Assemblée législative de l'Ontario

WORKERS' COMPENSATION BOARD

CONTENTS

Tuesday 14 September 1993

Workers' Compensation Board

Odoardo Di Santo, chair

Brian King, vice-chair, administration

Rumina DiValentin, analyst, vocational rehabilitation agency

Nigel Hunte, claims adjudicator, Toronto East integrated services unit

Linda Jolley, senior vice-president, strategic policy and analysis

Sam Van Clieaf, senior vice-president, client services

STANDING COMMITTEE ON GOVERNMENT AGENCIES

*Chair / Présidente: Marland, Margaret (Mississauga South/-Sud PC)

Vice-Chair / Vice-Président: McLean, Allan K. (Simcoe East/-Est PC)

*Bradley, James J. (St Catharines L)

*Carter, Jenny (Peterborough ND)

*Cleary, John C. (Cornwall L)

Curling, Alvin (Scarborough North/-Nord L)

Frankford, Robert (Scarborough East/-Est ND)

Harrington, Margaret H. (Niagara Falls ND)

Mammoliti, George (Yorkview ND)

*Marchese, Rosario (Fort York ND)

*Waters, Daniel (Muskoka-Georgian Bay/Muskoka-Baie-Georgienne ND)

*Witmer, Elizabeth (Waterloo North/-Nord PC)

*In attendance / présents

Substitutions present/ Membres remplaçants présents:

Arnott, Ted (Wellington PC) for Mr McLean

Haslam, Karen (Perth ND) for Ms Harrington

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

Murdock, Sharon (Sudbury ND) for Mr Mammoliti

Winninger, David (London South/-Sud ND) for Mr Frankford

Clerk / Greffière: Mellor, Lynn

Staff / Personnel: Yeager, Lewis, research officer, Legislative Research Service

The committee met at 1002 in the Huron Room, Macdonald Block, Toronto.

WORKERS' COMPENSATION BOARD

The Chair (Mrs Margaret Marland): We will continue the agency review of the Workers' Compensation Board, and we're going to continue in 20-minute-per-caucus rounds. Yesterday we did half an hour because we had an hour and a half left. Is it the wish of the committee to do 20-minute rotations? Would you like to start with the third party and do it that way for the rest of the week, in turn?

In fairness, the third-party critic isn't here at the moment. The official opposition party critic isn't here either. Would the government like to start with its 20 minutes? Mrs Haslam, you could finish with the question where you left off yesterday afternoon.

Mrs Karen Haslam (Perth): Is there going to be a presentation on the fraud issue here?

The Chair: No, I think the suggestion was that we dealt with that subject today, but I would suggest that we're dealing with it by questions and answers, and in their answers they can expand into their presentation if they wish.

I'm looking for some direction from the committee. Mr Mahoney, would you be prepared to start this morning? We were going to start with the third party, but since the critic isn't here, we'll start with you.

Welcome to Mr Di Santo and Mr King again this morning. We're back to 20-minute rotations today. We will start with the official opposition.

Mr Steven W. Mahoney (Mississauga West): I believe that yesterday I had finished with a question that you suggested had to be answered today. Is that correct?

The Chair: We were out of time. You're more than welcome to start there if you wish.

Mr Mahoney: If I recall correctly, my question to Mr Di Santo had to do with the statement in his letter regarding the flooring issue. I'm just looking for it so I have it exactly. It had to do with the statement wherein he said that the Workers' Compensation Board had some special, unique characteristics different from other businesses that had used this flooring. Mr Di Santo, do you recall that statement?

Mr Odoardo Di Santo: I didn't have the letter yesterday, but I have the letter in front of me now.

Mr Mahoney: Do you have that statement in front of you, sir?

Mr Di Santo: The letter of March 9, 1993?

Mr Mahoney: Yes, the letter dated March 9. You make the statement, to quote from your letter, the last page, second-last paragraph: "Also, the Workers' Compensation Board is unlike many of the corporations you have mentioned in that it has different operational requirements." I'm not sure of all of the corporations that Mr Mead mentioned, but they would be corporations like the Royal Bank, the Bank of Canada, the Ontario Provincial Police. What do you mean by this statement, Mr Di Santo?

Mr Di Santo: The statement is self-explanatory. The Workers' Compensation Board's new building is a unique building because, among other things, we serve injured workers, we have the largest computer system in North America and we have requirements that perhaps other corporations do not have. It's as simple as that.

Mr Mahoney: Could you tell me what they are?

Mr Di Santo: Well, I mentioned some of them. I don't understand the point.

Mr Mahoney: You're suggesting, as you did during the inquiry into the reasons for building the new building, that the Workers' Compensation Board is unique in the business world, I guess you could say. Here you're suggesting that you are unlike many of the corporations that use the Canadian-made flooring.

Mr Di Santo: That's right.

Mr Mahoney: I'm just asking you to tell us in what way you are unlike. If you're servicing customers, be they injured workers or bank clients or witnesses, you're using desks, you're using telephones, you're using computers, you're using other technology, you're using photocopiers. Aside from the fact that you service injured workers, because that's simply your client base, what is it that makes the Workers' Compensation Board so unique that would preclude you from buying a Canadian product and going to this American product?

Ms Sharon Murdock (Sudbury): It doesn't preclude it.

Mr Di Santo: I object to the innuendo that that was the reason for preventing us from buying Canadian product, because that was not at any point a factor in the decision that was made. The decision was made on the basis of a number of factors, and --

Mr Mahoney: Excuse me; I'm sorry. I didn't ask you on what basis the decision was made. I asked you to explain the statement in your letter. Did you write this letter, Mr Di Santo?

Mr Di Santo: But I won't let you make the innuendo that that was the reason that prevented us from getting a Canadian company --

Mr Mahoney: You said it, sir, I didn't.

Mr Di Santo: -- because that was not the point.

The Chair: Let's just have one person speak at a time. When Mr Di Santo --

Mr Mahoney: With respect, Madam Chair, if I might --

The Chair: Well, if you could do it without interrupting him more than once.

Mr Mahoney: Madam Chair, I've asked a question that relates to this. I did not ask a question about the reasons they bought a different product. I am quite prepared to ask that question. I asked him to tell me, in what way is the Workers' Compensation Board so unique or unlike these other corporations? That's all.

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Mr Di Santo: Well, Madam Chair, I said --

The Chair: Excuse me, Mr Di Santo. You have a point of order, Mr Marchese?

Mr Rosario Marchese (Fort York): Madam Chair, Mr Mahoney understands the process in terms of how it works with people who come before this committee. Abuse is one of the things that we don't do. If Mr Mahoney feels he's not answering the question, when he's got his turn again he can say, "Please say this instead of" whatever, but he should allow him the courtesy to finish the answer.

Mr Mahoney: That's fine. Thank you.

The Chair: Please proceed, Mr Di Santo.

Mr Di Santo: Thank you, Madam Chair. I want to premise that the choice made by the contractor, by Eastern, was based on a recommendation made by the facilities strategy team of which the Workers' Compensation Board is part. That was based on a number of factors, and I added that also the unique nature of the business we do was part of that decision.

Why is the Workers' Compensation Board different from the OPP, from other corporations? Because we serve every year 100,000 injured workers and we have, as I said before, the largest computer system in North America. Right now, we have incredible problems. If you visit the building, we will show you the ceiling when we have to plug a new line, the inconveniences to our staff and to our clients, ultimately.

We have an imaging system which is very large. In fact, we are a paperless company; all of our files are on imaging. We have a higher than average number of telephone lines because we serve 377,000 injured workers every year. Doesn't that make our institution unique?

Mr Mahoney: Thank you. I'd like to ask Mr King if he made the comment that is attributed to him. Madam Chair, let me preface this by saying that I very much would like to get into service delivery. Although this flooring contract causes me great consternation --

Mrs Haslam: You're the only one.

Mr Mahoney: -- I'd like to get into many of the other issues. Well, if it doesn't bother you, that's fine.

Mrs Haslam: No, I mean it's not the place.

Mr Mahoney: I really have some difficulty with this issue, and I'd like to know if Mr King made the statement that was attributed to him in the Toronto Star. I'll read from the article. It says, "Outside the meeting room King was more succinct: `Would you rather the floor collapsed?' he told reporters." Did you say that, sir?

Mr Brian King: I was met on the way into the meeting room yesterday with a scrum of media who asked me why we had chosen the concrete flooring over the wooden flooring. I indicated that was a decision made by professional engineers and by professional people, that it wasn't my decision to make, as a nonprofessional, as a non-architect, as a non-engineering person, to choose whether it should be a concrete or wooden floor, and I may very well have said that if I made the decision it may very well have been a floor that collapsed. I have to rely on professional advice on these matters, not on political considerations.

Mr Mahoney: What do you mean by that, sir? What political considerations?

Mr King: It is reasonably well known in Canada that some decisions made about buildings and tendering aren't based upon the quality of the product but based upon narrow political considerations such as whether the matter goes to certain favoured parties.

Mr Mahoney: Are you suggesting my concerns are narrow political concerns?

Mr King: I didn't say that at all. I'm sorry if you --

Mr Mahoney: What exactly do you mean? I don't understand what you mean by that. What political considerations would possibly enter into the decision on giving a contract out for anything, be it walls, ceilings, flooring? I would certainly assume there would be no political consideration.

Mr King: One would certainly hope there would be no political considerations taken into account in any contracting in the public sector. I've read recently about speculation about turning Pearson airport over to the private sector, to a consortium of companies led by former party presidents and members of a political party. Now, whether that's political consideration or good business, I leave for others to decide.

Mr Mahoney: Interesting analogy. I don't know what your building or your corporation has to do with that whatsoever. Is it safe to say that this report is accurate, with regard to the floor collapsing? I guess you indicate that it is.

Mr King: I made no reference to the type of flooring as represented by ASP flooring as collapsing in Simcoe Place. I said that professionals had given us the opinion that for our business needs, for the type of office tower that's being constructed, it should be the concrete flooring. We made that decision ahead of the tender being let to the interested subcontractors, the flooring subcontractors. The contractor in question bid on the concrete flooring, and only after it lost that bid in an open and free competition did it start complaining that we had chosen what we tendered for rather than what it wanted us to go out to the market for.

The Chair: Excuse me, Mr King. You just interrupted Mr Mahoney.

Mr King: I apologize.

The Chair: It has to work both ways if it's going to work. I just wanted to point that out.

Mr Mahoney: No problem, Madam Chair. I'm a big boy.

Mr King: I apologize, Madam Chair.

Mr Mahoney: You've again reiterated the statement, sir, that you made yesterday with regard to the fact that this company came in after it lost the bid. That's incorrect, sir, and I believe you know that's incorrect.

If you don't, I think you should check with the people who are building this project, because they very clearly -- they went to the extent of taking some of your construction people on a tour of the Royal Bank project which they're currently installing this floor in, prior to the tender being submitted. They attempted to communicate to you, to Mr Di Santo, to the Premier and to the Minister of Labour on an ongoing basis, prior to the tender being opened, that they had a Canadian alternative that not only was acceptable but had a longer warranty than the American alternative, had a 20% greater load capacity than the American alternative.

They tried to communicate all of this. They tried to communicate the fact that the product itself, the American-made access floor system, "has been manufactured for less than half a year and has no proven lifespan." No one would listen to them. The purchase of their floor system would "keep 50...factory workers employed for another year, not to mention the...suppliers" etc. No one would listen to them. The Canadian-made flooring "meets or exceeds all your loading requirements."

You're trying to suggest that they came in afterwards with some sour grapes.

Interjection.

Mr Mahoney: If the member wants to continue interrupting me, Madam Chair, perhaps you could call her to order.

They attempted to bring all of these issues to your attention and got nowhere. You have almost damaged, by the way -- now, we all get taken out of context; maybe that's what you want to say, that you were taken out of context, but you have damaged this company's reputation and this product's reputation, a product, I reiterate, that is approved by the Ministry of Housing for use in the province of Ontario, that's being used by government agencies.

Doesn't that concern the members opposite? Obviously, it doesn't. But I'm very concerned, Mr King, when I read this this morning, that you would leave some kind of suggestion that this Canadian-made product is inferior and indeed might collapse under the specific, unique, unusual uses required by the Workers' Compensation Board.

I think you owe this company a written clarification or apology, certainly a clarification at the very least, that you were not casting aspersions on their product. This is an Ontario company, which you rely on for your job, sir, I might add, as one of the companies that support the Workers' Compensation Board. They pay $50,000 a year to the Workers' Compensation Board, Mr Di Santo. I think that's a credible amount for an Ontario small business to pay in support of your organization. To have your officials publicly castigating their product is just totally unacceptable.

I wonder if you might be prepared to offer to Mr Mead, who, if he's not here yet, will be here some time today, some form of clarification or apology with regard to the statement reported in the Star this morning, Mr King.

Mr King: I certainly will, in front of this committee and in front of Mr Mead, indicate that I had no critique to make of their particular product. I did indicate that the decision as to what type of flooring would be best for the WCB, would be most efficient, would be most effective, was a professional call, not that of a bureaucrat. You have to rely on those who have been trained in this area, and that is the decision we relied upon as a facilities strategy group.

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The media report that indicated that I don't want a floor that falls down had no reference to ASP flooring's product but to the fact that we have got to accept professional advice, not make decisions based upon political considerations but upon professional considerations. If anyone misunderstood, including yourself or ASP, I apologize.

Mr Mahoney: Okay. I think it's appropriate that you do apologize, but how you could suggest that it wasn't a reference to ASP flooring -- that's what the whole article is about. Obviously your comment that you don't want a floor that would collapse, none of us would want to see that, but obviously you'd be making that comment in reference to the alternative product that was offered to the Workers' Compensation Board. You weren't making it in terms of some imagined product; you were talking about the access flooring provided as an alternative by ASP flooring out of Oakville. That's what the question would be about, and you expressed concerns that could be taken in no way other than to suggest, "Would you rather the floor collapsed?"

I just want the record to show that this is a first-class product, made in Canada; that this is a product that could have been installed in your building for $500,000 cheaper than the one you've decided to buy out of Grand Rapids, Michigan; that very clearly this product is installed in millions of square feet of flooring throughout the country, throughout the province of Ontario; that corporations like the Royal Bank, the Bank of Canada and the Ontario Provincial Police have decided to use this flooring.

This is not inferior flooring. They all have similar problems. They have hundreds of thousands of customers, Mr Di Santo, you'd be surprised to know, who go through the bank buildings every year, very similar to the numbers that would go through workers' compensation, plodding and jumping up and down on the floor when they're unhappy, I suppose, at whatever it is they're unhappy about. I fail to understand the uniqueness of your corporation with regard to something like the technical recommendations.

Mr King has made reference to not having a political consideration. I would certainly hope that would be the case. I would not want to see political interference in a decision to award a contract; that's certainly not what this committee is about. This committee is about questioning decisions made that you were part of, I presume. Maybe you can help me with that.

The strategy team, I understand in the letter from Mr Di Santo -- a letter that is quite technical, I might add, for someone who is not technically oriented. I'm quite impressed with Mr Di Santo's grasp of the situation, because it is quite technical in giving the reasons and justification to Mr Mead for not using this flooring. But you refer, Mr Di Santo, to members of the facilities strategy team. Does that strategy team include a direct representative, ie, staff or a consultant, for the Workers' Compensation Board?

Mr Di Santo: Yes.

Mr Mahoney: More than one?

Mr Di Santo: More than one.

Mr Mahoney: So they would have input into this.

Mr Di Santo: Absolutely.

Mr Mahoney: Would they come back to you or Mr King for advice on something of this nature?

Mr Di Santo: No.

Mr Mahoney: Mr King, would they come to you?

Mr King: The facilities strategy team did not come back to Mr Di Santo or myself with respect to the professional recommendation of engineers and architects as to what floor we should have.

Mr Mahoney: Are you aware, Mr King --

The Chair: Time.

Mr Mahoney: Sorry. Am I out of time?

The Chair: You are this time.

Mrs Haslam: There is a God.

Mrs Elizabeth Witmer (Waterloo North): Madam Chair, are we focusing on fraud this morning?

Interjections.

Mr Mahoney: Madam Chair, I thought it was open.

The Chair: It is open.

Mrs Witmer: Okay, I will focus my attention on that area initially, because I think there is some information that I would like to receive from you, Mr King. You did instigate and set up a comprehensive fraud strategy about a year ago, and you've obviously been very busy since then investigating some of the fraudulent happenings that have been occurring in this province. There's been a suggestion that because of what's happening in the United States, there are organized gangs that are moving into the border cities to capitalize on our compensation system. Could you give me a little more information about what exactly is happening with those gangs?

Mr King: I will be as forthcoming as I possibly can with the committee, recognizing that some of these matters are under criminal investigation at the present time. Insurance fraud in the United States has proven to be a rather large business of recent years, and some of the states have been particularly vigilant in cracking down upon the insurance fraud, on the organized groups that have been pursuing the assets of insurance companies, like workers' compensation boards, especially on the west coast of the United States, in California and the states of Washington and Oregon, and it has been reported through criminal intelligence bodies in Canada that some of those people who have been squeezed out of the operations in the United States have moved or are moving north of the border.

Basically, some of the types of operations they get involved in are to set up dummy companies, which are basically paper shells, to then file claims for employees who exist only on paper, and have a medical practitioner wrapped into the loop so that all three requirements for a workers' compensation claim would be met by what is basically a paper or a shell company; that is, an employer would report an injury, a worker would presumably report and a medical practitioner would report all at the same time.

In an organization like the WCB where you have around 400,000 claims a year, to put too many screens or too many blocks in front of the acceptance of a claim would lead to incredible delays. Therefore, we have relied traditionally on these three safety valves or safeguards: the employer report, the worker report and the doctor's or the medical practitioner's report. If all three of those reports are bogus or are somehow faked or not properly put together, we are vulnerable to an attack by a fraudulent exercise. That's the sort of thing I was referring to when I reported that very organized attacks on the assets of the WCB were being imported into Canada.

Mrs Witmer: Have you communicated with the states that have been vigilant to determine how you might counteract this?

Mr King: I was in Baltimore, Maryland, about two weeks ago at a meeting of the American state compensation funds, where I spent particular attention in dealing with those states that have developed a fraud strategy to see whether ours was of equal scrutiny. I am planning on going, if these hearings end, to Portland later this month for another meeting of American states. One of the key issues in that meeting is on fraud and fraud awareness and fraud prevention. We're very aware of the need for partnership with those who have already met the fraud situation and who have experience in it.

I would point out, in addition, that I indicated yesterday that we have made approaches to the RCMP, to the OPP, to the Metro police forces and the regional police forces. The director of my special investigation branch was in this morning at 7, on the way to Niagara to meet with the Niagara Regional Police Force. We have partnered or developed networks with the UIC, the Ministry of Community and Social Services and the Health ministry so that parties are aware of common concerns and common problems and will call each other if there is the need to know what's going on.

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Mrs Witmer: I was going to ask you that question. That's obviously very important, as we're seeing fraud in many of those other areas as well and it's probably some of the same people who are responsible for the fraudulent claims.

There are of course the two types of fraud, the internal and the external. What methods are you using to detect the internal fraud, and is it greater than the external fraud?

Mr King: I was badly misquoted, and for that I feel guilty, in terms of the 5,000 employees of the Ontario Workers' Compensation Board. In response to a question at a news conference, I indicated that the greatest potential for large-scale fraud resided in someone who had access to the internal computer systems because one individual can direct programs to create numerous payments, whereas those who are outside the board have a more limited ability to attack the assets of the board. This came out in the media as, "The biggest problem with fraud is internal." No, the biggest potential problem and where you have to be most concerned is over the security of your systems.

Your specific question was what we're doing internally to deal with the problem. The first step is human resources in the recruiting, to make sure the people we recruit are the sorts of people we wish to have working at the Workers' Compensation Board; that they not come, for instance, on the basis of a political suggestion from a minister, as may have happened in the past, but they come based upon their merit and ability to do the job for us.

The second is that we have routine monitoring, on a spot basis, of files that people are handling through internal audit processes. It's called an audit universe, where every area where you are at risk in an organization like the WCB is subject to a random audit at any point in time, so that people never know when they're apt to have an auditor come in and look over what they're doing.

The third area is a systems concern, that is, are our computer systems using passwords so that only those people who are properly authorized to get in and deal with a system go in and deal with it. We have beefed up very considerably our passwords and our computer security systems.

Mrs Witmer: I was interested in one of your comments. You indicated that some individuals had been appointed or received jobs and that they were political recommendations.

Mr James J. Bradley (St Catharines): That doesn't happen now, of course, with this government at all.

Mrs Witmer: I'd just be interested. Has this been a problem that has created some fraudulent situations, Mr King?

Mr Bradley: How did Mr King get his job?

Mr Mahoney: Or Mr Di Santo.

Mr King: I can only respond for the past two and a half years, that the hiring at the Workers' Compensation Board has been on the basis of merit and ability and the promotions at the Workers' Compensation Board have been on the basis of merit and ability. I have 20 years' experience with the Ontario compensation system as an external observer and one who has known the various leaders of the Ontario system for the past 20 years. Anecdotally, various members of those leaders over the years have indicated to me that they have been required to hire certain people, but that's about as far as I could go. I don't know of individuals.

Mr Bradley: This government takes no back seat in patronage, I can assure you of that, to any government.

Mrs Witmer: I'd like to focus now on another area; this is an area I'd like to receive some more information about. You talked about the suppliers as also being an area where certainly there is a situation and a possibility for abuse. The taxis giving claimants rides to rehabilitation centres: How much of a problem is that with the taxi drivers, and how can that happen?

Mr King: The Workers' Compensation Board used to have a series of chits or requisitions that workers would be given to allow them to be pre-authorized to use a taxi if they couldn't take public transit. Someone who is in a wheelchair, for instance, couldn't necessarily take a subway or a bus.

