Legislative Assembly of Ontario

CONTENTS

Thursday 8 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

Industrial Accident Victims Group of Ontario

Sebastian Spano, community legal worker

Ontario Home Builders' Association

Ward Campbell, president-elect

Byron Scott, chair, health and safety/WCB committee

Andy Manahan, director, industrial relations

Ontario Medical Association

Dr John Gray, board chairman

Dr Lily Cheung, chair, occupational environmental medicine section

Dr Robert MacBride, board member, occupational environmental medicine section

United Steelworkers of America, Local 1005

Alan Hodder, chair, compensation and benefits committee

Rob Butler, member, compensation and benefits committee

CP Pacific Rail System

John Taylor, director-general, government and industry affairs

Charles Sheehan, general claims agent

Jean-Louis Masse, assistant vice-president, risk management and actuarial services

Jim Madge, solicitor

Office of the Worker Adviser

Alec Farquhar, director

Ontario Sheet Metal Workers' and Roofers' Conference

Jerry Raso, legal counsel

Law Union of Ontario

Wes Wilson, member, workers' compensation committee

Peter Bird, member, workers' compensation committee

Income Maintenance for the Handicapped Co-ordinating Group

Scott Seiler, coordinator

Harry Beatty, legal counsel

Niagara District Injured Workers Organization

Don Comi, president

Lesley Penwarden, recording secretary

Karl Crevar, president, Ontario Network of Injured Workers Groups

Ontario Legal Clinics Workers' Compensation Network

Terry Copes, legal clinic lawyer

Andrew Bomé. legal clinic lawyer

Kiran Sawhney; Ravinder Sawhney

Ontario Psychological Association

Dr Warren Nielson, past-president

Dr Ruth Berman, executive director

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

Chair / Président: Vacant

*Vice-Chair / Vice-Président: Cooper, Mike (Kitchener-Wilmot ND)

Acting Chairs / Présidents suppléants:

*Duignan, Noel (Halton North/-Nord ND) for Mr Mr Waters

*Hope, Randy R. (Chatham-Kent ND) for Mr Ferguson

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)

Waters, Daniel (Muskoka-Georgian Bay ND)

*Wood, Len (Cochrane North/-Nord ND)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Arnott, Ted (Wellington PC) for Mr Turnbull

Duignan, Noel (Halton North/-Nord ND) for Mr Mr Waters

Hope, Randy R. (Chatham-Kent ND) for Mr Klopp

Mahoney, Steven W. (Mississauga West/-Ouest L) for Mr Conway

Phillips, Gerry (Scarborough-Agincourt L) for Mr Offer

Rizzo, Tony (Oakwood ND) for Mr Huget

Witmer, Elizabeth (Waterloo North/-Nord PC) for Mr Jordan

Also taking part / Autres participants et participantes:

Derek Fletcher (Guelph)

Clerk / Greffière: Manikel, Tannis

Staff / Personnel:

Fenson, Avrum, research officer, Legislative Research Service

Richmond, Jerry, research officer, Legislative Research Service

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.

INDUSTRIAL ACCIDENT VICTIMS GROUP OF ONTARIO

The Vice-Chair (Mr Mike Cooper): Today will be our last day on the public hearings on Bill 165. I'd like to call forward our first presenters. Good morning and welcome to the committee. Just a reminder that you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd leave a little time for questions and comments. As soon as you're ready, could you please identify yourself for the record and then proceed.

Mr Sebastian Spano: Thank you very much. My name is Sebastian Spano. I'm with the Industrial Accident Victims Group of Ontario, a legal clinic that represents injured workers. I will be making a presentation which is part of a joint presentation of the Union of Injured Workers and the Toronto Injured Workers' Advocacy Group, so this is a supplement in a sense to that presentation.

In my presentation I will be discussing the formula for eliminating full indexation of benefits and replacing it with the Friedland formula. I will also discuss a major aspect of the bill that is not dealt with, an issue that has not been dealt with in the bill, and that's the issue of the future economic loss benefits, or deeming.

You've certainly heard from various groups and a number of individuals and read in numerous reports of the Ministry of Labour that the formula that is being proposed to eliminate full indexation of benefits, known as the Friedland formula, is a reasonable alternative to full indexation as measured by the consumer price index. I'm sure the members are familiar with the Friedland formula, but what the bill proposes to do on indexation is to remove full automatic indexation pegged to the consumer price index and replace it with a formula that takes the CPI, the consumer price index, as its starting point, takes three quarters of that amount, subtracts 1%, and you're left with the result. Of course, there is a cap of 4%, so at no point can the indexation factor exceed 4%.

As I've said, you've heard that this method of indexing benefits is a reasonable alternative and its impact will not be too hard and it's a reasonable thing that injured workers can take. We're here to show you that this is not the case at all, that a lot of what you've heard, a lot of the statements and claims are totally unfounded. We're here to produce some information and some evidence to you to show you the full impact of the Friedland formula on workers' benefits.

You've also heard that the workers' compensation system can no longer afford full indexation, that the board does not have the revenues or the resources to maintain this. This too is a myth, and I will discuss that today.

I'd like to begin with trying to get a sense of what exactly indexation is, and there are a lot of misunderstandings about what it is. It's often treated as a means to increase workers' pensions. Well, that's not the case at all. It certainly is not that. It is simply a means to maintain workers' benefits at the levels at which they were initially awarded. It's simply a means of preventing the pensions from slipping further as price inflation goes up, because the value of a pension is not its nominal, monetary value; it's the value in terms of what it can purchase. This is what is often typically overlooked in all the discussion about indexation.

There have been certainly numerous studies done on why we need indexation for workers' comp pensioners, but I think one of the best was done by Professor Paul Weiler in a study that was commissioned by the Ontario government in 1980, Reshaping Workers' Compensation for Ontario. The study was published in 1980. Professor Weiler provides really an exhaustive analysis on the significance of indexation and what it really is. I'd like to briefly quote from Professor Weiler's report. He had this to say on the notion of indexation as merely an adjustment and not an increase:

"In addressing this issue as a matter of principle, there should be no question about the entitlement of workers' compensation claimants and pensioners to inflation adjustments as a matter of right...." If you're reading from the text, it's at page 4 in our submission. "We must keep clearly in mind that no real improvements and benefits are at issue here. We do no more than avoid an erosion in real income levels we earlier awarded to workers' compensation pensioners....

"This is how the problem looks from the point of view of fairness to the injured worker. But we have been told again and again that Ontario business and the Ontario economy cannot afford the cost. This fear is completely unjustified. The explanation is implicit in the very notion of inflation, which consists of changes in money values, not real values."

The second claim that you've heard about and that's been raised about indexation is that it's a drain on the resources of the Workers' Compensation Board. Again, this is unfounded. In Professor Weiler's study, he canvassed this point as well. In trying to understand why it is unfounded, I think I'll just briefly go into how the board collects revenues and how they increase.

There are two principal sources for the board's revenues. One is assessments on employer payrolls; the second is return on investments. What has been pointed out is that both sources increase in response to price inflation as well, so there's sort of a balancing effect. Inflation goes up, indexation goes up on workers' benefits, but there's also price inflation on the board's revenues. So there's clearly a match between what's being paid out to workers in the form of indexation and what they are taking in from the board.

If you look in the board's own annual report, particularly the 1993 annual report, the board provided some background notes on what it does with its money, and it said that it seeks to get a rate of return in excess of 3% over inflation -- 3% in excess of inflation. So they're taking in 3% in excess of inflation just on their investments, plus employer payrolls are going up simply because of wages that go up. As you know, it's the assessable payroll that the board uses to take in its revenues, so as these go up with whatever changes in wages, so does the board's revenues from these sources.

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Professor Weiler also noted this effect. He wrote, and this is at page 5:

"Just as inflation produces the need for adjustment of workers' compensation benefits to monetary inflation in order to provide distributive justice to the injured worker (again, recall, not to increase the real value of the benefit), so also inflation generates the financial wherewithal for the compensation system to pay for that adjustment. It does so through the impact of price inflation on the WCB revenues, either from the assessment of current employer payrolls or from the rate of return on its investment portfolio." I think that Professor Weiler is one of the best authorities on this subject.

I'd like to talk now about a particular effect of the Friedland formula on FEL benefits. As you know, FEL benefits are benefits that are paid by the board to compensate for the loss of future earnings. The board makes an estimate and projects that the worker will lose certain benefits as a result -- rather, they'll lose earnings power as a result of their accident, over time. Not only does taking indexation away reduce the actual purchasing power of the FEL benefit, but under the Friedland formula it results also in reduction in the nominal value of the FEL itself. So it's a double effect on the FEL awards.

We've produced some tables and some graphs in appendix 1 of our submission.

How much time do I have?

The Vice-Chair: Ten minutes left.

Mr Spano: I think I'll just show you on the overhead exactly what happens. If you look, I've chosen here a 4% inflation rate and deemed wages at approximately the same rate as inflation. We've sort of tracked the future economic loss benefit over time --

Mrs Joan M. Fawcett (Northumberland): Excuse me. Is that the same one as on page 2?

Mr Spano: No, it's not, actually.

Mrs Fawcett: It's a different one?

Mr Spano: I'll direct you to that one. It's in appendix 1. It's not numbered.

Ms Sharon Murdock (Sudbury): It says 4% of CPI.

Mr Spano: As I said, the graph tracks the future economic loss monthly benefit over approximately a five-year term. We've taken four case examples. One is a future economic loss award based on full indexation and 90% of net average earnings, we've taken the Friedland formula at 90% of net average earnings, and we've also used two other examples, using 80% and 85% of net average earnings, both at full indexation.

You can the see in the graph the line that goes down. This is the effect of Friedland on a future economic loss award. Initially, it tends to sort of rise somewhat, but at the second review the deemed wages seem to -- what happens, I guess, has to do with the calculation of the award. What the board do is they use projected earnings, and they'll use whatever the market rates of earnings are at the time of the review. Now, those actually will be going up, whereas the indexation factor under Friedland is going to be capped or it's going to be reduced. This is what produces the downward trend.

In this example, really there's a 23% drop by the fifth year when you compare the Friedland-indexed FEL award with the fully indexed FEL award.

We use another example. If inflation were to go higher, the drop is even more significant. As you see, this particular line right here is the Friedland-indexed FEL. That's the fully indexed FEL.

You can see that difference there. What that produces is that after five years, the difference between the fully indexed future economic loss award and the Friedland-indexed award

is 55%. That's a significant drop. We are not even counting the erosion of the purchasing power on that benefit itself.

I would like to make another point about, I guess, the process of how the ministry chose this particular formula and why it chose this particular means of compensating or indexing benefits. I think the justification was that somehow it's used in retirement benefit packages that are negotiated in collective agreements between labour and management. This is a totally absurd justification for taking away full indexation. This is certainly not a good model. We have to remember that workers' compensation is a wage replacement scheme; it is not a retirement income scheme. So, really, there's nothing solid to back that up.

Simply in terms of equity, again, there is really no good reason why workers' compensation pensioners or injured workers should be treated any differently or should be discriminated against by being given much less. For instance, retirement pensions and a whole bunch of other wage replacement schemes and even retirement schemes are fully indexed, such as the old age pension benefits. There's no reason why workers' compensation benefits should be excluded.

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I'd just like to talk a little bit about deeming. When we talk about deeming what we mean is the process the board uses to, in a sense, guess as to what the worker is likely to earn into the future. Some have called it crystal-ball-gazing, and in some ways it is; it's certainly not a scientific process. We want to point out that in fact there has been no reform in this bill on the question of compensation for loss of future earnings.

The experience of the last few years is that the system does not work to adequately compensate workers. The board has produced its own studies. A recent study produced by the board's policy branch -- it's a study of recipients of the award -- showed that at the time of the first review of the award essentially roughly 45% of the sample were still unemployed at the time of the first review. They were not adequately compensated at the time of that review either and many of those who were working had wages well below their pre-injury earnings.

Our recommendation then, in closing, is that we disagree totally with eliminating full indexation.

The Vice-Chair: You've just gone over your time, so on behalf of this committee, I'd like to thank the Industrial Accident Victims Group of Ontario for the presentation this afternoon.

ONTARIO HOME BUILDERS' ASSOCIATION

The Vice-Chair: I'd like to call forward our next presenters, from the Ontario Home Builders' Association. Good morning and welcome to the committee.

Mr Ward Campbell: Good morning. My name is Ward Campbell and I am currently the first vice-president of the Ontario Home Builders' Association. Next month, I will become the president of the association.

With me this morning is Byron Scott, who is the chair of the Ontario Home Builders' health and safety/WCB committee. I will provide you some background on the OHBA and Byron will provide more detailed comments on the draft legislation itself.

The Ontario Home Builders' Association is the voice of the residential construction industry, representing 3,700 member companies which are organized into 36 local associations across the province. In fact, last week you heard from one of our local associations, the Ottawa-Carleton Home Builders' Association. Collectively, our members produce over 80% of the province's new housing. The value of residential construction work in Ontario accounts for $15 billion of the total $32 billion in construction.

OHBA places a high priority on health and safety issues, and we have an active health and safety WCB committee which meets on a regular basis. We wanted to go one step further, however, to ensure that we were getting appropriate feedback on a geographical basis. A local health and safety contact network was formed to help facilitate the flow of information to our 36 local associations as well as get vital feedback on a range of issues. The benefits of this network are evident now as a number of local associations have formed committees on health and safety.

As I'm sure you are aware, the majority of our members are small companies that build a few homes each year. These building and renovation contractors and their trades are very closely tied to their local communities. Frequently for these smaller firms, the owner is also out there onsite working as a supervisor or a labourer. Of course, we also represent much larger building companies. For everyone, the cost of WCB represents a growing and significant proportion of their costs.

In 1994 the standard assessment rate for group 764, which is residential construction, increased from $5.95 per $100 of payroll to $7.16, an increase of over 20%. The magnitude of this increase had a direct impact on the bottom lines of many residential building firms and is disconcerting considering the great strides that have been made to further improve the safety performance of our industry.

The significance of our industry is illustrated by the assessable payroll of rate group 764. It alone was $633 million in 1993. Other rate groups also include our members, such as the mechanical contractors, masonry contractors, roofers, inside finishers, siding firms and so on, and these groups represent several hundreds of millions of dollars in assessable payroll.

I believe everyone in this room would hold the view that the workers' compensation system in this province is in dire need of meaningful reform. Many groups were pleased that the Premier recognized this fact when he appointed his labour-management advisory committee to recommend changes. The main point of contention at this stage is whether this bill is the appropriate remedy. OHBA along with other groups has come to the conclusion that Bill 165 should be withdrawn and that a new, more financially sound piece of legislation should be drafted. A clause-by-clause tinkering of this bill would not only illustrate political expediency, but would be a great disservice to the workers and employers of Ontario.

I'm going to now turn over the microphone to Byron Scott.

Mr Byron Scott: As Mr Campbell has stated, OHBA does not intend to critique the entire bill, as other business associations have already given detailed comments to the committee. We do however wish to emphasize our strongly held views on a couple of issues and to provide the members with a context for our position. In particular, we wish to focus on vocational rehabilitation and the CAD-7 experience rating program. But first, let's look at the safety performance of the construction industry.

Great strides are being made in safety performance in the residential construction industry. Data collected by the WCB and tabulated by the Ministry of Labour and the Construction Safety Association of Ontario show that lost-time injury frequency has dropped significantly in the past few years. Appended to the brief are tables showing the reductions in compensable injuries between 1965 and 1992.

While these data do not show the performance of the residential sector exclusively, we can confirm, as noted previously, that our sector has accounted for a high proportion of the construction activity, particularly during the recessionary period. The graph shows the significant improvements that have been made to accident frequency during the 1980s and into the 1990s. In addition, the construction industry is performing well compared to other industries, such as public administration, which we would presume are much less risky industries. You can see this in the appendix. An explanation of this remarkable improvement will be provided under the CAD-7 section.

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One thing that has become clear to us is that we do not need new WCB legislation to make an improvement in site safety. A far more effective way to reduce potential accidents and fatalities is to instil the safety ethic in each and every individual who has anything to do with the construction process, from the builder to the subcontractor to the individual tradesperson on the job site.

OHBA is a proponent of the existing internal responsibility system that involves onsite health and safety committees and promoting accident prevention. In other words, the workplace parties are in the best position to identify safety problems. Both workers and employers must share the responsibility for occupational health and safety and take appropriate action onsite in achieving the safety objectives.

Vocational rehabilitation: OHBA is supportive of the thinking behind the vocational rehabilitation and early return to work. Assisting an injured worker back to meaningful employment in a timely manner is a worthy and admirable goal. It is difficult in the construction industry, however, to achieve this objective, simply because of the nature of construction and the small size of the majority of firms. We are disappointed with the overall thrust of Bill 165's section 53 amendments. It does not recognize these inherent difficulties and appears to take an autocratic approach with employers.

As you have heard, in the construction industry there are impediments to implementing return-to-work programs because of the project duration, the cyclical nature of the industry, trade jurisdictions and so on. For example, an injured framer may not even be ready to return to work until the construction project is complete. In addition, modified work will not always be available for a specific tradesperson, and it could be added that alternative work will not be appropriate in every circumstance. It appears that Bill 165 has not taken account of these characteristics.

On July 11, OHBA met with Mr Jim Thomas while he was still deputy minister and we proposed an idea that appeared to be well received. The proposal centred around a credit system whereby a firm that has employment for a WCB-identified worker would receive a re-employment credit to offset possible future situations where alternative work might not be available. We believe this credit system of employing a worker that is not necessarily injured on your job site would help to solve situations where return to work is not always possible.

As we indicated, the ministry appeared to be receptive to a system that had re-employment obligations but where there was not necessarily direct linkage between the injured worker and the firm where the injury occurred. We trust that the committee recognizes that the proposed amendments contained in Bill 165 would be somewhat impractical for our industry.

Another idea we have links the concern that many business groups have with the 90% benefit level in Ontario. We would suggest first that the benefit level be reduced to help control expenditures. Perhaps even a level of 80% would act as an incentive for workers to return to work in a timely fashion. In cases where return to work is not possible for medical reasons in the medium term -- for example, six months -- we feel that the benefit level could then be raised to, say, 85%.

OHBA contends that this would be a financially responsible return-to-work policy which has elements of incentive and fairness. Indeed, other provincial jurisdictions have lowered benefit levels. This would be one way to help ensure that there will be funds to cover injured workers in the future. Recent events have shown this to be successful in New Brunswick.

Turning now to the CAD-7 experience rating program, as you know, the CAD-7 program was intended to promote accident prevention in construction by raising assessments on high-injury/severity firms and rewarding companies with good safety records. CSAO's 1993 annual report points out that CAD-7 "has played a major role in reducing Ontario's lost-time injury rate." The graph that we referred to earlier clearly demonstrates the positive effect of the CAD-7 program in our industry. Lost-time injury frequency has declined from a level of 50 injuries per 100,000 man-hours in the mid-1970s to 25.6 in 1993.

There has been criticism of CAD-7 because of the off-balances which have resulted; that is, overall the rebates have been greater than the surcharges. This is partially due to the fact that the projections made by the board of expected cost and frequency have not always been accurate. We are not criticizing the board for this, because the formula is based, in large part, on accident costs measured in previous years. A major reason for the off-balance lies in the fact that the construction industry has made such rapid and significant improvements in reducing the injury frequency. If the majority of the firms had to pay surcharges under CAD-7, then there would be real cause for concern, because accident frequency would be trending in the wrong direction.

The addition of section 103.1 ignores the importance of incentives to the construction industry. We believe that fine-tuning CAD-7 may be appropriate, but do not view this section as a means to enhance performance. No formula is provided which would give the board any guidance regarding weighting of criteria for refunds or surcharges. The measurement of the listed criteria would be subjective, discretionary and focus solely on the employer; for example, health and safety practices and programs, vocational rehabilitation practices and programs, practices and programs to assist workers to return to work and the nebulous "other matters." Does this include performance?

For example, as we have indicated, many OHBA members are small firms, and these companies will often subcontract work for various stages of the construction process. The majority of the small firms in this province do not have vocational rehabilitation programs. If the board places a great deal of weight on this factor in determining whether a refund or a surcharge is available, then many companies that otherwise have good safety records will be penalized unjustly.

OHBA is fully supportive of WCB's existing CAD-7 experience rating program. I should stress that this statement is based on feedback we have had from OHBA members. Many of these members obviously receive rebates from the board, but I did have a conversation this summer with a member who is in a surcharge position and still indicates the rebate potential is the more saleable incentive. This member has implemented a corporate safety policy and generally is taking an enlightened approach to safety.

The improvements made were influenced by the ability to receive a rebate. It should be noted that this is typical of what happened in the early days of CAD-7, and now many more employers have effective safety programs. We would contend that firms in a surcharge position recognize the incentive in the program but would be more effectual in a positive atmosphere.

A performance-based CAD-7 must be maintained if the objective is to continue to reduce accidents and injuries. The uniqueness of the construction industry and the diversity of firms in terms of size, type and activities demand that performance-based programs be the dominant factor in evaluating firms.

The construction workplace parties are responding to the current performance-based incentives without the need for excessive enforcement. Consultation with competent health and safety delivery organizations such as the Construction Safety Association and the efforts of the Ministry of Labour have resulted in expanded prevention awareness, better work procedures and follow-through to check performance results. We feel confident that our industry will make further improvements in accident prevention if legislative guidance is practical and fair.

