn't be concerned about on our house and we shouldn't be concerned about that; we should be more concerned with increasing benefits and paying out more. I wonder what your reaction is to that sort of --
Mr Gam: I've heard the same comment used with regard to the national debt or the provincial debt. Ultimately, the piper has to be paid.
Mr Zroback: Like any other responsible citizen, I'm very concerned about my mortgage and I'm very concerned about the unfunded liability. It's phantom until, like Eric says, the piper has to be paid. All of a sudden it's very real and I think we would be irresponsible not to address that in a much more responsible manner than we're doing in the Bill 165.
Mr David Johnson: I guess the question is, who is going to have to pay the piper? It's quite possibly the taxpayers who may have to dredge up the difference.
Mr Zroback: That's our concern, yes, indeed, exactly. The province's debt rating has already been downgraded, probably as a result of that.
Mr David Johnson: It's a contribution, I'm sure.
Mr Zroback: Yes.
Mr David Johnson: You also mention the experience rating and the fact that the current system emphasizes results and if you give an incentive to employers and it's in their financial wellbeing to get good results, then they'll go after that, and I think we've seen that in many industries.
The new system that they're proposing through this bill is to emphasize process, as you've indicated, rather than those results and I wonder if you could in the few seconds I've got left indicate what sort of impact you see that that new system will have on the employers in the province of Ontario.
Mr Zroback: Well, for the municipalities a number of our members and certainly a lot of the AMO members as well, and I emphasize the smaller ones, will have informal return-to-work programs, and they're working very well, but it's more on an informal basis. If we now emphasize process, this now has to be formalized. Someone has to be hired to formalize these, to run them and everything else, for no better results than we have right now. It's going to increase the expenses. It'll increase the bureaucracy to run this. It'll slow things down. I don't see it improving matters at all. I see it as a detriment.
Mr Paul Klopp (Huron): As a past councillor, I know about budgets. I got involved as a councillor when I think we really started to take issues seriously about who pays the bills. The unfunded liability, just for a couple of points quickly. The unfunded liability, national debt and provincial debt are really two different things altogether, and I just want you to understand that. I don't know what your background's in, but it's totally different.
Bill 162, in fact we just talked about the bureaucracy and the incentives to try to get people back to work. We're supposed to do that. Clearly, the last three and a half weeks and the past four years, as one who has watched this thing and been on a number of committees and we've held things up, we've slowed things up around there, we've moved things around, clearly this issue's been around a long time. I can remember it back in 1988 and 1989 when I was on council.
But are you stating now that the -- because part of this is the Friedland formula, which workers -- and it does slow the bleeding up, the unfunded liability up, and pretty well every workers' group has said they'll live with it. I gather you think that's okay too, but the Conservatives and Liberals have talked about actually further cutting benefits, and is that what you also want, benefits cut, from 90% and cut them even more down to 85% and 80%? Is that what you're also saying that we should do too?
Mr Zroback: I'm not saying in our submission that we should do that. Were that to be done, that would be fine by us too, yes.
Mr Mahoney: On a point of order, Mr Chairman: I only wish that the government members would stop making absolutely false statements. The Liberals do not support reducing benefit entitlements.
The Vice-Chair: Thank you once again, Mr Mahoney. Mr Hope.
Mr Hope: My question would be, in listening to your opening comments, you talked about the high cost, benefit levels, premium rates, the unfunded liability. You talked about accountability and interference. You talked about the program working fine. You said about pension increase. In your recommendations you say, and I have a hard time understanding because you represent municipal, and I hear municipal elected people saying, "We want to be empowered more; we want to have control." For you to come out and say for a year through the transition period, the Minister of Labour, "Take away that power for him to have that ability," I have a hard time understanding where you're coming from when I'm hearing municipalities saying they want more power over top of programs, and yet we're trying to give the minister power for a transition period to occur. It's only for one year; it's not continuous.
You're talking about the experience rating program. You're talking about abandoning the penalties. In your proposals you talk about the problems for the worker and then you say, "We want more accountability." I thought a municipality would want more accountability to its own residents who live right in the community, who pay taxes, who are dependent on -- we've heard presentations from people on WCB, on pensions, who have had to go to welfare. Maybe I'm wrong, but you're the director of community services department -- I don't know if that's around the social services department -- where you have expressed concerns around making sure that proper premium rates are being paid to the injured worker, making sure there's vocational rehabilitation, to enforce practices that make the employer more accountable than the system to the individual. I'm just having a hard time understanding. You're talking as if you're a business, yet you talk as if you're a community at the same time.
Mr Gam: I think our objectives are the same. We're saying that the mechanism proposed by this legislation does not achieve that objective in the ways that I think it could better do it, as per these recommendations.
Mr Hope: A $200 increase per month is not going to help alleviate your situation, especially from social services? I have a hard time with that one.
The Vice-Chair: On behalf of this committee, I'd like to thank the Municipal WCB Users Group for bringing us their presentation this afternoon.
Our next presenter, Keith B. Cookson, not being here, this committee stands adjourned until 10 am tomorrow morning.
The committee adjourned at 1753.