The dilemma was that the board lacked the controls to assure that those were being properly handed out to injured workers and being properly consolidated when the bill came in. That control weakness arose about 9 or 10 months ago with the arrest of a Toronto taxi driver who had defrauded the Workers' Compensation Board of some $50,000 for taxi chits that were submitted and for which rides never occurred. That was on the basis of a worker who had been receiving rides and had legitimately been submitting the bills but stopped submitting them at a certain point in time and the cab driver was able to continue submitting them. We have received full repayment of that $50,000, and the necessary controls have been put in place to prevent that sort of blanket requisition from being given to any supplier like a cab driver.

Mrs Witmer: If we take a look at the transportation and we take a look at the mileage claims, there was an article earlier this year that indicated that mileage expenses for the WCB totalled $19 million in 1992. You've indicated that there's a possibility of fraud as far as the taxi drivers are concerned. What about the individuals who are claiming mileage? What type of audit or check takes place?

Mr King: Mileage to workers is authorized if they have to come for a specialized medical treatment that's not available in their home community. For instance, perhaps in Thunder Bay there is not the type of specialist who would be able to treat a neurological condition of some sort that's as a result of a work injury. In order to get a worker recovered quickly, to give them the medical treatment that would allow them to rehabilitate and return to work, we're quite likely to approve them coming to a centre where there is such a specialty and would approve a payment for them to fly into Toronto, for instance. Those are checked against the medical reports that we receive for the service thus rendered.

In addition, people may come into Toronto and receive payment to stay or to be treated at the rehabilitation centre. Amputees are provided with artificial limbs at the rehabilitation centre, and those again are checked against the actual treatment that is given.

Finally, workers can be authorized mileage or travel expenses if they're attending a training course that will result in them getting the skills to return to work. If you live in Timmins and there is a course available to you in North Bay that will allow you to get the education or the skills to go back to work, you may be authorized mileage to attend that training course. These are checked by health care adjudicators on the basis of existing rules.

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I will add that that is one of the areas covered by the comprehensive fraud strategy I spoke of, the assurance that such rules and procedures provide minimum loopholes for abuse.

Mrs Witmer: I personally believe that in the area of mileage and a personal automobile there's a tremendous potential for fraud. I don't care whether it's WCB or any other organization: The potential exists, and we know it happens. I was personally involved at one time in checking mileage, for five years, and I certainly came across it. I would hope you would be vigilant.

You've indicated as well that perhaps there's some medical fraud in terms of the doctors and the people involved in the rehabilitation. What's happening there, and what methods are being used to counteract that?

Mr King: Again, I repeat my opening statement that I must be somewhat discreet because of a very intensive ongoing investigation. We have 170,000 pensioners who are receiving disability pensions from the Workers' Compensation Board who may require ongoing medical and drugs for their condition. We have in addition, at any one point in time, 70,000 temporarily disabled workers who all may be receiving medical treatment and/or drugs. The potential, given those quarter of a million Ontarians who are receiving medical and drugs, for overbilling or for billing for services not received is rather significant.

We do have an ability to profile suppliers through our computer programs to show average billings. In cases where norms are not met or the norms are exceeded, some work may have to be done to determine whether that is just a popular supplier or whether in fact it's something that requires greater investigation.

We have presently a partnership with the Ontario Provincial Police and with the Metro police forces to look into certain situations regarding supplier and health care supplier benefits. They're right in the midst of a very intensive ongoing investigation, and I hesitate to go much further in that particular area, but I'd be pleased try and help you on other questions.

Mrs Witmer: Mr King, I appreciate the efforts you have certainly put forward to investigate fraud, but it's been suggested by the critics that fraud totals somewhere in the neighbourhood of $500 million. You've indicated that you believe it's closer to $150 million. Do you still hold by that figure? You've had a chance to look at it more thoroughly.

Mr King: The numbers you quote are always as a result of a speculative story in the Financial Post that indicated up to $500 million of fraud in the workers' compensation system. The best I can gather in speaking to the source of that report and in picking up on where it might have come from was that there was a brief report that indicated the potential for about 17% fraud on one study of welfare payments.

I had responded by indicating that the professional forensic auditors I have talked to from two Toronto forensic auditing firms would estimate the fraud potential in the WCB to be closer to 5% rather than 17%. I had taken the gross figure of $3 billion of benefits and extrapolated out that a professional estimate would be closer to $150 million rather than the speculative figure of $500 million. If I were to estimate what I would call criminal fraud, I would estimate closer to the forensic auditing, the professionals' estimate, which would be closer to $150 million.

If people want to define fraud as someone who goes fishing while receiving benefits, then perhaps the speculative figure of $500 million may be closer. That is a problem with claims management. That is a problem with people's perceptions about what you can and cannot do while you're claiming total benefits.

But in short, $150 million would be closer to the figure.

Mrs Witmer: How does that percentage compare to the other provinces? You've had experience in Manitoba. Is that similar?

Mr King: Ontario is doing more right now than any of the other 11 jurisdictions in Canada to deal with the fraud problem. We have been in touch with all of the Canadian boards to discuss this with them. I believe it fair to say that there are three provinces with the largest potential, because of the populations and because of their closeness to large urban populations in the United States, and that would be British Columbia, Quebec and Ontario.

In contacting those boards, we would put ourselves well ahead. They don't consider the problem to be nearly as serious in their jurisdictions; that could be reality or that could be wishful thinking. All I'm indicating to you is that we have put in place the resources to do proper investigations and to deal with it in Ontario, and we consider it to be a problem in Ontario that we have to deal with.

Mrs Haslam: I have some questions on this topic. Mr Di Santo, I'm going to pass on your answer, and I still like you. I will have an opportunity to ask that another day, I think, and I'll leave that for the time.

In your opening statement, Mr King, I was very interested in what you said about the cost to industry of $2 billion a year, that private Canadian industry has a fraud problem of $2 billion a year. Ms Witmer mentioned a little about it and youe followed up on that. What I have to ask about it, though, is this: We are also prepared to cooperate with the private insurance industry in mutual efforts to reduce fraud where we are legally able to do so. I wondered how you were working with the private insurance industry to do that, if you could elaborate a bit on that last statement.

Mr King: There may be situations where there is double insuring, where workers or employers or suppliers or others, in addition to workers' compensation protection in case of injury, may have private insurance coverage for injury. What I intended to indicate by my comments was that where freedom of information rules allow us to do so, if people may be collecting from both ourselves and a private insurer, we would do what we could to try to prevent that from happening. That was the basis for that comment. Where we come across evidence on our files that there is double collection on the part of anyone, we would try to determine whether it is an area we can deal with or investigate.

The other thing I think I may have mentioned is that, as someone who has been interested in the Canadian social security system, the incoherence of the federal-provincial planning in the area of social security I think is something that has to be looked at.

We have a Canada pension plan that has a disability aspect to it. We have an unemployment insurance system that has a disability aspect to it. We have a workers' compensation system, which is provincial, which is for disability. We have the Ministry of Community and Social Services which looks to those who may have a problem because of disability. We have disabled veterans' programs which look to people who may have disability. We have automobile insurance programs that try to move in where people may suffer an injury and there is a disability.

I think somebody has to take a lead in saying, how are we going to bring all of these programs together and rationalize them? Quite frankly, right now I can't get Canada pension, for instance, to share anything with us. They may be making payments I know nothing about to the worker we are also trying to pay. I think we're past the day when we can have such a mixture of systems without some rationale and coherence to them, and that will require federal-provincial cooperation.

Mrs Haslam: Am I to understand that there might be cases where they are collecting from one of those other people you mentioned plus WCB benefits?

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Mr King: There are situations where people could be collecting from the Canada pension plan disability for the same injury they're collecting from workers' compensation for, and because we are not authorized to use things like social insurance numbers there's no common identifier. The federal government will say, "We're a first-payer and we don't care what the provinces do." We simply cannot, in an efficient way, determine who should be making what payments and what offsets there should be. It does cause a significant problem for every compensation board in Canada.

Mrs Haslam: I'd like to take that a little further and look at something in the Ministry of Health called northern travel grants. You were talking, when Ms Witmer questioned you, on mileage and coming to a specialist, let's say, in Toronto from the north. Under the Ministry of Health northern travel grants, there is an application process where a person can have their mileage, I believe, paid through the northern travel grant. Is it a possibility that they then would double that by applying through your operation for the same mileage? Is there anything you have in place for that particular aspect of fraud?

Mr King: I will profess total ignorance of the northern travel allowance. I make an undertaking to you that I will alert our special investigations branch to network with that particular program, to make sure we have in place the controls necessary to make sure people get paid, if they're deserving of a payment, but not get double-paid.

Mrs Haslam: I have a couple of questions. Ms Witmer was mentioning doctors. I've had cases where some doctors won't do WCB cases and therefore it's difficult to obtain the necessary medical practitioner if you go in and say, "This is a workers' compensation claim." That results sometimes in the doctors who will do it having most of the cases. You're saying you're looking at those patterns. I'm only mentioning that as one aspect of that pattern, because I know of cases where some doctors do it because they're the only ones in town that will do it.

The other problem I see with doctors is that in some cases their diagnosis is not accepted. I have a claimant come in and say, "I have my doctor's diagnosis here and now they want me to go to Toronto to have three more doctors look at me for the same situation." That's an additional cost to OHIP for additional trips to doctors in many cases. Why is that the case?

Mr King: I want to leave no misimpression with these committee members or with the public of Ontario that we would question doctors who are popular or who have a large practice. That is not the sort of situation I was referring to. I was referring to revolving door situations where just the sheer numbers that are being billed to us, the mechanics of getting that many workers through and talking to them all and doing a report on them all, defies imaginative planning. The numbers don't add up to the time available. I want to make very clear that I'm not questioning the medical profession.

Secondly, I think you've asked, why would we question a diagnosis of a family physician? We're a program that many times has pressures from two directions. One direction is the worker and the worker's physician saying that their diagnosis is this and they should be allowed to do that type of treatment.

That may not meet the demands of the employer on an appeal, for instance, who says, "I have a job in terms of light duties or in terms of alternative employment or accommodation." Sometimes, to break the deadlock or to break the adversarial situation, to referee as the legislation itself suggests we should do in terms of the non-economic loss award, where there is a medical referee allowed, where there is a dispute over the medical diagnosis or prognosis, we would call for a refereed situation.

I don't believe it's that widespread, but I won't deny that you have cases where workers are coming in.

Mrs Haslam: Talking about fraud, I know you have increased the number of people in a unit who are working on fraud. We hear about fraud cases, yet the charges have been few. Are there some explanations, or are there some projections of charges being laid? Are there some time lines you're looking at? I know we take up a lot of your time here at the Legislature, but more along the lines of whether you have projections or whether you have any idea of how this new fraud section will help in the laying of charges and in the stopping of the fraud that may or may not be present.

Mr King: The number of charges to be laid ultimately is going to be an agreement between police forces which we bring the material to and the crown prosecutors who are the ones ultimately to make the call. I could go through statistics. I'm not too sure that's as important as to indicate to you that we have something like 430 files under active investigation at the present time. If the norm holds true in past patterns, approximately 10% of those would be coming forward with sufficient evidence to lay charges. But that may just be the surface, because there are 822 that are presently being looked at to see if they fit the qualifications for a fraud investigation, and more keeping coming in every day.

My best advice to you is that we are going to see significantly more charges laid in the third quarter of 1993, and in the fourth quarter of 1993 we will see even more charges laid, and I would predict that by the first quarter of 1994, there may be a rather huge number of charges laid.

Mrs Haslam: Just before I yield, when you talk about charges, you're talking about the four areas you mention. I don't want to leave the impression that it's only so many cases against workers. There are various charges, and you named four areas: suppliers, employers, employees, and internal employees and workers. Out of those cases, it would be a variety of cases?

Mr King: Yes. There have been charges laid against all four of the categories you have just outlined, and there will be future charges laid against all four categories you have just outlined.

Mrs Haslam: Okay, I'll stop there. I know my colleagues have questions.

Ms Jenny Carter (Peterborough): I'm glad we just reminded ourselves at this point that there are the four different directions from which fraud can come, because I think there's a bit of a tendency to see it all as being with the claimants, when in fact there are these other kinds of fraud.

I want to come at this from a slightly different angle. I've been told by somebody back in my riding who deals with the board that adjudicators have forgotten that their purpose is to serve injured workers and that they make them jump through hoops. What this means is that a lot of claims are turned down and end up going to appeals, and I understand that 75% of these appeals are won. In other words, a lot of genuine claimants are being turned down, and the fact that they then go on to appeals obviously means that more public money is being spent, because it's a long-drawn-out process -- I understand it takes about six months -- and meanwhile a lot of innocent people may have their lives ruined, lose their houses, whatever.

I'm wondering whether, just to tighten up the system, because we say, "Oh, well, it was fraud, so we've got to make it even more difficult for claimants to succeed," that might not be counterproductive both from the aspect of justice to workers and financially. I wonder if you could comment on that.

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Mr Di Santo: If we had a different system of insurance, we could probably have a different adjudication system and we could accept all the claims, because if there is a disability and that disability results in a loss of income, then the worker is compensated regardless of the cause or the reasons the disability happened and the loss of income resulted. But we have a Workers' Compensation Act that we have to implement, and the Workers' Compensation Act --

Mr Mahoney: You're out of water.

Interjections.

Mrs Haslam: She was afraid you were full of saliva and ready to go for 20 minutes, right?

Mr Di Santo: We have a Workers' Compensation Act we have to abide by, and we are required to make judgement calls every day. Last year we had 377,000 accidents, and the majority of those accidents were dealt with in a very swift way and compensated.

What you're referring to are cases that are not easy to deal with because there are complications. For instance, to give you an example, the causation is not very clear, so we have to see if we can adjudicate and at the same time respect the law, because we cannot just accept any claim.

In many cases, the adjudicators make mistakes, because they are human, and in many cases they are forced to make decisions based on incomplete evidence, not because they want to make a decision without evidence but because in some instances the evidence is not readily available. In some circumstances the evidence is not forwarded by the parties interested in the adjudication. The result is that they do make mistakes and therefore an appeal results.

The appeal I think is a safeguard not only for the worker but also for the employer; in fact, the employers in Ontario can appeal claims as the workers do. But as I said before, out of 370,000 accidents, only 3.7% are denied, for many reasons. I'm not saying that we are right; as I said before, and I restate, it's possible that some of those decisions are wrong. Why they are wrong, there is a variety of reasons, as I told you.

What are we doing as administration and as a board of directors? Let's not forget that the policies are developed not by Brian King and myself but by the board of directors, and four of the board members out of eight represent the workers, so they have a vested interest that justice is done to the workers, who deserve justice.

When we came to the board, we looked at the situation and we noticed, as Brian King told you yesterday, that we had a large pool of our workers who were adjudicator assistants who were unable to make decisions, for many reasons. One of the reasons was that they didn't have proper training and their classification didn't allow them to have a relevant role in the decision-making process. So we reorganized the adjudication branch. Not only that, but we did something very fundamental: We asked our adjudicators to be trained on a permanent basis.

Mr King told you yesterday how many resources we are devoting to training our staff, because if they are not knowledgeable they will most likely make more mistakes and therefore wrong decisions will result. So we are training, and we made the commitment last year with the board of directors; we are developing the plan for 1994, and training is a central feature of the job of the adjudicators.

Another important aspect I want to tell you is that when we came before the standing committee on resources development in 1991, one of the objections we were faced with was exactly what you said at the outset in your remarks, that the adjudicators are playing games with injured workers. I think we must understand that adjudicators are human beings like all of us. They are doing a job, a very delicate job, and I think we all understand that they're not there to play games.

But when you have 150 or 160 files, perhaps you cannot devote all the time that you want to one claim, and sometimes because of the pressure of the job you can be brash or not be as polite as you want. But we have put an incredible emphasis on that, and we told all our workers -- this was the first letter we sent the staff -- that you have to treat injured workers with respect, because they come to us at the most difficult time in their lives. We have to respect them if we want to be respected, you have to treat them with humanity, and I think that's happening.

Mr Mahoney: Just to show that I'm not totally one-dimensional, I'm going to leave the --

Interjection.

Mr Mahoney: Well, I'm going to come back to it.

Mr Bradley: I do hope so.

Mr Mahoney: You can rest assured, because I have a number of other questions and concerns about the tendering process on the new building, but I want to address some of the other areas, particularly around service delivery.

We heard yesterday, in both the presentation by Mr Di Santo and by Mr King -- I would say that you left the impression that there's a high level of satisfaction both with the staff and the relationship that Mr King has developed with the staff, with many of the memos and the suggestion box concept that you've been working on with your staff. You certainly seemed to believe that there's a high level of satisfaction and teamwork and camaraderie.

I don't know if you'd be surprised to know, but I would think that in the majority of MPPs' constituency offices, certainly in mine and I know many of my colleagues', the number one issue is dissatisfaction with workers' compensation, whether it be from the point of view of the injured worker or the employer.

I'm sure you're familiar with the Employers' WCB Crisis Committee, made up of some 200 corporations. In my riding, they would include -- well, in everyone's riding there's Brewers Retail, but there's also Metroland Printing, Rockett Lumber, Kaneff group of companies, some very substantial companies within Mississauga. They've joined this crisis committee in an attempt to suggest reforms for workers' compensation.

One of the areas they've suggested could do with reform is in the area of the integrated service units. They have suggested tendering out three of the 12 units that are set up around the province to the private insurance sector, to allow them to compete, in essence. Rather than simply dealing with the suggestion made by the critic for the third party and others that workers' compensation simply be privatized, you have to look at what you do with that $11-billion unfunded liability if you're going to throw out into simply the private sector. I accept that that's a very real problem, because the answer to that is that you transfer it to the government -- that's probably the only answer -- which means the taxpayers get hit again.

The issue, though, that both the crisis committee and I have thought might make some sense would be to open up the coverage of workers' compensation to the private sector, to compete with the Workers' Compensation Board. You would be one of several insurance companies. I, as a small business person, would contact my insurance broker and say: "I've got 100 employees. I need workers' compensation coverage, insurance protection for my workers, and for my business, because I need to make sure that while they're off, they're being covered while I replace them with another wage." So it benefits all parties.

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I'm thinking in terms of the Zurichs, the Dominions of Canada, the large insurance companies which would then put together a package. My broker would go to market, as it's called, and would come back with five quotes and say, "Mr Business Person, Madam Business Person, here are the quotes for workers' compensation, here are the quotes for your fleet, for your auto, here are the quotes for your liability, your fire protection," whatever it might be. Then the Workers' Compensation Board would be one of those five companies perhaps being quoted to the business by the insurance broker.

Certainly the insurance brokers of Ontario would be delighted. It would give them a new product with which to service the customers they're already servicing with fleet and other types of insurance. I suspect, depending on the cost rate, that the insurance companies would be interested in providing such a service, and this would then force your corporation, your agency, to be competitive with the private sector. How do you feel about that? Either one.

Mr King: I'll give you a brief response. The model you suggest is a prevalent model south of the 49th parallel in the United States, where about one quarter of the states have a state fund, which presumably would be the compensation board, and the private insurance companies compete against that state fund. Other states in the United States have a totally free-market approach, with the private insurance industry being the only underwriter for coverage.

One of the things you will find if you attend the conferences of the state governments in the United States -- well, two things really. First, the little employer gets hosed every time because the bigger employers can walk into the marketplace with some clout and get the insurance companies to come in and write them very competitive policies. That tends to shut the little employers out and make them less competitive than the bigger employers because they can't go out and get those sorts of compensation coverages from the private industry.

The other is that that model is presently in crisis down in the United States. There have been bankruptcies of several large --

Mr Mahoney: Excuse me. Which model?

Mr King: The private market model of insuring through the private sector, through competitive insurance company bids.

There are several very large insurance underwriters in the workers' compensation field that have declared bankruptcy under Chapter 13 in the United States because they simply haven't been able to adapt to the squeeze of the increased cost spiral versus the demands for competitiveness.

Those two cautions I give to you on the privatization model. I would urge people to look very closely at where it presently exists before they jump to the conclusion. You make a strong argument, and I don't necessarily reject it out of hand, by the way. Mr Di Santo --

Mr Mahoney: Could I just clarify before Mr Di Santo? I'm not talking about total privatization. I'm talking about you guys staying in business, but you would be a government agency competing in the private sector.

Mr King: I didn't want to take up too much time, but that is the model in about a quarter of the US states. What happens is that the state ends up having to insure all of the bad risks that the private industry won't come in and cover.

Mr Mahoney: It becomes like the Facility Association under auto insurance.

Mr King: Every house that has oily rags in the basement ends up being insured by the government. Their premium ends up being incredibly high because of the bad risk. Unless there is some very sophisticated pooling arrangement requiring the private sector to come in and take part of that bad risk, that model is very shaky.

Mr Mahoney: Do you want to add to that?

Mr Di Santo: No, it's okay, go ahead.

Mr Mahoney: The concern, of course, notwithstanding what I will accept as your good intentions in yesterday's reports by both of you, is that the message out there on the ground is very, very different from the message you give to us. The only thing that even comes close to workers' compensation is SCOE problems, support and custody, in terms of workload for a constituency assistant in a local constituency or a community office. Those two, certainly in my experience, rank one and two, and everything else pales by comparison. It depends on the issue of the day.

Those would include issues where a young boy working at a summer job to get money to go to university steps off the back of a truck into a pothole and almost breaks -- it would have been better if he broke his ankle, but he simply sprains it and winds up getting one week's compensable wages from workers' compensation because he didn't dot an i or cross a t. The process of going through to an appeal is so outrageous, and in the meantime he winds up losing over $1,200 of wages because he can't work.