Little information is contained in the bill on how section 103.1 would work in practice, but we are certain that it would be incredibly cumbersome, that it would be subjective and that it would not be as powerful as the performance-based approach we currently have. For this reason alone, OHBA feels Bill 165 is inappropriate. We believe that CAD-7 should be a balanced system, but we also believe overall the WCB is better off in a negative, off-balance position than a positive one.

We wish to recognize improvements at WCB. All too often one hears only criticism about the Workers' Compensation Board, whether it be the construction of the new office building or abuse in the system. However, there are improvements being made that unfortunately are often overlooked in the highly politicized world of the Ontario Workers' Compensation Board.

OHBA's health and safety committee maintains a liaison with the board's construction integrated service unit. We are provided with updates on ISU's activities and we are pleased by the progress being made to reduce the duration of claims. This spirit of cooperation has also encouraged better employer case management among our members.

Communications: The intent of amendments to subsection 51(2) should be to enhance communication between the physician and the employer. Improved communication between the various parties involved in an injury is a positive goal. Unfortunately, the employer has frequently not been part of the process, and this has hindered return-to-work objectives. We are concerned that Bill 165 still does not overcome this problem.

We are pleased that the OMA has prepared a paper which examines the role of the physician in return to work. Better communications are necessary to facilitate better and more timely return to work. For example, the doctor may not be aware of modified work opportunities. We view communication links as critically important to facilitating better and more timely decisions.

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The purpose clause must contain reference to financial responsibility to ensure potential expansions to entitlement are not passed by the board without due consideration to financial consequences. The board has a responsibility to manage the workers' compensation system in a sound financial manner, just as any other board of directors endeavours to do.

If no controls on placed on the system, it will become even more difficult to reduce the unfunded liability. If the WCB collapses under the weight of its own debt, then both workers and employers will suffer. There will be nothing left in the pot to pay for the existing and future compensation claims.

Equally distressing would be the consequences for Ontario's competitive and financial wellbeing. The spectre of US-built modular homes rolling into Ontario is not one that I wish to contemplate.

In conclusion, it is most unfortunate the Premier's business representatives on the labour-management advisory committee were not given more weight. Bill 165 is not based on an agreement between labour and management, and this alone is compelling reason to withdraw the bill and draft a new one that will ensure the future financial soundness of the WCB.

The system loses credibility when office workers who never go near a construction site are assessed at the same rate as carpenters. Those who can are fleeing the system and opting for private protection which provides 24-hour coverage for fewer dollars. A system with a growing unfunded liability is not going to attract these people back. It is time to implement meaningful reform, but we are not confident that Bill 165 will achieve this goal.

Thank you for your attention and hearing our views.

Mr Gerry Phillips (Scarborough-Agincourt): I appreciate the thoughtful brief, and I'll ask two questions because we may only get one question.

The first is, I see in the deputy minister's letter to you that he indicates that there is a recognition the construction industry may be different. The first question would be, have you had any recent conversation around your proposal on the back-to-work provisions?

The second one is, there's been some concern on the experience rating that there's perhaps an undue pressure put on companies to not report accidents and I'm wondering if you can provide the committee with any evidence one way or another on whether that's something we should be concerned with or whether there's evidence that we really should set that concern aside.

Mr Scott: On the first question, I don't believe that we've had an opportunity to talk further with --

Mr Andy Manahan: I've spoken to April, actually, last week. They are looking at it still.

Mr Scott: Mr Manahan is our staff member. He's got some later information. But certainly in committee we haven't been able to address that further.

But probably more importantly, the effect of CAD-7 on whether you bring a person back to work the next day or whether you delay the return to work, I think the important part of it is that the incentive is there to be on top of the situation. Have a modified work program in place before an injury takes place, and then you can work quickly to inform the medical practitioner of exactly what you have available and he can make a knowledgeable decision as to whether that worker should be allowed to come back to work.

We all know, and it's been stated to you in other presentations, that when people get into the system for any length of time, it's more and more difficult to get them back out. It's human nature, and we recognize it, and we're trying to get to a point where there's confidence on both sides -- all three sides, really: the worker, the employer and the physician -- that we are all working in the best interests of getting the worker to a healthy situation.

Mrs Elizabeth Witmer (Waterloo North): Thank you very much for your presentation. I'm really pleased to see the emphasis on the cooperation in the workplace with all of the partners, and I hope the minister does give very serious consideration to your re-employment credit.

My question is this: In your conclusion you state, "Those who can are fleeing the system, and opting for private protection...." Are you aware of a number of businesses that are making that choice?

Mr Scott: It's not businesses as large numbers of people. It's obviously the independent operators that are doing it. They have the option of taking coverage with the board or going elsewhere.

In the construction industry, the bottom line counts, and if they can save literally thousands of dollars for equivalent coverage, they're going to do so. It's only human nature again. What we want to do is, we want to restore the confidence in the board and get more people participating. Therefore, we can spread the cost of those unfortunate situations that do occur.

Mr Len Wood (Cochrane North): I commend you on your presentation. There's no doubt about it that you have a dialogue going with the Ministry of Labour and the Deputy Minister of Labour that the construction industry and home builders are different and that dialogue is continuing.

I just want to do a follow-up on page 7, on your conclusion. You're saying that the cost of private insurance is cheaper than WCB. We had presentations yesterday saying that there's less coverage and it's more expensive in the United States than what it is in Ontario by a large amount of dollars. I just want to know if you want to comment on that. What type of coverage would you get compared to WCB?

Mr Scott: I don't have the figures in front of me, but I know from my experience in the field, and I literally walk around the projects and I'm asking people do they have protection, because I don't want anybody working on my job site without protection, and the common response is that if I start insisting on WCB, they start complaining that it's far more expensive for equivalent coverage. Obviously you have to compare apples to apples. But I don't have the figures to substantiate it. I have talked to one insurance company that works closely with the association, and they confirm that they can provide equivalent coverage for less money.

Interjection.

Mr Scott: Yes, you do have that problem.

The Vice-Chair: On behalf of this committee I'd like to thank the Ontario Home Builders' Association for their presentation to the committee this morning.

ONTARIO MEDICAL ASSOCIATION

The Vice-Chair: I'd like to call forward our next presenters, from the Ontario Medical Association. Good morning and welcome to the committee.

Dr John Gray: I'm Dr John Gray, chair of the board of directors of the Ontario Medical Association. I'm also a family physician in Peterborough. Our submission is in several parts. I will be addressing the return to work and voluntary reporting of workplace injuries.

With me is Dr Lily Cheung. Dr Cheung is the chair of the section on occupational environmental medicine of the OMA. She's also a specialist in internal medicine and in occupational medicine. She will be addressing vocational rehabilitation and board duties.

Also with me is Dr Robert MacBride, who is a member of the subcommittee of the OMA's medical care and practice committee and a member of the executive of the section on occupational environmental medicine. Dr MacBride will be addressing timely return-to-work programs.

I understand that our written submission has been distributed by the clerk this morning. I hope you all have copies, and I'd like to ask Dr Cheung to start.

Dr Lily Cheung: Good morning. The Ontario Medical Association would like to thank the standing committee for the opportunity for us to present our submission.

The Ontario Medical Association represents over 20,000 physicians in Ontario and has as its mission, "To serve the medical profession and the people of Ontario in the pursuit of good health and excellence in health care." Occupational health and safety is becoming an important issue in this mandate. Every day, doctors in Ontario, including general and family physicians, occupational health physicians and other specialist physicians, are working with other health professionals to ensure good health in the workplace. Physicians do this through prevention programs, through rehabilitation when necessary, through facilitation of ill or injured workers' successful re-entry into the workplace and through the promotion of wellness both off and on the workplace site.

The OMA welcomed the government's announcement in May that it would be reviewing and proposing changes to the workers' compensation system in Ontario. We as a profession are pleased to work collaboratively with the government and the Workers' Compensation Board as well as employer and labour groups to improve the workers' compensation system in Ontario.

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In this brief, the OMA will comment only on those amendments in Bill 165 to the Workers' Compensation Act and the Occupational Health and Safety Act with which the OMA has particular concerns. We look forward to participating in a more comprehensive review of the system under the royal commission on workers' compensation.

With regard to vocational rehabilitation, referred to in subsection 9(5) of the bill, Bill 165 proposes to substitute subsection 53(1) of the Workers' Compensation Act to ensure that the board, the worker, the employer and the worker's physician are all involved in designing and providing for a vocational rehabilitation program for the worker.

The OMA recommends that in addition to consulting with the worker, employer and worker's physician that, wherever available, the board also consult with the appropriate joint health and safety committee or workers' representative and members of the occupational health service team in the course of designing and providing a vocational rehabilitation program for the worker.

By the way, the committee members may not be aware of the fact that occupational medicine has been a recognized specialty by the Royal College of Physicians and Surgeons of Canada for some time, but we are only one member of the occupational health service team, which can include all occupational health professionals, including people like occupational health nurses, occupational hygienists, safety professionals, occupational therapists, physiotherapists, ergonomists and others, as well as all other specialist physicians. Being knowledgeable about the workplace and workplace hazards, these people are positioned in a way that they can achieve the changes required to ensure the appropriate and safe return of the employee to the workplace.

With regard to board duties, referred to in subsection 15(3), the OMA supports the monitoring by the compensation board of developments in understanding the relationship between work, injury, occupational disease and workers' compensation so that generally accepted advances in health sciences and related disciplines are appropriately reflected in benefits, services, programs and policies.

However, the OMA has concerns regarding how the board will be informed in this regard. The OMA recommends that appropriate scientific guidelines be employed in the choice of literature to be used by the board and that good science only should form the basis of the board's policy decisions.

For example, I think the board has taken an appropriate step in funding the Institute for Work and Health for the study of soft-tissue injuries and community clinics. The Institute for Work and Health was previously named the Workers' Compensation Institute.

On the issue of board duties, the OMA joins other organizations in expressing concern that successful rehabilitation and return-to-work programs do not operate in an adversarial environment. The board itself, at it most senior levels -- now it could be a bipartite board, as suggested -- must set a positive and constructive tone to be reflected in the workplace.

Dr Gray will continue our submission.

Dr Gray: There are two areas of concern to physicians that we have addressed in our submission and which I would like to highlight. I will be departing from the actual written text, rather, addressing these issues, specifically the role of the physician in the initial reporting of workplace injuries to the Workers' Compensation Board and the difficulty in communicating medical information directly to employers to assist in timely return to work. I should like to address the initial reporting of workplace injuries first.

As a senior member of the joint OMA-workers' compensation liaison committee, I became aware of what appears to be a disturbing and increasing trend, namely, a patient who presents to his or her physician with what clearly appears to be a work-related injury yet requests the physician not to report to the board, apparently at the behest of the employer.

Faced with a choice either to report against the patient's instructions or to ignore the apparent workplace circumstances, the physician has a terrible dilemma. The consequences of either choice are outlined in our submission, and in fact, in partial response to the question earlier from Mr Phillips, the OMA section on general and family practice recently undertook a survey of its members in an attempt to quantify the magnitude of the problem, and I would like to share the results of this survey with the committee.

Members were asked the question whether or not in the previous six months a patient had requested that they not report to the Workers' Compensation Board an apparent work-related injury. Of those who responded, 51% had indeed encountered such a request in the past six months and 47% had not. Of those who responded, the frequency of requests was as follows: In the past six months, one to three requests, 36%; four to six requests, 12%; more than six requests, 6%.

As things stand now, the vast majority of physicians likely would honour a patient's request not to report out of consideration for the confidentiality provisions of the Medicine Act. In the long run, however, to follow this course of action is likely not in the patient's best interests, to say nothing of the possible legal consequences for employers who ignore their legal obligation to report to the board, as well as the inappropriate physician billings to the OHIP globe which should appropriately be charged to the Workers' Compensation Board.

The OMA thus requests that government include in Bill 165 a provision which would ensure that physicians who voluntarily report to the board that a patient may have been injured at work be protected from incurring any legal liability, and the suggestion is amplified in our written submission.

To address the second issue, namely, the role of physicians in communicating directly with employers, we could perhaps facilitate an explanation of our concerns by way of a hypothetical case scenario.

I believe all parties involved -- namely, employers, workers, the board itself and physicians -- agree that currently there are significant delays in the transmission from workers' compensation to employers of the information regarding the fitness of their employees to return to work, either in an unmodified or modified work environment. Physicians are prepared to cooperate with the timely flow of this information, although, once again, confidentiality concerns are very real. The OMA is pleased that the proposed addition of subsection (2) to section 51 of the Workers' Compensation Act recognizes that the consent of the worker is required before any medical information can be forwarded directly to employers. However, as outlined in our submission, there will be infrequent circumstances in which the physician will be placed in a difficult position.

Consider the hypothetical case of Joseph, who is a 45-year-old, otherwise healthy crane operator for a medium-sized industry. He presents to his family doctor with a two-month history of occasional blackouts. Further investigation, including blood work, heart testing, EEG and CAT scan reveals that an underlying seizure disorder, a form of epilepsy, is the cause of the blackouts. The family doctor starts Joseph on an appropriate anti-convulsant medication and arranges a referral to a neurologist. As is her obligation under the Highway Traffic Act, she advises Joseph that she will be reporting his condition to the Department of Transport. Aware that Joseph also operates a crane at work, she in addition offers to work with plant medical services in arranging for a modified work environment that would be safe both for Joseph and his fellow employees. She is somewhat taken aback when Joseph refuses to allow this information to be shared with the employer because Joseph is afraid he'll lose his job.

The doctor is placed in an even more uncomfortable position when three months later the employer requests the family doctor to conduct a periodic medical examination and again Joseph refuses to allow the doctor to communicate her advice to the employer. What is she to do?

The OMA does not have a firm recommendation for government regarding this latter situation. Undoubtedly, situations like the one I have described are infrequent, but when they occur, they are problematic for all parties concerned. The recommendations of the Krever commission have been ignored for over 10 years, and the specific recommendations are in fact highlighted in a footnote in our submission. The OMA hopes that this might in fact be the forum to review this problem again.

I'd now like to ask Dr MacBride to address the OMA's timely return-to-work programs.

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Dr Robert MacBride: The Ontario Medical Association has developed a position paper, which is in general support of the return-to-work directions of Bill 165. The OMA strongly supports legislative amendments designed to facilitate timely and successful return-to-work programs in the workplace.

In March 1994 the Ontario Medical Association approved a policy regarding timely return-to-work programs and the role of the primary care physician, designed to assist in reducing absenteeism due to injury or illness through the early return to work of employees.

The policy recommends that the traditional passive model of disability management by way of medical certification be replaced with a new, proactive, timely return-to-work model in which the employee and employer negotiate a plan for returning to work using objective input from the physicians.

To be successful, return-to-work programs must be founded on goodwill and trust so that motivated employees who may have a medical impairment with objective limitations or restrictions can re-enter a supportive workplace with flexible, innovative and productive work options whenever these are feasible.

In essence, the essential impact of that paper is to remove the physician from a sometimes arbitrary role of certifying absence and return to work, much like a truant officer, and recognize the physician as a resource, a source of objective information regarding abilities, limitations and restrictions. This avoids the delay in return to work while physicians, who may have only limited information about a particular workplace, await something called "full medical recovery," missing an opportunity for the rehabilitative benefits of early return to work when a medical problem has stabilized.

Thank you for your attention. I should just add one comment, that the OMA position paper is appended to the submission for the reference of the committee.

Dr Gray: We would be pleased to answer any questions.

Mrs Witmer: Thank you very much for your presentation. You've now clarified the point that has been raised by some of the presenters, and the fact is that not all claims are being identified as they should be and appropriately recognized as WCB claims. Why is this happening? You indicated the number of doctors who had responded "yes" in the last six months. Why is this request being made?

Dr Gray: Well, I can tell you why physicians may in fact not be identifying the claims appropriately. I can't tell you why the requests are being made. That's really between the employee and his or her employer. Physicians, though, are hamstrung at the moment by legislation in terms of appropriately identifying the claim to the board.

Under the current workers' compensation legislation, as we understand it, the employer is obliged to report such knowledge of a workplace injury to the board, but the physician is in fact under no such legal obligation. The physician is, however, captured by the Medicine Act and the confidentiality provisions, and if an employee specifically requests that the physician not report, the physician risks, say, a charge of professional misconduct in a college disciplinary hearing if he ignores that employee's request.

Mrs Witmer: Well, I hope that issue will be addressed. That's a very, very serious problem.

Mr Tony Rizzo (Oakwood): Maybe the question's not 100% related to Bill 165, but I think it's important for us to know if the Ontario Medical Association ever considered sending representatives to the Workers' Compensation Board board of directors. Were you invited or were you consulted?

Dr Gray: We have not been formally consulted. We are aware there's been some discussion about the constitution of the board generally. I think if the OMA were offered a place at that table, that would be a decision for our board of directors to make. At the moment, we're not aware of any formal offer.

Mr Rizzo: What is your personal opinion? Would it be a positive move in the direction of getting more of your people involved in the decision-making process?

Dr Gray: I don't think my personal opinion is relevant, sir. It really would be a decision for our board to make.

Mr Rizzo: There was no decision or discussion at the level of your board?

Dr Gray: There has not been.

Mr Steven W. Mahoney (Mississauga West): I think you've been very helpful and responsible in analysing the problems in your position. As you probably know, in my document I envision you having a seat on the board of the WCB because I think your profession is key to resolving many of the problems that exist.

I just want to ask you, however, under the voc rehab part of your presentation you suggest that the board should also consult, in addition to the worker's employer and worker's physician, with the joint health and safety committee or workers' rep and members of the occupational health service team.

You go on, at the bottom of page 2 of your submission, to identify various health professions that are part of that health service team. We've had some of them here before us suggesting that we need amendments to the health profession regulation act to allow them to act in a somewhat independent way to provide voc rehab or services or return to work or identify other job opportunities, all of that kind of thing. Do you support that kind of loosening up of the current regulations?

Dr Cheung: Do you mean that they work independently, not as a team?

Mr Mahoney: No, they would work as a team. In other words, the physiotherapists would be able to work independently on their specific thing, not necessarily under the direction of a physician, but they would be able to provide their services as part of being defined as part of the health regulation act so that they'd have the freedom to work within the WCB, not to exclude physicians, but to -- they are saying to us that they're restricted from acting without having the specific direction of a physician.

Dr Gray: If I could comment briefly, certainly the Regulated Health Professions Amendment Act has liberalized considerably the scope of practice of many of the health professions that you're talking about. It would be my view that if it's within the current RHPA scope of practice of one of those professions to exercise some independent judgement and it can allow that judgement to be communicated, I would have no objection.

If you're asking, should the scope of practice be widened, it's a hypothetical question that's difficult to answer without really knowing specifically what's envisioned. I think a lot of the health professions now have a more liberal scope of practice than they had before, and in fact it may be just a matter of going back and looking at what they're permitted to do under the new RHPA, much of which is new for them now.

The Vice-Chair: On behalf of this committee, I'd like to thank the Ontario Medical Association for its presentation to the committee this morning.

UNITED STEELWORKERS OF AMERICA, LOCAL 1005

The Vice-Chair: I'd like to call forward our next presenters, from the United Steelworkers of America, Local 1005. Good morning and welcome to the committee.

Mr Alan Hodder: Thank you very much on behalf of Local 1005, United Steelworkers of America. My name is Alan Hodder. I'm the benefits chairperson for Local 1005, United Steelworkers. On my right is Mr Rob Butler, a committee person also within Local 1005. Mr Butler will start out on the preamble of our presentation, and then I will close off in closing comments.

Mr Rob Butler: Good morning. Local 1005, United Steelworkers of America, is very pleased to have this opportunity to present our views and comments in regard to the government's intent to amend the Workers' Compensation Act and the Occupational Health and Safety Act through the proposed changes as contained in Bill 165.

Local 1005, United Steelworkers of America, represents 5,600 members at Stelco Hilton works and is affiliated to the United Steelworkers of America with approximately 60,000 members in the province of Ontario. Our local has a very active benefits committee, with a full-time chairperson and four committee persons dealing with all forms of government as it relates to benefits, at an annual cost of approximately $250,000 in lost-time wages.

Workers' compensation makes up approximately 70% of our case load and we make representation from initial entitlement to WCAT on behalf of our membership. Local 1005, United Steelworkers of America, is no stranger to the WCB or government, as we have participated in many forums through consultation, whether it be the Minna-Majesky task force on rehabilitation and service delivery, submissions on Bill 101, or as a very vocal opponent to Bill 162. Primarily, it is the latter which we are most concerned about, as the realities of Bill 162 have now become our most recent nightmares.

Although it is the historic right of government to introduce legislative changes to the act, we feel that it is imperative to review some of these changes and their impact on workers to date.

In 1985, the government of the day passed Bill 101. Primarily, one of the greatest gains for workers in the province was the birth of an independent appeals tribunal, commonly known as WCAT. WCAT was mandated through Bill 101 to be at arm's length of the WCB and have the final say in the appeal process, yet we know now that this has not occurred.

We state this for the very simple reason that the board, through section 93 of the act, has sole jurisdiction as it pertains to the matter of compensation. In fact, the board has used its discretionary powers on two occasions in reviewing WCAT decisions and refused to implement them in their entirety ie, decision 915 and decision 72.

