Transcription du comité 1994-sept-01 | Assemblée législative de l'Ontario

Workers' Compensation and Occupational Health and Safety Amendment Act, 1994, Bill 165, Mr Mackenzie / Loi de 1994 modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail, projet de loi 165, M. Mackenzie

Apparel Manufacturers-Marketing Association of Ontario

Jason Mandlowitz, consultant

Bob Kirke, director, member services

Greater Kingston Area Injured Workers Association

Elizabeth Jones, secretary and case worker

Karl Crevar, president, Ontario Network of Injured Workers Groups

Public Service Alliance of Canada / Alliance de la fonction publique du Canada

Joane Huruns, vice-president, health and safety

Ottawa New Car Dealers Association

Jean-Yves Laberge, member

Gord Hoddinott, president

Irene Thomson, member

South Ottawa Community Legal Services

Charles McDonald, staff lawyer

Caroline Harris-McDonald, lawyer

United Transportation Union-Canada

Michael Hone, vice president

Ottawa-Carleton Public Employees' Union

Victoria Jenkins, staff assistant

Clarence Dungey, national representative, Canadian Union of Public Employees

Ottawa-Carleton Home Builders' Association

Richard Lee, executive director

Brian Rowley, chair, safety committee

United Food and Commercial Workers International Union, Local 1000A

Pearl MacKay, executive assistant to president

Quinte and District Injured Workers

Dorothy Ellis, past president

International Union of Operating Engineers, Local 793

Rick Kerr, business representative

Ottawa Construction Association

Dan Greco, director, labour relations

Federal Employers Transportation and Communications Organization

Dr Roger Rickwood, chair, workers' compensation committee

Curtis McDonnell, Canadian National representative

Ted Robbins, Air Canada representative

Stormont, Dundas and Glengarry Injured Workers Resource Centre

Sydney Gardiner, injured worker representative

Labourers' International Union of North America

Daniel McCarthy, director, Canadian Tri-fund

Employers' Advocacy Council, Ottawa chapter

Ray Bordeleau, chair

Madeleine Meilleur, vice-chair

Canadian Labour Congress

Dick Martin, secretary-treasurer

Communications, Energy and Paperworkers Union of Canada

Fred Pomeroy, executive vice-president and treasurer

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

Chair / Président: Vacant

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

*Acting Chair / Président suppléant: Waters, Daniel (Muskoka-Georgian Bay ND)

Conway, Sean G. (Renfrew North/-Nord L)

*Fawcett, Joan M. (Northumberland L)

*Ferguson, Will, (Kitchener NDP)

Huget, Bob (Sarnia ND)

Jordan, Leo (Lanark-Renfrew PC)

Klopp, Paul (Huron ND)

*Murdock, Sharon (Sudbury ND)

*Offer, Steven (Mississauga North/-Nord L)

Turnbull, David (York Mills PC)

Wood, Len (Cochrane North/-Nord ND)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Carr, Gary (Oakville South/-Sud PC) for Mr Turnbull

Fletcher, Derek (Guelph ND) for Mr Huget

Frankford, Robert (Scarborough East/-Est ND) for Mr Klopp

Johnson, David (Don Mills PC) for Mr Jordan

O'Neill, Yvonne (Ottawa-Rideau L) for Mr Conway

Wilson, Gary, (Kingston and The Islands/Kingston et Les Îles ND) for Mr Wood

Also taking part / Autres participants et participantes:

Cooper, Mike, parliamentary assistant to Minister of Labour

Jordan, Leo (Lanark-Renfrew PC)

Clerk / Greffière: Manikel, Tannis

Staff / Personnel: Richmond, Jerry, research officer, Legislative Research Service

The committee met at 1005 in the Delta Hotel, Ottawa.

WORKERS' COMPENSATION AND OCCUPATIONAL HEALTH AND SAFETY AMENDMENT ACT, 1994 / LOI DE 1994 MODIFIANT LA LOI SUR LES ACCIDENTS DU TRAVAIL ET LA LOI SUR LA SANTÉ ET LA SÉCURITÉ AU TRAVAIL

Consideration of Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act / Projet de loi 165, Loi modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail.

APPAREL MANUFACTURERS-MARKETING ASSOCIATION OF ONTARIO

The Vice-Chair (Mr Mike Cooper): We will be continuing our public deliberations on Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act.

I'd like to first call forward the Apparel Manufacturers-Marketing Association of Ontario. Good morning, and welcome to the committee. Just to remind you, you will be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd keep your remarks somewhat briefer to allow time for questions and comments from each of the caucuses. Could you please identify yourself for the record and then proceed.