In that particular instance, the employer was prepared to offer to keep the individual on at 70% wage rather than go through the horrendous experience that the employer would experience in having you people come back in, now that he would file a claim. The individual injured decided: "No, I'll get 90% through workers' comp. That's what it's there for. It's insurance. It's protection. I trust them." So he turns down the employer's offer, winds up losing a substantial amount of money he needed to go to university, and then the employer winds up getting reassessed because of one week's compensable wages and because it's an incident.

People are afraid of you in the business community; they really are. They want to avoid you coming in. You're worse than income tax. They want to avoid you coming in at all costs. I would suggest that some of the statistics you gave yesterday that show that the number of claims is down, that you're seeing, I believe you said -- what was the reduction in your overall budget? I recall a figure of $400 million or something; it wouldn't be that high.

Mr King: Administrative?

Mr Mahoney: No, in claims. What was the reduction in claims?

Mr King: About 400,000 down to 377,000 over a one-year period.

Mr Mahoney: So you're seeing a reduction. If I could be, as you might expect, rather straightforward in this, you tend to claim that as some sort of administrative victory when in fact I think what's happening is a combination of the recession, the number of people going out of work, the number of people who don't have jobs any more, who would not qualify to apply for workers' compensation because they don't have an employer; and the fact that the underground economy has kicked in, in my experience, in big way.

You might not know much about a riding like the one I represent, but you could appreciate that outside the Metro area, in the GTA, there are a lot of small businesses, an awful lot of 50-and-under employers and small manufacturing concerns, assembly corporations, companies where there may indeed be some possible injuries that would occur from lifting or whatever. These people are going underground on you, Mr King; they don't want to see you. I don't know how you can claim, with due respect, the great success that I saw you and your chairman claiming here yesterday, with that fact being there, or do you dispute that?

Mr King: I think we were at pains to point out that even with only 13% of the workers being unhappy with the Workers' Compensation Board --

Mr Mahoney: They must all be in my office.

Mr King: -- versus 17% two years ago, 13% of 400,000 workers is a large number of workers. Similarly, the corresponding figure for employers was that 30% were very unhappy with us two years ago; 19% are very unhappy. I don't think we were claiming victory; we were claiming improvement, but it still leaves a long way to go.

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Mr Mahoney: The statement, I believe, was made by Ms Carter about the adjudicators that -- I don't want to put words in her mouth, but I think what she said is that she hears from her constituency that people feel that adjudicators have forgotten that their main role is to service injured workers. Is that a fair analysis of what you said? Certainly that's not a partisan problem; that's a problem every MPP faces.

You talk in here of the four major strategic goals of workers' compensation: service excellence, financial soundness, public understanding and responsible administration.

Service excellence: You can quote me statistics and percentages all day long. Workers' compensation didn't go to hell in a hand basket in the last two years; I acknowledge that. You've gone to some lengths to stress that this is not, in your view, a partisan issue. There may be a lot of partisan issues within the overall issue, but by and large, in terms of service excellence, I would have to say that in my experience, if there were a government agency that provided less in terms of service excellence, I would be hard pressed to find one. As I said, SCOE is running right up your back, pretty close, but even there it has ways of getting garnishees and things of that nature; through the legislation that's been introduced, there are ways of getting that particular problem solved that seem to be working, albeit with certain frustrations.

Your number one issue here is service excellence. Do you really believe that workers' compensation is delivering that kind of excellence? If not, what can you do, either a major change -- I sort of hear the chairman suggesting, and I won't put words in your mouth on this, that some form of universal program might solve the problem, in your view. What is it, if there is not service excellence, that you have to do to deliver it?

Mr Di Santo: I want to say that those are two totally unrelated issues. The system you choose has nothing to do with the way you do service. Whether it's universal or this type of insurance that we have now, you can give good or bad service.

What we have told the committee, and I want to repeat it, is that we are not claiming we are giving perfect service, because we are not. What I tried to say yesterday and want to repeat now is that when we came to the board, we had a situation that was chaotic. You have to read what every member of every party said at the standing committee in 1991. From then on, we have tried to sort out the mess, and we have told you exactly what we have been doing. In terms of reorganizing our service, we had a problem with the decision review branch.

Now, if we make generalizations -- you can say, "People fear you." We can say the same thing about politicians, about priests, about journalists. I can say people don't like politicians. Does that mean anything? It doesn't help at all. What I'm saying is that between 1989 and 1992 the appeals tripled, and we have been able to solve that problem. Is that service excellence? Now when somebody makes an appeal at decision review, in six weeks we are able to give a decision. Is that acceptable or not? I think that should be the parameter: Is that acceptable or not?

We told you that when we came we had a situation where the adjudicators could not make decisions, for many reasons. One was because of Bill 162. You have to remember that it's not all the fault of "those guys," us, who are not liked, because we are dealing with three acts: the pre-1985 act, Bill 101 and Bill 162. If you have to make a decision, you have to be knowledgeable in the three acts, so it's a very complex operation.

We have been training our staff, we have been rationalizing the service and we have recentralized the decision review branch. I think we are doing, objectively, a better job in rehabilitation, and it's very difficult to do rehabilitation.

When I came, I went to Sudbury. There were case workers who had 120 cases and they had to travel eight hours a day, and you blame them? Of course, it's easy: If I'm not served, it's easy to say I wasn't served properly. But look at the circumstances under which we were operating, and despite that -- we are not claiming victory, but I think it's fair to say that the board of directors decided we would have a flat budget and we have been operating with a flat budget. That's probably not excellence, but I think it's a good result, because we have the plan, the board of directors told us this is the plan, and we respected the plan.

I think we are making inroads. We are not saying we are perfect, but we are moving towards a situation that is acceptable. There are injured workers who are dissatisfied, but there are workers like John, whom I mentioned yesterday, who thanks us because he is a double amputee and now he can operate.

Mr Mahoney: I would certainly hope that out of the tens of thousands of injured workers you deal with, you'd be able to find a John here or there, or a few of them that would be satisfied.

Mr Di Santo: Well --

Mr Mahoney: Maybe the problem is that the MPPs only hear from the ones who aren't. We don't often get a call from John to tell us how happy he is with workers' compensation, and I acknowledge that. But to say, as you said, that people don't like politicians, the first thing a politician had better do is recognize that that's the truth --

Mr Di Santo: You can say that about everybody.

Mr Mahoney: -- and let's accept that as the truth. I suggest to you that when people say they're not happy with workers' compensation service delivery, you should accept that as the truth, in the same way that I accept that people aren't fond of my profession even though they like me.

Mr Di Santo: In fact, we have been operating under that assumption, recognizing the shortcomings. Exactly.

Mrs Witmer: Unfortunately, I would have to concur with some of the remarks that have just been made by the opposition critic. In speaking to my constituency office today and certainly in speaking to many of my colleagues, I know that much of our time is devoted, on a daily basis, to dealing with WCB problems. In fact, I really question whether or not an MPP should be devoting that much time to that particular issue. In my case, my staff tell me it's at least one third, and sometimes it becomes one half. The only thing that's keeping the percentage down right now is the number of people calling us concerning welfare.

Mr Bradley: And SCOE.

Mrs Witmer: And SCOE, but at the present time, they tell me that welfare is the big issue in my community of Kitchener-Waterloo.

The two problems they face, as far as the WCB is concerned, are, first, the lack of appropriate and timely communication. Even my staff are becoming frustrated when they call the adjudicator on behalf of the injured worker and can't get through or are told by an answering machine, "We will respond to you within 24 hours," and they're not responding. In fact, I heard of a case this morning where my staff made the call on September 7, today is the 14th, and there's still no response.

That's the type of frustration that injured workers face and that's the reason they call our offices, because they can't get through on the telephone lines. Nobody's telling them what's happening and they feel so terribly frustrated. You have to realize that by the time they call us, they really are at their wits' end.

Then we have other people whose claims have been inappropriately adjudicated. One case this morning that my staff was dealing with went back to 1991; they're still trying to do something with a $500 overpayment. Now the employee's been injured again, and on the first cheque the individual received they took the $500 off, which should never have come off. Nobody can get an answer; it is very frustrating. The human resource people at the plant get involved; they can't get an answer and they call us.

There's a problem there and it's a very serious problem. Today, for the first time -- I didn't initiate this WCB discussion with my staff, because I leave it up to them; they're competent. Today they said to me: "You know, Mrs Witmer, I don't know what's happening, but we can't even get through any more on the phone line. We can't even get answers from the adjudicators."

So one problem is lack of communication. People just don't know what's going on, nobody's telling them and nobody's getting back to them within the time they promise on the phone message. If you're not going to get back, don't leave that; don't make the promise. You and I know that people are upset and they want an answer.

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The other problem is the time involved in the adjudication and resolving the claim issue, and also in the appeal process, where people are waiting one to two years. It is very frustrating. I don't know if you really have any idea of what our staff go through, but I sometimes wonder why I would want to be a constituency assistant. I'll tell you, because of the frustration in the area of workers' compensation and now welfare and SCOE, they do get dumped on. They are fine people, but they go home at night and they feel pretty frustrated, because they become the individual who's blamed because WCB isn't responding in a timely fashion or communicating well when they do respond to the individual.

I can assure you, it's a serious problem. I can appreciate that you're doing your best; nevertheless, it's a problem that does remain very serious. I would like my staff to get on to another issue, because I don't think they should be devoting that much time to this particular issue.

Last week I met with an employer representative group, and most of them were personnel managers. I met with them to discuss employment equity, but by the end of the afternoon's discussion, when I said to them, "Tell me, what are some of the issues that confront you that I need to know about," do you know what? Every one of the 10 individuals said to me, "The biggest problem we have is workers' compensation." It's very frustrating.

So to both the employer and employee community alike, I know you're doing what you can, but there obviously is much more that needs to be done. These individuals are feeling extremely frustrated, and again it gets back to the communication, the message not going out in a timely fashion, or the type of message that's being communicated, which oftentimes turns out to be erroneous and as a result creates complications. I say that to you in honesty. That's certainly the view that I have from Kitchener-Waterloo.

Mr Di Santo: I'll let Brian reply to you, but I want to make just a brief comment. I want to say that I know the frustration you and your staff go through. When I was an MPP, I had a very large case load.

If we came to you and said, "We will fix the system immediately," we would not be truthful, because the system is too complex. There is too much litigation; too many cases are appealed. As long as we have this system, we are going to have administration problems, adjudication problems. But nobody intentionally tries to delay dealing with a claim, or no adjudicator deliberately tries to stop your staff and say, "I will not deal with Ms Witmer's staff." It's not deliberate. It's the circumstances. As I said before, when you have a very high volume of files to deal with, then you don't have time probably to do what you'd like to do. I'm not saying that's justifiable, but that's the system.

Mrs Witmer: That is the system. I just want to make one other point, because this point has been made by my staff and other people's staff. They really do sense that the individuals they're talking to feel very overworked and spend a lot of time telling the MPPs' staff how busy they are. That's fine, we're all busy, but that's not something they need to be communicating. Obviously, you spend so much time worrying about how busy you are that you're not getting your job done.

Do you not agree, Mr Di Santo, given the fact that the system isn't responding to the needs of the employer or the employee community, that there is a need at this time for a royal commission to take a look at how we can restructure? It needs to be from the bottom up, the top down. We need to do something, because we're not responding to the needs that are out there.

Mr Di Santo: I don't know if you were here when I said that we are dealing with three different acts, pre-1985, Bill 101 and Bill 162.

Mrs Witmer: Yes, I was here.

Mr Di Santo: If you were an adjudicator and you had to deal with three different acts perhaps with the same person, it would be a very difficult job.

I agree with you. It's not a system that can continue based on the present premises. There are a number of people who are there to represent injured workers and employers, because the system is too complex. Ideally, any injured worker should be able to go in front of the Workers' Compensation Appeal Tribunal and make his case or her case, because it's his or her life, but no worker can appear before WCAT and understand the intricacies of the legal system. It's a very complex system.

What we can do -- there are two levels here. One level is the administration, and we have been telling you what we are honestly trying to do, with our staff, with streamlining the procedures. One of the big problems at the board, I want to tell you quite frankly, was the letter-writing. I was the chairman of the board, and sometimes I had difficulty reading the letters of some of my neighbours who came to me asking, "What does this mean?" It was not done intentionally to mislead, but the people who were preparing those form letters were trying to put in every possible piece of information, and it resulted in a jargon that was not understandable. One of the action groups has been doing exactly that, to redo all the letters in plain English. We are trying to do whatever is possible at our level.

There is another level, and that's what you're talking about. How do you simplify the system? You know very well that there is a Premier's Council on which there are people who have very serious responsibility, like the chairman of --

Mrs Witmer: I know all the players; I have all the information.

Mr Di Santo: Exactly. Those people, the chairman of Stelco, of Canada Trust, of Digital Equipment, of General Motors of Canada, have at heart the destiny of the system, because it affects their operations fundamentally.

Mr Mahoney: Is that the one Sid Ryan's on?

Mr Di Santo: What I'm saying is that they are dealing now with this issue: Is this system workable, or should we look beyond this? I want to tell you, if you have no consensus out there in our society between workers and employers, the system does not work.

Anecdotally, you can bring your case of your constituency office. I can tell you that last Friday at the Sheraton Hotel, 70 employers were at the seminar with our modified work program. They were enthusiastic. Does that mean we are great?

Mrs Witmer: Do you feel that a royal commission on the WCB is necessary at this time if we're going to resolve the systemic problems that the short-term reforms simply can't deal with?

Mr Bradley: But Gerald Caplan is busy now.

Mrs Witmer: Well, there are no political appointments any more.

Mr Mahoney: Audrey will be available shortly.

Mr Di Santo: There are and there will be all kinds of people, including past, present and future politicians, I suppose. But I think personally -- and this is my personal opinion; it is not shared by everyone yet -- that the system needs to be revisited, because we have to decide primarily what we want to do. Do we want a system like the one you mentioned, privatized? Do you want a system like Mr Mahoney mentioned based on a competitive basis?

Mrs Witmer: Those are the alternatives we need to look at.

Mr Di Santo: Those are options you have to look at. Do you want a universal system, the one that I prefer, for instance?

Mrs Witmer: I don't think anybody wants a universal system, except I hear you say that.

Mr Di Santo: Except me. Not everyone appreciates it.

Mrs Witmer: I'll tell you, that's not the way you're going to resolve the economic difficulties at the WCB; that's not the solution.

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Mr Di Santo: What I'm trying to say is that there are different options, and some of them are compatible and some are not. Those options have to be revisited, but fundamentally, I think we have to resolve the most crucial problem, the problem that this is a system --

Mrs Witmer: Can you just answer my question? You went all through this yesterday when I asked you the question about the unfunded liability. Do you think we need a royal commission on the WCB?

Mr Di Santo: I think I said yes, because we have to revisit all those issues.

Mrs Witmer: Okay, that's all I ask.

Mr Di Santo: Brian, would you like to --

Mr Mahoney: Does Brian agree?

Mr King: Being the non-political member of this group, I defer answering that question to my colleague Mr Di Santo. I'll respond to the service excellence question.

I couldn't agree with you more that the WCB of Ontario should be providing service excellence. It is not providing service excellence. It is showing improvement in what it has been doing.

I would ask people to understand that we're trying to change a culture that is 80 years old, which is insular to some extent, which didn't focus on the customer or the client; rather, it focused on the noise that may be surrounding the program. We are seeking the advice of such experienced private sector groups as the Xerox corporation, which has done better than anyone, I think, in Canada to turn things around from a service excellence point of view. I think we will be able to move the culture towards one of serving the customer or client, to service excellence. We are not there yet; one would not pretend we're there yet.

The thing I would ask everyone to keep in mind is to differentiate between service excellence, which is timeliness and correctness of decisions, versus the adversarial program, where people may want more than the system may allow them under law or if we differ in opinion on what fact gives us. That is a difficulty, because often people can't make that distinction with the limited information you have available to you. If someone comes in and says, "They owe me more money," that doesn't necessarily mean a service excellence problem; that may mean a legitimate difference of opinion on rights that exist under law.

Mrs Witmer: I'd like to pursue an area that we touched on yesterday. You had suggested that it was time that the large and prosperous sectors of Ontario's economy be placed within the confines of the WCB system; you expressed a concern that 40% of the workforce wasn't covered by the WCB, and of course that includes the very wealthy financial sector. Then you're suggesting a flat-rate payment system. What exactly do you mean by that? I just want some clarification.

Mr King: Right now, the workers' compensation assessment or tax on employers is apt to fall under one of about 200-plus categories. If you're in a very high-risk industry -- let me take cutting down trees as an example, where you might be using chainsaws -- you may be paying a rate that is 15% of your payroll for workers' compensation protection. If you manage an office of white-collar workers, you may be paying one quarter of 1% or 25 cents per $100. So there's an incredible difference between the rates that employers pay for workers' compensation protection.

I think it worth the while of thoughtful people to reflect on how Ontario's prosperity comes. Ontario's prosperity doesn't come from my insurance agent coming to sell me insurance; Ontario's prosperity comes when it manufactures goods for export abroad, when it exports its natural resources. What we're doing under our present assessing arrangement is that we're charging the manufacturers, who have to compete and sell things abroad, the highest premiums, or we're charging those who extract resources the highest premiums, amd then they have to go out and compete on the international market.

It may be that Ontario should think about whether all business isn't one entity in this province, and that if the manufacturer of widgets is not being supported or is being held back by its compensation rate, maybe you should have one flat rate where you have cross-subsidization between all industry to support those that create the wealth in Ontario.

Mrs Witmer: I guess that's part of the NDP ideology and philosophy. As you and I both know, the employer community in this province really is very supportive of the system that is presently in place; it has certainly helped to promote a fairer distribution of the assessment burden. Without this type of rating system, I think employer equity would be compromised. It also has provided a very powerful incentive for firms to take charge of their workers' compensation performance by reducing injuries and encouraging employees to return to work. That just would not be there if we were to have one flat rate for everybody. Where would the incentive be?

Mr King: There are incentives that you could build into a flat-rate system in terms of accident prevention. You could also bring in some equity considerations through some sort of experience-rating program of rewards and penalties.

The problem with the present model is that as the price goes up on some of those manufacturing industries, they don't lobby to prevent injuries as much as they lobby to get us to reduce the benefits available to the workers; right now the employer lobby is to reduce benefits from 90% down to 80% of income.

I assure you that the US states, especially in the sunbelt states, are reducing the benefits available under workers' compensation very considerably, and the pressure is now on Canada to harmonize under the free trade agreement to bring ourselves down to the level of those southern states.

I just ask people to be very thoughtful about this before you come up with positions or declare them ideological. I think this is a question of Canada's competitive position vis-à-vis a very difficult North American market today.

Mr Mahoney: You're already shopping in the States. You might as well adopt their rate system.

The Chair: Obviously, it is the turn of the government members next, but we do have a little business to get back to from yesterday, which was the wish of the committee in terms of the balance of the week. Yesterday, we said we would revisit that subject this morning, whether or not to do the tour and, if we were to do a tour, when to do it. I'm waiting for the direction of the committee about that subject.

Mr Mahoney: First of all, I think the original suggestion was to do the tour on a Thursday. I've said I'm not available that day to do it, and I believe there are others who are not available Wednesday.

With regard to the necessity or the advisability of taking the time out to do the tour, I think it might be nice, but I don't know that it would be terribly useful. While we have Mr King and Mr Di Santo available to committee, I would rather have the opportunity of continuing along the lines of what we've been doing. I think there are a number of areas that have been identified that require explanation, questions and delving into these issues. Frankly, a tour of a facility that they're moving out of anyway -- unless they're telling us that they've decided to cancel the building and they're going to stay where they are, but I don't think that's on the agenda -- it would seem to me, would not be terribly productive.

If there are issues that either gentleman or other staff with workers' comp who are here want to present to us in relationship to the administration, then I think that would be very appropriate. But to take the time of the committee to go physically to the office that they're closing is not something I would support.

Mrs Witmer: I'm neutral at this point; whatever the majority decides.

Mr Marchese: I personally find repetition not very productive, but we do it anyway. But to the point that the plan is to move to another building, therefore rendering the visit useless, I would say that visiting the site is important because it gives you a sense of how the whole administration of claims works, and I think that would be very productive for all the members to see. Not that we shouldn't see the site because they might be moving or are moving, but rather, as you see it in this present site you may see it as it would be in the other site, and you can visit again.

I find that very productive. I feel the time we're allocating to the various questions the members have is more than adequate, and if we avoided repetition it would be more than fully adequate. Those members who can come Wednesday should come, and we should go ahead with that tour.

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Mr Bradley: I don't think a tour is necessary. This is an old game that governments play when you've got somebody in the hot seat: When you want to get them off the hot seat, you go on a tour of the facility. This has happened in estimates in years gone by, and it's just a government ruse to get the attention and the heat off those who are before the committee.

I don't think it would be productive. If I want to do a tour to the WCB building I will do a tour on my own time, not on committee time.

Mr Ted Arnott (Wellington): I've been to the existing building where they presently conduct their administration, and I daresay most of the government members have likely been there already; in three years' time as members they've probably physically visited the building. I would expect that most of the members who may be here substituting or whatever will also actually have experienced that particular building, and it's probably unnecessary to conduct an additional tour.

Ms Murdock: This is the third standing committee that I have been on where we have reviewed the Workers' Compensation Board. It's becoming extremely redundant, however, and in all of the three committees not once have any of the committees gone to look at the premises or to see how the process works, where it moves, or how a claim moves through the process.

I must state for the record that I take exception to the comments by Mr Bradley in imputing motives to us, in the sense that Mr Di Santo and Mr King have made themselves available for this entire week, as has their entire executive. In fact, the administration is not at work, they're here in this committee, so they aren't over there on the job. Lord knows how much that's costing the taxpayer. They have never refused to come to any committee and they have been here. I am speaking in their defence because I know they won't say anything, but it is wrong for it to be left on the record unsaid.