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Bill 101 has also changed the calculation of benefits which a worker would receive from 75% of gross to 90% of net and enacted the indexing formula at 100% of the consumer price index, CPI. The government, by introducing Bill 165, forms a base to change this and we refer to the present proposal of implementing the Friedland formula. We will speak to this in the latter part of our brief and our views on this subject matter.

In 1989, we saw the implementation and passage of Bill 162, which in our opinion was the most retrogressive piece of legislation ever faced by workers in this province since the inception of workers' compensation in 1914.

Bill 162 clearly set the stage for two classes of workers in this province: those who were injured pre-Bill 162 and those who were injured post-Bill 162. It is our opinion that Bill 165 will only add to another class of workers for those who fall under the new proposed legislation. We state this for the simple fact that workers who receive benefits under Bill 165 will no longer receive 100% indexing tied to the CPI unless they meet the criteria as set out by the bill itself.

The Liberal government, when passing Bill 162, hung its hat on the fact that workers injured after January 1, 1990, would have a greater right to re-employment based on the language as contained in section 54 of the act. Yet reality clearly shows that approximately 78% of those workers remain unemployed and in reality are living below the poverty line based on meagre FEL awards after the board has deemed them capable of alternate employment or phantom jobs. The legislative intent, as promised, failed because of two very simple reasons, number one being the fact that section 54 is only an obligation; number two, continuing entitlement to benefit, ie, temporary partial disability, is paid as a result of subsection 54(13) for a maximum period of one year.

Another selling factor that the government promised upon implementation was the fact that older workers who were injured prior to Bill 162 would be guaranteed vocational rehabilitation services. We know in fact that this did not occur, as many of these same workers remain unemployed and never really received true vocational rehabilitation, the reason being, why would the board spend money and resources to rehabilitate this class of workers when many are older and have been out of the workforce for so long, with no transferable skills to make them competitive in today's global economy? Another reason is that many of these same workers, when injured, were at low-level income based on pre-accident earnings and it would make no sense to either retrain them or integrate them back into society.

Bill 162, in reality, when introduced, was supposed to be cost-neutral, but in fact has become cost-ineffective for all the reasons which we have previously stated. By this, we mean that 78% of workers remain unemployed due to the employers failing their obligation under section 54 of the act. Clearly, the government's intent, through Bill 162, was to attack that of benefits for workers and reduce the unfunded liability through cost-saving measures expected from the now dual award system of FEL and NEL. Clearly the unfunded liability is not the responsibility of the workers and benefits should not be addressed as a means of reduction, but in fact the focus must be on, number one, how the board administrates its services and, number two, how employers maintain their respective workplaces.

Truly addressing these concerns through a royal commission study will guarantee a clear directive which the board or government must act upon if the workers' compensation system is to remain viable in the foreseeable future. We must state for the record that our only concern with a royal commission is, once the commission has achieved its mandate of whether there is a better mousetrap, whether it will be binding upon the government which is expected to be elected within the same time frame.

At this point, I'd like to turn the mike over to Mr Hodder.

Mr Hodder: This brings us now to our concerns and views based on the present legislative changes which are being proposed through Bill 165. Although we believe Bill 165 is only a Band-Aid solution to a long-term problem, we support the bill in principle, but with reservations as it is currently written.

We do support the fact that the government will add a $200 increase to the pensions of those who are most in need, that being those who were injured previous to Bill 162. We are concerned by the fact, though, that many of these workers may not qualify based on the proposed criteria as they apply to the supplement issue. It is our fear that a number of workers may fall through the cracks, those being older workers who are over age 65 and did not qualify for a supplement through either subsection 135(4), pre-Bill 162, or subsection 147(4), as contained in Bill 162, and those who were in receipt of a subsection 45(7) supplement prior to July 1989. Clearly, those who receive this income must have the increase affixed to lifetime pensions and the supplement issue must only be used as a mechanism to target those individuals.

Local 1005 also supports the position of a bipartite board of directors, as truly this process should not be a fear factor for both parties. Clearly, history will show that employers and workers have achieved and overcome many hurdles and obstacles when dealing in this forum.

We are, however, concerned by the fact that the employer community has now placed an iron curtain to the process by reneging on the commitment of workers' compensation reform. We will remind the committee that the employer community has had full participation on this issue and refer the committee to the findings as contained in the Premier's Labour-Management Advisory Council report.

It is clear that the employers of this province would rather circumvent the process and not participate, in the hope that a new government, if elected, will succumb to their agenda, that being the attack of benefits for workers as opposed to addressing the real agenda of reform.

Having stated the above, another concern which Local 1005, United Steelworkers of America, perceives is the language as contained in subsection 51(2) of the act, section 8 of Bill 165, which provides for prescribed medical information. Clearly, we see employers abusing the statutory intent by not implementing a cooperative return-to-work program.

It is our submission that the only information the attending physician must supply to determine this question is that of non-diagnostic medical information. By this we propose a simple test, that being: Is the worker partially disabled, and if so, what are the restrictions which need to be accommodated, and for how long?

Local 1005, United Steelworkers of America, and Stelco Inc Hilton works have a long-standing relationship as it pertains to re-employment of injured workers, with a 99% success rate of returning workers back to pre-accident employment with accommodation or alternate employment with accommodation. We have attached to our brief an appendix 1 which will deal with our specifics that pertain to Bill 165 and the amendments which we propose.

Bill 165, in our opinion, will not change the statistical data which implies that 78% of workers under Bill 162 remain unemployed as a result of section 54 of the act. It is our submission that we believe Bill 165 certainly takes a step in the right direction by amending sections 53 and 54 of the act, but does not go far enough. Until such time that the statutory right guarantees "mandatory," versus "obligatory," these numbers will increase.

One of the fundamental flaws in this approach is the simple fact that benefits, once determined as an employment issue, switch from clause 37(2)(b) of the act and administratively revert to section 54 for payment purposes. Many employers would rather pay the penalty as contained in section 54, as opposed to meeting the statutory obligation when compared to the feasibility of accommodation or modifying employment. The board justifies the employer stance by imposing a fine, if any, and rejecting any further entitlement to rehabilitation after one year. Thus the worker is left out in the cold with no benefits or moneys.

Bill 165 must be worded to make section 54 of the act mandatory, and benefits should not cease for the worker once the employer fails the obligation. We agree with the fact that those employers who do have real programs which re-employ workers and who are reducing frequency and severity in their respective workplaces should receive rebates as it pertains to NEER.

There has been much discussion during these hearings about the issue of experience rating and the impact Bill 165 will have on an employer's ability to access assessment rebates. To fully understand employers' concerns, let us investigate the facts.

Experience rating in Ontario was introduced in 1984. It's purpose was to shift a greater degree of the responsibility for workers' compensation costs from the industry rate group as a whole to the particular employers actually incurring the injury costs.

The original intent of experience rating was to serve as an incentive for employers to reduce both the number of workers injured and the length of lost time by encouraging the employer to establish and maintain safety and prevention programs and to assist the worker to return to work as soon as possible. Experience rating programs ultimately make a firm responsible for its own injury costs to varying degrees. Employers with claims costs above the industry average must pay a surcharge or an increase in their assessment rates. Firms with costs below the industry average receive rebates or refunds or a lower assessment rate. The adjustment to the employer's rate is based on the employer's past claims experience.

It is important to know that this program was not designed to increase the assessment revenue but to rather more fairly allocate costs among larger employers and encourage appropriate safety initiatives.

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Although the intent to encourage return to work and health and safety initiatives was accepted by labour, the experience has been to date that, while employers have continued to access rebates, in too many cases the rebates have been achieved in a dubious manner.

Instead of implementing or improving return to work and health and safety programs, many employers have found it easier to manage claim costs with a different focus. In order to reduce their accident frequency and duration ie, costs, employers have coerced employees into not claiming workers' compensation, engaged in the hiding of claims, frivolously appealed initial entitlement and/or further benefits, avoided employing accident- prone employees, and spent enormous resources on accessing claim cost relief from the second injury enhancement fund, otherwise known as SIEF. By offering bonuses and monetary incentives to employees under the guise of reducing accidents, they have instead used coworker peer pressure to reduce the reporting of accidents.

By using these methods, many employers have been able to master the means of achieving maximum rebates.

Although it was originally anticipated that refunds and surcharges would balance out, in practice, perhaps because of some of the aforementioned employer abuse, refunds have exceeded surcharges by as high as a ratio of three to one.

For example, in 1985, $13.6 million in refunds were paid out as opposed to $8.9 million in surcharges being assessed. In 1993, a whopping $282 million was refunded while only $95 million was surcharged. The difference in moneys paid out versus moneys collected is called the off balance. Since its inception, the experience rating system has witnessed a total off balance of approximately $500 million.

The business community has stressed over and over again the urgency of financial accountability, yet employers have not entertained discussions on the merits of experience rating in terms of fiscally responsible programs. Unless reforms are made to this present system, experience rating will continue to exist as nothing more than an employer cash cow rather than the accident prevention incentive it was intended to be.

Bill 165 attempts to rectify the occurrences of employer abuse by amending the procedure in which an employer can be subject to either a rebate or a surcharge. Accident frequency and duration will continue to be the cornerstone of the rebate-surcharge determination. However, these two components will be augmented by additional criteria.

The amount of rebate surcharge will include consideration of the employer's health and safety practices, vocational rehabilitation practices, return to work programs, and any other programs the board may consider appropriate. In other words, changes to an employer's statutory assessment will be influenced by the degree to which they demonstrate their earnest desire to prevent and rehabilitate injuries.

So why are the employers worried about the amendments to experience rating? The answer is that good employers, those that already are conscientious about health and safety and re-employment, have nothing to worry about. In fact, many may even notice an increase to their rebate due to the new formula. However, employers who in past years have assessed rebates only through hiding and contesting claims will need to change their practices or observe a negative impact on their assessment monies.

The cries we hear about the unfair audits by the WCB police and complaints of unnecessary bureaucratic red tape are nothing short of a smokescreen. Other jurisdictions in Canada have proven that if financial incentives are tied to improvements in health and safety programs, accident prevention will become a priority.

Alberta and the Yukon are two examples of provinces that require an employer to undergo comprehensive evaluations of health and safety programs before the allowance of rebates. Employers must remember that one of the fundamental principles of workers' compensation was that it be funded collectively by employers. Experience rating is a system designed to reward employers that make the workplace safer and healthier for its employees. It was not designed to benefit those who merely appear to be conscientious.

Consider the following analogy. In Toronto, a home owner has a statutory obligation to keep their sidewalk clear of snow. Failure to comply with this bylaw results in a fine that is over and above the taxes already paid on their property. However, if a home owner consistently complies with the law, although they receive no penalty, they are unable to access any type of rebate. Why should an individual experience a financial reward for merely fulfilling their legal obligation?

If the financial situation of the WCB system is truly in dire straights, as suggested by almost every employer presentation we have heard, perhaps the government should consider eliminating the merit system of experience rating. If not the government, certainly the new financial responsibility clause should force the board of directors to investigate the cancellation of this incentive program that will result in savings equalling hundreds of millions of dollars annually.

On second thought, maybe employers will agree that the proposed changes to experience rating aren't so bad after all.

Local 1005, United Steelworkers of America, states emphatically that we do not agree with Bill 165 adopting the Friedland formula as it pertains to the indexing of benefits. This should not be used as means for a cash cow to reduce the unfunded liability and the inflated costs attached to it.

Clearly, this will be part of the question that the royal commission must address when it reports back to the government on future funding.

If benefits for injured workers are to be reduced, then clearly the cap must be reduced. The CPI is the only true measure by which injured workers can have their earnings protected against inflation, as statistics will show that many remain unemployed and living on fixed incomes which are below the poverty line.

In conclusion, we urge the government not to cave in to the demands of the employer community, as their fears are unjust. The unfunded liability should not be the central focus in this debate, as workers continue to be at the mercy of the system as it currently exists. We will remind the government of the historic compromise achieved in 1914, that being fair and equitable compensation for injuries which arise out of and in the course of employment. Truly, along the way there has been a breakdown of the original intent, yet it should not be the workers who are compromised as a result of this failure. Again, we look forward to addressing the real issue of change, and clearly the only forum for this venue should be the royal commission.

We look forward to any comments or questions this committee may have, based on our submission.

The Vice-Chair: You've gone over your time so there won't be any time for questions or comments, but on behalf of this committee, I'd like to thank the United Steelworkers of America, Local 1005, for its presentation to the committee this morning.

CP RAIL SYSTEM

The Vice-Chair: I'd like to call forward our next presenters from the CP Rail System. Good morning and welcome to the committee.

Mr John Taylor: My name is John Taylor. I'm director-general, government and industry affairs for CP Rail System. With me is Jean-Louis Masse, assistant vice-president, risk management and actuarial services for CP Rail; Jim Madge, solicitor, Canadian Pacific legal services; and Charles Sheehan, general claims agent for CP Rail System. We're also accompanied by John Cuthbertson, who is a safety and loss control officer for CP Rail System.

Believe me, we're not trying to overwhelm people with numbers, we're just trying to bring along the breadth of areas that are involved within our company.

CP Rail would like to thank the standing committee on resources development for this opportunity to comment on Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act.

As a federally regulated company, with railway operations in Ontario and most other provinces of Canada, CP Rail has a major stake in ensuring that Ontario workers' compensation regime is effective, manageable and stable for all parties with an interest in the system: workers, employers, the government of Ontario and in fact, we believe, all citizens of this province.

The status quo is not acceptable. CP Rail is very concerned about the stability and financial integrity of the workers' compensation program in Ontario. According to the WCB's 1994 second quarter report, as at June 30, 1994, the WCB's unfunded liability stood at approximately $11.7 billion. In the first six months of 1994 alone it grew by $181 million, a staggering increase of about $1 million a day.

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The business steering committee indicated in its written submission to this committee that without real reform in the system, the unfunded liability will stand at $31 billion by the year 2014. The business caucus of the Premier's Labour-Management Advisory Committee, in its presentation of November 17, 1993, to Premier Rae predicted that the unfunded liability could in fact soar to as high as $52 billion by the year 2014.

CP Rail System agrees with the vice-chair of administration and chief executive officer of the WCB, Mr Kenneth Copeland, when he stated in the WCB 1994 second quarter report that, "The status quo is not acceptable and the system must be improved."

The general effects of Bill 165: By Premier Rae's estimate contained in his letter dated July 18, 1994, to the president of the Board of Trade of Metropolitan Toronto, Bill 165 is expected to have the effect of reducing the projected $31-billion unfunded liability as of the year 2014 by $18 billion. Assuming that estimate to be accurate, this would result in an unfunded liability of approximately $13 billion by the year 2014 or a $1.3-billion increase from today's level. This would represent a slowing of the rate of growth of the unfunded liability and as such could be regarded as a step in the right direction.

However, we urge the government to pursue even greater financial responsibility by working towards absolute reductions of the unfunded liability.

Should the correct level of the unfunded liability by the year 2014 be instead the PLMAC prediction of $52 billion, it becomes obvious that additional measures will be necessary in the not too far distant future in order to check the escalating liabilities.

Of course, these are all only estimates; perhaps best- and worst-case scenarios. This company submits that any debt level within such a range is unacceptable and potentially disastrous. No one can predict the future with certainty. However, it's evident that a regular valuation and monitoring process should be embodied in the system in order for the true total costs of the program to be known to all interested parties before practices or benefit provisions are modified. The system's financial responsibility and accountability must be re-established. Only by implementing a system that is sustainable and cost-effective will a true solution to this urgent problem be found.

CP Rail is a concerned stakeholder. As an employer of approximately 5,400 Ontarians and as a company engaged in a service industry integral to the vitality of the production and distribution sectors of the Ontario economy at large, we are especially interested in Ontario's ability to attract, retain and support a strong industrial base. The companies engaging in business in Ontario are CP Rail System's customers. If they are negatively affected, we are negatively affected.

For the protection of the workers' compensation system as well as the economy of Ontario, real and effective changes are urgently needed. Bill 165 proposes some measures which are steps in the right direction. Other measures, however, appear incomplete and do not go far enough. Others need reconsideration. Our specific comments on the various provisions in Bill 165 follow.

Financial responsibility and accountability: CP Rail System recognizes that section 12 of Bill 165 proposes that the WCB board of directors act in a financially responsible and accountable manner in the performance of its duties. We agree that financial responsibility and accountability are very important controls necessary for effective management. However, Bill 165 does not go far enough. Financial responsibility and accountability should be extended to include the executive officers of both the WCB and the Workers' Compensation Appeals Tribunal. It is also our strong belief that nothing would be lost and much would be gained if the same principles of financial responsibility and accountability were also entrenched in the purposes provision.

Section 1 of Bill 165 proposes to add a new section to the Workers' Compensation Act setting out the purposes of the act. It is submitted that this proposed amendment is inadequate in that it fails to provide for the workers' compensation system to be administered in a financially responsible and accountable manner in keeping with the best interests of all stakeholders.

The purposes provision does refer to providing fair compensation. However, given the absence of financial responsibility and accountability as expressed purposes of the act, it leaves it open to the WCB to widen the scope of recognized claims and increase benefits beyond the means of the system.

Section 15 provides that the WCB is to monitor developments in understanding the relationship between work, injury, occupational disease and workers' compensation so that generally accepted advances in health sciences and related disciplines are reflected in benefits, services, programs and policies consistent with the purposes of the act. But the only restraint this provision places on the WCB is that the WCB is to evaluate the consequences of its changing awards to ensure that the purposes of the act are achieved.

We are opposed to the enlargement of areas of entitlement. At a minimum, enlargement should only take place after explicit analysis and consideration of the costs and effects of these decisions on the system.

The indexation formula: The Friedland formula for indexation is in our view a noticeable improvement over the current indexation formula. However, we contend that the effectiveness of the proposed change is significantly diluted by limiting the scope of the formula's application. It is submitted that the exemptions should be deleted, thereby increasing the indexing provisions' effectiveness in ensuring the system's viability.

Increase in pensions: Section 32 of Bill 165 proposes that an additional $200 per month be paid to certain claimants. In his address before this standing committee, the former Deputy Minister of Labour estimated that this payment would be made to approximately 40,000 persons currently.

We question the necessity of providing such supplements to pensions at this time. The additional costs are considerable. The BSC indicated in its written submission to this standing committee that the real effects will be to increase the unfunded liability by more than 10% or approximately $1.5 billion immediately.

At a time when the financial integrity of the system is of concern, we question the prudence of these increased payouts without some safeguards. If additional pensions must be granted, we submit that the dollars should be directed towards those individuals with greatest need, and that at the least, the additional pensions be terminated or substantially reduced at age 60 or 65 when other benefit programs such as the Canada pension plan and old age security become available.

Duplicated benefits: CP Rail System supports the bar to WCB compensation where compensation is being received from another jurisdiction in respect of the same accident as provided for in section 3 and subsection 15(2) of Bill 165.

Obligations to re-employ: Section 10 of Bill 165 proposes to allow the WCB to determine on its own initiative whether the employer has fulfilled its obligation to re-employ. We submit that the merits of expending time and resources determining such matters where no complaint has been made are questionable. The present system, which is triggered by worker complaint, is working well and should not be changed.

Vocational rehabilitation: Section 9 of Bill 165 provides that the WCB shall, where required, design and provide a vocational rehabilitation program for injured workers in consultation with the worker, the employer and, if possible, the worker's physician. Sections 27 and 31 of the bill purport to allow the WCB to order a penalty payment against an employer who fails to cooperate in vocational rehabilitation services or programs. The powers to assess such a penalty and to determine the amount are completely within the discretion of the board. There is no indication of any limits or guidelines, or of any grounds upon which the employer may object.

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CP Rail System is concerned that valid objections about the design and implementation of vocational rehabilitation may be determined by the WCB as being uncooperative and result in a penalty being assessed. The legislation should establish specific criteria against which all parties can measure their performance and establish programs of due diligence. Levels of penalty and grounds for appeal must also be established.

Section 8 of Bill 165 provides that medical information may be released from a physician to an employer only with the consent of the worker. The employer is required to cooperate fully with a view to the timely rehabilitation and re-employment of the injured worker, but there is no corresponding obligation on the worker to likewise fully cooperate in this particular regard. This provision allows a worker to impede the flow of medical information necessary for an employer to effectively participate in the development of the worker's rehabilitation program and re-employment process.

CP Rail System submits that sections 8, 9, 27 and 31 of Bill 165 are not consistent with fostering a cooperative spirit on the part of the employer and worker and are counterproductive to the motivation required by all stakeholders in promoting the purpose of the workers' compensation system.

On the question of mandatory mediation, section 21 of Bill 165 requires the WCB to provide mandatory mediation services with regard to certain issues relating --

The Acting Chair (Mr Noel Duignan): I must interrupt. You've got approximately about two minutes left to finish your presentation.

Mr Taylor: Fine. Thank you. The entire process could be made very time-consuming by mandatory mediation, and it requires the WCB to increase its services at a time when its resources are already stretched to the limit.

Independence and impartiality: We respectfully submit that the WCB will be effective and credible in the exercise of its duties only if it is truly independent of the Ontario government, that it has the requisite competence and staffing to deal with issues placed before it and if it deals with these issues in a consistent and impartial manner. We are concerned that several proposed amendments will have the effect of eroding the effectiveness and credibility of the WCB's actions and decisions.