Mr Jason Mandlowitz: My names is Jason Mandlowitz. I'm with M.C. Warren and Associates Inc. There are people here in addition to the apparel manufacturers, as you will see, but they are all listed on our submission as supporters and contributors -- Mr Glen Grant and Mr Michael Daley, Domtar Fine Specialty Papers in Cornwall; Mr Dean Powell, city of Belleville, representing the Municipal WCB Users Group; Mr Bob Kirke, Apparel Manufacturers-Marketing Association of Ontario; and Mr Paul Mulligan, city of Nepean, representing the Municipal WCB Users Group.

Our core submission has been distributed to you. You will recognize it is as being identical to the submission we presented in London. It's for your convenience, therefore. Our comments today -- which is the smaller document -- are different from the comments in London. There will be, however, some similar introductory comments to address to the new members of the committee, and I see that there is a membership difference here today as compared to London.

Mr Kirke will make a very short comment and then I will come back and make our comments with respect to Bill 165.

Mr Bob Kirke: I'd just like to make a few remarks because we will be running very short on time. The association came forward to participate in this session because we feel workers' compensation is a very important issue for our members. Our industry employs directly about 23,000 people across the province in virtually all parts of the province although we're concentrated in Toronto. We will be more than happy to provide any kind of details around employment or WCB issues and/or assessments for our industry, as I believe any of the other people presenting here would be. We could table it with the clerk or make it available to the committee in some other way. So I'll pass it over now to Jason, who will go through the major points of our submission. There may be some chance for questions afterwards.

Mr Mandlowitz: These employers and those on our submission have a number of concerns with Bill 165.

We support in the strongest possible terms maintaining the current experience rating programs now in place in Ontario. They have proven to be successful vehicles for encouraging employers to control WCB costs and be measured for rebates or surcharges on the basis of real performance. The efficacy of the new experimental experience rating or NEER program has been confirmed by several WCB studies, internal and external. Any concerns which this committee or the government may have regarding rebates under experience rating should be offset by a recognition that for each dollar of rebate under NEER many additional dollars in compensation costs have actually been saved.

The ratio of NEER rebates to savings to the system would be a useful future research project for the WCB or the royal commission.

We support the application of the Friedland formula to all injured workers receiving compensation from the Workers' Compensation Board.

We support deleting from Bill 165 any reference to government policy direction to an arm's-length, independent agency.

We submit that Bill 165 has a number of failings. It fails to articulate either a comprehensive set of principles or a clear vision for workers' compensation reform. If enacted, it would require implementation by the WCB concurrent with the work of the royal commission, whose efforts would be made more difficult. It would require implementation, and lengthy implementation, at a time when the WCB today continues to wrestle with the aftermath of Bill 162. The WCB faces imposing policy and service delivery demands. Bill 165 would only complicate the mess. I'd just point out that the presentation that we made in London addresses these issues in greater detail.

Today we will be focusing on, specifically, the purpose clause, governance, the memorandum of understanding, payment of benefits interjurisdictionally and pension enhancements. While we will not review all of our concerns today, we wish to emphasize that the employers here support them, share them and recommend that Bill 165 be stayed until the royal commission has completed its work and provided a report to the government of the day. We are quite prepared to work with the current act until the work of the royal commission has been completed.

Purpose clause: We submit that the purpose clause in Bill 165 is inadequate and must reflect the true purpose and object of workers' compensation legislation while remaining true to the principles established by Meredith.

We recommend that the financial responsibility framework agreed to by the PLMAC be added to the purpose clause in Bill 165.

Page 12 of our submission, which was distributed, provides background on the purpose clause already enacted in the Yukon. It embraces a full range of purposes or objects for workers' compensation, including fair and adequate compensation, rehabilitation, the solvency of the compensation fund, fair employer assessments and other important issues.

The Workers' Compensation Act is clearly one which addresses benefits, rehabilitation and health care issues, which should be reflected in a purpose clause. However, all of regulation 1102 and over 60 sections of the current 151 sections in the act refer directly to funding, assessment, revenue or cost issues. In addition, the Workers' Compensation Act, apart from board policy, establishes 28 sections where penalties or non-assessment costs are issued against employers. Bill 165 adds another five penalties or cost centres.

It is submitted that this recognizes the importance of financial and fiscal matters in workers' compensation, issues which must be reflected in the purpose clause.

Governance: We support the recommendations made earlier in London by M.C. Warren and Associates on governance, which include adding the word "and" after the proposed paragraph 56(1)4 to ensure the WCB chair is not also a director of the board of directors, adding a section detailing the duties of the chair, adding the WCB president as a non-voting member of the board of directors, and requiring that meetings of the board of directors have a quorum of seven members with at least one each from the various stakeholder communities.