I think we should be going over to the board office and seeing how the process works or doesn't work, as the case may be.

Mr Arnott: Which of the government members have not been to that building?

Mr Marchese: Do you mean actually been into the building, as opposed to having a tour of the building? Is that the distinction you want to make?

Mr Arnott: Who have been in the building to see how the administration is done. I'm very surprised.

The Chair: Yesterday we passed a motion as to the schedule for the whole week, with the exception of this subject being unresolved, so we need a motion to make the decision on the question of the balance of the week's schedule, which is the tour for Wednesday afternoon.

Mr Daniel Waters (Muskoka-Georgian Bay): I move that we do the tour Wednesday afternoon.

The Chair: Any discussion on that motion?

Mr Mahoney: I don't know if this is an amendment or if it's contrary, but could I ask that if you're going to do the tour, you do it Thursday?

Mr Waters: Fine.

The Chair: So the motion is to do a tour of the building on Thursday afternoon. Any discussion on that motion? Oh, just a second. If that motion carries, would you like to move Thursday's subject on the agenda, which was the discussion of the new building, up to Wednesday afternoon?

Mr Marchese: It won't be a problem for us.

The Chair: All right. The motion is to tour the WCB at 2 Bloor Street on Thursday afternoon. All in favour? Is Mr Winninger subbed in?

Ms Murdock: Yes, he is.

The Chair: How are you voting?

Mr Bradley: I hope against.

Mr David Winninger (London South): I'll exercise my independent vote.

The Chair: Opposed to that motion?

Mr Mahoney: He didn't vote at all.

The Chair: Well, Ms Witmer hasn't voted either.

Mrs Witmer: As I say, I'm ambivalent on this.

The Chair: But if you sit in the chair you have to vote.

Mr Marchese: There's no ambivalent vote to this.

The Chair: And Mr Winninger, you have to vote.

Mr Winninger: I'm voting with the government.

Interjection: Surprise.

Mr Marchese: Bloc voting on the other side: Is that a surprise?

The Chair: So the motion is carried and we will tour the WCB facility on Thursday afternoon. We will adjourn now until 2 o'clock this afternoon, at which time we will start with the government members.

The committee recessed from 1156 to 1407.

The Chair: In rotation, we were with the government members.

Ms Murdock: Before I get into the afternoon's scheduled framework, I would like to just comment on a couple of things that were talked about this morning and ask a question.

I want to thank you, first of all. I know you're here for the whole week and you're helping us instead of being at the board office, so it's appreciated.

As a former constituency assistant -- I know that Mr Arnott and I are the only two members of the Legislative Assembly --

Interjection.

Ms Murdock: You were a constituency assistant as well? Three of us, then.

In the four years that I was a CA I worked for Elie Martel and, as many at the WCB will know, that was one of his pet projects. Over 60% of our case load was on workers' compensation, and I would say that at any given time I had anywhere from 150 to 175 active cases, amd of those, 15% to 20% at least were into the appeal process, so we were constantly active in that.

Then when Shelley got elected, I continued in that office and maintained approximately the same kinds of averages. I had claims adjudication, decision review, hearings officer and WCATs, which our office did, and I represented the injured worker at those.

I am now the member for Sudbury, and have been for three years. I admittedly started a brand-new office and had no carryover from the previous member but expected that, like Sudbury East riding and Nickel Belt riding, I would have a high incidence of workers' compensation cases. Initially, we did have. To your credit, with a lot of conversation in between and so on, I actually have only about 22 active cases in my office.

Admittedly, as parliamentary assistant to Labour, I am not allowed to carry hearings and WCATs, so I only go up to the decision review branch level; I can't go beyond that. I don't know what my load would be if I had that, but still and all, my staff started telling me we didn't have all that many WCB problems that weren't resolved very quickly; the 22 are ongoing, but there are a number of others I get that are resolved very quickly. I have found in my office that it has improved, so I wanted you to know that.

I would also like to say that in terms of your action plan and the things you have done in relation to the regional offices -- I'm concerned about the province, of course, but we're really concerned about the dealings we have to go with on a daily basis. You have worked very hard, from my understanding of what I'm hearing locally, talking to the staff and so on, but I'm now hearing that it's sliding back. I'm wondering what kinds of ongoing procedures you have in maintaining the dialogue with your front-line workers. If you could talk to me about that, I'd appreciate it. I don't know who would answer that.

Mr Di Santo: I think in my introductory remarks, I made the point that we have to look at what level of service is acceptable, given the resources available to us and given also the complexity of the system, which as I said this morning has to do with different pieces of legislation and also with some problems that have been lingering for quite a long time.

For instance, Brian mentioned yesterday the problems we had with payments. When the workers' benefits system was set up, it was set up to issue payments as fast as possible but without control. Now we have been directed by the board of directors to review all the claims, more than 400,000, and that takes an incredible amount of money.

I don't sense that we are falling back into a situation where service is deteriorating --

Ms Murdock: Excuse me. I wasn't saying that service was deteriorating. I was talking about the dialogue of the front-line workers in how things could be changed.

Mr Di Santo: I'll come to the point. It's not because we are not vigilant or because we have interrupted the approach that I described yesterday with our staff, because we are very serious about that. You will hear the staff themselves talk to you. In fact, we brought with us Rumina DiValentin, on my right, and Nigel Hunte, two staff members who participated in the process of the action plan. They will tell you what type of participation they had and also how we will make that approach a permanent feature within the board.

We just recently had a social contract like any other public agency. As I said yesterday, we have unionized staff and non-unionized staff, so while we were dealing with the union on one side, we had to deal with this métier of employees who are not unionized and belong to different groups within the board. I think as an institution we have been very successful in involving them all. Brian mentioned to you how many of them voted on our proposals. We incorporated most of the proposals that were agreed upon consensually with the non-unionized staff.

We intend to keep that dialogue, because I think that is essential. We have been insisting since the beginning that we don't believe in a pyramidal type of organization where the decisions come from the top. We want input from the staff. We will be comparing that in every possible expression of the work we do. Whether that is policy, whether it's adjudication, whether it's implementation of policy, we will be asking the staff to participate.

Ms Murdock: Are Nigel and Rumina from the Toronto office?

Mr Di Santo: Yes.

Ms Murdock: My concern is, how are the regional offices brought into this program of dialogue?

Mr Di Santo: When the 16 teams were appointed by the union, they were chosen throughout the province, so you have cases like Sudbury where there was a very high number of participants in the teams.

Ms Murdock: There would be. The morale level there was very negative when you got appointed, so they were quite hopeful of change.

Mr Di Santo: Very negative, but I think it would be a very positive experience for you if you went to the office now and spoke to our staff; you would find a different situation. Rumina, for instance, is from the Hamilton office. We covered all the regional offices. If you want, your question can probably be answered by them. We can invite them to tell you what their experience has been with the action plan and what that means, not only for them but for the rest of our staff.

Ms Rumina DiValentin: Right now I'm the vocational rehabilitation agency analyst, and at the present time I am working out of our head office in Toronto.

If I could just answer your point about the open dialogue, a really good example I could state to you is the action plan; you brought that up earlier. The action plan presented an opportunity for all the staff of the whole board to get involved in open dialogue. It allowed the opportunity for front-line staff, for all levels of management, to get involved in the process of what we should be doing. We had recommendations that came out of the chair's task force report, and I think it was the opportunity for the staff to say, how should we do it, and what should we be doing?

There were 16 action plan teams. Staff were represented from all area offices, regional offices. At the present time, one of the recommendations, the case management model, is on the verge of being implemented in the Hamilton regional office. I think that's a really good example of bringing staff in from other areas and getting them involved in having a say in how future business is to be done at the board.

Ms Murdock: Is this being maintained? Are you still on a committee?

Ms DiValentin: No. I was on project number 1, and our mandate was to establish the mandate for and hire a chief vocational rehabilitation officer. That has since been completed, as of August 16. My team consisted of eight team members from all different levels of vocational rehabilitation at the board. It's with that team that we set out to look for this leader, who would then provide us with a vision for future voc rehab at WCB.

Ms Murdock: Is your experience the same, Nigel?

Mr Nigel Hunte: I'm a claims adjudicator from Toronto East integrated services unit at head office.

I have to take a step back. I started working at the board in 1989. In 1989, the staff had no say as to how business was going to be run throughout the WCB. In 1991, Brian and Odoardo came to the board and they set out to get staff more involved in regard to what the board's vision in the future was going to be and how the staff was going to be involved.

In January, I was appointed the coordinator of action plan project number 5, which was to promote cooperative return to work with the office of the employer adviser throughout the re-employment program. We had staff from regional offices, staff from all levels of client services throughout the board in to human resources, in to vocational rehab, and we set out to meet with the office of the employer adviser but also to meet with our employer groups, the medical associations, the workers' associations and try to develop a program that would assist them in returning injured workers back to work. We've come up with something that they've all said they're interested in.

The action plan process allowed the staff, who have the knowledge of how the business is actually done, to go out with management's backing and develop this kind of consensus among our stakeholders. That is a continuing process; it hasn't stopped. My project was supposed to be over in May; my project is continuing because of the type of involvement the staff have had with the outside stakeholders and the type of influence the staff can have in regard to developing something that can work for the agency.

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Ms Murdock: I would tend to agree that everybody was gung-ho on getting the changes, particularly after the task force recommendations. Too often we see that things are done as an impetus from that and then, once you think you've at least partially achieved it, everything stops and it doesn't continue. That's what my fear is. I think it should be continuing.

Mr Hunte: That hasn't happened. It has been continuing. There are programs or project teams that have stopped because they've come to their conclusion. Whatever they have recommended, or if they have recommended, is being implemented. The ones that are continuing are the ones that all the outside stakeholders still have involvement in.

Yesterday, we were talking about consultation. There's so much consultation now between staff and the outside stakeholders that you can't just stop a process as it goes along any more, and that's what's happening. Even the regional offices have all those, as much input as everyone else.

Mr King: I might just add that in terms of the continuity of the process, the board has established a joint committee on productivity and savings. That joint committee has equal membership between the Canadian Union of Public Employees local that is half of our employees and the non-bargaining unit that is half of our employees, and the employer, through two members on that committee, has two management present. That joint committee is going to be working on ways we can become more productive, more responsive to our stakeholders, to our clients. That's one example of where an ongoing process is in place.

Mr Marchese: I guess it would be appropriate to ask Mr Hunte or Ms DiValentin about adjudication, because yesterday I asked a question about performance standards to which Mr King spoke. I'm not sure I asked whether that was part of the performance review. If we have performance standards, which I think are very important in terms of how we monitor the adjudication, the case load, do we then have a performance review of the adjudicators based on that performance standard? Is that the case?

Mr Hunte: In regard to our performance standards, yes, we do have performance standards that we all try to achieve. Our adjudication process is so involved: We have to know all the policies inside the act and know the policies that we use to implement our decisions. It's important that we look through the whole file to make sure we're making the correct decisions. All our files are reviewed after we've made a decision to ensure they are the correct decisions. So there are standards we try to maintain.

Mr Marchese: I understood that. I'll rephrase it. I'm sure there's performance review of yourselves as adjudicators. What form does that review take?

Mr Hunte: It takes the form of review by our technical advisers, our managers. They will go in periodically and take a look at the files we're working on to make sure we are doing what we're supposed to be doing. In regard to priority correspondence, that is, correspondence from your offices or correspondence from doctors or whoever is writing in to the board, there's a monitoring process within each ISU that monitors correspondence to make sure we're answering those within the appropriate time, which was mentioned: 7 to 10 days of the time they're received.

There's an ongoing process, always, to ensure that we're always answering or doing what we're supposed to be doing in the appropriate time frames.

Mr Marchese: I'd be interested in your point of view in particular on this, because part of any action plan we put into place should reflect, I would think or hope, the buy-in of adjudicators. Does the action plan reflect the input and participation of the adjudicators?

Mr Hunte: I'm from Toronto east, and in Toronto east we are implementing one of the pilot projects for case management model, which is a way of going about doing our business differently. It's been developed by adjudicators, by case workers, by the actual front-line people who are going to be the ones responsible for working on the claims or dealing with injured workers and employers, so there is that buy-in. You can rest assured that everyone who is in that unit is currently working towards getting that pilot project up and running.

Mr Marchese: Part of the problem, from my experience as an old adjudicator, having left, and meeting some of them from time to time --

Ms Murdock: Former adjudicator, not old.

Mr Marchese: Former and old. The complaint they make from time to time is that every time you have a new administration you get changes, so changes are imposed on adjudicators. They say they don't like them, but unfortunately they have to implement them. That's why I asked about the buy-in and your level of participation in the new kind of direction.

Mr Hunte: If you take a look at the old administration, we had a major change in 1990 with Bill 162 and with the introduction of adjudicative assistance. I came to the board in 1989 as an adjudicator, and in 1990 they changed the process and I became an adjudicator assistant, and then in turn was changed back to adjudicator. That was major turmoil.

With this administration currently, what they're trying to do is ensure that if we are changing in any direction, there is the communication between staff, that they know the reason for the change and how we're changing, and the staff is also giving input into what changes should be made.

Mr Mahoney: Just before I begin, yesterday Mr Marchese suggested that the chairman and vice-chair invite a number of their experts to attend with regard to the flooring issue. I wonder if those flooring experts are here. Was that suggestion followed up on?

Mr Di Santo: If there is any particular point that has to be clarified, we can make people available.

Mr Mahoney: Are they available today? The experts are here?

Mr Di Santo: Yes.

Mr Mahoney: I also have taken the liberty of inviting an expert, Mr Bruce Mead, who is the president of ASP Access Floors, and I'd like the committee to hear from Mr Mead.

Mr Waters: No.

Mr Mahoney: No? Well, forgive me, Mr Marchese has suggested that we hear from experts on the construction issue. I would assume you'd want to hear from both sides of the issue, would you not?

Mr Waters: This whole thing, first off, is not a court case. Secondly, if we had all been granted an opportunity and that had been the game plan, if we could all have witnesses appearing and be calling people from different backgrounds, then that would have been fine. But in midstream, in midday, to come in here and say we all of a sudden want to hear from one individual, I can't support that. The format has been agreed to that we would be asking questions of WCB and those people who work within WCB or represent WCB. That, to me, was the format we agreed on and that's one we should be sticking to.

Mr Mahoney: I guess I was misled yesterday. I was under the impression -- perhaps Hansard could reveal the truth of this -- that Mr Marchese suggested, I think he said, that this issue is not going to go away, to paraphrase your comments, and you suggested that the experts, because both of these gentlemen have testified they are not experts, be brought in today. I thought that was going to take place.

The president of the company has flown back from a business meeting in Detroit to be here specifically for the purpose of dealing with this issue. I'm not only prepared to hear from Mr Mead; I'm prepared to hear from the experts on the construction team who made the decision on the flooring. It was not my idea. The members opposite are shaking their heads. It was Mr Marchese's idea.

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The Chair: Let's be very clear about the purview of the committee. It is to review a government agency, namely, the Workers' Compensation Board, and I think within that purview is any matter involving the board whatsoever. Having said that, obviously the request of Mr Mahoney would have to be placed as a motion before the committee. If the committee wishes to entertain that motion, then we can proceed.

Mr Mahoney: I am putting that motion. I thought I was following Mr Marchese's request that we bring some experts in on this issue.

The Chair: It wasn't a motion by Mr Marchese.

Mr Mahoney: It was a suggestion.

The Chair: All right. We're using up Mr Mahoney's time in this debate.

Mr Mahoney: I don't know why. I'm asking for clarification of the committee. Why are you taking that off my time?

The Chair: Well, the clock is ticking.

Mr Mahoney: I think that's quite unfair.

The Chair: It's three minutes. If you want me to restore the time based on the point you made --

Mr Mahoney: I'm asking for clarification on the process of the committee. I was under the impression that there would be experts here from the WCB or Cadillac Fairview or somebody to answer many of the questions that the gentlemen in question were unable to answer yesterday. That's a request on process in this committee, and that should not come off my caucus's time allocation.

The Chair: Okay, if you're making a formal request. Mr Marchese.

Mr Marchese: Simply to speak to this, what I did say, knowing that Mr Mahoney was going to raise this issue again, it was my suggestion that they bring the people who were directly involved with this case because they would have the expertise to be able to respond to it, and suggested they do that. We didn't order them as a committee to do that, but it was a suggestion that they do that.

Furthermore, the point is that I did not ask that the president of the company come here to offer his expertise, and the problem with doing so is that there's a direct conflict with this issue to have the president speak to this matter. Perhaps he might speak as an expert in the field, I'm not sure, but certainly having that individual come to speak to a case that pertains to him would be a problem, in my view.

If the member wants to ask a question and the people who were directly involved who have the expertise in this are here, they should answer that question, but to change the direction I think is inappropriate.

The Chair: Is there a motion?

Mr Mahoney: I would put a motion that the committee hear from any experts from the facilities strategy team, representatives from the developer, Cadillac Fairview, as well as key consultants etc; that the committee hear from any of those experts who might be in attendance and that it also hear from Mr Bruce Mead, president of ASP Access Floors Inc, 1081 South Service Road, Oakville, Ontario.

Mrs Haslam: I think the honourable member is beating a case. This isn't an individual case. We're here to look into the issues, that's true, but when we get into hearing this witness and that witness over a contract -- it has been very clearly stated by the WCB that it is dealing with a contract and the contractor -- is going outside of our mandate and outside of what we're looking at. This isn't a court case. If Mr Mahoney wants to continue to question them and they have the answers to Mr Mahoney's questions, that's what this committee is supposed to be doing.

Mr Arnott: I'd just like to say for the record that I'd be very interested in hearing what the witness has to say in terms of technical information. I don't think this is the most important issue facing the Workers' Compensation Board today. I think the unfunded liability issue is probably of more significant proportions. However, since the individual has made an effort to come here and we also have, apparently, the information from the board, the engineering advice it received, I think it would be very helpful to this committee to hear both sides.

Ms Murdock: As part of that point, I know this committee didn't advertise for anyone to speak. I'm sure there are thousands of injured workers, or even injured workers' groups, any number of people who would like to come forward. The Employers' Advocacy Council, I'm sure, would love to be here to be a witness in terms of a review of the Workers' Compensation Board as a government agency. I don't think we did that. Correct me if I'm wrong, but we didn't advertise for anyone to come, and I don't think we should be widening the mandate or the forum we had, I thought, agreed to.

The Chair: All right. Maybe the clerk could read the motion for us and then we could take the vote.

Clerk of the Committee (Ms Lynn Mellor): Mr Mahoney moved that the facility strategy team and Mr Mead from ASP appear to respond to questions of the committee.

The Chair: All in favour? Opposed, if any?

Mr Bradley: The government muzzle.

The Chair: That motion is lost.

Would you like me to restore all of the time? It's eight minutes.

Mr Mahoney: That's your decision, Madam Chair, but I would think that's fair.

Mr Marchese: It's a question he raised within his own time.

The Chair: In fairness, that was a procedural question, and I will restore the time.

Mr Mahoney: Even though Mr Marchese doesn't want me to have that time, I thank you very much for your usual generosity.

Since Mr Mead is used to being turned down by the WCB, and now of course by the NDP government, he's used to wearing a muzzle, as uncomfortable as that is, and is probably not overly shocked at the fact that this committee refused to hear from him; we were quite prepared to hear from the strategy team as well on the issue. As that's not possible and I simply get an "I'm not a technical expert" answer from Mr Di Santo and Mr King, I find it necessary to go through some of the questions I put to these people yesterday with regard to this particular issue.

To the member from the Conservative Party, this may not be in his opinion the most important issue facing workers' compensation, but clearly, as I said yesterday, this is an issue of confidence in the leadership, confidence in the administration, confidence in the entire setup of workers' compensation, which, whether Mr Di Santo believes it or not, is spending public money to build a building and a long-term lease -- well you are, sir. It's all public money; that's where it comes from. It comes from the employers and it ultimately comes from the workers and therefore it is public money. You can argue that if you wish, but in any event, this is a question of confidence in the leadership at the top of workers' compensation, and until the people in the province, be they people bidding on contracts, be they injured workers, be they employers who are footing the bill for this agency, until those groups can have some sense of confidence that they're going to be dealt with fairly by all actions in the Workers' Compensation Board, then I think it is indeed one of the most important issues facing this committee and facing the board.

In response to the letter, and I've asked Mr Di Santo to respond and he's indicated that he's not an expert, even though he wrote the letter and signed the letter -- this reminds me: Maybe he didn't write the letter and maybe he didn't sign the letter; we've heard that excuse before from this government. But I'm assuming that this is Mr Di Santo's signature on the bottom of page 3 of this letter of March 9; he now has the letter and I think he would concur that this is his letter that he signed, and therefore he owns and is clearly responsible for it.

There are a number of issues that were raised, and I'd like to deal with some of those. Perhaps in this 20minute segment there may or may not be time for them to respond, but there will be in the next one, and I assure you I'll be continuing to ask them to do that.

Mr Di Santo says in a letter to Mr Mead: "As you are well aware, the Workers' Compensation Board, as a public agency, must follow fair tendering practices and as such is not in a position to select a product from a supplier outside of the tendering process."

The response to that from the expert in this issue: "With respect to fair tendering practices I would like to display the prices for the access floor system which were received by both Jackson-Lewis and PCL for the as specified cement-filled steel system:"

ASP Access Floors, out of Oakville, $3,495,900; Camino, two bids, one of $3,535,000 and the other $3,560,000, the difference being that one provided hoisting into the building and the other did not; CGC, a bid of $3.6 million; and Innovative Arch Systems, a bid of $4.1 million.