Section 16 provides that policy direction is to be dictated to the WCB for one year by the minister. Further, it requires that the WCB report to the minister whenever it acts or decides in a manner that related to policy direction. In addition, section 17 provides that the minister and the WCB are to enter into memoranda of understanding in regard to several integral areas affecting the operation. This could be used to extend permanently the ability of the minister to dictate policy to the WCB.

Requiring the WCB to report to the minister every time policy touches upon its actions or decisions makes no sense operationally. Not only is such a provision inefficient, but it also will have the effect of fundamentally impairing the WCB's ability to act and decide. It is essential that the WCB remain independent and impartial. The politicizing of WCB policy must be strongly discouraged, and in this regard, sections 16 and 17 should be deleted.

In conclusion, as we have noted, there are elements of Bill 165 that CP Rail System supports. However, a number of improvements are needed, and they are urgently needed, in order to ensure that Ontario has an effective and manageable compensation system that is both secure for injured workers and allows business to remain competitive and viable.

During these hearings you have heard from many representatives of the employer community who have recommended that Bill 165 be withdrawn. CP Rail System asks you to seriously consider this recommendation. Failing that, we urge you to implement changes to Bill 165 consistent with our comments today.

We thank you very much for your attention.

Ms Murdock: In the presentation in Ottawa we did get a chance to talk outside. I don't know whether CP has a modification or a return-to-work program so I don't know if you'd have time to even briefly state what it is.

Mr Charles Sheehan: As a matter of fact, we are working on a return-to-work program and at this very moment we are meeting with labour representatives in Montreal.

Mr Mahoney: I'd like to ask you how you'd feel about being moved from schedule 2 to schedule 1, which some people in this room might like to do to you. But I would rather ask you a question around the unfunded liability. Why, in your view, is it necessary, when the liabilities of some $17.2 billion against the assets of some $6.8 billion are required to be paid out over a 25-, 30-, 35-, 40-year period down the road, to have $17.2 billion in the bank today to cover $17.2 billion in long-term liability?

Mr Jean-Louis Masse: I guess our main message is to control the growth of the liability. Liabilities have to be paid in a consistent and regular manner. It may create other problems to have assets equal to the liability, as you're suggesting. That may not be necessary. But a substantial reduction in the liability and a measure of the financial implications of future changes to your actions or provisions are important so that you know where you're going.

Mr Ted Arnott (Wellington): I have a question about the experience rating system. Of course, this bill changes the experience rating system which, in the past, has been a results-oriented incentive for employers to improve their workplace safety records. How will the changes that the government is proposing, to make it a more bureaucratic, audit-based approach to experience rating, affect your company?

Mr Jim Madge: As far as CP Rail System is concerned, it doesn't directly affect it that much in the sense that as a schedule 2 employer we pay dollar for dollar, plus the administration fee. So it's not a question of affecting ability to either reduce the premium or be penalized with a heavier premium.

It ties in more, with respect to our company, with the customers and their ability to be able to cope with a program that, in effect, disregards experience and looks more at a specialized program of return-to-work or rehab, whatever.

The Vice-Chair: Thank you very much. On behalf of this committee, I'd like to thank CP Rail System for bringing us their presentation this morning.

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OFFICE OF THE WORKER ADVISER

The Vice-Chair: I call forward our next presenter, from the office of the worker adviser.

While they're coming forward, I'd just like to indicate to the committee members that the Ontario Chiropractic Association is here. Unfortunately, they will not be able to be scheduled in the public hearings, but their presentation will be handed out to all the committee members.

Good morning and welcome to the committee.

Mr Alec Farquhar: I'm Alec Farquhar, director of the Office of the Worker Adviser and I'm very pleased to be here with you today to present our views on Bill 165.

The package that is being given out contains a full brief, an executive summary, and what I'll be working from today are the notes for the presentation which really are hitting the highlights. I would urge you at your convenience to take a look at our brief. We've provided a lot of statistical background and detail that might be of use to you in your deliberations. I'll get right in to my comments.

The office of the worker adviser is in a good position to comment on Bill 165 because of our unique role as an agency advocating for injured workers. We deal with around 30,000 new requests for assistance each year. We have 15 offices in every major centre of Ontario. We represent a significant proportion of workers at all the appeal and review levels in the system, so we encounter the workers who are having problems with the system, and we try to help them resolve them as best possible.

Before getting into comments on the bill, I'd like to just take us 20 years back to when I got involved working with injured workers. That was 1973 in law school, and we encountered a system where we assumed that many of the workers we met would not be able to return to work after their injury. There'd be no job for them. There was virtually no legal protection for return to work for injured workers. We assumed they'd get little voc rehab. The WCB's programs were rudimentary at best. Lots of people got no rehab. The board was very compensation- and benefit-focused. They thought of themselves as an agency whose prime role was to pay out benefits.

We assumed the extent of workers' injuries wouldn't be fully recognized because of the role of board doctors, and we assumed we'd be dealing with a centralized, Toronto-based hierarchical structure that wouldn't be able to respond to our needs. I know there are many employer organizations that share that same view on the latter point, that the board wasn't that responsive to their needs either.

All of this meant that we fought for injured workers' benefits. We focused on getting money for them to make up for what they'd lost and the fact they were unable to return to work, and in our brief you'll see, I think, some shocking statistics of the extent of the failure of the system and the failure of Ontario's employers to get workers back to work. Depending what statistics you use, anywhere from 30% to 40% of all the workers with a permanent disability award prior to 1990 are unemployed.

Depending on the statistics you use, up to 80% of a similar group, injured since 1990, and unfortunately we're comparing apples and oranges a bit because the systems are different, are unemployed following injury. It looks as if for injured workers in Ontario, having an injury for up to four out of 10 of them, and maybe even more in the new system, is a sentence of lifetime unemployment. That's a system that needs drastic change.

Much has changed in the 20 years I've been advocating for injured workers, and I try to sum up in the presentation here really the two key changes: First of all, a greater emphasis on prevention, rehabilitation and return to work; second, a greater emphasis on empowering the workplace communities in the system, opening up the system to them. We've had an equalization of the number of members for employers and workers on the board. I'll give you what I hope isn't a controversial opinion but perhaps finding the solution is going to be difficult.

I believe, and on behalf of the OWA I would say, that whatever views workers, employers and members of this committee might have on this specific bill, the challenge for all of us is the same and the challenge is that we must find ways for workers and employers to reach consensus on key issues. We must find as many win-win solutions as possible, focusing on prevention, rehab and return to work. At the highest levels and in every workplace -- in other words, the leaders of business, the leaders of labour, the local leaders of business and labour, in every workplace in Ontario that the act applies to -- we have to build partnerships that ensure dignity and work for injured workers and keep the system affordable for employers and the economy as a whole.

That's a tough job. Right now the two communities are very polarized, and I hope that your work will contribute to restoring a consensus approach. It's going to be tough but it's happened before, and I give you an example in the notes here. In 1991 and 1992, a bipartite task force of employers and workers with representation across the province reached consensus on 12 key areas of change to the system. That was the Chairman's Task Force on Vocational Rehabilitation and Service Delivery. I worked at the board then, I supported the work of that task force and its work has resulted in an action plan. Consensus on key issues was reached. They were operational on service delivery issues but essentially it was shown to be possible, and I think this bill opens up further areas for cooperation, consensus and building that partnership.

I'll turn very briefly to the bill, because I do hope to leave a little bit of time to have questions, and I'll go through quite briefly touching the high points. What I've done in the notes is I've given you our proposed amendments. I won't go into them in detail here.

Purpose of the act: I support strongly the addition of a purpose clause to the act. It's vital to describe the fundamental, substantive objective of the legislation, and I believe the description in the bill is appropriate.

Governance: I believe bipartite governance will require that the workplace parties reach consensus, and the OWA's position is that we agree it's the most desirable way to govern the system. It'll help us build those partnerships at the provincial, local and workplace levels that must exist to ensure an effective workers' comp system. Imagine if, in five years, all of us can look back and say that something was done here that helped build that partnership. I think it would be a tremendous achievement and something everyone could be proud of.

Vocational rehab and re-employment, in my view, is the key, the nucleus, of the financially viable system. I've given you the statistics on the unemployment rate of injured workers; it's shocking. It's a failure by our society to reintegrate people into the dignity of work. The bill presents a framework for voc rehab and re-employment cooperation among employers, injured workers and the medical profession that could lead to real improvements, and what I've done here is I've proposed some changes that I believe are in the spirit of the legislation that would focus it more on some of the needs I've identified in terms of injured workers.

First, provision of medical reports: This would ideally support a meaningful exchange of information among the voc rehab partners, including the medical profession, which is essential to re-employment programs. I'm worried about the way it's currently drafted because I believe it could permit uses by employers which were not intended and wouldn't fit in with the re-employment objective.

What I've set out here in page 6 of the notes are some pretty simple amendments that say that the medical information will be provided when there is cooperation by the employer in a voc rehab or return-to-work program. We don't want to be giving out information for negative purposes, but for positive purposes. On page 7, we have some language regarding clarifying the consent requirement by the injured worker.

At the bottom of page 7, we speak a little bit about the need for a no-reprisals clause in the act. That is where a worker, for good reason, doesn't consent to disclosure. We want the worker protected from adverse consequences, and this kind of language is in many pieces of labour relations legislation, notably, I believe, the Occupational Health and Safety Act. We give a sample draft of that on page 7.

Voc rehab services for employers: The intent of this amendment, in our view, is to help employers understand the benefits of bringing workers back to work, to support employers in learning how to accommodate disabilities in work area and in job design and to help employers become more active and cooperative in voc rehab. These are aims that must be supported, in my view.

We'd like, as we did with the medical provision, to clarify that the employer's involvement in voc rehab should be focused on situations where they're cooperating in return-to-work and rehab efforts, not simply allowed where perhaps they're concerned about cost consequences but have no intention of helping that worker get back to work at their workplace or anywhere else.

Again, the language on page 8 and 9 is an attempt to clarify and focus the intent on the cooperative situations, and there are a couple of ways of going about it. One way we set out, and another way I'm perfectly satisfied with as well, on page 9, is the OFL's amendment. They are different ways of doing the same thing.

On page 9 we speak briefly about re-employment, and there what the bill does is it gives the board the opportunity to be proactive in re-employment. The Office of the Worker Adviser represents by far more injured workers in the re-employment process than any other single agency in the province. What we've noticed time and again in the hundreds of cases we do every year is that often the board is reactive; it waits for an application, it waits for time to pass. A notice of fitness is sometimes issued after the worker has returned to work, or perhaps after problems have developed. The amendment would allow a proactive approach.

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What we do on page 10, from our experience in case work, is set out another list of areas where we believe action could be taken to improve the re-employment process. I won't give you the details, but essentially it's about various ways to better integrate workers back into the workplace.

On page 11 we look at the mediation provisions. We welcome these provisions because they provide an opportunity for swift and fair resolution of disputes. A very common situation unfortunately now, especially in re-employment, is while it's supposed to be a fast-track process, it often takes many months.

We do make comments on page 11, though, about the need to ensure standards for these mediators, the need to ensure that if the worker needs a representative that would be available and the time limits could be extended to accommodate that, the need to ensure we have a final hearing at the board before it goes to WCAT. I'm really worried that if we don't have that final hearing, WCAT will be swamped with re-employment matters. So our language on page 12 is aimed at fixing those aspects of the provision, but the idea of mediation, the approach that tries to reach consensus on a case-by-case basis, we welcome that.

Experience rating, page 12: The language in the bill and the amendment that's been proposed will, I believe, balance employer concerns about the preservation of a cost and frequency basis for experience rating and the need to add new factors. On page 13 I mention that this amendment will essentially add some way of auditing or reviewing employer rehab and re-employment practices, and of course prevention practices, to the list of factors which will influence assessments. This way, we think we will encourage employers not to be afraid that a general program they might introduce, which might initially lead to more claims being recognized or reported, will prejudice their assessment rate. We believe if we can add in the audited health and safety and re-employment practices, we will create a holistic experience rating program that will really meet the needs of workers and employers.

I know there's a lot of concern in the employer community about the auditing and how that would be done. I strongly believe that if we jointly involve workers in the workplace, through their unions especially, and employers in that auditing process, you're not going to see bureaucracy; you're going to see a problem-solving approach that will really work for workers and employers and is already working in workplaces.

On page 13 we highlight the shocking statistic that there was an off-balance in experience rating of $187 million in 1993; $187 million more awarded in rebates than charged by surcharge. That figure, just for example, would more than pay for the $200 a month that's being proposed as additional benefits to injured workers. It's at that kind of level.

We strongly advocate making experience rating revenue-neutral, so that the bad actors are paying for the rebates that are given to the good actors, instead of the immense off-balance we saw last year. I will add that historically that's by far the highest. It was a bit less in previous years but it's been a growing problem, and I understand we're headed for a pretty large off-balance this year as well.

On page 14 we look at the $200 a month. It's a change we welcome. I know these are tough times. It's a real, although modest, step to deal with all these unemployed workers who've been outside the workplace for many, many years on small pensions. We welcome that as well as the government's announced intention to avoid a clawback by family benefits and general welfare.

When I think of the $200 a month, I know it's a cost item to employers, but I think of people I know, workers I know, what it'll mean to them and their families, people who've in some cases been unemployed and on disability pensions since the 1950s, the 1960s and 1970s. Their families have suffered from this and they deserve some recompense. We argue strongly for the addition of one more group, those workers who are currently over age 70 who were unemployed and in receipt of the older worker supplement before they turned 65. But we welcome the provision.

Indexing's a tough issue. That's the last one I'll speak to. Ideally, in a perfect world, the Office of the Worker Adviser would rather solve the problem without the Friedland formula, and we advocate here on page 15 a cost-reduction strategy based on aggressive prevention and re-employment practices.

We'd also like to see tougher revenue measures by the board to force the 20,000 employers that are estimated, although covered, not to be registered -- give them a bit of an amnesty or something, but then make them register and pay their premiums. We advocate getting rid of the off-balance. That would save the system a lot of money, and in the longer term covering all employers at a fair rate to account for the fact that our economy's changing. That's something that's not before you.

If we can't do anything about Friedland, in terms of withdrawing it or otherwise proceeding without it, I've got some proposed changes on page 16. The top of the list is a withdrawal of the 4% cap. I believe there would be little cost consequence to this. My understanding is that the cost projections didn't really take the impact of the cap into account during times of high inflation.

Another change we'd like to see is to look at extending the exemption to some new groups, groups similar in characteristics to the ones that were exempted in the original drafting of Bill 165, and I list some examples on page 17, workers injured since 1990 who are currently age 55 or older, workers who return to work at a significant wage loss with a large FEL award etc.

And then the royal commission, we support and hope that it's a real opportunity for employers and workers to learn more about the system and about possible solutions. I'm serious about consensus. Consensus could mean give and take, but we've got to strive for it. I've left a little time for questions and would welcome any of them that you have now.

Mr Mahoney: The issue of the off-balance, you've got to help me with this. It seems to me on the surface that if you have an incentive plan that is to give incentives to companies to be good actors -- I think your term was good actors, bad actors; and we have more good actors than bad actors -- we're going to see accident rates go down, both in number and severity. If they go down, rebates are going to increase. Your suggestion is that we need an equal amount of rebate to surcharge, which the simple implication would be an equal number of bad actors and good actors. That simply makes no sense to me at all.

It would seem to me, on the surface, that if the rebates have gone up, there's a problem identified that workers are being intimidated not to file claims, and I accept that this happens, and that's got to be stopped, but by and large, if the off-balance is as high as it is in favour of rebates, and the accidents we know are down, which some will argue is the economy etc, there's a balance here that just -- why would you equalize those things?

Mr Farquhar: Okay. I think it's a very good question, and I don't think I could do justice to it in a 30-second answer, but what I'll say is this. Under the current system, it was established to be revenue-neutral, and it's somehow gone off balance, and I believe for revenue purposes, we've got to resolve the off-balance.

I agree in the longer term, if we can really show that the good actors do outnumber the bad actors, and I'm not sure the current statistic really shows that, we could look at a longer- term situation where rates go down. I would personally prefer a system where we balance the rebates and surcharges and then the whole system benefits from the payoff of gradually reducing rates. I think designing that is going to be a challenge. Rather than assuming that the current system is really measuring what we want to measure, and letting it stay off balance, I think we've got to distinguish between the current system, making it balanced, and the future system which could well generate long-term savings, and you could justify looking at an off-balance as long as it's documented, but under the current system, I think we've got to balance it. It's a haemorrhaging in the system that's -- $187 million is getting close to 10% of the board's revenues for 1993.

Mrs Witmer: Thank you very much for your presentation. It appears that you're pretty well supportive of Bill 165 and you've made a few small recommended amendments to the bill.

I'm sorry that you didn't also take the time to demonstrate where savings could be achieved within the system. I know there's a lot of frustration with the Office of the Worker Adviser. We know that from our staff in our constituency offices, and I think that type of information might have been very helpful.

Mr Farquhar: In the brief there's more of that, but a statistic that's quite valuable in the board's report on the unfunded liability, for every 5% improvement in return-to-work rates, we save 15 cents on the $3 rate. That's the assumption of the aggressive return-to-work strategy. The off-balance removal would save from $100 million to $190 million a year. The revenue collection measures that I mentioned, it's a bit harder to estimate, and I don't have those statistics available to me, but 20,000 employers, even at an average payroll of $100,000 each, you're looking at a dramatic revenue increase for the board. So I have suggested some that I think are quite costable.

Mr Derek Fletcher (Guelph): Thank you for your presentation. It's a pleasure to be here. I'm just wondering about the rebates and what Mr Mahoney was touching on. We know there are some companies that would rather a person not file a claim on the WCB. In fact, I know some companies where if a person is hurt outside the workplace and goes on weekly indemnity, that's fine, but if a person is injured at the workplace, sometimes it's: "We have light duties right off the bat. We don't have to file a claim." That tends to keep some of the reporting down, and some of the accidents down. The rebate is also based on that with the findings that they have.

Do you honestly believe that under the present situation where this does happen -- I'm not saying it happens everywhere but it does happen -- that perhaps the rebate situation is not the way we should be going? Perhaps we should be looking at a different form of incentive when it comes to accident free rather than a rebate so that the money can get back into the system and it's not being a drain.

Mr Farquhar: I guess there are two questions, one is distinguishing, as I tried to do, between the current and future systems. Currently, I don't believe we have strong enough evidence that could justify allowing the off-balance to continue. In a future system, you might conceivably be able to look at an off-balance situation.

I think financial incentives of some kind are really important, and whether they are done by rebate or simply perhaps by forgiving part of next year's assessment or by some other flow that the employer can measure as being of benefit, I believe that to abandon some form of varying the assessment rate, depending on your success in health, safety and rehab, would probably be a mistake. It's the form, the way we do it, that's really at issue here.

What I welcomed in the bill was making it a more holistic assessment. We encounter, as the Office of the Worker Adviser, a lot of employers who really want to cooperate with the system and bring their workers back to work, who want good health and safety programs. They're competing with bad actors who hide claims and engage in all kinds of avoidance behaviour. They come to us saying: "How can we compete? We've got to start acting like these other people." I'd like a system that encourages proactive prevention and return-to-work programs and really measures the costs, rather than one where it can be manipulated by hiring a consultant or whatever.

The Vice-Chair: On behalf of this committee, I'd like to thank the Office of the Worker Adviser for bringing its presentation to this committee this morning.

The committee recessed from 1214 to 1404.

The Vice-Chair: It's my understanding that we have consensus among all three caucuses that the amendments, wherever possible, will be submitted to the clerk by Thursday, September 22 by 5 pm, and again this doesn't preclude new amendments coming while we're in clause-by-clause. But for the convenience of the committee members, they'll try to have them out to each of the members' offices by noon on the Friday so we'll have a chance to look at them before we get into clause-by-clause.

ONTARIO SHEET METAL WORKERS' AND ROOFERS' CONFERENCE

The Vice-Chair: Our first presenters for this afternoon are the Ontario Sheet Metal Workers' and Roofers' Conference. Good afternoon and welcome to the committee.

Mr Jerry Raso: My name is Jerry Raso, and to my right is Mr Scott MacDougall. We are here today on behalf of the Ontario Sheet Metal Workers' and Roofers' Conference. The conference represents presently over 10,000 unionized construction workers in the province of Ontario, both sheet metal workers and roofers. Up to a few years ago, we had over 15,000 members, but with the recession in the economy we're now down to 10,000.

The conference is very pleased today to be able to have this opportunity to comment on Bill 165. Coming from the construction industry, our union is very, very active and concerned with workers' compensation issues, and it goes without saying that the construction industry has a very high, disproportionate share of injuries in Ontario. It's a very dangerous industry, we have a lot of our members forced on to workers' compensation, and because of that we're very active in Bill 165 and all workers' compensation issues.

At the start, we'd like to say there are elements of Bill 165 that we support. We are very, very pleased to see this government initiate reform in the area of workers' compensation. There are a lot of issues in workers' comp that have to be dealt with. Again it goes without saying that the workers' compensation system is presently not serving our members. We have a very high rate of accidents; we have many members who are not being compensated for accidents they should be compensated for; we have members who are undercompensated; and we have a lot of members who are not getting back to work and who are not receiving the vocational rehabilitation that they need and that they deserve.

Elements in Bill 165 that we do support: First of all is the proposed $200 increase for older workers who were injured before 1989 and who are still unemployed. For those people, that is an emergency issue. It is not a matter of charity, but it is a matter of justice. These people have been denied justice for too long. A lot of them are living in poverty, living on welfare, and this has to stop. The $200 is not going to solve the problem. I mean, we all know that $50 a week does not go very far, but at least it's a beginning.

We support the introduction of the purpose clause, which clarifies that the purpose of the bill is to help workers who are injured or who suffer occupational disease.

We fully support the creation of a bipartite board of directors, and we fully support the creation of the royal commission, which will study not only full and all-encompassing reform of the workers' compensation system but will also look into a universal disability system, which our union supports.

Unfortunately -- and we say this with much regret, because our union was here making submissions fully supporting Bill 40, and we've made submissions fully supporting Bill 80 -- we see a lot of problems with Bill 165, and when we speak today we're speaking mainly from a construction-industry perspective.

The first thing we have to say is that this bill came out of the PLMAC discussions, or negotiations, and unfortunately construction was not invited to that table. We weren't there, and our issues and our concerns were not addressed. The WCB already recognizes that construction is unique because of the nature of construction. We have an ISU that's devoted strictly to construction; we have sections of the re-employment provisions of the bill which deal strictly with construction. But when it came time for Bill 165, we were forgotten, and because of that, Bill 165, in many respects, does not help us.

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The thrust of the bill is supposed to be a compromise or a tradeoff. In exchange for greater re-employment rights with the accident employer, injured workers were supposed to give up full benefits, were supposed to accept cuts in the form of de-indexing. Because we weren't there, what has happened is that we won't get re-employment rights through Bill 165 but we will get the de-indexing. For us, that's a no-win situation.

There are many examples where the bill, in excluding construction, hurts us. The most glaring one and the most offensive one is the issue of re-employment, which is supposed to be the key element that's supposed to benefit injured workers. I have a quote that says, "The new agreement will reduce the practice of deeming by strengthening the employer's obligation to re-employ injured workers."

The major problem we have in construction in getting back to work is the fact that section 54 of the present bill excludes probably 75% of our members from having any re-employment rights whatsoever. Section 54 provides re-employment rights for injured workers only if you've been with one employer for a full year and that employer employs over 20 workers. Those two provisions eliminate at least 75% of our members. Construction is characterized by short-term, temporary employment with many, many employers. We're not tied to employers; our members are tied to the union hall. They go out and they work for a company for a month or two, they get laid off, they go back to the hall and hopefully they get sent out to another employer.

The employers our people do work for, the majority of them are small companies. We have hundreds and hundreds and hundreds of companies that employ five, six and seven people. Because of this, the majority of our people do not have any right to re-employment whatsoever. Bill 165 did not address this, and because of that, that situation doesn't change. It's still a massive problem.

The second problem is, because of the nature of construction, if you do have re-employment rights, for those few who do, and you're permanently injured, accommodation in the construction industry is quite difficult. Again, because you've got temporary work sites that don't last very long, it's hard to accommodate. We don't have factories that are permanent, where people go and expect to stay there for years at a time, so you can spend some money to make some adjustments. For our members, they go on to a site, they do their work and they get off, and because of that, it's very difficult to accommodate.

The third problem with construction is that if you do manage to have employment rights, you do manage to get back to a site, that site will only last probably for a few weeks or a few months and you get laid off. The present act deems that the employer has fulfilled its re-employment obligations, and that's all you get. You've gone back three, four weeks, you've been laid off, and the board says, "Sorry, you've got all the rights you're entitled to."

Because of these three things, our people are not getting re-employed. Bill 165 does absolutely nothing to address that. It doesn't do a thing.

There are some other aspects of re-employment that we have problems with in Bill 165. The one basic principle of the bill for re-employment is to get the responsibility away from the board and on to the workplace parties: the accident employer and the employee. We have problems with that. On one hand, you could see that as the board and the government trying to empower the workplace parties to take responsibility. Another way of looking at it is that it's an abdication of responsibility.

For people who belong to unions, that shouldn't be a problem. You've got a union, which at least in some aspects of the workplace will equalize the power. If you don't have a union, or even if you do have a union and you're terrified of challenging your employer, there's no equal relationship, there's no balance of power, and what you have is one party dominating the other, and that's what we're afraid of.

Documentation from the board talks about it becoming an enabler and an adviser. Well, we think the board's responsibility is more than simply advising other parties. The board is supposed to be an advocate for injured workers and is supposed to work to get people back to work. We're not so sure that this new principle is going to work in each and every case.

Other problems that we strongly object to and we feel are an invasion of our members' rights is the obligation to provide the employer with medical reports from physicians with the worker's consent. We strongly object to that. We feel there's no justification whatsoever for an employer to be in direct contact with the physician. That violates doctor-patient confidentiality. I think it creates a more confrontational approach. If things are working well and if the employer is sincere about getting the worker back to work, he or she or it does not need to speak to the doctor directly. They can get it through the compensation board or they can get it through the worker.

We are concerned that this will be used as a means of coercion against workers. Even when they are afraid or object to consenting, especially if they don't have a union, they're going to agree to it, very reluctantly. Another reason they are going to agree to it is because they're going to be afraid that if they refuse they're going to be deemed uncooperative by the WCB and they're going to end up getting cuts in benefits. We're afraid the information is going to be used for improper purposes. Again, we feel there is no need for employers to have direct contact, and that section should be deleted.

Two other problems in terms of re-employment: One thing the act does to encourage employers to cooperate in re-employing is to levy a fine or a penalty. We don't think that's good enough, and we don't think it's necessary. First of all, that power already exists in the act in subsection 54(13). If they don't accommodate, they don't re-employ, a penalty can already be levied.

Secondly, a fine doesn't go far enough. That's not the answer. We made submissions in Bill 162 that the board has to have the power to order reinstatement. Bill 165 fails in that it also does not give the board the power to order reinstatement. The board needs that power and it should have it.

Another area of Bill 165 is vocational rehabilitation. Again, construction has special needs in that area. Because of the nature of construction, a lot of our members who are permanently injured will never be able to go back to work on a construction site. They need vocational rehabilitation. We are presently experiencing a lot of problems getting our workers decent vocational rehabilitation. Whether it's through a lack of sincerity or understaffing, whatever, our members are not getting good voc rehab service. Many times they're being denied vocational rehabilitation services because of their age or their educational level or because of the fact that they come from a high-wage-earning industry.

The board's goal of voc rehab is to get people back to a job that can approximate their pre-injury earnings. Well, for a lot of construction workers who were making a decent wage, they can't get back to a high-level job, so the board denies them voc rehab, totally ignores the question of self-respect and dignity and the fact that workers are willing to be retrained to jobs that may earn less but they do want to get back to work.

Bill 165 doesn't address the issue of voc rehab for our members. Again, the problem is that our people are being denied voc rehab or they're being pushed into jobs and goals that they don't agree with. Bill 165 doesn't address that because it still gives the board too much discretion.

The language is that voc rehab services will be provided "if the board considers it appropriate to do so." If the board determines that a worker requires a voc rehab program, there shall be one designed. A voc rehab program "may include assistance in seeking employment."

Again there's too much discretion, and there's nothing in there that addresses the quality of the voc rehab. In fact, subsection 53(12) weakens it. The present act says the WCB "shall include" assistance for up to six months, and now it's being changed to "may include."

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For our members, they're not going to get greater re-employment rights, they're not going to get better vocational rehabilitation, and in exchange what they're going to get is a cut in their benefits. They're going to see their benefits now cut through de-indexing, through the Friedland formula. We think that's wrong and we think it's unjust. What it's doing is blaming the victim. We're going to pass the cost of injuries back on to injured workers. That's wrong, and it will be devastating. The business caucus of the PLMAC wrote that over a 20-year period, de-indexing will reduce total benefits by $27.6 billion. That's a lot of money out of the hands of workers and it's going to force them even further on to welfare and into poverty.

I look at the business proposals to the PLMAC, and one justification they give for reducing benefits is they say, "It's a fundamental principle of insurance and pension design that people who are not working do not need as much income as those who are working." Well, that's news to me, that I can simply phone my bank and say, "I'm unemployed, so will you reduce my mortgage payments?" I didn't know I could phone Ontario Hydro or Consumers' Gas and say, "I've lost my job, so will you cut my hydro bill?" "Will you cut my gas bill?" This is ridiculous and it's very offensive and it's simply not true. Everyone needs money, and there's no justification for cutting benefits. It's taking money out of the pockets of injured workers and it's putting it into the pockets of their employers.

As to the $200 increase, we wholeheartedly support it. It's long overdue. We think it's not enough, but it's a good start. We have two concerns about the $200 increase. It excludes a few people, those who were over 65 in July 1989. We feel that isn't right; they too are entitled to it and they shouldn't be denied it. The other problem is the discretionary aspect of it, it being tied to the supplement. It's supposed to be permanent. We're concerned that you're going to get it today but tomorrow, if you get your supplement cut off, you're going to lose the $200. It should not be tied to the supplement.

One other point: employers being involved in voc rehab. We strongly, strongly object to that. If the accident employer is not providing re-employment, that accident employer has no right whatsoever to be involved in a voc rehab program. If they're going to provide re-employment, they're going to be involved. If that injured worker is not going back, the accident employer has got no business being there, none. If he or she is concerned, they can voluntarily assist the employee in trying to find other work, and they have a right to be informed through the WCB. But there's no reason they should be involved in a voc rehab program to get injured workers back into another occupation or another field. It just doesn't make sense.

Mrs Witmer: I think what we're seeing now at the end of our three weeks is that there's tremendous polarization on this bill, and I don't think it's possible at present to come up with a bill that is going to respond to the needs of injured workers, employers and employees. That's the only comment I have; I don't have a question. I think we have a very serious problem in this province.

Ms Murdock: This morning we had the home builders' association in, and they made a suggestion about having a credit system for employers taking back workers from other employers. We all recognize that construction is a very unique business, but they would set up a credit system for employers if other employers -- say there was a project going on that you could get someone back on early return to work. I'd like your comments on that.

Mr Raso: If other construction employers take injured workers back, giving them a credit?

Ms Murdock: You've explained very eloquently the short-term relationship sometimes between employer and employee in the construction industry, and that by the time they are able to return to return to work the project's over or whatever. If there were a credit system set up whereby an employer would get a credit if he took a worker from another construction firm -- I don't know how it would work. It would have to be discussed.

Mr Raso: I'd have to think about that. It seems to me, with most of our employers, they have to consider dealing with their own workers. Most companies have their own workers who get injured. I don't have any problems with that if what you're talking about is them designing return-to-work programs.

Mr Steven Offer (Mississauga North): Your presentation starts off by being complimentary about the legislation, but then the bulk of your presentation goes against it, with some very serious concerns you have with the legislation. I take it from your submission, as we are in the final day of public hearings, that if the legislation is not amended in accordance with some of the concerns you've outlined, you would be opposed to the legislation passing as it now stands.

Mr Raso: We're opposed to some elements of the bill passing. We feel that a lot of the bill should go through. The $200 should go through; the bipartite should go through; the royal commission should go through.

Mr Offer: That's separate. My point is that you've made a very persuasive argument about some of the glaring deficiencies in the legislation, and from my perspective what I would like to know is, in the event that the government fails to address the concerns you have brought forward today, even though the bill contains some areas that you personally are in favour of, is it the position of the Ontario Sheet Metal Workers' and Roofers' Conference that it would be opposed to the legislation, for the reasons you have outlined in your submission today?

Mr Raso: I don't see why it has to be all or nothing. There are positive aspects and they should go through. You can delete provisions of the bill. Our biggest objection is the de-indexing. That's a major one. Why can't we put through the $200 and the other positive aspects and deal with our concerns in construction in the royal commission or dealing with the board, trying to convince the board to create a bipartite structure for construction?

The Vice-Chair: On behalf of the committee, I'd like to thank the Ontario Sheet Metal Workers' and Roofers' Conference for bringing its presentation to our committee.

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LAW UNION OF ONTARIO

The Vice-Chair: I call forward our next presenters from the workers' compensation committee of the Law Union of Ontario. Good afternoon and welcome to the committee.

Mr Wes Wilson: My name is Wes Wilson. This is Peter Bird; this is David Wilken. We're from the Law Union of Ontario. It's a group of about 300 lawyers, law students and legal workers. A sizeable proportion of our membership has acted for injured workers for quite some number of years, both in the clinics and in the public sector and in the private bar as well. Most of our comments will be directed towards the Friedland formula, the partial de-indexation. Mr Bird's going to start.

Mr Peter Bird: I can perhaps start by answering the last question that was asked. We can state quite clearly that if de-indexation remains in this bill, the law union absolutely opposes the legislation as a whole. The de-indexation clause is such a massive cutback to injured workers that any of the other benefits contained in the bill are greatly outweighed by this cutback.

We're going to concentrate on de-indexation. We want to do more than simply say we oppose it, because I think anyone who's speaking on behalf of injured workers would say they oppose de-indexation. We want to show you what it actually does, what it will do to injured workers' benefits over the years.

In starting the discussion, it's important to know what indexation is. Indexation is not an increase in benefits; indexation merely makes sure that benefit levels don't decrease over the years. Professor Paul Weiler, who did a study into workers' compensation back in the late 1970s and had a report in 1980, stated that the right to fair compensation implies a right to full indexation, that if you don't have full indexation, you are decreasing benefits. So it's important to state that indexation is an adjustment in benefits, not an increase in benefits.

It's very ironic that this government has introduced a piece of legislation, a bill, to de-index workers' compensation benefits, when the New Democratic Party played an important role, finally, after years and years of efforts by injured workers, in having benefits fully indexed in 1985. Prior to that, with the high inflation in the 1970s, injured workers' benefits were seriously eroded over time and that created the political pressure that eventually resulted in benefits being fully indexed. I note that it was an all-party agreement in 1985 that saw this full indexation come into place. It's strange that we're now dealing with a government wanting to take that away, when that party played an important role in seeing indexation brought into place.

The Friedland formula, the formula that's being proposed, or a modification of that formula, doesn't have anything to do with workers' compensation benefits. The report created by the task force chaired by Professor Friedland was looking into the problem of private pension plans not being indexed. Most of them had no indexation whatsoever. Consequently, after retirement, people's pensions would decline over the years until they were worth practically nothing. This de-indexation formula Professor Friedland proposed is in response to a situation where there's no indexation and it's an attempt to start the process to fully indexing private pensions.

We have a situation now where workers' compensation is, as it should be, fully indexed so that benefits don't decrease over time. To try to impose a formula meant for a private pension plan to try to assist pensioners -- to impose that formula into a workers' compensation system and penalize injured workers is absurd.

There are two striking differences between private pensions and workers' compensation benefits. The most important is that private pensions will generally be paid for a relatively short period of time after someone retires; therefore the effects of de-indexation are not as severe. If you de-index pension payments over 10 years, the effect is far, far less severe than de-indexing workers' compensation benefits for in some cases 40 or 50 years. The fact that there's a limit on the amount of time that private pensions are paid was a factor in the creation of that formula and that formula allowing for less than full indexation.

The other important issue to note is that workers' compensation benefits are compensation for a loss of earning capacity and the resulting loss of earnings over a worker's lifetime. Pensions are not that. Pensions are, in most cases, a benefit negotiated with an employer. They're something on top of earnings, something on top the money a worker needs to support themselves over their lifetime. They are two entirely different things, and to put one formula into a system out of context just makes no sense.

To look more carefully at the formula, there are two particular factors where the formula has been changed, and it's been changed in such a way as to penalize injured workers. One is the cap. The cap in the original Friedland formula amounts to a 6.5% cap on the increase in any one year. The cap stated is 10% on the CPI adjustment, but when you do the multiplication of 10% by three quarters and subtract one, you get 6.5%. So the cap has been reduced in a dramatic way.

The second thing that's happened is that there's no rollover of any excess on top of the cap from one year to the next. To quote from Friedland:

"Because of the rollover, the cap has a small effect on the benefits to retireds. Indeed any deficiency in indexing caused by the 10% cap would have been made up, over the past 50 years, in the very first year that the CPI fell below 10%."

The rollover effect of allowing any excess on top of a cap in indexation being carried over to a following year means the cap had virtually no impact. That rollover is not in this bill either, so the formula being used isn't appropriate in the first place, and then two very important modifications are being made to it to even more penalize injured workers.

To look at, in dollar terms, what can actually happen with de-indexation of benefits, we'll look at a number of the different awards that de-indexation will impact.

First I'll talk about FEL awards, future economic loss awards. FEL awards are the current system that's in place for workers with a permanent impairment. Six per cent of workers injured in 1992 received FEL awards in 1993. Of that 6%, only 6% of them received a 100% award and therefore were exempt under the de-indexation clause; therefore 94% of FEL recipients will be affected by this de-indexation.

To look at the impact on FEL, there's really a double impact, and I don't think anyone in their right mind would have intended this double impact to be there, because you're not simply de-indexing the FEL.

The way a FEL is calculated is that you take 90% of the difference between net average earnings before the accident and the net average earnings that a worker is deemed to be able to earn after the accident. The current system, as things stand now with full indexation, is that you compare a fully indexed pre-accident net average earnings. However, if you start de-indexing benefits, the pre-accident earnings will not be fully indexed and you'll be comparing apples to oranges. You'll be comparing wages that a worker is deemed to earn some year down the road, after inflation has had its impact, to pre-accident earnings not fully indexed so inflation has not had an impact.

The example we've given on page 4 of our submission looks at a worker with net average earnings of $21,000 prior to an accident. This worker is then, after the accident, deemed to be able to earn $11,000 per year. I might add that that would result in a very generous FEL, but given practical experience in dealing with the board, very few workers receive a FEL of that size. The FEL would be $9,000 per year, 90% of the difference in those two wages.

Assuming that you have inflation of 2% a year, in five years you would get a FEL award of $9,936.73. If you apply the de-indexing formula to this, and this is in an inflationary climate of only 2%, which is presumably about as low as anyone is going to assume, you get a FEL award of $8,446.85. That's a benefit cut of 15% in just five years. That's in circumstances where inflation is extremely low and in circumstances where the FEL payment is much higher than usual.

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If you turn the page and look at a situation where the FEL payment is 25%, ie, the worker is assumed to be able to earn 75% of his pre-injury earnings, then the cut after five years is 30%. The reason for this massive cutback is because you are comparing fully inflationed deemed earnings to non-indexed pre-accident earnings. You're comparing two things that should not be compared.

So what you're saying, if you're going to have less than full indexation, is that all FEL recipients, other than the very, very small minority who receive 100% FEL, are going to have their benefits totally destroyed over a very short period of time. It's not going to take long before their FEL benefits are going to be worth a pittance.

Non-economic loss awards, the effect of de-indexation on that, that will affect the maximum amount that can be paid, ie, 100% NEL. We first note that if you look at what this award is meant to represent, a compensation for pain and suffering, for the personal injury you've suffered, the 1993 maximum is under $74,000. In the court system, if you suffer a personal injury, the maximum amount you can receive is $250,000 approximately. That's just for the injury itself. That's nothing to do with loss of earnings, nothing to do with the cost of caring for a disabled person, anything like that. So you see we're already in a situation where you compensate a very small percentage of this loss. If you de-index the award, and here's the example we've given, 10 years of 4% inflation, effectively your de-indexing results in about a 20% cut in benefits.

These are very large cutbacks. You look at the formula, "Well three quarters of CPI, that's not bad; subtract 1%, that's not bad." If you do the arithmetic you see it's a very massive cutback, and you should know it must be a massive cutback to result in the billions upon billions of dollars taken away from injured workers over the years that this system will be in place.

Permanent disability pensions, ie, pensions for people under the old system. Prior to 1985 you received 75% of your gross pre-accident earnings; since then it's been 90% of net. These are about the same figures, more or less. If you look at appendix 1, which is I think the third-last page in our submissions, this looks at someone who receives a pension in 1985. To the current date it's been fully indexed, so you can see that the graph is flat. They're receiving the same amount of money every year, in real dollar terms.

However, if you start to de-index, pursuant to the current formula in this bill, and take reasonable assumptions about inflation -- the assumptions we've taken are the inflation that's happened in the last 30 years. On this graph, the inflation shown from 1994 to 2024 is the actual inflation that happened from 1961 to 1991. Here's the effect on the benefit level these workers are receiving. To start, they're getting 90% of net. That's what the legislation states they should receive. Over the years it declines and declines. By the time these workers are perhaps age 65, they're actually receiving only about 38% of net average earnings. If you average that out over the life of the claim, you're saying they receive 68% of net average earnings. That's the effect of this de-indexation. It's a massive, massive cutback for the permanently disabled worker.

I've been told that some of the committee members asked previous presenters, "Well, which is worse, this de-indexation or cutting benefits back from 90% of net?" This example shows just how draconian this de-indexation clause is, and it hits the most vulnerable workers: the ones with the longest-term, most severe disabilities.

I'll now ask Mr Wilson to continue.

The Acting Chair: Before you do, I remind you that you have two minutes left for your presentation.

Mr Wilson: I've made constitutional arguments in shorter periods of time.

It's our position that the Friedland formula is unconstitutional, that it denies long-term disabled injured workers the benefit of equal protection of the law based on disability. If we posit two groups, the short-term disabled and the long-term disabled -- in other words a person with a broken arm as opposed to a person with a severed arm -- it's quite clear that although the Friedland formula appears, on the face of it, equally to all injured workers, the long-term effect is such that the erosion of benefits has a grossly disproportionate impact on those who are permanently disabled.