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As you can see from this, ASP out of Oakville was the low bidder with Jackson-Lewis and PCL, but the contractor on this particular site indicates that Camino was the low bid.

It has been revealed to me that Camino gave a separate bid to Eastern Construction, the contractor on this, separate from the bid they gave to Jackson-Lewis and PCL, for some reason I don't understand. Now, they're private sector; they're not necessarily subject to the rules of fair tendering practices that a government agency would be, but clearly any government agency would be concerned about sort of under-the-table bids that were handed by one company to another and would question why that would happen. It would seem that it was to make PCL and Jackson-Lewis non-competitive and to favour the contractor that was working directly with the WCB.

I'm also told that the bid was within 3%, that ASP was within 3% of this under-the-table bid that was provided to Eastern. The government policy, I've also been made aware, is that the government of Ontario will buy Ontario first and will generally allow a 5% leeway, given that the quality of the products are comparable. They were within the 5% price allowance and yet they were ignored. I guess what Mr Mead is saying to Mr Di Santo is that "the committee neglected to tell you this" and therefore you were given wrong information.

Going on, Mr Di Santo says, "Your request for the Workers' Compensation Board and the developer...to disregard the result of the competitive purchasing process and select ASP Access Floors is inappropriate and unacceptable."

Let me be clear that the American-made access floor system has only been manufactured for less than half a year and has no proven lifespan and, as Mr Mead goes on to say, "The purchase of the ASP Access Floors system will keep 50 ASP factory workers employed for another year, not to mention the amount of employment for ASP's suppliers." This access floor, it should be clear, according to the expert, "meets or exceeds all your loading requirements" -- this is a direct response to Mr Di Santo -- "and we have all substantiated test data performed by an independent testing organization to prove this." He goes on to say, "To use an American-made product and pay more money for it is unacceptable and inappropriate."

Mr Di Santo goes on with other comments about ASP. He appreciates them trying to stay in business. It should be clear that what they're trying to do is stay in business in the province of Ontario, and if they're not allowed to do business with their own government, then they, like many other businesses, would have to leave.

Mr Di Santo says he had a meeting with the facilities strategy team representatives from the developer, Cadillac Fairview, as well as key consultants involved in the selection of the floor product and that they've taken considerable time to meet and review each of the concerns he raised. Mr Di Santo said yesterday in testimony that it is clearly the decision of Cadillac Fairview and not the Workers' Compensation Board, yet he's had correspondence and discussions with the strategy team. He's written back a very technically oriented letter in response to the individual, but here in front of this committee he doesn't have that expertise.

He also said that the members of the committee "have confirmed once again that the woodcore access floor is unacceptable and that a concrete-and-metal panel system will best meet the needs of the Workers' Compensation Board."

It should be clear, and this is also Mr Mead saying it, that he "had contacted Mr Gary Dunlop, senior vice-president, construction, Cadillac Fairview, on two occasions and he had advised me that nothing had been brought to his attention with regard to the ASP woodcore access floor system." Even though Mr Di Santo says this strategy team had all kinds of meetings and investigations on this issue, it was not brought to the attention of Mr Gary Dunlop, senior vice-president for construction for the developer.

He went on to say that Mr Dunlop said: "...he would not oppose it. If Workers' Compensation Board wants a woodcore system, he would use the woodcore system. ASP was never contacted, nor were we asked to be involved in this meeting to review" the product specifications.

Let me also make a point. Mr King has said, and it's in Hansard on at least two occasions, that ASP is coming back on this issue after having unsuccessfully lost the right to supply the contract that was bid on. ASP took members of the strategy team two years ago on a tour of their Royal Bank building installation in downtown Toronto to show them the product. At that time, they said they had some concerns about the product. In response, Mr Mead said this was the original installation of the product, and if they wanted to see an updated, state-of-the-art version, they would simply come with him to a site in Markham, Ontario, where they would see the latest design of this access flooring. He was told they did not have time to go to Markham.

I am told that same committee was subsequently flown to Detroit, Michigan, to sit down and meet with the manufacturer in the United States. They didn't have time to go to Markham, but it's clear they had time to go down to the States to sit down and review this American-made product. They rejected any attempt by this gentleman to provide a $500,000 saving to this project and to provide Canadian-made product.

Let's be clear about that. Two years ago, Mr Mead suggested that this Canadian-made product, at a savings of $500,000, be used in the construction of this building. It was not subsequent to the tendering process that he participated in -- and came within 3% of, I should add: If the WCB lived up to the policy of the Ontario government, he would have won the bid on the flooring that's being put in, manufactured in the United States, as well as the alternative flooring that's manufactured in Canada.

For whatever reason, misinformation was given to Mr Di Santo, passed on to Mr Mead, by the people involved in the strategy team, who seem to have some desire, for some unknown reason -- at least currently unknown; we're still investigating this matter -- for some unknown reason they wish to use this American-made product.

Mr Di Santo goes on to say that his reasons, this non-technical gentleman writing a technical letter, were: "As you may be aware, the decision to use a concrete and metal panel system was reached following extensive research and evaluation of all access floor systems. A concrete-filled steel panel was selected for the following reasons: better acoustic properties, use of non-combustible materials, constant dimensional stability, ease of field cutting, no dust in cutting process, better load performance.'"

Mr Mead, the expert, his response to better acoustic properties: "False. This is unproven and there is no test data supporting this statement that has published by either manufacturer. How can any intelligent comparison be made without test data?"

"Use of non-combustible materials: This has no bearing on this job. ASP panel 250 GO (woodcore) has been approved by the Ministry of Housing (building material evaluation commission) for use in non-combustible buildings. Obviously, the person that provided the above information is not up to date on the access floor industry, as we have been approved for two years. Our panel meets your specification and is ULC tested. The low bid product," by 3%, "has not been ULC tested. Don't tell me," as he says to Mr Di Santo, "your committee missed" that minor little point.

"Constant dimensional stability: All ASP products are manufactured with Ontario-made hardened steel dies that will stamp to exact tolerances. We have an extensive quality control program that entails precise measuring of product prior to final fabrication.

"Ease of field cutting: One of the biggest disadvantages," according to Mr Mead, "of concrete-filled steel panels is field cutting." The exact reason Mr Di Santo gives as a reason for going with the concrete is exactly the opposite of that. "Concrete-filled steel panels must have special saws and some products require diamond-tipped bandsaw blades and even water cutting saws. We would gladly challenge," Mr Mead says, "anyone to cut a hole in the centre of a panel faster than woodcore.

"Once again, you have been ill-advised," Mr Di Santo, "and it only takes common sense," not technical expertise, "to figure out a woodcore panel is much easier to cut than a concrete-filled panel.

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"No dust in the cutting process," another one of his technical reasons for turning this down. Mr Mead says: "The statement is ludicrous. How can a concrete-filled steel panel be void of dust when cutting? This is concrete, concrete chips, dust, cracks and falls out of steel panel when cut. This is the exact reason why we do not recommend cement-filled steel panels in computer rooms, as the concrete can fall from the steel panel and get into the air conditioning and cause extensive damage....

"Better load performance: This statement is the most amusing of the above." Mr Mead says: "ASP metal-clad panel will meet or exceed all specified loading requirements as per test data from an independent test laboratory and as per CISCA standard test procedures. A statement like this is insulting, as the system you intend to utilize does not even meet the specified ultimate load requirement of 3,000 pounds. I repeat that this low-bid product does not meet your specifications but will fail at 2,300 pounds."

And that, particularly in light of the statement for which Mr King has, in all fairness, apologized, with regard to the floor cave-in that was reported in the Toronto Star, is most interesting.

A number of the other issues with response to -- Mr Dunlop, senior vice-president, construction, Cadillac Fairview, said in a letter to Mr Di Santo, "ASP Access Floors Ltd's unsolicited alternative price submission for woodcore access floor needs no reply."

ASP's response is, "True, with the saving of one half million dollars there should be no reply and the alternate system that meets the Workers' Compensation Board loading requirement be accepted. Please note that two of the tendering contractors asked for a woodcore alternate price" at the same time as they prepared the tender on the specified product. That's very, very important. Two of the contractors asked for this as an alternative because they too knew that this was substantially cheaper and just as acceptable as the product that comes from the United States. In fact, Mr Mead says, "In several conversations with Gary Dunlop, he had told me it was up to" -- very important -- "it was up to the WCB and that he had no problems with our metal-clad access floor system."

This would clearly fly in the face of testimony yesterday by Mr Di Santo, who said it was up to Cadillac Fairview and the construction team. The vice-president of Cadillac Fairview in charge of construction is saying it's up to the WCB. I don't know who it's up to, but obviously there's been a serious mistake here.

Mr Di Santo goes on to say, "I reiterate that the process from evaluation, selection, tendering and award was fair to all parties." Claire Lavoie, senior associate, Rice Brydone Ltd, says, "The Access Floors study was comprised of three phases." This is very important too. Phase 4 was a very important phase, and the addendum that was put out that approved the product that was ultimately selected approved a product that was not approved in the original evaluation sessions, the three sessions that were referred to.

The product was approved one week prior to the tendering closing date. One week prior to closing tenders, these guys came in to bid on 600,000 square feet of flooring that they had supposedly no involvement in. One week prior they were allowed in the back door with a product that had been manufactured for less than six months, had not been installed in Canada at the time of the original evaluation and was not even on the market at the time of the original evaluation.

Mr Bradley: This is getting more interesting by the moment.

Mr Mahoney: Going on here, it says: "In the third phase," this is Mr Di Santo, "mock-ups of the recommended product type were constructed and evaluated. The comprehensive Access Floors study formed the basis of the base building tender documents."

Response: "True, however, the product that was approved by addenda one week prior to tender was not required to have a mock-up with the others.

"Why not? Could it be because it was not being manufactured at the time, or was it favoured to avoid direct comparison? Why wasn't it required to go through the same process as all of the others?" Interesting question.

In my last minute, because there are many things that I could go on about, in reference to this company I want to make very clear what we're dealing with here. These are the projects where this company, this Canadian Oakville company, has installed their product in this country: Royal Bank, 320 Front Street, 80,000 square feet; Canadian Imperial Bank of Commerce, Streetsville, Markham computer centre for the bank; Ministry of Government Services, Thunder Bay, 70,000 square feet; Ministry of Government Services, Sudbury, development and mines, 100,000 square feet; Ontario Lottery Corp, Sault Ste Marie, 320,000 square feet; Royal Bank Data Centre, Guelph, 60,000; Rogers Data Centre, Markham, 60,000; Solicitor General's building, Ottawa, 30,000; Ryerson University, Toronto, 24,000; First Financial Place, Toronto, 20,000; CMHC, Ottawa, 17,000; Royal Bank leasehold improvements, Toronto, 13,000; Unitel Data Centre, 30,000; Bell-Northern Research, lab 5, Nepean, Ontario, 400,000 square feet of flooring; Regina, Saskatchewan; Winnipeg, Manitoba; Guelph, Ontario.

It is an outrage that this company has been cut off without any opportunity. This committee has put a muzzle on them that simply extends the muzzle that the Workers' Compensation Board has put on them from day one, going back two years. It is an absolute outrage, and if the committee members on the government side had any integrity in this, they would demand that this issue be reopened now.

Mr Arnott: It's my first day on this committee, so if I ask any questions that may have come up yesterday, I hope you'll understand why. Like many of the other members of this committee, I have serious concerns and have heard many complaints from constituents who have had difficulty in getting a timely response from the Workers' Compensation Board, and that concerns me greatly. I share the experience of many of the other members whose staff have made calls.

When I used to work for Jack Johnson, who was the former member for Wellington, I probably phoned Mr Marchese; I seem to recall his name. I made many calls at that time, from 1987 to 1990, and we had the same problem. The problem, at least in my experience, goes through two governments; it may very well have existed during the course of three governments. But it is still there, there is still inadequate service, and I remain dissatisfied with the system as it is.

I don't know how much of the time of our riding office staff is consumed by workers' compensation complaints, but it is significant. We've never done a real accounting of what we spend our time on specifically, but it is significant. I wouldn't be surprised if it's 33%, as some of us have reported.

Back in 1991, when the government was new and, Mr Chairman, when you were a newly appointed chairman, and, Mr King, when you were coming in, at that time I think the government recognized that some changes had to be made. In fact, Mr Waters was the member of the subcommittee of the resources development committee at that time which used, as the government's motion, standing order 123 to look into the issue of service delivery at the Workers' Compensation Board. Coincidentally, we've received today a copy of that report. Our caucus, and I was a member of that committee at the same time, had a great deal of interest in this issue. We didn't support every single recommendation in the majority report; we issued a minority report at that time, and I hope you've had a chance to look that over. You probably recall it from that time, Mr Di Santo.

We made five specific recommendations, and I'd like to ask you now if you followed up on any of them, and if not, why not. At that time, and this is October 23, 1991, almost two years ago, we asked that the Provincial Auditor be immediately commissioned to conduct a value-for-money audit of the Workers' Compensation Board. Has that been done, and if not, why not?

Mr Di Santo: As you know, the board is reviewed annually by the Provincial Auditor. We just recently had a review of the building by the auditor. Apart from that, we have an internal audit committee, which is chaired by Mr Carmer Sweica, who is a representative of the employers on the board of directors, and two more board members. We are auditing on a permanent basis the business of the board, but apart from that, I want to put on the record that for the first time in the Workers' Compensation Board's history, we are costing every program that we develop. That's a commitment we made with the board of directors and we stick to it. If you look at the minutes of our board, every program has been costed constantly so members of the Legislature and stakeholders can check continuously on our expenditures, how we are spending dollars on our revenue side.

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Mr Arnott: So I take it from your answer that there has not been a value-for-money audit through the Provincial Auditor?

Mr Di Santo: There has been not an audit in general terms because that has not been approved by the Legislature, but there have been a number of audits and there are continuous audits internally and annually by the Provincial Auditor.

Mr King: A very brief addendum to what Odoardo said: We are subject to audit by the Provincial Auditor. In fact, there is an external auditor named. The present external auditor is the firm of Peat Marwick. They come in and do a complete audit on those things they think should be done to make sure they can attest to the validity of the board's books. That is signed off in our annual report. In addition to that, they do two additional value-for-money audits per year.

So it's not that we are not subject to the audit by the Provincial Auditor; it's that a total and comprehensive audit of every part of the WCB, which I would conservatively estimate would be a $20-million or $30-million cost, has not been done.

Mr Arnott: And that compares to what, $150 million worth of fraud, your estimate?

Mr King: I had indicated that experts would present a 5% figure as the possible fraud. I'm not too sure, however, that there's a linkage between the amount of fraud that might be in the system and what it costs to do a comprehensive audit.

Mr Arnott: Yes, but a value-for-money audit might be able to identify ways to minimize fraud. That's what I was just thinking of.

Mr King: As a matter of fact, we have called in several special audits to help us deal with the question of how to protect ourselves against fraud.

Mr Arnott: Mr Di Santo, you've indicated that there are ongoing internal audits, but the whole purpose of an external audit is to have an outsider come in and point to things that might not come to the fore through an internal audit. So an internal audit, while it may be fine and required, may not be going far enough.

You've indicated that there's been an audit of the building. Has that report been released to the public?

Mr Di Santo: To the Legislature.

Mr Arnott: To the Legislature? Okay. But a value-for-money audit is something different, and it would make sense that through the Provincial Auditor would be the best mechanism to achieve that. When you're talking about the audit that your chartered accountant looks after, it would attest to the accuracy of the books, I gather, but it wouldn't demonstrate value for money.

Mr Di Santo: We realize that a value-for-money audit is different, but that's a decision that obviously has to be taken at a different level; it cannot be taken by us. What we can do and what we've been doing: The board of directors, I'd like to remind you, which is made up of representatives of workers and employers, has asked us to cost every decision we make, and we've been doing that. That's a way of controlling our expenditures. If a request for an audit for money's approved, then somebody else has to make that decision.

Mr Arnott: All right. The majority report back in 1991 of the standing committee on resources development suggested that there should be an operational review completed, and I assume that was done.

Mr Di Santo: We did it in the --

Mr Arnott: Right. The Conservatives also recommended that upon completion of the operational review and before any additional resources are allocated to such major activities as claims adjudication, assessment and rehabilitation, the chairman of the Workers' Compensation Board table in the House a detailed cost-benefit analysis of the proposed policy changes, including specific justification for any increases in staffing levels.

Have there been increases in staffing levels since 1991, first of all, and if there have been, has this report to the Legislature taken place?

Mr Di Santo: This is the report that we submitted to the Legislature on May 18, 1992, as a response to the standing committee request. In terms of staffing, in fact we had a decline since 1991; there has been no increase in staffing. As I said before, in the annual purchasing plan we are costing every new expenditure, including possible staff increases, but they have not materialized until now and we are not forecasting an increase for the time being.

Mr Arnott: How many staff do you have right now and how many did you have in 1991?

Mr Di Santo: I think we have close to 5,000. I don't have the figure with me right now. As I said yesterday, when you were not here, in 1992 we had a flat-line budget. If you include all of our legislative obligations towards the health and safety agency, the tribunal, the office of the worker and employer adviser and if you include all the internal obligations, the contractual obligations with our staff, we actually performed at a much lower level than in 1991.

In 1993, again we had a flat-line budget and the board of directors directed us to seek a saving in the order of 3% on the administration budget. We are right on target. On top of that, of course, you have to add the budgetary reduction because of the social contract.

Mr Arnott: What's the average salary of an employee at the board?

Mr Di Santo: You're asking me questions that I cannot answer, not because I'm not an expert but because I don't have that. We will get it for you.

Mr Arnott: Do you have someone here?

Mr Di Santo: We'll be able to give it to you.

Mr King: I think I can shed some light on the concerns about the administrative situation. We do have some figures from our annual report, that in 1990 there were 5,138 employees at the Workers' Compensation Board; in 1992, there were 4,909, or a drop of 229 employees over the space of those two years. But I want to stress to the members that we didn't cut the service to the injured workers or the employers. We redeployed people out of non-core operations. In fact, $10 million was added to the budget that serviced injured workers and employers that came from other parts of the organization.

At a time when the rest of the broader public sector still hadn't realized that there was a problem with resources, our administrative budget moved from $343 million in 1991 down to $338 million this year. So we have dropped our administrative budget for the past two years. Our employees have not had raises for several years now.

Mr Bradley: Like members of the Legislature.

Mr Arnott: Your staffing reduction over that period of years is commendable; I think you deserve credit for it. I would like to know if you can give me, even if it's at a later time, the average salary of an employee of the board. I think that would be helpful for us too.

Mr King: I think we can get that for you before the end of the day.

Mr Arnott: Okay. Our third recommendation was that before the Ministry of Labour allocates additional resources to the office of the worker adviser to establish a satellite office, which was the recommendation of that committee -- this is outside your purview directly, but perhaps you might be able to give us some advice on this, because there was a recommendation to establish additional resources to the office of the worker adviser -- the minister would table in the House a detailed cost-benefit analysis.

Are you aware of whether the office of the worker adviser has increased its budget? I know this is maybe a difficult question.

Mr Di Santo: As you know, with the social contract I don't think anyone can get more allocations.

Mr Arnott: We're talking starting 1991, I think, to today.

Mr Di Santo: No, we didn't get any more allocations.

Mr Arnott: Okay. We recommended, number four, that a moratorium on all Workers' Compensation Board policy changes be established until 1993; so a two-year moratorium on policy changes.

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Mr Di Santo: When we came to the board, we decided that we wanted more input from the employers and the workers on the board of directors, so I set up a priority policy committee on which sits Mr Robert Stanbury and the vice-chair representing the workers.

As I said yesterday, one of the problems we were faced with when we came to the board was the incredible number of policies that were required because of the new legislation that had been passed, which not only took a lot of time from the organization but also complicated immensely the work of the adjudicators because they just couldn't keep pace with the new policies. So we decided we would limit the policy elaboration within the board, but of course we couldn't stop completely, because we have to deal with realities that affect the workplace; we have to deal with them because it's an obligation under the act. But if you look at the policies approved by the board of directors in the last two years, you will see that they're comparably insignificant in numbers in comparison with previous times.

Mr Arnott: More technical and refinement policy changes than --

Mr Di Santo: We have requests from adjudicators, we have requests from employers, we have requests from workers. We cannot say we will stop everything. A total moratorium is unfeasible, is not practical.

Mr Arnott: I have a great deal of concern about the idea of flat-lining the rates. I understand from what you've said that you're giving consideration to that concept. I'm not sure what stage you're at. Have you studied it? Are you undergoing some sort of review of the concept? Could you tell me a little bit more about what's happening there?

Mr King: I'm the one who was quoted in a speech yesterday as suggesting that people should give serious consideration to a flat rate and provide other incentives for safety or equity and fairness. The Workers' Compensation Board has done nothing to initiate a flat rate. As a matter of fact, the Workers' Compensation Board implemented the revenue strategy that the employers of Ontario asked to have implemented.

I merely threw out some ideas to this committee in a public setting yesterday for people to think about. I'll repeat what I said this morning. I think competition in North America that has arisen because of the Far East, because of the free trade and possibly because of NAFTA, has called into question some traditional thinking that said rates should be based upon straight experience. If that straight experience prices us out of the market, then I think people have to look at whether there shouldn't be some sort of cross-subsidization between those industries that feed upon or get rich on those manufacturing and resource industries that create the real wealth in Ontario. There are going to be no banks or insurance companies getting rich in Canada unless there are healthy manufacturing industries, healthy mining industries to support the lending and the insuring. That was the point I was trying to make.

Mr Arnott: But there aren't too many people, any sort of people, getting rich these days in Ontario, as you know.

Mr King: Including bureaucrats.

Mr Arnott: When you're talking about the need for competitiveness in Ontario, the requirement upon the government to ensure that a competitive environment exists such that businesses can survive in Ontario, I agree with you 100%. Whether your suggestion that we go to some sort of flat-lining achieves that or not, I have some degree of doubt.