In the time I've got left, I want to take the committee through an example beginning on page 15 of our brief.

We take two injured workers and suggest that they're both earning the average industrial wage in 1985, and let's assume the Friedland formula is imposed on them at that time. In all respects these two workers are similarly situated. They're both injured and they're both awarded temporary benefits at a 50% rate. For the month of April 1985, they make the same amount of money. One injured worker goes back to work. The other one's disability is permanent. She makes 50% and is given a 50% disability award on a permanent basis. Now let's assume that the person who went back to work and is continuing to earn at his full earning capacity is re-injured every April 1 in successive years.

If we look at the long-term effect of the Friedland formula set out in appendix 2 of our brief, this graph demonstrates that for the same period of time in each successive year, the person who's gone back to work and who is off at a 50% level each time and whose earnings are based on the average industrial wage at the time of each temporary disability is far better off at the end of that 10-year period than the person with precisely the same impairment of earning capacity over a long-term basis. In fact, after 10 years, in April 1994, the person who is on the long-term disability benefits is making, turning to appendix 3, some $140 a month less than a person with precisely the same impairment of earning capacity who is there on a temporary, short-term basis as a disabled worker.

It's our submission that the imposition of the Friedland formula has a disproportionate impact on the injured workers who are disabled on a long-term basis. I won't take the committee through it. I've set out a quote on page 14 of our submission from the Supreme Court of Canada that directs the court -- and this is in the context of common law tort awards -- to pay strict attention to the long-term effects of inflation in order that a person may be fairly compensated over the long run.

It's our position that Friedland, because of the disproportionate effect on long-term injured workers, is unconstitutional, it victimizes the most vulnerable members of our society and that is not a legacy any government should be proud of.

The Vice-Chair: Thank you very much. You've gone a little over now. On behalf of this committee, I'd like to thank the Law Union of the Ontario Workers' Compensation Board for giving its presentation to the committee this afternoon.

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INCOME MAINTENANCE FOR THE HANDICAPPED CO-ORDINATING GROUP

The Vice-Chair: I'd like to call forward our next presenters from the Income Maintenance for the Handicapped Co-ordinating Group. Good afternoon and welcome to the committee.

Mr Scott Seiler: My name is Scott Seiler. I'm the coordinator of the Income Maintenance for the Handicapped Co-ordinating Group.

Mr Harry Beatty: My name is Harry Beatty and I'm legal counsel to the group.

Mr Seiler: The income maintenance group has been in existence since 1978 and has dealt with income-related issues and people with disabilities since that time. We would like to talk now about some of the issues around what we think are some of the things needed for the WCB.

Mr Beatty: I'm going to talk for a couple of minutes and then turn it back over to Scott.

The first point we wanted to address was the process in which this debate is taking place. Our group, as we have frankly acknowledged in our brief, is not workers' compensation specialists, but we have, over the last 15 years, addressed many issues relating to the overlaps and gaps among different disability compensation programs and have come to identify some of the issues common to all of them.

One of the unfortunate things, as is outlined in paragraph three of our submission, is that reform, or so-called reform, of disability compensation programs has always taken place in the way the current process is taking place in that the programs are looked at one at a time and in isolation from each other. It detracts from the general principles; it detracts from looking at the issues raised by the overlaps among the programs and the gaps between them.

I certainly have advised many clients over the years where they are eligible or potentially eligible for three or four different programs. It keeps lawyers like me busy trying to figure out the interactions, but I think people could benefit if things were simpler and clearer. Also, too often the result of the so-called reform is simply an offloading of responsibility, for clients and for benefits, on to another program.

Our group has advocated a more comprehensive study such as a royal commission, and in fact would hope that the forthcoming royal commission on workers' compensation announced by the provincial government will at least take as part of its mandate seeing what could be done in a more systemic and organized way.

Our first topic, substantively, with regard to Bill 165 is inflation protection, which was of course just addressed in detail by the previous groups. Like the previous presenters, we are concerned about the use of de-indexation as an approach to cost control. It affects those more who are injured in the long term; it has a disproportionate effect on people who are younger when they become disabled.

The real impact on individuals is 20 to 30 years down the road and it means that there isn't so much of a constituency to fight it now. When people have been disabled for 20 or 30 years, we find that their interests are very rarely actively represented any more by unions or other staff organizations. There are really very few advocates for those individuals, and I think it's an easy way out to say, "Well, we'll just de-index the program and we'll worry about the effects 20 years later."

We are concerned not only with regard to this program but with what we see is a tendency to approach programs in this way. For well over a decade, under three different governments it was the practice to have an annual inflationary increase for social assistance. It was done every year, although it was not entrenched in legislation, and that has been discontinued by the present government.

Also, in the automobile insurance plan, while it's commendable that the benefits generally have been indexed, the one exception that was made was for those who are arguably the most disadvantaged. The $185 monthly payment for those outside the labour force was given no inflation protection whatsoever.

De-indexation is seen as a way of generating savings. Because the estimate is somewhat close to $18 billion, I guess other items are included in those savings, but that's the main one. But we think if you look at the system, if I can describe it that way as a whole, it's largely illusory. What really happens to long-term injured workers, if there are not supports, compensation and other supports, available from WCB, is that they will turn to other programs, like social assistance, long-term disability and other disability-related programs.

Ultimately, employers as taxpayers and governments will wind up either paying compensation for them out of another pocket or what may happen is that the person's disability is not compensated and then you have all of the social costs related to things like family breakdown and institutionalization. So if the perspective of more than a single program were taken, we would question that there is a true social cost saving even though the actual payments out from WCB may be less.

What we advocate of course are, as we've already said, a more coordinated approach to reform, to produce a more understandable system, one that is fair among different groups of people with disabilities and also one which better facilitates the return to employment.

At this point, I'll turn it back to Scott.

Mr Seiler: Something that is very much needed for people who are WCB clients and people who are consumers and people who are on other systems as well is many more choices than are given today. We need people to be able to have choices of where they would like to work, what kinds of work they would like to do, what kinds of training they would like to have. We're not just talking about income and income security here. We're also talking about getting people back to work as a primary mandate of the WCB.

We need a system that will retrain people into viable careers, that will not ghettoize people into careers that are not necessarily going to give them a high enough income to survive in the real world out there. We don't need McJobs; we need real jobs. Just as the rest of the people with disabilities need those things, people who are on WCB do too.

We also have some significant issues, I believe, with representation of people with disabilities on all forms of boards of inquiry, and the WCB is no different. We need proper representation of the people who are going to be served by the WCB. People who have disabilities must be the key players in running a system that is going to be for them. If they are not key players, then the system is really not for them and will never be able to serve their needs properly because the system will always not completely understand all of the needs that are out there. You need our participation, as people with disabilities and injured workers, to create systems that will work. That is the only way of creating a system that will work.

Most of the systems today that are being "reformed," like Mr Beatty is talking about, are being reformed with the participation of consumers and consumer advocates. I think it's about time this was spread into all facets of government.

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Ms Murdock: Thank you for your presentation. From your last comments, I'm taking it that you mean in the context of workers' compensation -- I understand from your opening comments that you don't necessarily do all that much with it, but you're saying that the individual injured worker would determine their return-to-work and rehab program?

Mr Seiler: As much as possible, yes.

Ms Murdock: With the board and with the employer and the health care practitioner or whatever?

Mr Seiler: The things that the person would want would be facilitated through the WCB, through the practitioners, through the rehabilitation people. It would be a facilitation, but it would be the person's wishes that would be the primary driver of that system and what the person would like. So if they would like to go back to school because the career that they had before doesn't suit them any more, for whatever reason, they have the ability to say and make that kind of choice. We're asking for people to have choices here.

Ms Murdock: Okay. Your point about the inflation protection has been made numerous times by other groups than yourselves. It's not that I'm in disagreement with you, but many of the other presenters take an opposing view, and I would like your comments, on the importance of the unfunded liability and how control of the board must be taken into account -- financial control of the board.

Mr Beatty: Basically, we haven't looked in detail at the issues around the WCB unfunded liability or at costings or anything like that. As our presentation said, we'd much prefer, though, that the savings be generated through increasing the percentage of people who can be returned to meaningful employment. Clearly, that has potential for a lot more savings in the true sense than just reducing the benefits 20 and 30 years down the road. If even a modest increase in re-employment were achieved, you get the same savings without hurting people.

Mr Offer: Thank you for the opportunity of asking a few questions on your presentation. I would like to ask you a question, not necessarily based on your presentation but based on a paragraph the Minister of Labour delivered to this committee on the first day of hearings. I think it's appropriate. As we're now on the last day of public hearings, I'd like to get your thoughts on the phrase that appears in his presentation, which states, "I can state categorically today that Ontario's first-ever social democratic government will not reform the Workers' Compensation Board on the backs of injured workers." What is your reaction to the statement of the minister?

Mr Seiler: If de-indexation is going to happen, then it will be on the backs of injured workers but 30 years hence.

Mr Offer: I have no further questions to ask. I'd like to thank you for your presentation.

Mr Arnott: Thank you very much for your presentation as well. I'm not sure I have any questions. I think you outlined very clearly what your position is on the bill. Clearly, I think you're absolutely right that younger injured workers are the ones who have the most to lose with this change in the inflation protection.

Your mandate also includes other social welfare programs and studying that, and I think you're also right when you say that -- well, if you look at an injured worker who may gradually lose his pension, have it eroded over time due to lack of inflation protection, there's a good chance that they're going to be applying for, say, the Comsoc family benefits program.

Mr Seiler: Most definitely.

Mr Arnott: Yes, and then money's going to be coming out of another pocket if they're eligible.

Mr Seiler: It's just a flipping of the responsibilities for the payments that are happening now through the WCB on to other places and other governments.

The Vice-Chair: On behalf of this committee I'd like to thank the Income Maintenance for the Handicapped Co-ordinating Group for bringing their presentation to this committee this afternoon.

NIAGARA DISTRICT INJURED WORKERS ORGANIZATION

The Vice-Chair: I'd like to call forward our next group, from the Niagara District Injured Workers Organization. Good afternoon and welcome to the committee.

Mr Don Comi: I'm going to make the introduction. My name is Don Comi. I'm president of the Niagara District Injured Workers Organization and treasurer of the Ontario Network of Injured Workers Groups. Karl Crevar is the president of the Ontario Network of Injured Workers Groups, and Lesley Penwarden is the recording secretary of the Niagara District Injured Workers Organization.

Ms Lesley Penwarden: I hope everybody's got their pens. Please understand that my involvement in compensation for the past decade has been purely volunteer. I'm paid as a secretary and person responsible for all accounting functions in an optometry office in Port Colborne. I had three late evenings and a couple of hours this morning to write this. There was no time to edit.

On the bottom of the first page, you will see "Most regressive aspects of Bill 165." Please strike that.

Preface: the Niagara District Injured Workers Organization was incorporated in February 1984 as the Welland District Injured Workers Organization. It organized loosely in the 1970s out of people who were finding they were not getting the rights they were entitled to under the law.

Niagara Injured Workers observes that any potential of Bill 165 to contribute to the development of positive change towards a truly equitable, progressive system was forfeited when the injured workers themselves were excluded from the process. You can't bridge a schism between society's espoused beliefs and its reality, its actualities, by restricting access, input and design of legislation to the status quo representatives on committees such as PLMAC. You missed your opportunity to correct the situation when you only held hearings in four cities.

Introduction: Niagara Injured Workers supports the position of the Ontario Network of Injured Workers Groups and others that Bill 165 in its present form is untenable.

This brief discusses the reasons PLMAC collapsed, the historic original social contract known as the Workers' Compensation Act, and since the committee has had numerous briefs discussing the perfidious nature of claims by parties crying financial crisis and hardship while clearly profiting, several copies of Ontario network, TIWAG members', CAW, OPSEU, the Ontario Social Safety Network and others' research and recommendations outlining essential changes to facilitate acceptance of Bill 165, Niagara will then move directly to recommendations.

Failure and collapse of PLMAC: However well intentioned, the PLMAC concept was doomed to fail and collapse for numerous reasons.

The committee consisted of representatives of the status quo, two opposing factions who, more expressly in the case of labour, denied access to information and input to less affluent stakeholder groups on the basis that they "weren't experienced enough in the collect bargaining process."

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This is a monumental assumptive error. You can't put two groups who have been fiercely fighting for more than a century together and all of a sudden expect them to work in an enlightened, progressive manner. The PLMAC members themselves, in deciding their traditional pattern of collective bargaining was appropriate to the task, also made a monumental assumptive error.

Legislation is not a temporary bargaining agreement negotiable in one to three years and cannot be successfully treated as such. The bargaining agreement was already established in 1915, the social contract in which workers relinquished the right of legal action in return for a comprehensive no-fault insurance system funded by the employers responsible for and profiting by the damage to workers' health and lives.

Niagara Injured Workers cannot support the result of a process from which injured workers were excluded. Injured workers' two-decade-old issues were not addressed and the proposals constitute yet further regression and breach of the social bargain.

The Workers' Compensation Act, a historic social contract: Although Ontario was the first in Canada to legislate a compensation act, it was merely following the Zeitgeist of the early 1900s. Germany, just one example, had developed all-inclusive compulsory sickness and maternity, old age and disablement pensions as well as compensation for industrial accidents and disease and unemployment insurance by the 1880s.

It's interesting that more than a century later we have yet to equal our European and Scandinavian neighbours' level of social maturity, evolution of civilization and basic philosophy of justice. We blame this on the negative, disproportionate, atavistic influence exerted on our governing bodies and media by corporate enterprises.

Development of legal precedent in western civilization acknowledging employer responsibility based on ownership and control of the workplace expedited acceptance of a compensation act by Ontario employers. Why? Under these conditions the economic class structure status quo would be maintainable and the theoretical potential redistribution of wealth through legitimate civil suits averted.

What specifically is contained in these no-fault insurance contracts worth surrendering the right to sue?

-- Recompense to the injured worker and his/her family;

-- Accident prevention measures and health and safety programs;

-- Prompt payment and service to reduce stress;

-- Decisions made on individual case merit and justice less strict than legal precedent;

-- The right of claim review at any time;

-- Unlimited medical, surgical, hospital, nursing and medical rehabilitation services;

-- Pensions to widows and dependant children;

-- Rehabilitation as a priority and provision of the best available treatments to minimize disability;

-- Any necessary training or vocational rehabilitation of the injured worker's choice enabling a return to gainful, sustainable employment; and

-- Pensions to injured workers unable to return to gainful, sustainable employment.

Anything less is a breach of the social contract and initiates reclamation of the right of civil action.

Since its introduction, the act's been subverted, so much so that by 1980, Paul Weiler, an American, wrote in his submission, Reshaping Worker's Compensation for Ontario, to Robert Elgie, then Minister of Labour:

"Worker's compensation has now totally lost any legitimacy which it might have ever had. People no longer tolerate the inequities in individual cases which are produced by a system of average `rough justice.'... The same act which offers only a facade of adequate compensation for real life economic losses also denies the right of access to the courts to try to recover the difference."

Injured workers, the so-called beneficiaries of the compensation act, have had their health, their lifetime earnings, their families, their self-worth, their very lives sacrificed to support profit margins and the lavish lifestyles of their transgressors.

The former Liberal government muscled through Bill 162, the most regressive piece of compensation legislation in recent memory, breaching many of the precepts of the social bargain. The Conservative government of the early 1980s is responsible for the present approach to funding, which created the artificial construct of the unfunded liability, now propagandized by the corporate media as provincial debt when in fact it is not legal for the accident fund to requisition funds from Ontario taxpayers.

Don't add to the travesty by failing to modify Bill 165 to incorporate the demands of the injured workers themselves. Do, please, incorporate the following recommendations, which have been put forward by numerous submissions, upholding the position of injured workers themselves, the missing component of Bill 165.

Mr Comi: The recommendations we have are:

Change the present, unsuccessful 1984 funding strategy to the current cost approach. This will eliminate the possibility of deficit and eliminate artificial constructs, such as guesstimates of future costs, presently known as the unfunded liability, being falsely treated as a debt.

Eliminate schedule 2, incorporate all employers in the accident fund in schedule 1 and extend the right of coverage universally to the entire workforce. This will eliminate the finance department's worst problem, employer fraud, as well as reduce the need to investigate compliance.

Incorporate this government's position on equity by conferring full partnership with the other stakeholders through designated injured worker seats on the board of directors.

Remove deeming from the Workers' Compensation Act and replace it with gainful, sustainable employment as per the social contract.

Deliver the decades-old promise of job security or full compensation.

Accord independent, accountable, practising physicians the respect they are entitled to by eliminating unnecessary WCB doctors.

Increase penalties on employers who violate and endanger workers' health and safety.

Assessment rates should include a reflection of the employer's incorporation of up-to-date ergonomic equipment and health and safety efforts rather than the fraud-promoting claims rate.

Remove all reference to the present inappropriate application of the Friedland formula from the act and provide automatic cost-of-living adjustments to all claimants.

Utilize the Workplace Health and Safety Agency as the Workers' Compensation Board's agent of record to monitor all workplaces.

Provide the $200 pension increase as a true pension increase and not as a supplement by adding it to all persons receiving permanent disability pensions.

Respect Canadians' right to privacy by restricting employers' access to medical reports directly related to the claim, with the injured worker's informed consent.

Change section 3 to prevent double recovery by rewording to "receiving compensation under workers' compensation law from another board's jurisdiction for the same injury or disease."

Change the purpose clause to state "full compensation," not "fair compensation."

Remove section 12 on the grounds it could be used by employers to neglect their moral and pecuniary obligations.

Provide any necessary training or vocational rehabilitation of the injured worker's choice enabling a return to gainful, sustainable employment.

The Minister of Labour should approach the Minister of Education to implement a grade 9 level compulsory credit course entitled "workplace rights and responsibilities" covering all workplace legislation, such as the Workers' Compensation Act, presented in layman's terms. This course should be taught in all educational institutions and streams of study and should include presentations by groups such as injured workers, labour, Workplace Health and Safety Agency representatives etc.

We further strongly appeal to your sense of justice to study and incorporate the recommendations of groups such as the Ontario Network of Injured Workers Groups, Toronto Injured Workers' Advocacy Group members, CAW, OPSEU, the Ontario Social Safety Network and others representing the missing injured workers' component to Bill 165.

Finally, as an extraneous but possibly important suggestion to this government's experience with financial institutions, amend the Ontario Elections Act to state that any financial institution or bond rating body, either lending money to or making ratings on the government, may not make any form of political contribution and must be seen to be non-partisan.

We thank you for taking time to hear our submissions and hope you will give it serious consideration.

Before we open to questions, Mr Crevar has some comments he'd like to address.

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Mr Karl Crevar: Let me, first of all, say if the presentations by the injured worker community seem biased, it is because they are. Any decision that this body makes, that this government makes, that the Workers' Compensation Board makes, will have a direct impact on injured workers. We are the ones who are going to receive the brunt.

I want to state for the record and, Mr Mahoney, it's nothing personal, you made a comment yesterday on the injured worker presenters in the past who have stated -- your comments were that they had called for the withdrawal of Bill 165. I hope it was just an error because that's not correct. What we have stated very clearly at this stage, before even the hearings began, was that the network does not support the bill in its present form and we wanted to use and we hoped to be able to use this forum to address to you our concerns and hope that this group here would sit around and make the necessary amendments that we are concerned with.

What I have seen in this process, it seems to me that the politicians are sitting there, one taking one position, one taking the other, and I think that's wrong. It's our lives, it's the lives of injured workers that are going to be affected by your decision. Give us the opportunity to talk to you. Make some recommendations. We have presented that there are some aspects of the bill that we will support, but there are other aspects that we will not support. That's why we're here. We're not here to take positions. The whole purpose is to develop a system that's fair to injured workers. They deserve that right.

I find that very appalling, over the last three weeks, to have heard the comments that have been going back and forth, and I can assure you, Mr Mahoney, you have the letter which you have passed around from Mr Rae making promises to employers about the purpose clause. Well, we have a letter that promised injured workers to eliminate deeming. We have a letter to that effect. But by the same token, we are critical of this bill because we are concerned about the Friedland formula. We would not support any bill that would cut benefits.

I think it's been clearly demonstrated by a number of presenters what that impact would be and we would hope in the course of this process that at the end of the day we are heard and that the appropriate amendments can be made so that we can get on with our lives.

So with that, I will cut off. Remember one thing, and it hasn't been mentioned: Workers do not go to work to get hurt deliberately. If there's one person in this room or around this table who can tell me of an individual who goes to work to get hurt intentionally, not knowing the extent that they're going to be hurt, is going to impact for the rest of their lives, not only on themselves but their families, their friends and the whole community, that's a ludicrous suggestion. We do not go to work to get hurt.

Interruption.

The Vice-Chair: Order. As I've stated in the past, this is an extension of the House and outbursts from the audience aren't acceptable.

Mr Mahoney: Thank you for your presentation, all three of you. Karl, let me just be very clear on my concern and my question to injured workers and to unions who have come before us, particularly to some members from organized labour, from the CAW and others where they've outlined in one case, Local 444 in London, objections to 17 parts of this bill. My question is, that if you don't get the changes, and the same question to injured workers -- I appreciate the fact that you're here to try to put forward your ideas. I respect the work that you do on behalf of injured workers. I know you're a very passionate man about it.

But if you don't get the changes that you're asking for, our fundamental question is, are you in support of this bill? Do you wish this committee to recommend, with government majority members or even support of opposition, that the Legislature put Bill 165 into law in its present form?

Mr Crevar: Well, let me reply to you again, Mr Mahoney, the same as I did with Mr Offer earlier on that same particular question, why are we here? Are we not here to attempt to put our concerns to you? We cannot come up --

Mr Mahoney: No --

Mr Crevar: We've stated very clearly, in its present form, we will not support the bill --

Mr Mahoney: That's fine.

Mr Crevar: -- because of the Friedland formula. However --

Mr Mahoney: That's the point --

Mr Crevar: -- we are in this process to attempt to convince you --

Mr Mahoney: Absolutely.

Mr Crevar: -- to amend it, to change it.

Mr Mahoney: Absolutely. I totally agree with that.

Mr Crevar: I could not give you an answer now to say we will oppose it. We don't know. Hopefully, you will look at our concerns and make the appropriate amendments at the end of the day.

Mrs Witmer: The first presenter this morning indicated that, as opposed to introducing the Friedland formula, it would be better to reduce the benefits to 80% and 85%. What do you say to that?

Mr Crevar: Well, my only comment is, again, as I've indicated earlier -- and I find it troubling to have those types of comments. I shouldn't say the comments, but the presentations that were made, it should not be a guise -- and this committee should not look at it as a guise that lowering from 90% to 85% would be better than the Friedland formula.

Injured workers deserve, under the act, full compensation, not any reduction. I think you've heard from many presenters, from injured workers groups how their lives have been impacted because they're not getting what they're entitled to. We will not support any reduction of any type of benefits to injured workers that they're entitled to.

Mr Will Ferguson (Kitchener): Thank you for your presentation. As you are well aware, the government has tabled this bill. We're having discussions on it. We're listening to all the concerns that are being expressed. As you're also aware, the Liberal party has suggested that the Friedland formula ought to be adopted right across the board for all pensions. The Conservative Party has taken a different stance. They suggested that the level of benefits ought to be reduced for injured workers. Just so everybody knows exactly the positioning that's taking place here.

There is an enlightened school of thought out there that suggests that this in fact is not a government debt; it is in fact an employer debt. Most of the responsibility ought to be put back on to the employers to take care of the unfunded liability. I would like to know what your thoughts are on that.

Mr Crevar: If I may comment, our position has been very clear. I hope I've made it very clear. It's the employers' obligation to fund the system.

I think what hasn't come out here in many cases when we've talked about the cooperative approach -- and I agree with a cooperative approach. But how can we as injured workers rely on a cooperative approach when what we have seen through this whole process is three occasions where the employers have walked away, and as most recently have walked away from participating in the vocational rehabilitation advocacy committee? Why? When we talk about a cooperative approach, attempts are being made to address some real, real problems. How can you do that when you have a negative side saying, "No; if we don't get our way, we will not participate in this process"?

The other factor I'd like to leave you with is, when we talk about assessment rates and the unfunded liability, are those costs not absorbed in consumer goods? Are they not absorbed in the benefit packages that are provided to their workers? I can assure you, if you look deep enough, you will find those costs are absorbed in those benefits and the consumer is paying for the cost of the assessment rates.

The Vice-Chair: On behalf of this committee, I'd like to thank the Niagara District Injured Workers Organization for their presentation to the committee this afternoon.

Is there anybody here from the Canadian Union of Public Employees, Local 1750?

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Mr Mahoney: On a point of order, Mr Chair: While you're waiting for a response there, I'd just like to add into the record, the last presenter made comments about the Liberal government muscling through Bill 162 and the Tory government's record in the 1980s. They didn't include the following, which is part of their submission. It said also, "Don't add the" current "government elected on the `Agenda for People' to the list of minions serving concentration of capital to the avaricious privileged few at the expense of not just injured workers, but in graphic terms, at the expense of the depletion of planet Earth itself." I just wanted that on the record.

ONTARIO LEGAL CLINICS WORKERS' COMPENSATION NETWORK

The Vice-Chair: We'll call forward our next presenters, from the Ontario Legal Clinics Workers' Compensation Network. Good afternoon and welcome to the committee.

Mr Terry Copes: I'm Terry Copes from the Sudbury Community Legal Clinic. To my right is Andrew Bomé from McQuestern Legal Services in Hamilton. We are appearing on behalf of the Ontario Legal Clinics Workers' Compensation Network.

The network is an organization made up of representatives from legal clinics from each region of the province which do workers' compensation cases. As such, we bring a perspective which isn't just narrowed to one area of the province but is aware of the problems as they affect injured workers throughout the province.

I won't be following exactly my brief today. Basically, I'll be addressing a couple of points; namely, the $200 benefit. Also we'll have something to say about mediation, while Mr Bomé will talk about the Friedland formula and de-indexing.

The $200 benefit certainly is looked forward to by many injured workers in the province. Any additional money is eagerly looked forward to by many injured workers in the province who have been forced into poverty as a result of their injuries. That being said, that does not mean we are entirely happy with the way that the $200 benefit has been structured in Bill 165.

In particular, we have some concerns over how the $200 is being given, and that is, being tied into the subsection 147(4) supplement. By doing this, it puts the $200 additional benefit in jeopardy for any injured worker who gets it. The reason for this is because of the board's practice, on the two- and five-year reviews of the supplement, of cutting off many people who were initially given the supplement when there has really been no change in their circumstances. Certainly, we saw a lot of this occurring on the original two-year reviews of those supplements.

In effect, this additional benefit is a supplement to a supplement. We have a problem with that. What we suggest as a solution to that would be, instead of having this tied into subsection 147(4), tie it into the sections which deal with the granting of the permanent disability pension. This I think would certainly make a lot of injured workers feel more secure about this benefit.

The other problem we have with the way the $200 benefit is being given is that numerous groups are being excluded from eligibility for this benefit and some of these groups shouldn't be excluded. There's, for example, no rational reason for excluding workers who turned 65 prior to July 26, 1989, from eligibility for a supplement. In fact, many of those workers need the supplement most because they will tend to be injured workers who were hurt back before full indexing was put into place in 1985. Many of these injured workers have already seen their permanent disability pensions eroded, particularly those injured workers who were hurt in the 1950s and 1960s when there was absolutely no indexing in place.

An example of this, and this actually ties into another group who won't be able to get the extra $200 and that's 100% pensioners. We know of an injured worker who was hurt in the 1960s and is in receipt of 100% pension but, because of the lack of indexing, is getting less money per month than another worker injured at the same job site, doing the same job he was 20 years later, who is in receipt of a 30% pension from the board. The only reason for that is because of the effect of not having those benefits indexed throughout the 1960s and 1970s. This person got hit then, will get hit again -- won't get hit again in terms of the Friedland formula because they're protected because of the 100% pension. If he was getting a 90% pension, he'd be hit again, but he's not eligible for the $200 and yet that person certainly could use the $200 as much as anyone else who will be granted it.

There are other groups who are going to be denied access to the $200 the way the bill is currently worded. Another example is Johns Manville asbestos victims and Elliot Lake uranium miners who receive a supplement very similar to a subsection 147(4) supplement under a special rehabilitation assistance program. Because they're getting that supplement, they aren't eligible for the subsection 147(4) supplement and thus would not be eligible for the additional $200 benefit.

There are also many cases of injured workers who, for one reason or another, have not been deemed by the board to be eligible for a subsection 147(4) supplement, who have not returned to work, who have not had their earnings restored, who are living off of their meagre pensions from the board plus CPP disability and they will not be eligible for this as well.

The solution would be to not tie the $200 into the eligibility for subsection 147(4). As I say, tie it into the receipt of the permanent disability pension. If you are concerned about giving it to people who may be working and earning a decent wage, there can be ways of accommodating that simply through having it that if the person's current earnings, combined with their pension, are greater than their adjusted pre-accident earnings, they won't be eligible for it. But don't deny it to everyone who can't get a 147(4), because that is totally unfair and is going to leave in need many injured workers who certainly can use the money and are just as deserving as those who will be eligible for it.

I know this question's been asked of some other presenters today whether we are in favour of scrapping the whole bill. We are not. We want the $200 given to injured workers. They have been waiting for many years for this. This has been something which injured workers have been lobbying for as long as I can remember, and certainly we don't want to see this killed, even if the rest of the bill is.

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Turning now to mediation: I know that alternative dispute resolution is currently a very sort of hot and popular thing in legal and governmental circles now and, generally speaking, we have nothing against mediation or alternative dispute resolution; however, we have serious reservations about the mediation provisions contained in Bill 165.

The main root of our problem with the mediation provisions is that most of the listed items for mediation are not areas where, in my experience, the primary dispute will be between the injured worker and the employer. Instead, the primary dispute, in our experience, is often on these issues going to be between the injured worker and the board's vocational and rehabilitation department.

In fact, we often run into cases where both the injured worker and the employer are asking the voc rehab department for something and the voc rehab department is not willing to give it. In that kind of case, having the board act as a mediator in a dispute between the injured worker and the board itself simply does not make any rational sense. The board is not a neutral third party in these disputes, but is rather a party to the dispute itself, and you don't let a party to a dispute mediate that dispute because that is not going to be fair mediation.

We therefore recommend that if mediation is going to remain in Bill 165, amendments be made to have mediation only apply in cases where the dispute is between the injured worker and the employer and not in cases where there is an element of a dispute between the injured worker and the board. Often you'll run into cases where there may be a dispute between the injured worker and the accident employer, but there's also an element of a dispute with the board there as well. It simply is blatantly unfair to the injured worker to have this so-called neutral mediator there, supplied by the board, when the board has its own interests to support in the dispute.

The other concern we have with mediation is simply with the fast-tracking of mediation. We can see reasons for that and we're all in favour of disputes being settled quickly. Right now, injured workers, generally speaking, cannot obtain representation all that quickly. Certainly, in the Sudbury area and throughout northern Ontario, the office of the worker adviser is running a waiting list often up to two years before they will open files. Our own legal clinic maintains a waiting list which is running approximately 18 months before we will look at workers' compensation files. This is simply due to the workload pressures we have.

With recent talk of cutbacks to legal aid, one of the suggestions has been that legal aid certificates no longer be issued in workers' compensation cases. This will leave injured workers, either in a non-unionized setting or in settings where they are unionized but the union doesn't handle workers' compensation matters, often scrambling to get some kind of representation. If mediation is fast-tracked, they may not be able to obtain representation for that mediation process.

That can constitute a real problem, particularly since the board is there to protect its own interests and certainly knows compensation matters in more detail than the average injured worker who isn't used to the system or is new to the system, and employers also are in a much better position to go off and get legal representation. We have real concerns about injured workers being subject to mediation where they are the only party there who really isn't having independent representation. That is a real concern we have.

I'd now like to turn it over to Mr Bomé to make some comments on de-indexing and the Friedland formula.

Mr Andrew Bomé: For me, the de-indexing provisions of this bill are probably the worst parts of the bill for injured workers. It's for that reason that we're adamantly opposed to any forms of de-indexing for any injured workers. I say that because we have experience; we've met injured workers who were affected by the lack of indexing of pensions in the 1970s. Mr Copes spoke about one case where a worker with 100% pension wasn't getting the same as a worker who was injured 20 years later with a 30% pension. I myself represent two injured workers working at very high wages in the 1960s who are now receiving 70% pensions. Both their pensions are less than $1,000 per month.

What this bill does is, it proposes to eliminate full inflation protection for many groups of injured workers. There are two groups of injured workers I'd like to talk about in particular who are being affected by the lack of full indexing. The first is injured workers who turned 65 prior to the passage of Bill 162.

The way this bill is structured, for a pensioner who's not receiving 100% pension to receive inflation protection they must receive the $200 benefit. As Mr Copes indicated, injured workers who turned 65 prior to July 26, 1989, will not receive that $200. Therefore, they will not receive full inflation protection. It's inconceivable to imagine why this particular set of elderly injured workers is being hit by de-indexing one of their only sources of income they have. Given the age of many of these workers, these workers here will not only face de-indexing of their pensions in the future, they are also likely to have been injured prior to the implementation of full indexing in 1985. So they've had significant portions of their pensions de-indexed in the high inflation era of the 1970s. The easy solution to that is to give those workers the $200 benefit and then they don't have to worry about de-indexing.

The other group of injured workers being affected by de-indexing is workers in receipt of future economic loss awards that aren't 100% future economic loss awards. These injured workers now are not being compensated based on any actual wage loss. The amount of their future economic loss award is based on earnings from wages that they don't receive. Statistics from the board indicate that 78% of all workers receiving future economic loss awards at the two-year review don't have jobs.

These injured workers here who are just receiving small FEL awards plus with no income are being impoverished, and having the purchasing power of their benefit reduced year in, year out by partial de-indexing is just simply wrong. This bill contains a double whammy. These workers here who are being impoverished by low FEL awards and are having the purchasing power of their FEL awards decreased by de-indexing will also, by the mechanics of the reviews at the two-year and the five-year award, in times of high inflation have their future economic loss awards actually reduced.

It cannot be seen as right to have an injured worker who's being impoverished by an inadequate FEL award, having the purchasing power of that FEL award slowly reduced by inflation, to then have it cut twice in their lives. That's just simply wrong.

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What this bill does with these workers who are receiving future economic loss awards -- we're creating another group of injured workers who will get an inadequate benefit from the board and then will, as time goes on, become slowly impoverished, just like our clients who were injured 20 years ago who are now in poverty. That's not going to be a cost saving. It has to be remembered that any injured worker who is inadequately compensated by the workers' compensation system will inevitably end up going on welfare, family benefits, and it's just simply a shifting of responsibility of the upkeep of these injured workers from the employers of Ontario, who caused these workers injury, to the taxpayers of Ontario. That's not good.

The Acting Chair (Mr Randy R. Hope): We have approximately 30 seconds per caucus. Miss Witmer?

Mrs Witmer: No questions, thank you.

Ms Murdock: Do I get her 30 seconds?

The Acting Chair: Thirty seconds.

Ms Murdock: We had a presentation in Ottawa made to us by one of the employer groups actually where the Quebec model of mediation was suggested, because they saw problems with the mediation section as well. Their idea was, unlike the Ontario ones who wait for a problem and then one of the parties applies, the mediators there initiate the mediation. I guess the word really isn't "mediation," but I'm wondering what you think of that concept.

Mr Copes: Not being totally familiar with the Quebec system, I can't really comment in any detail. What I can say is that if mediation is going to be used, outside mediators should be used rather than board employees as mediators.

Ms Murdock: My fear there is, after Bill 162 we had a new growth industry in consultants --

The Acting Chair: I said 30 seconds for a comment, not for debate.

Ms Murdock: -- and after Bill 165 we'll have a new growth industry in mediators.

Mr Mahoney: That's for sure.

Ms Murdock: That would be my concern.

The Acting Chair: Mr Mahoney, you have a question?

Mr Mahoney: Yes. First of all, you don't clearly say it and I'll give you a chance: I'm assuming if you don't get the changes you want, particularly to Friedland, that you're opposed to the bill. But my question would be, you suggest that there be no purpose clause whatsoever. There have obviously been suggestions that financial responsibility be included -- not be the only item in the purpose clause, but be included -- and included with that would be the requirement for compensation, everything that's laid out in the purpose clause as it sits now, and then the interpretation of future benefits etc, etc, as they relate to the purpose clause.

Do you think it's possible that including financial responsibility in the purpose clause -- and I recognize you don't want one at all -- could actually backfire on the employment community and require the board to then increase rates if it's going to be truly financially responsible in giving benefits or increasing benefits?

Mr Copes: That's a possibility, but I see as much more likely that the purpose clause is going to be used to cut back benefits to injured workers.

Mr Mahoney: You're opposed to the bill in its present form, are you?

Mr Copes: I addressed that in my submission where I said we want the $200 to go ahead regardless.

The Acting Chair: I'd like to thank the Ontario Legal Clinics Workers' Compensation Network for its presentation today.

KIRAN SAWHNEY
RAVINDER SAWHNEY

The Acting Chair: The next presenter is Kiran Sawhney. Make yourself comfortable. You have 20 minutes for your presentation; introduce yourself for Hansard and continue whenever you feel comfortable.

Mrs Kiran Sawhney: My name is Kiran Sawhney and I'm an injured worker for the past four years. With me is my husband, Ravinder Sawhney, who has acted as my counsel in all the proceedings with the board and in the courts and will answer any questions after for clarification.

The purpose of my presentation today is to highlight the lack of accountability at both the WCB and the WCAT -- the appeals tribunal -- levels of the officers responsible for adjudicating the claims for injured workers. I will obviously be speaking personally about my experience with the WCAT and my own case.

When I was cut off from benefits without any opportunity from one of Canada's largest employers to rehabilitate vocationally, an appeal not only met with stiff resistance from the employer but, very surprisingly, from WCAT.

I had raised the issue of bias and misconduct and that was obviously not taken very well with WCAT. The chair protected senior tribunal counsel responsible for investigations and setup of hearings in my case and stated there is no bias in the evidence that showed on the part of the counsel, such acts as deliberately not placing my requests before the panel, pretending that my letters did not reach the tribunal, treating me as a criminal by investigating against me but not investigating the employer, forcing me to produce irrelevant documents through a threat of subpoena and not even accepting my request for documents from the employer.

Because the employer is a huge department store, the tribunal has shielded it and is obviously influenced by the corporate power of the store. The senior tribunal counsel is a past manager of the office of the employer adviser of the Ministry of Labour and is obviously biased against injured workers struggling to have benefits restored.

The courts in this particular case are also biased against myself as an injured worker. Not a single case has been successful at the Court of Appeal in favour of injured workers. As a group, injured workers are extremely poor and have no recourse to the legal system to rectify the biases against them at the WCB level and, as is obvious from my case, even at the WCAT level. Only a massive program to challenge the injustices of WCB and WCAT in the courts can hopefully result in some of the cases being successfully pleaded in favour of injured workers before some judges whose backgrounds lend them to decisions of sympathetic consideration of the pain and suffering of injured workers.

What was shocking in my case is that my allegations were not considered by the court, which simply stated that the same panel against whom I am alleging bias and misconduct adjudicate in its own cause the allegations against them. This is contrary to the common law principle that no one can be a judge in his own cause. The court is well versed with this principle but nevertheless decided to shield the misconduct of WCAT's top officials.

The Court of Appeal has even decided that I should pay legal costs to WCAT for bringing a review of its decision. It is a shame as well that WCAT hired an outside law firm to defend its senior officers against my allegations, this in the face of continuing cutbacks to the benefits of injured workers and the accepted need for trimming the WCB deficit. It is most alarming that the highest appellate body under the act should abuse the public funds to hire a big Bay Street law firm to intimidate an injured worker and to prevent her from making allegations of bias and misconduct on the part of several of its top officials. This misappropriation of funds must be prohibited under new legislation.

This is particularly significant because the injured workers can never have similar access to Bay Street law firms to even make the allegations, let alone obtaining justice. To cap it all, the agency, WCAT, knowingly selected a member of the board of directors of my new workplace, a former Ontario human rights chief commissioner, to represent them, leading obviously to my termination of employment from the new workplace, where I had with great difficulty managed to find a job after the store refused to take me back.

The court did not address the conflict of interest that is so obvious for a former human rights chief commissioner, under whose term the Ontario Human Rights Commission suffered tremendous public disgrace.

There is thus an order of costs outstanding against me. This is the legal system's response to my act of bringing forward allegations of bias and misconduct against senior WCAT officials in the sanctity of the court. In my severe distress, it is now upon me to find the funds to bring an appeal to the Supreme Court of Canada. I am losing hope in the legal system and am shocked that WCAT can, through its top officials, manipulate all rules and regulations to ensure its unaccountability.

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What is also distressing is that the Minister of Labour, the Premier of Ontario and the Lieutenant Governor have all turned down my request for a public inquiry into the allegations that are of tremendous public interest to the injured workers, as well as to the taxpayers of Ontario. It is obvious that the entire system of adjudicating the claims of injured workers is subject to the control, manipulation and influence of the big parties to clog every avenue of justice for the handicapped in the province of Ontario.

It is my shocking experience that the courts are no different from political appointees in their transparent protection of such big parties. The court ordered costs against me to intimidate me in the hope of shutting me up. WCAT, for its own part, ironically seeks to fill its coffers and reduce its deficit through legal costs against an injured worker. Some time back, WCB's former chief was let go; I think it's now time for WCAT's chief to go.

The amendment I propose for this bill is that there be a section in the act stating that no funds of the WCB and the WCAT shall be paid to hire outside counsel in any matter concerning, directly or indirectly, the conduct of any of its officers, and that no court of law shall award any costs against an injured worker for bringing into court any action in the nature of a judicial review, proceeding or an appeal with respect to any matter arising out of a claim for benefits under the act.

It needs no genius to figure out that injured workers inherently as a group do not file frivolous appeals, with no funds at their disposal to even initiate a court proceeding. The act does not promote accountability of officers discharging serious duties affecting the livelihood of those deprived of a fair means to meet the economic challenges of life due to handicap. Such accountability is the key to a just and fair system of adjudicating the claims of injured workers in Ontario.