Also, I have serious concerns about the issue of an employer who has a good safety record in the workplace subsidizing someone who doesn't. I don't understand the connection as to how that would promote safety in any way. I have some experience in the construction industry; my family's been in the construction industry for 60 years and I've worked on construction. Construction sites, by definition, are not the safest places to work, therefore the construction industry, generally speaking, pays a higher rate of workers' compensation premium than a grocery store. I think that makes sense. But to have a situation where the small businesses are coming in and paying the same rates as some of the heavy manufacturing or construction or what have you, and having the small businesses subsidize the others, the less safe ones, I don't see the sense in that.

Mr King: Again, this is something that probably is the subject of a lengthy debate in and of itself.

People don't find it strange that the construction industry, which has a cyclical hiring situation, pays the same unemployment insurance rates as a manufacturer who probably doesn't have any layoffs during the course of a normal year. I think people, if they expand their thinking beyond workers' comp into some of the other areas where there is cross-subsidization, may come to an understanding that there are other ways to look at this than in the traditional ways.

As a point of information, I will get precise figures down to the dollar, but our average salary for nonbargaining unit employees is $50,000. For bargaining unit or unionized members it's $35,000.

Mr Arnott: Are the claims adjudicators in the bargaining unit?

Mr King: They are not in the bargaining unit. The bargaining unit is composed of vocational rehabilitation and the secretarial complement, the clerical staff.

Mr Waters: I don't know whether to say it's a pleasure to see you here again or not. It seems that every six months we do one of these, and I don't know how you manage to get any work done when you're spending all your time preparing for us.

Mr Bradley: You guys do your best to keep them out of committee.

Ms Murdock: That's not true.

Mr Waters: My colleague across the way, Mr Mahoney, has gone on at great length about some flooring.

Mr Mahoney: Twenty minutes.

Mr Waters: Twenty minutes the last round, and this is about the fourth round on flooring so far.

Mr Mahoney: I'm trying to help you understand the problem.

Mr Marchese: Repetition is good.

Ms Murdock: We didn't have a problem understanding.

Mr Waters: I do have the floor, I believe, at this point in time, Mr Mahoney. He just went on for 20 minutes reading a letter into the record and making comment on it. Obviously you didn't have a chance to respond, and I would ask Mr King, if he has a response, to please not eat up the 20 minutes, but a response to some of what Mr Mahoney had to say.

Mr King: I can give you a brief response to the concerns raised, except that someone took my paper away. If they bring it back it would be very helpful to me.

Number one, the decision about what type of floor would be used at the building was made before the tender was let; in other words, the decision to go with a concrete-base floor, was made before the tenders went out, saying, "You can bid on a concrete floor." The possibilities of either a wood-fill floor or a concrete floor were thoroughly investigated by a significant number of people before the decision was made about which flooring to utilize. That group consisted of an electrical engineer, a representative from the architect and planning group, it consisted of one representative in that decision from the WCB, it involved two people from the developers and it involved two people from the overall architect of the firm. That decision, I stress once again, was made before the tender was let.

The manufacturer who is being quoted at length here had every input to try to sell to this group a wooden floor before the decision was made to go with concrete. I want to stress this, that the decision was made to go concrete before the tender was let.

I don't wish to go into the type of debate as to this floor versus that floor. That's a very technical debate. I have been quoted in the media in a way that I have already apologized for, if it left anyone any misunderstanding that I was questioning wood-fill flooring. I indicated to the media that this is a professional decision that has to be made and that it was made by professionals, and that if you left decisions like that to laypersons like myself we wouldn't have very good or sound structural buildings. That in no way denigrated from the wood-fill flooring that is being discussed at this committee.

Four firms bid on the concrete flooring, including ASP floors. They bid on the concrete. They were an active bidder on what the WCB facilities strategy determined should be the flooring. They lost the bid.

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Mr Mahoney: By how much?

Mr King: They lost the bid. The flooring would have been manufactured in the US if it had been concrete-filled, so I'm not too sure it depends on how much they lost the bid by.

Mr Mahoney: It's Ontario government policy.

Mrs Haslam: We shouldn't be discussing that anyway. It's a private matter.

The Chair: No interjections, please.

Mr King: Therefore, on the first item, the decision on which flooring was made before it went out to tender. Secondly, four firms bid and the lowest bidder was chosen. It was after that that a considerable amount of lobbying occurred.

I think I have to try to let you know that there is no way of knowing the ultimate job situation related to this tender; a lot has been said about jobs at risk in Ontario. I indicated yesterday that the flooring that will be provided for the building will be 80% to 85% Ontario-product-supplied. Therefore, there will be jobs created in Ontario, so this business about the WCB putting people out of work I think is speculative at the best and perhaps misleading at the worst, although again I want to stress, I want to --

Mr Mahoney: I'm just reading the facts.

Mr King: I understand that it is hurtful for someone to lose on a fair and open tendering process, but to come in and argue for something that was considered seriously and rejected as an alternative, after the fact, after you've openly participated in the tendering process for the flooring that was chosen, I find to be unusual in the contracting business, in the construction business.

I think I've said enough about this. I also had the letter and I was following the member's questioning. He didn't get through the entire thing. Maybe we'll have a chance later to discuss this issue further.

Mr Waters: One quick comment, by the way. I've heard so much about dust. I've been in maintenance and around industry most of my life, and I've cut concrete, and you do it with water, for the most part. There is not dust. There is a sludge, but there is not a lot of dust. It's all wet and very slippery.

But I'd like to get back to what I believe the topic of the afternoon was to be, fraud.

Ms Murdock: No. That was this morning.

Mr Waters: Then I missed out on this morning; I never got a chance to ask. You made a comment this morning that said you've been doing some visitations with our counterpart south of the border and you were talking about how they're dealing with fraud. I was wondering if you had any indication as to how your efforts stack up against theirs at this point. Are we about equal, are we worse than they are at dealing with the situation, or are we indeed ahead of them?

Mr King: First off, Ontario citizens are generally more honest than many people below 49, and that is no disrespect to people I have a good deal of admiration for, but Ontario citizens generally are very honest and it's unfortunate that there are some who pick another route to go.

I believe it fair to say that the Americans tend to try to put forward for public display individuals who may have been caught in some fraudulent behaviour and to publicize individuals in that way. I believe we have more freedom of information protection for individuals that doesn't allow us necessarily to be quite as aggressive as some of the American jurisdictions are in this area, although I want to stress that when charges are laid, we are partnering with the law enforcement agencies a joint press release approach; that is, at the final stage of when a charge is capable of being laid. We're not trying to hide anything here, it's just that we can't be quite as aggressive in publicizing this.

In terms of vigilance, I would put our present efforts of moving from only one individual two years ago, one person, to having more than 20 people full-time just investigating fraud, let alone training 1,700 people on fraud awareness in terms of looking at all of our systems to make sure they're secure, in terms of bringing in outside audit firms to do special audits to determine whether our systems are secure from tampering, ensuring that our human resources policies are secure against hiring people who probably are not secure, with large temptations. I think we're doing as much or more than all but one or two of the most advanced states in the United States to combat fraud.

Mr Waters: I'm going to ask one more quick question, and then I know everyone else wants to. I go back to the resources development 12 hours. Under staffing, on page 14, the first comment was that "adjudicators may be responsible for as many as 300 claim files" at any given time. It was felt by not only the injured worker but also by the employer that this, and dragging you down here all the time, were two of the biggest concerns they had. They wanted that dealt with and they wanted us to leave you alone to do your business. Could you answer that part of it? Has that improved?

Mr King: There are two key functions to proper case management, that is, getting workers' claims adjudicated and getting workers back to work. The vocational rehabilitation counsellors are case workers who are the people who go out and help workers return to employment. The average case load at the time the standing committee was holding hearings in 1991 was in the neighbourhood of 82 cases per individual case worker. We've got that down through the addition of staff and through the reduction in the total number to around 61 people, so that's a decrease of around 25% per case worker. Our adjudicators are down around 80 to 100, depending on what area, from the 200 and 300 you may have heard quoted.

I want to stress, however, that this doesn't mean we're not looking carefully at the total staffing complement needs, that we're retaining people when there's no work for them to do. As a matter of fact, in order to try to make sure we are not overstaffed, we just made a voluntary early retirement package available to those who qualified under the superannuation plan. This package was put out to some almost 80 people, and 62 of them have selected to opt for an early retirement provision. So we're looking at ways to reduce our total complement while maintaining our support for the case loads, so that as our numbers of claims drop off we don't end up with an embarrassment of resources with few claims coming in. We're trying to plan our way towards a smaller, better-managed organization through things such as this early retirement program.

Mr Waters: I'll pass to my colleagues.

Mrs Haslam: I'd like to thank the committee and the people who have been so accommodating in getting the information when we've asked for it. For instance, we asked for the standing committee on resources development and we have it, we asked for a report on the chairman's task force on the service delivery and that came, and if you take a look at all of this, it provides a very interesting paper trail.

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In November 1991 under the resources committee there were some recommendations brought forward.

"The committee therefore recommends that:

"An operational review of the service performance of the board (as recommended by the office of the employer adviser) should be conducted immediately."

It's my understanding that this has resulted in an action plan, which, surprisingly enough, is what we're talking about this afternoon -- some of us are.

It also made some recommendations about:

-- "thinking through the adjudication function and working at adapting the electronic imaging to better meet the needs of adjudication staff," which I understand you've worked on and you've done.

-- "ensuring that clients telephoning the board have the option of speaking to an employee rather than an answering machine," which, thanks to another piece of paper, shows that your telephone areas have come down and the time involved has been cut down.

-- "invoking a more rapid turnaround time," which, I understand through the other piece of paper, you've been able to bring down too.

-- "ensuring that all board forms, documents and correspondence are written in a clear, simple manner," which you had stated earlier you were able to bring into place, and doing it in a consultative manner with both employers and employee groups, which is another recommendation: "consult with its clients and keep in mind their need for a system that is accessible."

So that's the first one. That was November 1991. Out of that came the Report of the Chairman's Task Force on Service Delivery and Vocational Rehabilitation, which came down with some recommendations, and I read again: "Appoint a chief vocational rehabilitation officer and establish a vocational rehabilitation secretariat with the following mandate." It's my understanding from the young lady you had here today that she was on the hiring committee and that that recommendation was followed through from that task force report.

Throughout the task force there are references to the fact that staff and stakeholders must be brought more fully into the workings of the board. Another common theme running through the task force report is the need to build an internal partnership between the staff, the executive and the board of directors. From what I hear from the two people you had here this afternoon, again you've followed through on that recommendation.

That brings me to the Workers' Compensation Board of Ontario annual report from 1992, where again you say: "The action plan: Introducing new initiatives in vocational rehabilitation and case management; creating partnerships with stakeholders; developing a new corporate culture; looking to the future; and developing the internal partnership."

It seems to me that again you've followed through on that. If I'm not mistaken, that's what the action plan second-quarter report was all about, giving some details and giving some time lines about what you've been able to accomplish.

All of this seems to show that you're following through on every recommendation that's ever come forward out of all of these books, even in what you, Mr King, said at our opening the other day: "First of all, there is the action plan, which is the administration's response to the task force report. It is extremely innovative and an invigorating experiment in workplace democracy and cooperation."

Like I said, I came here with a lot of questions and a lot of concerns about how the WCB works, but anyone worth their salt in research will see that in front of them the answers to half their questions are right here, that you're doing your job.

But I still have a question for you. Given all of that, I understand you have these recommendations and you want to implement the recommendations of the task force. You have a joint committee which is looking at a more productive and a more responsive way. Can you please tell us, though, how you'll be able to monitor the progress to make sure these recommendations are not just implemented but have a positive effect on both the service delivery and in particular the vocational rehabilitation, which, as everyone knows, is something you are keenly interested in at WCB?

Mr King: Can I defer to the chair of the board?

Mrs Haslam: Only if his answer is shorter than my question.

Mr King: He has made the task force and the promise of implementation his own special project.

Mr Bradley: Somebody pass the pompoms.

Mrs Haslam: You went to school with me, Jim. You know I was a --

Interjections.

The Chair: I think we can proceed a little more efficiently if you don't bait each other and interject.

Mrs Haslam: You're correct. Madam Chair. I want to agree, because that was one of the things I said in the House. Don't bait the bears, Mr Mahoney; don't bait the bears. You're absolutely right, and I take the admonition seriously. I am very interested in the answer.

Mr Bradley: I'm just reading Elie's old speeches.

Mr Di Santo: I want to thank Mr Bradley. I think I heard him saying that the answer has been passed into very able hands. Thank you, Jim.

Mr Mahoney: Do you have a plaque you'd like to present to them, maybe?

Mr Di Santo: I'd like to say, Madam Chair, that you had here two of our staff telling you of the democratic process that let them choose their new chief, but we didn't make the headlines: If you look at the business page today of the Toronto Star, there is a big headline, "In This Company, the Workers Choose Their Boss." We don't make those headlines; we make headlines when something goes wrong. Okay, we accept that. This has been the history of the board and probably will be the history of the board.

What we are trying to say honestly to the committee is that we are attempting in a very serious way to try to overcome some of those problems. Also, in a very straightforward way, I want to tell you that we cannot solve all the problems, because some of the problems are of a legislative nature. We cannot solve them.

In terms of the action plan, which is an internal operational plan, we have planned it with the board of directors, because we want the input of the two stakeholders. We had a bipartite task force.

Mrs Haslam: Mr Di Santo, my question was --

Mr Di Santo: How do we implement it? Exactly.

Mrs Haslam: No, no, not how you're implementing it, but are you monitoring it so that it is a positive reaction for everyone involved?

Mr Di Santo: The two tenets were that the board of directors wanted our staff participating, so we have committed ourselves to report quarterly; you can get our quarterly report. Brian said that we have a committee made of workers and employers, our workers and management at the board, who are monitoring the implementation of the action plan.

Also, we have an advisory committee on rehabilitation, which I just appointed based on nominations from employers and workers, and they will be monitoring and working with the chief rehabilitation officer. I hope that in future we can have local advisory groups in each regional office so that we have a continuous interaction between clients, our staff and the management at the board. I think if it works, it will be good for the board.

Mrs Haslam: Do I have time?

The Chair: No, I'm sorry.

Mrs Haslam: I always get just one, don't I?

Mr Mahoney: In the area of accountability, let's talk specifically about governance. I think it was Mr King, and I stand to be corrected, who said, "We want many of the issues, whether it's the building or the flooring or whatever, to be devoid of any political interference." I'm paraphrasing, but that was basically what I understood.

Mr Di Santo, you were appointed when to the board?

Mr Di Santo: May 1, 1991.

Mr Mahoney: No, when were you appointed to the board, not as chair?

Mr Di Santo: May 1.

Mr Mahoney: In 1991?

Mr Di Santo: Yes.

Mr Mahoney: Who appointed you?

Mr Di Santo: The government.

Mr Mahoney: Mr Rae, the Premier?

Mr Di Santo: That's right.

Mr Mahoney: You're a former MPP?

Mr Di Santo: That's right.

Mr Mahoney: You served in the Legislature -- perhaps you can help me.

Mr Di Santo: I was serving in the Legislature from 1975 to 1985. In 1985, I was appointed by David Peterson, the Premier of Ontario, as the director of the office of the worker adviser.

Mr Mahoney: That was probably part of the accord, was it? Was that part of the accord?

Interjections.

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Mr Mahoney: Listen, a lot of things that were done in those days I didn't agree with, but I just want to understand. That was 1985, so that was part of the accord between the Liberals and the NDP, was it? I'm just trying to understand what the political framework of this whole thing is.

Mr Di Santo: I will never impute motives to the decisions of the then Premier of Ontario. I modestly think that --

Mr Mahoney: He made a heck of a decision.

Mr Di Santo: -- given my background and my expertise, he thought I could do a good job, and he expressed pleasure with my performance on several occasions; you can check with him. That was totally non-partisan and apolitical.

Mr Mahoney: In any event, you were there for 10 years. You're currently collecting an MPP pension as well as the salary from the WCB so you were --

Mrs Haslam: Like Mr Mancini.

Mr Mahoney: Mr Mancini does not work for a government agency, you might like to know. He works for the private sector. I think there's a difference.

In any event, your background is with the NDP. You're appointed by the Premier to be chairman after 10 years of what I'm sure was a distinguished career representing your riding in the Legislature.

Mr King, I understand you were appointed in April 1991. Your background, sir, I understand was something to do with the Saskatchewan Workers' Compensation Board, is that correct?

Mr King: I had been chairman for five years, one term, of the Saskatchewan Workers' Compensation Board, yes.

Mr Mahoney: How do they do it in Saskatchewan? Is that a political appointment, or who would make that decision?

Mr King: The chairman's position is by order in council; the cabinet would be making the decision, yes.

Mr Mahoney: Are they like this government, where the Premier makes all those decisions? That's probably unfair, but in essence you would have been appointed by the Premier in Saskatchewan.

Mr King: Mr Blakeney would have signed the order in council. I'm not too sure whether he made the decision or whether that would have been the Minister of Labour, who would have been the minister responsible.

Mr Mahoney: And then you went to the Manitoba Workers' Compensation Board, another NDP government, interestingly enough, and you were again appointed by the Premier there.

Mr King: That's correct.

Mr Mahoney: I'm not questioning your qualifications. I just want to deal with the issue of political accountability, who's pulling the chain of whatever goes on. Just to be clear for the record, you were appointed by an NDP Premier in Saskatchewan, another NDP Premier in Manitoba and then an NDP Premier saw the good work you did and got you to come to the province of Ontario, and that's why you're here today.

Mr King: Am I going to be allowed to respond to that?

Mr Mahoney: I'm asking if that's true.

Mr King: Am I allowed to respond to that?

The Chair: You're being asked a question. You may respond to it, of course.

Mr King: In 1973, I joined the civil service of the province of Saskatchewan, recruited not for political reasons but for reasons of being the best to do the job: merit and ability. Because I happen to know a good deal about workers' compensation and because the government of Saskatchewan wanted a non-political appointee to the chairmanship of the board, I was selected. I served for five years in Saskatchewan, two of those which would have been under the Blakeney government. I continued on for three years under the Conservative government that was elected in 1982.

I then joined to do a study in Manitoba, which was supported by all parties of the Legislature, on the workers' compensation system. A near-unanimous report of industry and labour was written about the Manitoba system and the government later asked me to come in and try to bring a non-partisan approach to the Manitoba Workers' Compensation Board.

I did not apply for the job in Ontario. I was recruited by a management consulting firm on behalf of the government. Thank you.

Mr Mahoney: I understand that these questions may cause you some frustration. I'm not attempting to attack you personally; I'm sure you could care less. I'm attempting to deal with the issue you raised, that there shouldn't be politics in these appointments. I happen to agree with that, notwithstanding that David Agnew is head of the civil service; that's not a very political appointment, I'm sure.

Someone once said that politicians should stop -- that there's too much politics going on. I don't know what they expect from their politicians. It's sort of in the job description that you've got to do a little politicking from time to time. I guess it's an issue of credibility, though.

I agree that decisions, such as the one that went against the Oakville company on the flooring issue, should be totally clean of any political influence. I'm not even suggesting there was political influence; I have no evidence to make such a charge or suggestion. I think it's an unfortunate administrative decision that, frankly, rests at the feet of the chairman of the Workers' Compensation Board, from all of the evidence I've been able to obtain.

I only suggest that when you have a government agency such as the Workers' Compensation Board, where the people who are in charge of governing it are -- and this is not a question on competence but a statement of fact -- a former NDP MPP, appointed by the current NDP government to chair the Workers' Compensation Board, and the vice-chair of administration has worked for several NDP premiers throughout the country -- to me, those are political appointments, and I don't know how you expunge the politics out of that particular reality. Chances are, Mr Di Santo -- I'm not making any predictions, but a future government might not see fit to renew and indeed may look to someone who doesn't particularly have political ties to its party. Time will tell. Currently, of course, the chair is appointed by the Premier, as is the vice-chair.

There has been some concern, because many advocates of the workers' compensation system -- and let me be clear that I and my party are very much advocates of a good workers' compensation system, whether it be a model such as the one I suggested earlier that you and I, Mr King, had some dialogue about or whatever the model be; my mind's open to it. How we arrive at that decision on reform of workers' comp causes me some concern, because the leaked document that came to our party a week or two ago on the government's fall agenda did not include workers' comp reform on its agenda. As a matter of fact, it was specifically excluded, which bothers me a great deal, because I thought the Premier's Council was reporting to the Premier, virtually imminently, to make recommendations on reform, yet the government House leader and the agenda being drawn up does not address any of the reforms that I get a sense even you folk would like to see addressed in some positive way.

One of the areas is that I think advocates of the system feel that, quite often, a chair's decision and/or a vice-chair's decision could be influenced by the government of the day if that particular government happens to be the one that holds the power to appoint or fire, as the case may be. As a result, the suggestion of an independent chair, or a chair and vice-chair elected by the board, perhaps, would have some merit. There's no guarantee there, because you could wind up with a board that would decide to elect both of you. That would be fine, if that was its decision, democratically arrived at, but it might decide to elect Bob Rae's brother-in-law, for all I know. I have no idea, so there are no guarantees.

The government's always trying to push you guys away at arm's length. Bob Mackenzie, every time he writes a letter, says he wants nothing to do with you. I don't know why, but that's what he does. Why not have a little more arm's length with regard to the governance and the appointments of the chair and the vice-chair? Any comments or reactions?

Mr Di Santo: I want to respond to that, because I am really offended by the tone of the comments made by Mr Mahoney. Regardless of what he thinks of myself and my ability to run the board, I will not accept that the fact I was a member of the New Democratic Party is impeding me from working at the board in a way that is objective and that has regard for all the parties.