Ms Murdock: I don't want to get into the facts or anything, but I'm surprised that you would think that a Court of Appeal would -- I mean, from your second page, you're basically saying that the Court of Appeal is, with bias, making a decision in favour of WCAT against you, and I am surprised that you would make that --

Mrs Sawhney: It was surprising to me as well, and I think you have to look at the particular parties and the personalities that are in this case. I will not mention names at this point; it's all in the court documents. It would be no surprise to learn that the parties that are involved and the names that are involved in this particular case -- that a Court of Appeal and the justices sitting on that particular bench would find no remorse in siding with the parties I have alleged misconduct and bias against. It's very surprising to an outside party listening to these kinds of details. This kind of thing, in any normal setting, you would expect not to happen.

I am an injured worker with absolutely no power in the system and I have alleged some very serious allegations against some of WCAT's very top officials, including the chief, and naturally it is my opinion, through my experience, that these parties have very well influenced the justice system. Now you're seeing that bias occurred with me at a level where the merits of my case have not even been heard, so I have been stopped in an avenue right at the first level.

Ms Murdock: Now, on your amendment that you're proposing, you're saying that in all instances, regardless, WCB or WCAT would not use their own in-house counsel.

Mrs Sawhney: Outside.

Ms Murdock: Or would use their in-house counsel rather than outside counsel.

Mrs Sawhney: Yes.

Ms Murdock: I don't think there's any section that applies under Bill 165.

Mrs Sawhney: Well, it's not addressed. If they can use public funds to go get one of the biggest law firms in Toronto to allege against an injured worker, I have no power, because this is an intimidation tactic.

Ms Murdock: No, I understand from you --

Mrs Sawhney: So if those funds are misappropriated, then there should be something in the act that says injured workers have the same access to the same kinds of legal systems through funds that are going to be given to injured workers, which obviously would not happen. But at the same time, injured workers are always in a position of subordination in the sense that they don't have the power, the access and the money when you're dealing with agencies that are this big.

Mr Mahoney: I don't really have any questions. I guess I'd just make a comment that sometimes agencies of this size can afford to hire almost an unending stream of in-house attorneys, and seem to do so in many instances, and maybe the reverse would be as appropriate: They should fire all their in-house staff and only use outside legal assistance when it's needed.

But in all fairness, the second part of your request, that we make some kind of amendment that directs a court on awards or costs against any appellant, is totally out of line, out of the purview of this committee and even, frankly, I think out of the purview of the Legislature. That's a justice matter that we have no jurisdiction in.

Mrs Sawhney: The point here is to make you aware of what is going on.

Mr Mahoney: I appreciate that.

Mrs Sawhney: Not only that, I think the act doesn't take into account any funds going towards outside counsel for their in-house counsel if you're defending. That is not addressed at all because this is not something that occurs on a regular basis. So that, at some point, I think has to be addressed, that this can happen; if people are nervous enough about the allegations, what length they will go to to keep injured workers quiet, and if there's any other technicality --

Mr Mahoney: I'd just tell you, by the way, that it happens with the Ontario government, it happens with municipal governments, it happens with the federal government, it happens with large corporations that have legal staff in their employ. Very often the legal staff that the particular organization has in its employ is not specialist or not fully acquainted with the law --

Interjection.

Mr Mahoney: -- let me finish -- as it pertains to a particular case. In many instances in my experience in 10 years on municipal council, we hired outside legal staff to fight cases and appeals and all kinds of things. That's our right and responsibility to the people who pay our bills, in that instance the taxpayers of Mississauga. In this instance it's the ratepayers who pay the bills at WCB and WCAT.

My point is, I think your request is outside of the purview, and I appreciate you bringing your concerns to the attention of the committee.

Mr Ravinder Sawhney: Can I just make a brief comment? There is a section in the Workers' Compensation Act that no judicial review shall be brought in a court of law in respect of any decision made by the Workers' Compensation Appeals Tribunal, since that is considered to be the highest body, and no injunction, for that matter, can be sought. A section such as that, on the very face of it, legally, as we call it, a prohibitive clause, protects the agency to an extent that even the courts do not like, which is why the courts have an overriding concern and say that if it's patently unreasonable, such a clause does not have validity even though it's in a statute.

If the government can put a statutory clause which shields the Workers' Compensation Appeals Tribunal to such an extent, definitely this committee has within its purview the jurisdiction to promote such a clause in favour of the kind of costs which Kiran Sawhney has suggested, that no order of costs be awarded against an injured worker.

Obviously you're right in saying the courts have jurisdiction and nobody can take away the jurisdiction of a court. Just as courts have jurisdiction with respect to the patently unreasonable segment of the section that states that judicial review cannot be sought, in the same way, in an appropriate case, the courts can interfere.

There's nothing wrong with a section stating that costs should not be awarded by a court. Simply because, just as the speaker before rightly said, nobody purposely gets injured, it follows logically that nobody purposely goes for a frivolous appeal if the person is an injured worker. Once we accept that assumption, it is possible to say that no costs should be awarded, and obviously any court can interfere with such a legislative purview.

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Mrs Witmer: Thank you very much for your presentation. There's a different perspective than what we've been hearing from injured workers, and I think, unfortunately, what you've indicated does happen. There is an attempt at times to intimidate the injured worker and prevent that individual from pursuing the case and the appeal further. I would agree with Mr Mahoney; I'm not sure how much we can do in this particular regard.

How long have you been out of work? That was the one question that wasn't answered here. How long have you been fighting this?

Mrs Sawhney: Four years, but in the interim I did get employed through my own efforts in 1993, and because the tribunal very maliciously sought to continue fighting me with outside counsel, hired one of the directors, therefore I lost my position that I did have. So I have been effectively out of work since May 1993.

Mrs Witmer: You say you effectively lost the job that you had. What would motivate that employer then? On what grounds could that individual let you go, the second employer?

Mrs Sawhney: The second employer? I was pregnant at the time and was leaving on maternity leave, with the very clear understanding that I would have a job when I returned. Two months later, when I went to go back to the position I had, I no longer was welcome back.

Mrs Witmer: Thank you very much for bringing this to our attention. I wish you luck.

The Vice-Chair: Mrs Sawhney, on behalf of this committee, I'd like to thank you for bringing your presentation to this committee this afternoon.

ONTARIO PSYCHOLOGICAL ASSOCIATION

The Vice-Chair: I'd like to call our next presenters, from the Ontario Psychological Association. Good afternoon and welcome to the committee.

Dr Warren Nielson: Mr Chair and members of the committee, I am Dr Warren Nielson, past-president of the Ontario Psychological Association. With me is Dr Ruth Berman, executive director of our association.

The Ontario Psychological Association is a voluntary organization representing the profession of psychology in Ontario. Our membership of approximately 1,400 members includes psychologists, psychological associates, psychometrists and graduate students in psychology. We are pleased to have the opportunity today to appear before you regarding amendments to the Workers' Compensation Act.

Psychologists have historically played an integral role in the provision of health care services to injured workers. These services have included both general diagnostic assessments and special assessments such as neuropsychological evaluation of traumatic brain injury and psychovocational evaluation of occupational and rehabilitation potential. In addition, psychologists commonly treat WCB clients for conditions such as post-traumatic stress disorder, chronic pain syndrome, depression and anxiety disorders that have arisen as a result of workplace injuries.

Notwithstanding our extensive and long-standing involvement, neither the current act nor Bill 165 recognizes the involvement of psychologists historically in this system. Our efforts to have current practice reflected in statute did not originate with the present bill. Identical concerns were raised during 1988-89 with the introduction of Bill 162. Despite a general endorsement by members of this committee and other members of the Legislature, our amendments were not included in that bill. Thus we are here today to both reiterate our continuing concerns about the Workers' Compensation Act and to share with you our specific comments with regard to Bill 165.

In spite of the sweeping changes initiated with the passage of the Regulated Health Professions Act, RHPA, the current WCB act and Bill 165 do not reflect the reality of current health care practice and continue to be outdated and inconsistent with other existing health care legislation. The RHPA introduced three fundamental changes to the way health care services are delivered in this province: first, increased public accountability by health care providers; second, recognition of the expertise of a greater range of health care professions; and third, increased freedom for consumers to choose from among the regulated professions.

The RHPA was also intended to create a more equal playing field among the professions, in contrast to the effective monopoly accorded some professions within the old legislation. Unfortunately, the current Workers' Compensation Act and Bill 165 perpetuate the outmoded approach that existed before RHPA. Specifically, many provisions make reference exclusively to physicians when this is no longer appropriate, given the RHPA and the particular range of health needs of injured workers.

We would like to note that the OPA supports most of the provisions in Bill 165. In particular, OPA supports those amendments directed at making the board more fiscally accountable. We believe that the clarification of worker and employer responsibilities concerning vocational rehabilitation services is in everyone's interests. The introduction of mediation services designed to facilitate resolution of disputes about vocational rehabilitation, medical rehabilitation, worker cooperation and employer obligations are also a constructive step forward. We also support the duty imposed on the board in subsection 15(3) to monitor "so that generally accepted advances in health sciences and related disciplines are reflected in benefits, services, programs and policies."

However, we would also point out that in spite of the board being required to integrate advances made in applicable disciplines in the interests of efficiency and effectiveness, the act itself, as well as Bill 165, largely ignores the roles played by non-physician providers. This contradiction is illustrated in, for example, subsections 8(2) and 8(3), which stipulate that information provided by physicians is available to the board only with the consent of the worker, and only physicians may be reimbursed for the provision of these reports.

Similarly, subsection 9(5) stipulates that, where possible, the worker's physician should be involved in designing and providing a vocational rehabilitation program.

In addition to physicians, psychologists and other health care practitioners are routinely asked to provide clinical information about injured workers. It is our view that in these circumstances workers are entitled to equal protection, no matter what type of health professional they're seeing. The requirement for consent should apply to all regulated health professions. Under the current legislation, workers abrogate their right to hold information obtained about them by a psychologist as confidential. As a matter of simple fairness, all professionals who are asked to provide such reports should be compensated.

Subsection 9(5) poses a similar problem. Although we recognize that the intent of the bill is to encourage a more integrated approach to vocational rehabilitation, the exclusion of other health care providers precludes such integration and ignores the fact that many workers may have non-physicians participating in their care or as their primary care provider. Moreover, subsection 9(5) fails to recognize the particular expertise of psychologists and other rehabilitation professionals in designing and providing such programs.

The Ontario Psychological Association therefore recommends changes to Bill 165 such that, first, subsection 8(2) be amended, replacing the word "physician" with the phrase "health care practitioner"; second, subsection 9(5) be amended by replacing the word "physician" with the phrase "appropriate health care practitioner"; and third, section 14 be amended by replacing the term "medical information" with the term "health care information" and the term "medical restrictions" with "health restrictions."

These amendments would more accurately reflect both the manner in which health care is, in reality, delivered to injured workers and the fact that health care is now universally defined as more than just physicians' services.

Bill 165 should also include additional sections that amend the current Workers' Compensation Act to remedy problems that we've raised in the past. Despite the definition of "impairment" in subsection 1(4) of the act which included "any physical or functional abnormality or loss including disfigurement that results from an injury and any psychological damage arising from the abnormality or loss," section 42 enables only medical practitioners to conduct assessments of impairments, irrespective of whether the consequences of an injury are physical or psychological.

Although the term "medical practitioner" is not defined, the intent of the legislation appears to restrict such assessments to physicians. This is inconsistent with recent changes made in workers' compensation laws in other North American jurisdictions and with the treatment and rehabilitation provisions of the Ontario automobile insurance act. In the latter case, psychologists are accorded the authority to diagnose psychological disability for purposes of entitlement to benefits.

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We would also recommend that Bill 165 further amend the Workers' Compensation Act such that under section 42 psychologists are included as health professionals who can assess worker impairments. This would allow psychologists to conduct assessments of cognitive and emotional impairments when these fall within the scope of the practice of psychology. All of the provisions in this section related to medical practitioners should be applied to psychologists and other regulated health professionals. Thus, the term "health care practitioner" should replace instances of "medical practitioner" throughout this section.

The definition of "health care" in subsection 50(2) of the act is antiquated and should be amended so that it is consistent with the principles and provisions in the RHPA. We would propose the following definition to ensure in law that no injured worker will ever be inadvertently denied a necessary health care service:

"In this act, `health care' means those services provided by practitioners regulated under the Regulated Health Professions Act (RSO 1991), hospital services, such artificial members or appliances or apparatus as may be necessary as a result of the injury and the replacement or repair thereof when deemed necessary by the board."

Again, speaking for our association, we very much appreciate having had the chance to express our views to you today, and we would be pleased to answer any questions that you might have.

Mr Mahoney: Thank you very much for your presentation. First of all, I want to tell you that generally I agree with the intent of your amendments in relationship to the words "health care practitioner." We've heard from others. Dr Berman, you and I have talked after my report was put out, and we failed to connect in some areas, but I think it makes a lot of sense. I think the solution to many of the problems at the WCB is recognizing the difference, and it's already been recognized in the amendments to the RHPA; it just doesn't quite go far enough to follow through in the process. So we'll be drafting some amendments that I think will take care of most, if not all, of the concerns you express there.

I want to ask you, however, about the difference between psychological disability and stress. You are the people who scare the devil out of the employers, who say that stress is going to now be compensable and how do we determine how stress occurred, where it occurred, who caused it, what it is, all of those things that laypeople like myself and others are very unclear about. I assume that in relationship to the automobile insurance act in some of these other jurisdictions that you talk about the term "psychological disability" is much broader than just stress, could result from some form of trauma or something along those lines.

Talk to me about the difference between stress on its own and psychological disability or impairment, how it's caused, how you define it and how you don't open an incredible can of worms with this specific problem.

Dr Nielson: The board and committees such as yours can decide what is covered and make recommendations about what is covered by the WCB. We're concerned about an equal playing field in terms of who makes the decisions about what is already covered. What you're referring to, I think, is probably the issue of chronic occupational stress and whether that should be covered. I don't know if that's something that you're considering including in this act. I didn't think so.

Mr Mahoney: No. Maybe you didn't understand my question. You're absolutely right that I'm referring to occupational stress, but what I'm trying to get at is that I recognize there are a lot of ways you and other health care providers could help in solving problems in rehabilitation. So I acknowledge that. The concern that we hear, however, about opening the door to your profession in a broader sense is the issue of occupational stress. We can hide from it and pretend, "Well, we're not really talking about that," but ultimately that's what we're talking about. That's what we hear from labour that they want included and we hear from employers that they don't want included.

Dr Ruth Berman: I'd like to respond to your question. Our references here to psychological impairment or psychological disability are not specific to the topic of occupational stress. That really is something quite separate from what we're talking about here. What we're talking about here is for workers, the majority of whom, subsequent to a physical injury -- I'm not talking about chronic occupational stress -- will encounter psychological difficulties in response to having had a physical injury.

I should mention, just parenthetically, that my own background is as a rehabilitation psychologist. Typically, with most of the people I see who have had difficulty returning to work, it often is not because of the physical injury itself but is because of the psychological sequelae that often accompany having a physical disability: the impact that it might have on somebody's psychological state, cognitive functioning, anxiety, depression, family changes, changes in the role of family members as a result of an injury and an inability to do what someone did before. It's often the psychological sequelae that need to be addressed before someone is able to be rehabilitated physically. So that's what we're talking about when we're talking about the psychological disability that might accompany an actual physical injury. The other is an issue, but I don't know that it's something that is --

Mr Mahoney: That's why I asked the question, so we can separate those two.

Mrs Witmer: We've certainly had similar presentations to your own, and I think most of us would be amenable to making some changes to the sections that you've requested and taking a look at replacing that with "health care practitioner."

I guess my question to you is, there's also been a request that a physician be included on the board of directors. Now, have you given any thought to that or discussed that at all? If that type of addition were made, again, would you want the general reference to "health care practitioner," or have you discussed that at all?

Dr Berman: Actually, this is again one of the things that came up in my discussions, and we subsequently had a meeting with Mr Mahoney because there was some reference to board composition in a report that he was involved in that reviewed the Workers' Compensation Board.

I think our preference would be to either have representatives from all of the relevant health professions on the board, which I think is impractical, or to create some kind of a mechanism where, rather than having representatives on the board, there can be representations to the board. I can see the advantage in having health care practitioners available to the board as resource people, because we're dealing with an area where that kind of expertise may be needed, but given the way in which injured workers are serviced, requiring a range of health care practitioners' involvement, I think that in addition to physicians there would be a lot of benefit to the board to have as resource people the other health care groups.

Perhaps the way to go is to set up an advisory council or a professional advisory committee that could make representations to the board or could be accessible to the board. If there's a need for these people to actually have voting seats, let the professions on this group elect some representatives who could serve that function. But I think you would find there would be a large hue and cry from the other regulated professions if one or two professions were singled out when the others feel that they are playing important roles as well in that entire system.

Ms Murdock: Thank you very much. It's actually a really interesting way to end, because I agree with what you said about physicians and limiting it to physicians. So Mr Mahoney and I may even agree on an amendment here.

Mr Mahoney: Good. I'd better rethink my position.

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Ms Murdock: The problem with changing it all, in all of the act, is we're limited to changing "physician" as it's used within Bill 165. In terms of vocational rehab and return to work, that makes an awful lot of sense that you would use "health care provider" or "practitioner" rather than limiting it to physicians.

I don't know whether or not you even know about this, but this morning we had a written submission made to us by the Ontario Chiropractic Association. In one part of their submission they're talking about where drugless practitioners were once included, now that health care services has been changed, as you have stated, under the Regulated Health Professions Act they are now not included under the Workers' Compensation Act. Unless you're entitled as a doctor, you aren't included. I'm wondering if you know anything about that.

Under the legislation of the RHPA, the five professions were recognized as competent and authorized to (a) perform and communicate a diagnosis and (b) use the title "Doctor." These are: chiropractors, dentists, optometrists, physicians and psychologists.

Dr Nielson: It might have been that the act was repealed, the Drugless Practitioners Act, at the time of RHPA.

Ms Murdock: Yes.

Dr Nielson: So right now there's a void in terms of how that corresponds with the Workers' Compensation Act, which refers to the Drugless Practitioners Act. That's my guess.

Dr Berman: Without having the original act in front of me, my recollection is that the language under the definition of "health care" makes reference to practitioners regulated under the Drugless Practitioners Act. But that piece of legislation has been repealed with the proclamation of the Regulated Health Professions Act. So we kind of have a definition that isn't attached to any statute, and this is why we're making the recommendation that health care be defined as services provided by those regulated under the Regulated Health Professions Act. Psychology was never mentioned in that definition.

The Vice-Chair: On behalf of this committee, I'd like to thank the Ontario Psychological Association for their presentation to the committee this afternoon.

Mrs Witmer: I would like it to be recorded on the record that although I asked on August 22 for copies of the discussion papers that were prepared by the transition team, they have still not been provided to us. I think that was done in an attempt that we wouldn't have access to that information and use it in our questioning. There was ample time.

Ms Murdock: On this table, I got two delivered to me.

Mr Mahoney: Well, that's the problem.

Mrs Witmer: Well, we didn't. I got all the material again yesterday --

Ms Murdock: But I got it from the clerk, and I'm presuming it came from the director of the department. Now I will personally --

Mr Mahoney: Elizabeth's copy was attached to yours. That's the problem.

Ms Murdock: Excuse me. I thought that was checked out, and that it would be checked out, because that was asked yesterday or the day before. Definitely we will send it to your offices, but I do take exception for Mrs Witmer to say that was intentionally done, because it certainly is not the intent to keep that information from anyone.

Mrs Witmer: Well, they were ready prior to August 22. Why they weren't provided was the question.

Ms Murdock: My understanding was that it was provided, as I stated on the record. If it hasn't been, and the clerk has not advised me such that it hasn't been --

Interjection: Check your mail, Elizabeth.

Mrs Witmer: I will again.

Ms Murdock: I will check.

The Vice-Chair: We're just waiting for clarification.

Mr Mahoney: I just wanted to say, in a spirit of cooperation, that these hearings have been difficult at times, entertaining at times, frustrating at times for all of us, and I think you, as the Chair, have done a commendable job of keeping things in order. Congratulations to you and the staff for getting us through this stuff.

The Vice-Chair: Thank you very much. Ms Murdock.

Ms Murdock: The clerk gave us exhibit 3/6/104, filed on August 31, 1994. The date of the letter from the Ontario Ministry of Labour is August 30, 1994, and it's signed by Mitchell Toker, manager of the workers' compensation unit. So that everybody's clear here, it says, "Standing Committee on Resources Development's Public Hearings on Bill 165 -- Ministry of Labour Undertakings Given on August 22, 1994," and then goes through a listing of all the undertakings made by the ministry at the request of different members of the committee.

Then there's a letter of August 26, 1994, addressed to Ms Manikel, explaining what was provided thus far. Then it has "WCB Reform: Governance and Leadership" and "The Role of the Board of Directors," decision-making on a bipartite basis, "Government Directions on Workers' Compensation Reform." Then it says, "New Directions for Return to Work and Vocational Rehabilitation." That is the transition team submission. So it is there, and you have had it.

Mrs Witmer: I have it now, thank you.

Ms Murdock: Well, it is not my fault. The clerk was given that to give to you. We all got it.

The Vice-Chair: This committee stands adjourned until Monday, September 26 at 2 pm.

The committee adjourned at 1636.