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Incidentally, I have to say that, obviously, before me all the appointments were non-political. In fact, the chair before me was the Honourable Robert Elgie, who was a surgeon, was not a politician --

Mr Mahoney: Surely we need a surgeon.

Mr Di Santo: And before him, the Honourable Lincoln Alexander, who was a lawyer, who was not a politician; before him, the Honourable Michael Starr, who was not a politician, who was a bookkeeper at Sklar furniture in Oshawa. Of course, this is the first time in history that a person with political affiliation is appointed to the Workers' Compensation Board.

I have to remind the committee in the strongest possible terms that one must understand the way the board works. The board is run by a board of directors that is made up of four representatives of the workers and four representatives of the employers. The four representatives of the employers are Mr Carmer Sweica, who represents COCA; Ms Daphne FitzGerald, who works with Zurich Canada; the Honourable Robert Stanbury, who is a full-time vice-chair representing employers, and Maurice Dutrisac, who works for Southam. For the workers, we have Dennis Schweitzer, who works for the transportation workers; Joe Duffy, who is with building trades; Stephen Mantis, who is an injured worker; and Homer Seguin, who is a skilled worker, a former miner.

The board makes all the important policy decisions at the Workers' Compensation Board. I invite the committee, for respect of the truth and for respect of what's happening at the board, to look at all the decisions of the board. Never in my life have I made a decision on partisan terms. In fact, almost all the decisions of board are reached by a consensus. There have been a couple of occasions where I had to split the vote, and one time I voted with the employers and one time I voted with the workers, so I think nobody can impute that because of my past, I am impeded from performing my job at the Workers' Compensation Board.

Mr Mahoney: Mr Di Santo, one of the difficulties, whenever you try to honestly examine an agency or a system, is that it impacts people who will take comments personally. I assure you that mine are not of a personal nature; I don't even know you, so they're not of a personal nature. I'm talking about the system where a Premier appoints -- and no government is immune to this. Our government did it; the Conservatives did it for 42 years, for goodness' sake.

Mrs Witmer: The best days of the province.

Mr Mahoney: Gasp. The point I try to make is that if we're going to really objectively analyse reforms, then the first thing you have to do is have thick skin. Surely to goodness, after 10 years in the Legislature, you would have such thick skin.

This is not a personal attack on you or Mr King. This is an issue of governance about, how should we be appointing a chair and a vice-chair of a government agency, in this case yours, ours, the workers' compensation agency? There are people who would say that a chair holding a card in the New Democratic Party or having been a past member of that party or being a current member of that party might be influenced by that party as long as it's in government. There are people who have said that. How do you deal with that kind of criticism if you don't depoliticize it, which is what I heard Mr King saying this morning?

Interjection.

Mr Mahoney: Oh my goodness, Jim Bradley, New Democrats? Get that out of here.

Mr Bradley: I have a card and I never got appointed.

Mr Mahoney: Don't appoint him, whatever you do.

How do you get that kind of objectivity and ensure -- the issue of: "Not only must justice be done; it must be seen to be done. Not only must independence exist; it must be seen to exist." You just happen to be the person in the chair to whom I'm asking the question because you are an appointee of the New Democratic Party. I don't really need a response, but I just reiterate -- well, you can make one if you want. Do you think we should have a system that appoints, independently of the Premier's office, the cabinet etc, the chair and the vice-chair of the Workers' Compensation Board, perhaps appointed by the board itself?

Mr Di Santo: The board of directors of the Workers' Compensation Board has been dealing with this issue for the last year, since May 1992. As I said before, the board of directors is made up of representatives of workers and employers. In fact, they have produced a document on governance. If the question were asked in the interests of governance and not in relationship to the people who are now at the board, I would have answered in kind.

The proposal made by the board of directors was agreed upon by us, by the two of us, regardless of the fact that I am a New Democrat, regardless of the fact that I have been appointed by this government. The proposal made by the board of directors, of which we are members, recites like this: that the workers and employers will have an equal number of representatives on the board of directors and they will choose a chairman and they will choose a president.

Mr Mahoney: Have you recommended that to the government?

Mr Di Santo: We have recommended that to the government. That's why I was offended by your remarks, because you are not interested in knowing what we have recommended, but you were pointing to two people who --

Mr Mahoney: You happen to fill the seat at the moment, sir.

Mr Di Santo: Exactly.

Mr Mahoney: I have to ask the question of the people to whom I am speaking. It's not very hard to figure that out.

Mr Di Santo: Okay, but I can react the way I want.

Mr Mahoney: You sure can, and so can I. If you want to get your nose out of joint, that's your problem.

Interjections.

Mr Mahoney: I want to go back to the issue on the floors, if I can, very briefly, the issue of the product you selected. Clearly, ASP's response states they were not required to have a mock-up prepared along with the others for discussion purposes and that they were allowed to come in with a week to go. Can someone explain why they were not required to go through the same process as the other bidders?

Mr Di Santo: Madam Chair, I want to add only this comment, and this is my final comment on this topic --

Mr Mahoney: You won't answer any more questions?

Mr Di Santo: I will answer questions, and I will answer the way I choose to answer the questions.

We told the committee that our evaluation committee, of which we were part, chose a certain type of flooring, and after choosing a certain type of flooring, bids were open, everybody who qualified was invited to the bids and --

Mr Mahoney: Did they have to do a mock-up? That's my question.

Mr Di Santo: -- and the contractor chose the best bidder. I want to add that Cadillac Fairview is a partner in the building. They are partners for 12% and 15% of the building, so they have a vested interest. I think Cadillac Fairview had no interest at all in wasting money just because it wanted to choose one contractor over another for mysterious reasons. These are my final comments on this.

Mr Mahoney: Cadillac Fairview is not accountable to the Legislature, sir. I hope you are. The question was, did they have to do a mock-up? "The construction of the lastminute-approved product bears no structural resemblance to the cement-filled steel panels specified and is merely a sheet-metal-clad cement board." Why did they not have to do a mock-up? Why were they not required to go through the same process as the other people submitting a bid? And, in the time I have left, will you reconsider this bid and reopen the issue?

The Chair: There isn't any time for that answer at this point in the meeting. It's now 20 minutes and 30 seconds.

Mr Bradley: The NDP will yield some time so we can get an answer, I'm sure.

Mrs Witmer: I'd like to focus on some of the problems that are being faced by people in this province. I alluded to some of those problems this morning. I'm going to deal with a specific example and a specific letter. This letter is from London Cartage and Delivery Ltd, signed by the president of that particular company. It's dated August 10, 1993. I want to point out to you some of the frustration that is being experienced by people in this province and I would certainly appreciate your comments. By the way, it refers to your policy on independent operators. It's written to my colleague Dianne Cunningham.

"We are a small, family-owned business that has operated in London for the past 30 years. We currently have 33 people who earn their income, pay taxes and support families through association with our firm. Through an arbitrary decision reached by the bureaucratic nightmare called the WCB, these incomes" of the 33 people "are at risk.

"There are 23 independent operators who supply tractors and some trailers to our company in return for work offered by the company. After an agreement was reached in 1976 between the WCB and the Ontario Trucking Association, independent operators could sign a WCB form. This authorized the deduction and payment of WCB costs on their behalf by the company. All of our independent operators signed the form, which was designed and produced by the WCB. By doing this, the independent operators received coverage and the WCB received payment.

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"The independent operators running for our firm have been deemed by the WCB to be workers for purposes of the WCB. It amazes me how the WCB can deem these people to be workers when Revenue Canada, UIC and CPP recognize them for what they are, independent operators. We do not provide a T4 to any of these operators, nor can they contribute to UIC because they are independent businesses. These drivers pay for their own vehicles, pay their own maintenance, fuel and replacement costs, and when they leave, the tractors go with them. I do not understand how the idiots at the WCB can realistically deem these people to be workers." I just pause here. I think you can see the frustration. "It frustrates me to no end, and fighting the government bureaucracy takes up valuable time that could be better spent looking after paying business.

"New rules established on July 1, 1993, will not alter the current situation one bit. The problem stems from the revenue department and the need for these people to justify their positions. The cost to small business is of no consequence, and since the bureaucrats continue to produce an endless paper trail, their position will remain secure. In the meantime, our very existence is in jeopardy. The rules will continue to change at the whim of some bureaucrat who has little or no knowledge of the trucking industry and is not interested if we continue to operate.

"If we are forced to refund any money to any of the independent operators, we will have no recourse but to declare bankruptcy. This would add several people to the welfare system and nothing would be gained by any parties involved. The only winners in the whole situation will be the legal profession. Because of the WCB, we are facing a lawsuit by a former independent" and another suit by another independent. "There is not enough money in trucking to accept these...hits and still survive. It seems that the government is intent on forcing small businesses to shut down at a time when we are so important to the economy. They fail to realize that if they continue to remove small business from the economy, they jeopardize their own livelihood, as small businesses like ours pay people who, in turn, pay taxes so government employees can be paid. I will continue to object to this arbitrary ruling until I have exhausted all channels open to me. If you feel your office or even Mr Mackenzie at the Ministry of Labour could offer any advice...I would appreciate" it.

He goes on to say that it's impacting his personal health and he really does look forward to having this problem resolved.

Can you give me some suggestions as to how individuals such as this person can be assisted?

Mr King: Can I make the very initial response of indicating that on an individual case basis, I don't believe it fair nor proper to debate or respond in a public forum like this. I will undertake, however, if you will refer either the individual to me or the correspondence you've just referred to, to have a personal response prepared for that person. I would like, however, to have the senior vice-president of strategic policy comment on the efforts we have taken, as an organization, in the trucking industry to clarify the rules and to simplify for the industry who is an independent contractor and who is a worker.

We worked very closely with the Ontario Trucking Association and achieved its concurrence on the type of decision that was finally arrived at.

I would like Linda Jolley to briefly go through that.

Ms Linda Jolley: Linda Jolley, senior vice-president of strategic policy and analysis division at the Workers' Compensation Board.

We worked with the Ontario Trucking Association and the trucking unions. These concerns were brought to us when our new questionnaire came into effect on January 1, 1993. We had a series of meetings with all of the industries concerned about the independent operator situation but, needless to say, the trucking industry in particular was the one that was the most vocal.

We met continually with the Ontario Trucking Association, with the independent operators' association, with the Teamsters, with CBRT, the Canadian Brotherhood of Railway, Transport and General Workers, and with a number of other unions, including the United Food and Commercial Workers, which has independent operators and workers in the organization. We reached a tentative agreement on a new questionnaire that in fact the trucking association, the Teamsters and the independent operators organization signed off on. Two of the unions expressed some concerns about it but were willing to go along with it.

The understanding in this one is that they will use the questionnaire to define whether or not they're independent operators. The industry itself felt, as did the Teamsters and the other unions, that we were really defining who is an independent operator and who is really a worker in a way that our previous questionnaire did not do.

The understanding, however, would be that the industry and the WCB would try, although we're not mandated to demand it, to encourage independent operators to then take out personal coverage. One of the interests that the industry would have was the protection against lawsuits in the case of an accident if they did take personal coverage.

Right now, this new questionnaire has been in effect since July 1, 1993. My understanding is the revenue department is not making the decisions that it was making with the other questionnaire. The decision on whether or not one is a worker or an independent operator will in fact be made at the time of an accident and is not being made by the revenue department. We are taking the questionnaires at face value on the understanding that this is an experiment, and if we can attain coverage through this experiment in the next year and a half, we will have served all interests.

Mrs Witmer: Then why has it taken so long for this particular situation to be satisfactorily resolved? I think I've pointed out the stress it's caused to the personal health of the employer.

Ms Jolley: Unfortunately, when one is dealing with two separate interests, from an industry and a union perspective, it takes some time to build the trust to come together to work on a policy. It took us, unfortunately, about two and a half months to bring the parties together to really sit down and to forge this consensus.

Mr King: I heard what you said in terms of the anguish and the possible personal health problems that were involved here. I repeat my offer not to debate an individual issue in public -- I don't think it proper if there are quasi-judicial decisions to be made here -- but I will give the undertaking to have a personal response to the concerns in a very timely way so that this citizen of Ontario is aware fully as to what his or her rights and responsibilities are, through myself.

Mrs Witmer: This is part of what I alluded to this morning. There really is a high level of frustration. Maybe in this case it's the lack of a timely response, which I indicated this morning was a primary concern, as well as a lack of communication. Individuals just don't know where they are in the process. Those are probably the two most critical areas.

I trust you will follow up and I trust that we can save the jobs of these individuals, because obviously they're desperately needed in our province.

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Mr King: Just a technical matter: I have been given a copy of this, and I assume I now can take this and respond to it.

Mrs Witmer: Yes, you can.

Mr King: Thank you.

Mrs Witmer: I'd like to move over to another area: I'd like to take a look at Bill 162. It's obvious that the implementation costs have far exceeded even the highest projections that were ever made. The amendments which took effect in 1989 added nearly $1 billion to the unfunded liability. At that time, if you will recall, the Liberal Minister of Labour, Mr Sorbara, stated: "The overall financial impact of these reforms will be revenue-neutral. They will reallocate resources within the workers' compensation system to compensate for loss of earning ability and help focus our efforts on the priority of rehabilitation."

Mr Bradley: Sounds like Bill Davis on separate school funding.

Mrs Witmer: We know that's not true. We're aware that although the area of undercompensation has been addressed, in the area of overcompensation we have a very critical problem in this province. Why is it more critical in this province than in other Canadian jurisdictions?

Mr King: I'm sorry. What is more critical? I apologize.

Mrs Witmer: The problem of overcompensation.

Mr King: I'm not certain myself that the problem of overcompensation is more critical in Ontario than in other provinces.

Mrs Witmer: Apparently there was a study done by the Canadian Federation of Independent Business in 1987 that indicated it was a very serious problem in this province in comparison to others.

Mr King: I've dealt with the CFIB across at least three provinces, and I can tell you that they've said the same thing in three different provinces, that the problem of overcompensation exists. The same briefs that appear in Ontario appear in Manitoba and go on a Xerox machine and then go to Saskatchewan. I believe that if you checked with your colleagues in those three provinces, you would find the same urgency to the overcompensation question.

Mr Di Santo: Can I ask you a question? When you say "overcompensation," what do you mean?

Mrs Witmer: We know that some individuals are receiving as much as 135% of their former take-home pay. That's what I mean by overcompensation.

Mr Di Santo: Bill 101, which was approved the Davis government, brought compensation from 75% of gross to 90% of the net wage. That's the compensation that in fact we give to the workers.

I know what you're referring to, that because of the income tax system and the way it works, it may end up that some workers, for a given length of time, may end up getting a little bit more than 90%, but there are also other workers who are not getting more than 90%.

The board attempted to look at this aspect, but we were facing the situation where the statute must be changed. We cannot intervene in any way to try to modify the compensation of the injured worker after the accident unless the bill is changed.

Mrs Witmer: So you feel you have no control whatsoever over the overcompensation.

Mr Di Santo: I told you that we tried to deal with this issue, and we have not come to the conclusion that there is a case of overcompensation. We heard the allegation, and I think that employers are making that case at PLMAC, the Premier's Labour-Management Advisory Committee. The employers' representatives are making that case, but that's a political decision that has to be made. It's not an administrative decision made by the board administration.

Mrs Witmer: I would suggest to you that the formula at the present time is 90% of net, and that's supplemented by the retirement pension of 10%, so that's 99% of pre-injury income and it's non-taxable, so that ends up in the worker's hands, and then we also see some allowance being made in the areas of mortgages and child care. What would your response be to all of this additional money that's being made available to the employee, who's now making substantially more than he or she ever made before?

Mr Di Santo: As I said before, the act provides that we pay 90% of the net wage. Because of the income tax system, it may be that some workers, because of the lower rate of income tax, may end up with a slightly higher income than 90%. But that's the Workers' Compensation Act, Bill 162. If you change the act, then we can implement the act, but under the present circumstances we have no choice but to pay what we are required to pay by the law.

Mrs Witmer: I guess that demonstrates that the present system really isn't viable if some individuals are ending up with 135% of their former income.

Mr Di Santo: I don't know about 135%, and I don't believe that happens. You are a legislator, and obviously you can raise that question in the right forum.

Mrs Witmer: What allowance is provided for individuals if they have mortgages? Is there any additional compensation given?

Mr Di Santo: No.

Mrs Witmer: It's all part of the 90%; they don't ever get any additional money?

Mr Di Santo: No.

Mrs Witmer: Given this situation and the fact that some individuals are getting anywhere from 90% to 135%, for whatever reasons, have you done anything in the way of launching an in-depth review of the future economic loss and the non-economic loss provisions of Bill 162? The present system is simply not viable.

Mr Di Santo: I would like to ask Sam to come forward. We have been reviewing FEL, future economic loss, because we have a legal obligation to do that: After two years we have to do a review. As you know, the legislation is being challenged from several quarters, employers and workers; workers as well are not happy with FEL because of the deeming clause. We are in a very difficult situation because we are asked to do an almost impossible job.

We are trying now to look at all aspects of FEL. I'll let Sam discuss this issue because he is an expert, more than I am, and I recognize that. We have to deal with the aspect of sustainability, and I think we have to find a consensus with the employers and the workers. We found the solution finally, but it's not an easy question. Sam.

The Chair: I don't know if you want to start, with six seconds left.

Mr Mahoney: I move we hear them.

The Chair: No, it's not that simple, because then we're taking time away from the government members. We've done this pretty fairly all around.

Mr Mahoney: We have, and I'm not contesting your fairness in this, Madam Chair -- as usual, you've been fair in that area -- but we've got more than enough time for the government members and the official opposition to have one final kick at the can. I think we could hear them for a minute or two.

The Chair: Is there agreement? Thank you. Please proceed and identify yourself for Hansard.

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Mr Sam Van Clieaf: I'm Sam Van Clieaf, vice-president of client services.

The question you pose about the financial viability of Bill 162 is really very interesting and I've studied it closely. I really don't think at this stage that one can accurately predict the outcome, simply because of the review system that's in place within the statute.

When an accident occurs, if a worker is disabled for 12 continuous months or if they have a permanent impairment, then they're entitled to a review for future economic loss, and we really started into those reviews early in 1991. They are now coming due for the first review, which takes place 24 months after the initial review, and there are a variety of awards that can be granted. The most common one is a sustainability award, which simply means that the board is issuing a 1% award which provides protection to the worker to have their case reviewed in case the expected rehabilitation result does not happen. Then you have a whole series of awards that could be made from 1% to 100%.

The way the future economic loss system works, it is very much the focus of successful vocational rehabilitation. What we're seeing is the system beginning to take effect. When we started in 1991, quite frankly, the board was very new to this process of determining future economic loss awards and we were also really starting to gear up our vocational rehab activities. We learned through the process of evaluating cases in those early stages and, more importantly, we have really heightened our voc rehab activities, especially in about the last 18 months. So what we are seeing is a shift in the entire pattern of lost-time claims.

To make the system work effectively, you get injured workers back to work literally before 12 continuous months of temporary disability, and one of the most encouraging things we've seen -- I guess there are really three or four reasons for it -- is that there is a marginal decrease in the number of injured workers in an accident year going through 12 continuous months. It is gradually dropping, and a drop of 1% or 2% of those cases, say from 8.5 to 7.5, translates into multimillions of dollars in long-term payments.

So the first instance is: Help to return workers to work more quickly in the first place. On the very positive side, I think the credit primarily goes to the stakeholders themselves, the employers and the unions, getting together and setting up modified work programs. I think the chairman mentioned that two years ago there was a handful of modified work programs operational in many employers in the province; right now, there are over 2,000. If these people get back to work, that eliminates in the first instance a future economic loss award itself.

But for the cases that are now coming through the system at the first review -- we've only done about 1,500. They're now three years out from the accident, and we are seeing trends that suggest that vocational rehab is again having an effect, in that employers seeing the financial obligations are helping to take many of their own people back to work, and through our own efforts of voc rehab in trying to mitigate the effects of the injury, we're better preparing many of the workers to be able to compete in the job market.

There's the alternative argument of deeming. If you'll listen to labour critics, who will talk about the board deeming, there are two sides to that argument.

But in fairness to the system, a further review will take place on these initial claims another three years out, and it's at that point in time that you'll really see the effects of Bill 162 as it relates to a future economic loss.

The Chair: Thank you, Mr Van Clieaf. Perhaps you will have another opportunity to expand on your response, but that was six minutes. We now move to Ms Carter.

Ms Carter: Actually, I was about to --

The Chair: You're going to give your six minutes to Mr Van Clieaf, right?

Ms Carter: -- raise the question of vocational rehabilitation, and I guess you've just been speaking about that anyway. When we were speaking earlier about case loads, did that apply to vocational rehabilitation case workers, or are there separate figures to those?

Mr Van Clieaf: The numbers Mr King mentioned were for our vocational rehabilitation case workers.

Ms Carter: So the case load is being reduced.

Mr Van Clieaf: It has been reduced substantially.

Ms Carter: Yes, which is obviously very important, because I think we all realize that the happiest outcome for both the worker and public finances is to have the person get back to work.

I have just recently been sitting, as has Mrs Witmer, on the justice committee, where we've been discussing employment equity. It occurs to me that maybe there is a link-up here because, unfortunately, there will always be some people who will not be totally rehabilitated, who will in fact remain disabled to a greater or lesser degree. As you know, the new legislation says that employers must hire disabled workers in proportion to the numbers in the population.

It seems to me that you are more concerned with the original employer accommodating a worker, but this opens up the whole area of employers in general hiring people who may indeed need to change to something different as a result of an injury. Also, of course, it does require accommodation for people with disabilities. I was just wondering if you felt this would have any positive impact on the problem as it affects the Workers' Compensation Board.

Mr Di Santo: Madam Chair, I've been convinced for a long time about the integration of the Workers' Compensation Board with the broader society. In fact, when I was a member of the Legislature, I even introduced a bill that ended up like all private members' bills: on the shelf.

I think the issue here is that the Workers' Compensation Board in Ontario has been charged since 1914 with a task that it cannot discharge. In other words, if you live in Marathon or Schreiber or in northern Ontario and you get injured and there are no jobs available with the employer where you were working before, then your predicament becomes very, very serious.

We know that for a long time, until 1990 when Bill 162 was introduced, there was no obligation at all to hire injured workers or, as you said, people with disabilities in general. That requires a change in approach in our society: that society becomes responsible for people who have disabilities, for people who cannot compete with other people because of their disability, and then society helps them to become productive.

The problem we had in the past was basically based on a myth, that a person with a disability was a less productive person, a person who would be a liability for the employer. Now, as Sam said, we have 2,000 employers who are in the modified work program.

I want to talk to you briefly about Inco, which was one of the employers that was very resistant initially to the idea of having a modified work program. Today, they have 10% of the workforce made up of people with disabilities, not only injured workers but people with disabilities.

In London, Ontario, Cuddy Food was a company plagued with overcharges because of the incidents, and now is a company which is free from accidents and is receiving rebates because it has a modified work program.

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We have to make a further step. I hope the Employment Equity Act will help us in that direction. I think that if public employers, including the government, including municipalities, libraries, the liquor board, have an employment equity program, we can find the jobs; not with the old employer, because sometimes in the construction industry there are no jobs for them, but there are jobs for disabled people. We have to find a mechanism. In other countries, in Europe, they have different systems. For instance, in Germany, they have a quota system which is very, very tough, because they impose 5% employees with disabilities in any employment place with more than 20 people; that is for historical reasons. In other countries, they have systems that encourage it based on incentives, based on grants to the employers who hire people with disabilities or levies to people who don't want to hire.

Ms Carter: And of course the point is that if you get the person in the right job, they can do it just as well as anybody else, so there's no problem to employers. We heard from IBM in particular that, having a policy of hiring a lot of disabled people, it finds it has a better workforce.

Mr Di Santo: I think at this point in time in the history of Ontario, we can prove that those 2,000 employers who have modified work programs are employers who are happy with their employees, because they save money, they don't pay to the board, and those employees are productive workers, more productive than the other workers.

Ms Carter: I see that you employ ergonomic specialists. That's something that wasn't raised when we were having the hearings on Bill 79. I was just wondering if there's a larger place for those people or whether in fact we have enough of them.

Mr Van Clieaf: In each of the integrated service units, there is an ergonomic specialist who is available to assist employers with workplace modifications to help mitigate the effects of an injury. As required, they will visit work sites, give employers advice, working with the labour people, working with management, to try and accommodate workplaces to injured workers, or design them, as the case may be, in the first instance.

Ms Carter: So probably we could use more of those to increase the benefits of matching people with jobs that they can do.

Mr Van Clieaf: Yes.

Mr Marchese: I want to talk briefly about the flat rate as it applies to assessment, because Mr King has talked about this twice. It has raised questions in my mind. It has the appearance of equity, a flat rate, but in my view it would have very unequal results. The way it would do that is that if you charge a flat rate, everybody would pay equally, it seems -- that's what it means to me -- irrespective of size, irrespective of wealth of that particular industry, whatever it is, and it doesn't recognize that some small employers or large employers might have fewer accidents because they're involved in better safety prevention mechanisms. If all of that is true, then how could a flat rate be fair?

Mr King: The first aspect of the question was that different-sized firms would pay unequal shares. The concept of a flat rate is that your percentage taxation would be flat. Right now, the average rate in Ontario is just under 3% of payroll, so you would pay according to the size of your payroll. If you're a bigger firm, you would pay more because you have a larger payroll. That's the first half of your question.

The second half is whether you believe the taxation system is the proper system for creating incentives for safety or whether you think it is a system of either: Do you punish people through a series of fines for violations of safety or do you set up some sort of reward system? I'm not too sure that using a system of taxation which is to pay for work injuries is the best way to reward employers for incentives on safety, or whether that should be a workplace health and safety agency which looks at workplaces. Do you let what is basically an accident, which by definition is something unplanned, something unforeseen -- do you let people be punished for an accident or do you try to affect behaviour by indicating: "Here is a defined good behaviour. If you breach that, you will be punished. If you follow it, you will be rewarded"?

I think a different system could be adopted than to utilize the workers' compensation system to reward and punish those in the area of safety. I realize it's problematic from an intuitive point of view, that you think, to use British parliamentary language from 80 years ago, that those who spill the blood should pay the costs of the system. But I think we're at the stage, interestingly enough, where less than half of our work injuries now involve trauma. Half of them involve so-called soft tissue, repetitive strains and things like that, which have more to do with the way work has changed in our society and the need to ergonomically adapt ourselves to the way the work has changed.

I don't posit it as a solution. I point out to thoughtful people that if we allow our compensation premium to make our industries non-competitive on the international market, then I think we have a serious problem. It may be that people have to think in terms of: If we have to export automobiles, if the compensation costs for those automobiles are significantly greater than they are in South Korea or in Taiwan or Mexico, does the compensation system assist and abet in that unfair competition? I merely indicate that there may be another model that is better in terms of this international competition, which we're all very new to. I don't believe we have examined some of our social insurances to take into account that newness.

Mr Marchese: But if we talk about the rates they pay as being non-competitive or being a real problem for these companies because it drains a lot of the resources to pay into this assessment scheme, why wouldn't that in itself be an incentive for employers to put into place good, healthy, safe workplaces? Why wouldn't they be doing that? Why do we as a government think of something that would provide some other kind of incentive or some other way of doing business, when they themselves should realize on their own that this is costly? In addition, it's not only the assessment rates they're paying, but also having on staff highly paid people who bring a case forward to the compensation board to attack, often, workers; at least, if not attack, to try to defeat a case that a worker has brought forth.

Mr King: Again, I think you've responded to my challenge, which is to say, can't we think of a better way to deal with this than through the compensation system? One of the things you will note, if you're a student of workers' compensation in Ontario, is the highly adversarial nature of the program. I think it's approaching evil that we design a program that would cause employers to fight with their workers over a compensation claim because it may result in a penalty to an employer if a worker files a work injury. That in effect is one of the outcomes of the present experience rating program, that employers become so conscious of penalties that they will actually hire lawyers to fight claims of workers when in fact on another day they would go to bat for that injured worker if it was for an insurance claim under group life.

I think Ontario has to seriously consider whether or not the compensation system and the incentives we have built in are leading to a greater adversarial system in Ontario at the workplace plant floor. What Ontario requires right now is the combined effort of workers and employers to be competitive on the international scene. I think our compensation system is detracting from that need to be competitive.

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Mr Marchese: I will pursue that again tomorrow, but my colleague would like to ask a question.

Ms Murdock: I'm going back to the action plan. Mr Di Santo mentioned the 2,000 workplaces where the employers have instituted a voc rehab program. I've always tied, as you know, because we've had this discussion before, vocational rehab and medical rehab. Personally, I think you should be looking after client services and that there should be somebody specifically designed to look after voc rehab and medical rehab, but I haven't won that battle yet.

As to the section you provided to us on the action plan, the section 3 task force recommendations on voc rehab, looking at everything that's in there, I see that the developmental training for work site analysts won't be undertaken until the third quarter, correct?

One of the problems we had when I was a CA was that we couldn't get anybody from the board to go to a workplace to even look at the job site to see why the accident occurred in the first place. In many instances, if the work site had been changed, the accident wouldn't have occurred. Of course we get into the whole health and safety argument, which is that if more employers spent more money on health and safety -- Inco is a perfect example -- you'd have fewer accidents.

I want to get into the evaluation process of voc rehab, the functional abilities evaluation, which is a bugaboo that I will probably never like, and the whole work trial aspect of voc rehab. I'll use Sudbury as an example because that's the one I know best.

In the work trial, if the injured worker is able to work but the WCB wants to make a determination about what kind of work they can do, they are -- and I say this -- stuck in the CNIB woodworking workshop. I have no disparaging remarks about the CNIB; however, that's where the majority of them are placed. They sit for their two months and they count bolts and nuts, and an evaluation is made on them. Inevitably, at least thus far, we're finding that at the end of getting this functional abilities evaluation, it determines invariably that they have to go back to work, whether or not they're really ready or can do the job they were doing pre-injury.

I'm wondering, on the basis of what's on pages 3-3 to 3-5, what you're finding and how that fits in with the experience and whether any of this is really going to be changed.

Interjection: In five minutes.

Ms Murdock: Actually, three minutes.

Mr Van Clieaf: During the course of these proceedings, it's been mentioned that Katherine Rellinger has been brought on board to take a close look at our vocational rehab, and there are interlinks with medical rehab attached to that. For instance, the very thing you're mentioning would be an agenda item for Katherine to concentrate on; that's very much what was linked to looking at this in the third quarter. Actually, she came on a little later than was originally forecasted; in fact, we're probably going to really get into that in the fourth quarter, once she's had an opportunity to review it.

But the functional abilities evaluation really comes at the second stage of voc rehab. Under the board's hierarchy of objectives, the best hope for success is with the accident employer, in two ways. First, there's just the moral obligation, the ethical obligation, they have to the wellbeing of their people, and I believe most employers truly do have that. The other reality is that the reinstatement provisions in Bill 162 put obligations on the employer to do that. You really only start --

Ms Murdock: But truthfully, it's within time frames, though.

Mr Van Clieaf: Yes, there's no question it's within time frames. If you want to examine the statute, there are holes wide enough to drive trucks through it from that perspective, and it could be tightened up. But once you're past that stage, if you're not going to be successful in returning to the accident employer -- and sometimes it's the injury itself that makes that determination. But it's really a tool to help the workers sort out what their aptitudes are, along with, literally, the functional ability they're going to have, flowing from the disability. It's strictly a tool that's used, ideally, by the case worker, the injured worker, the injured worker's representative and the injured worker's physician to try to help map out the --

Ms Murdock: I think we have to stop. I'm getting the eye from the Chair. Thank you very much.

Mr Mahoney: The question I asked at the end of my last round was, will you reopen and revisit the flooring issue, Mr Di Santo?

Mr Di Santo: No.

Mr Mahoney: You will not. Will you debrief Mr Mead -- maybe this is appropriately to Mr King -- or have somebody debrief him to answer the questions that I've placed on the record and that he has placed in your hands for some time? Will you at least undertake a debriefing of the process?

Mr King: I'm certainly not against having people from or representing the Workers' Compensation Board meet with Mr Mead.

Mr Mahoney: So you will arrange a debriefing. Is that what I understand?

Mr King: That is correct.

Mr Mahoney: To go on to a couple of other issues -- perhaps there will be more on that later -- the issue of flat rates that I think Mr Marchese was questioning and discussing raises a bit of a double-edged sword, in a sense. A flat rate for all industry throughout the province initially smacks of public auto insurance, shall we say, in that the big debate in public auto insurance was that everybody's going to get a standardized rate and the good drivers will be penalized for the bad drivers. That concerns me about a flat rate, although a flat rate, like a flat tax system, might be more understandable to the users and the payers of the system.

But I think you used the comment, in relation to earlier comments I made about changing the system, that you'll get the guys with all the dirty rags coming to the government agency and, in the same sense, those people with all the dirty rags in the basement will be getting a much cheaper ride than perhaps they should. Does it not make sense, whether it's a 100% government agency, as it is today, or whether it's a combination of private sector and government agency, to set your rates based on experience ratings?

Mr King: Our present rate structure or pricing model is based on experience rating. It's widely used across Canada in the Canadian workers' compensation system, and it tries to reflect the rate for an industry that deals with the number, the incidence and the severity of accidents in that industry. But it has many shortcomings; for instance, occupational disease develops over 20 or 30 or 40 years, so you don't necessarily prevent occupational disease through an experience rating program, but you still have to pay the costs for it.

A second problem is that the most seemingly minuscule of injuries can result in enormous costs. Under an experience rating system, a moment's inadvertence, which has no blameworthiness to apply to that employer but may cause a fatality, occurs just through sheer accident, and very significant costs and penalties would arise under an experience rating would occur.

I am merely trying to put on the table for some discussion that maybe we should cover the behaviour of employers as it respects safety under a different method than the taxation for paying for work injuries. It may be under regulation; it may be under rewarding those who take workers back to employment rather than making them go out and become a burden upon the compensation funds or the funds of other employers, which in itself is a way to rate experience. It isn't just straight measurement of dollars, which the present system does, to a great extent.

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Mr Mahoney: I think the point Mr Marchese was making, if I could just interrupt you, on the issue of incentive, was, how do you develop a system that's understandable and affordable and yet has incentive built into it, notwithstanding the fact that there are accidents that will occur? In fact, if I could take it a little further, if there are other companies in the business of providing compensation insurance, it may well be that a company which had a simple accident with workers' compensation covering it would not be happy with its increased premiums and would then be allowed to go to market and explain to the other companies, which had not borne the burden of the payout -- whether that's fair to workers' comp or whichever the company may be, but that's the way the insurance system works: You have an opportunity to go out and explain that it purely was an accident you had no control over and get competitive bids.

I'm somewhat attracted to a flat rate, but I see some real pitfalls in not recognizing -- you talk about illnesses. If a company's dealing in asbestos or a company's dealing in bad air conditions or something of that nature, or the mining industry has serious lung problems, whatever the particular issue happens to be, it would seem to me that the rate for a mine should be substantially different from the rate for a small manufacturer in Scarborough that doesn't deal with any kind of toxicity at all.

Mr King: I think it's a mistake, though, to think that your rate in a mine might be significantly higher than a rate in a small manufacturer. One of the problems you've got is that some of the small manufacturers that we depend on in Ontario to generate our wealth are charged extremely high premiums by the workers' compensation system based upon that experience.

My own years in Canadian workers' compensation teach me that we in Canadian compensation have charged 25% to companies to do work; in other words, we've charged them a tax of 25% of the payroll, in some cases. That's in shaft sinking, some of that very arcane work.

Mr Mahoney: That's a good description of it: 25%.

Mr King: Yet it doesn't seem to affect or influence their behaviour in safety, because there are still people killed and very seriously injured. I'm merely questioning the use of a tax system, which is to pay workers for injuries, to effect proper safety behaviour on the part of employers, because in Ontario it has led to a different behaviour called claims management or, at the worst, I suppose, suppression of claims, of which there are many documented cases. I think rather than create a fight between workers and employers, we use our creativity to think of a different model to effect positive safety behaviour. It's difficult, I agree.

Mr Mahoney: I'm glad you refer to it as a tax system, because in essence that's what it is; there's no question about that. Help me out with this: a question about some $40 million in expenditures that the board undertook over the past year or so with regard to a new computerization program dealing with the rate adjustment program. Can you tell me what that's all about?

Mr King: The board, beginning in about 1989 or 1990, began to work, at the request of the employer groups, on a new cost and pricing model or a new assessment rate model. Involved in the total expenditure in developing that model was a significant amount of money paid to actuaries to help design a pricing model. A significant amount of money was paid to other consultants to help the board deal with the request of employers that we provide a different model for assessing employers. I'd indicated to you that right now we have something like 215 or 216 rate groups; a year ago there were 109, so the impact of the new pricing model was to virtually double the number of rate groups.

In order to implement the new pricing model or the new assessment model, the administration of the board felt it was necessary to provide a new computer system, a new system which has an acronym called RESET, revenue enhancement system for tomorrow's environment, or some such acronym.

Because of my experience with the failure rate or error rate in the system which pays workers' compensation benefits, the WBS system -- I described a 40% error rate -- I insisted on the implementation of a quality assurance aspect to the development of the computer system. That quality assurance system basically said, "Do it right the first time or you can't do it"; in other words, there was an independent check on whether the system was being developed properly. That quality assurance indicated that there was a problem in the system development late last summer, the summer of 1992.

I had experts called in from outside the board to look at the systems development. Those experts reported to me in October of last year that there were serious quality problems with the systems development. That led to a very serious accountability issue being raised among the senior management of the board: There were four senior employees of the board let go in October of last year.

Mr Mahoney: I don't understand. Is this all part of the $40 million? Is this a separate budget item that we could get a page on, say?

Mr King: It's late in the day, but tomorrow I can certainly provide you with the detailed cost breakdown of the aspects of that, yes.

Mr Mahoney: How much of that would have been spent on consultants, and the types of consultants? Let me be straightforward and tell you my concern. My concern is that there appears to have been a lot of money spent on a revenue strategy plan for both hardware and software and consultants and things of that nature; I don't quarrel with that, because I don't have figures to go one way or the other. But that plan has been put off, and there's some nervousness, particularly in the employer community, about the hammer that's going to fall. I just wonder if there are some data or information you can provide to this committee so that we as MPPs and our colleagues in our different caucuses can respond to people with when they call.

Mr King: Yes, I'll provide you with details on costs tomorrow. I'll briefly summarize the end of this.

I went out and met with the employers, who were very interested in the implementation of this plan last October. I reported to them on the quality assurance failure; I reported to them on the accountabilities I had exacted as the manager of the compensation board; I reported to them on the plan to complete the process.

You questioned the privatization. We went out to tender to help us design and build the system, so it is not now being built in-house, and I can give you assurances tomorrow, based upon that tendering process, as to the timeliness and the implementation of that system.

Mr Mahoney: You went out to tender to Canadian companies, I hope.

Mr King: Yes. They may not have been Ontario companies.

Mr Mahoney: I wanted to -- but I'll deal with the letter from Mr Miclash tomorrow. Mr Bradley has a question.

Interjection.

Mr Bradley: I'm an adviser to Mr Mahoney.

Mr Mahoney: He rolls up the snowballs for me to throw.

Mr Bradley: I want to get this on record. Have you said to the committee, in effect, that the government cutbacks -- at least, the so-called social contract provisions -- which have been applied to the WCB have in fact not inhibited your ability to provide service to your clients?

Mr King: We were about three or four months ahead of the government in determining that we had to manage better with less in Ontario, so we had publicly announced to all of our employees that our 1993 plan was going to require a significant reduction in total resources while maintaining service as the main priority. So we've been through a nine-month exercise of redeploying resources away from non-core functions to the solid middle of our business, which is compensating workers, rehabilitating workers and servicing the employers from whom we collect money. I can give you assurances, as the administrator, that we are providing better service, even under the terms of the social contract.

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Mr Bradley: So if the miracle of 1990 is in fact given away and a new administration were to be elected at the very last minute of 1995, you would not be complaining if that administration were to continue to allocate the same resources or to impose the provisions of the social contract on you? You would not be critical of a new administration doing that, may I presume?

Mr King: I think that's a political question that I'll defer to Mr Di Santo, given the discussion that's occurred earlier today.

Mr Di Santo: If I may answer briefly, in the last two years we had a flat-lined budget. Also, I think we said that there has been a decline in injuries in the last two years so we don't forecast any increase in administration expenses. So, unless the Legislature and your legislators impose on us any changes in the act, we can foresee that we can live with the present budgetary arrangement, unless there are unforeseeable new circumstances: If the cost of living goes up 5%, then we have to deal with that, but under the present circumstances, we don't see any change.

Mr Bradley: Would it be fair to conclude that at least part of the decline in the business of the WCB may be attributed to a decline in economic activity in the province, particularly in those areas where there may have been some significant injuries occurring: the construction industry and other industries where the danger to workers is greater than perhaps in other industries? Would you attribute some of that to the decline in economic activity, just as we'll be able to attribute a decline, hopefully, in the pollution count due to factories closing down?

Mr Di Santo: Absolutely. I said that in my introductory remarks. The three major contributors to the board are construction, manufacturing and mining. In these three sectors we lost 294,000 jobs in three years, and obviously, that has an impact on the performance and on the accidents that result.

Mr Bradley: I'll direct this to Mr King. You said that some people in the past, presumably before you got there, got their jobs or at least there was pressure for people to get their jobs with the WCB from politicians, presumably the governing party. Would you elaborate on that? It's alleged that happened at the Liquor Control Board, but I could never see evidence other than the fact that the same people who worked in the liquor store were the same people who were on the executive of the political party in power.

Mr King: Any evidence I might have of that is anecdotal only, and I don't believe I should repeat anecdotal evidence that came to me through either previous chairs of the Ontario compensation board or previous vice-chairs of adminstration. I don't have firsthand knowledge of that.

Mr Bradley: I detected -- I could be totally wrong -- a pretty strong assertion on your part at the time, and that strong assertion, you're saying, was based only on anecdotal evidence and not on any hard evidence out there. That's interesting to know.

The last question I would have, because I think my time is very limited, is the problem that the WCB encounters with the cooperation of members of the medical profession, and any of the three of you who wishes can answer. Some members of the medical profession will say it's impossible to deal with the board; I don't know whether that's true or not. But the injured worker is caught in between. What do we do with doctors who will not cooperate by providing in an expeditious manner the necessary evidence so that there can be a conclusion drawn in the case? The company may want this settled, I don't know, but certainly the worker does, and very often the worker phones the constituency office to ask, "What are you going to do about this?" Of course, we can't instruct doctors. How do you handle those cases where doctors are tardy or outright refuse to provide the necessary information in dealing with the board?

Mr Van Clieaf: In the first instance, if we're finding physicians who are not providing us with needed reports or reports on a timely basis, our chief medical officer, Dr Barbara Whylie, will get on the telephone and speak to them about it or go and visit them, and in most instances, that sort of discussion results in the desired result. We can take it beyond that, if that is necessary, by coming up with other sanctions to try to improve the performance.

The Chair: Thank you. Tomorrow morning we will commence with the third party in the order of rotation. I thank you for your cooperation today.

The committee adjourned at 1707.