Bill 165, however, fails to address the duties of the board of directors in the context of final say and final determination. The Workers' Compensation Act has established two adjudicative processes, one at the board and another at the Workers' Compensation Appeals Tribunal. In fact, these are parallel and different processes, with unique rules of procedure and evidence as well as interpretation of law and policy. This situation has complicated the workers' compensation process and added significant direct costs to the system.

It is noteworthy that the government of Newfoundland has recently disbanded the WCAT, the Workers' Compensation Appeals Tribunal, in that province and replaced it with a more streamlined Workers' Compensation Review Division within the WCB. Cases will be heard by one individual and review commissioners will have no authority to interpret WCB policy. The review commissioners will review compliance with policy and order remedies as needed.

In Ontario, board of directors' review of WCAT decisions has been limited and has failed to clarify the issue of final say.

We recommend that this committee consider the matter and adopt the position that final say or final determination rests, as conceived by Meredith, with the WCB. All decisions of the board of directors would have predominant standing and become effective from the date when the decision was rendered.

In recent years, increasingly more decisions made by the workers' compensation system have touched the issue of retroactive effect. This is another area of conflict between WCB and WCAT decisions. It is recommended that this committee review and support the policy of the WCB of New Brunswick for use in Ontario. A copy of that policy is appended to our submission.

Finally, we recommend that all board-of-director decisions should be considered public information and made available as soon as possible and not later than 30 days following the date a decision is rendered.

Memorandum of understanding: We support the undertaking of a memorandum of understanding between the government and the board. The wording of this section in Bill 165 requires that the memorandum of understanding, which I'll refer to as an MOU just to save some time, apply only to the WCB. It does not state that a symmetrical requirement shall apply to the minister. We recommend, therefore, that this section be amended to reflect a symmetrical requirement for both parties.

Subsection 65.2(1) requires that a memorandum of understanding, an MOU, be entered into at least once every five years. This provides an important opportunity to revisit the purpose, sustainability and accountability of the WCB. It is recommended that, concurrent with the process of establishing an MOU, an external review committee composed of stakeholders be established as a regular feature of ongoing review of workers' compensation. The Saskatchewan experience may serve as a useful model for consideration. Details of section 162(1) of the Saskatchewan act are provided on page 24 of our submission for your consideration.

It is recommended that the committee specify in Bill 165 that in the course of establishing the first memorandum of understanding between the minister and the board, the board be required to file a five-year strategic plan, including a comprehensive financial plan, outlining the principles and actions which will be taken to adequately fund the WCB and address the containment and reduction of the unfunded liability.

Regular reviews of the workers' compensation system will ensure it remains in step with the dynamism of the workplace and development in health sciences. This type of review by stakeholders will also properly identify and distinguish between policy and legislative issues and is able to make important and timely recommendations, not relying on periodic royal commission studies.

If not already in place, Bill 165 should also require that MOUs be established between the minister and every agency now involved in workers' comp issues, such as the offices of the employer and worker adviser, the Industrial Disease Standards Panel, WCAT, the Workplace Health and Safety Agency and others we may have missed.

Payment of compensation where benefits have already been provided by another jurisdiction: Bill 165 provides that no compensation should be payable if a worker or dependant has already received such under the law of another jurisdiction in respect of an accident. Bill 165 fails to address corrective measures should dual payment have occurred.

It is recommended that Bill 165 be amended to add that where payment of compensation has been made and where the worker or dependant has received compensation contrary to subsection 8(7.1), recovery of the overpayment be pursued by the board. All cases of overpayment involving interjurisdictional matters should be regularly reported to the board of directors with full details on the status of recovery actions.

Finally, pension enhancements: Bill 165 proposes to amend section 147 to provide an additional $200 per month to injured workers under certain circumstances. The business caucus of the PLMAC agreed to consideration by the government of pension increases for pre-1990 injured workers only if additional costs to the system would be offset by the existing revenue base after the application of the Friedland formula to all workers. Bill 165 fails to address the issue of sources of revenue. The only possible conclusion available is that pension enhancements would come from current and future WCB assessments on employers.

1020

Having noted this, the concern we wish to express today is the inclusion not of the pension enhancement but of the fixed sum in the act. Generally speaking, regulations have been the place where specificity has been attached to legislative initiatives. To maintain consistency with the evolution of workers' compensation statutes, it is recommended that the proposed new subsection 147(14) be reworded to specify that the WCB shall review worker entitlement to additional sums under subsection (4) or, if the worker would be entitled to a supplement under subsection (4), pay an additional amount to a worker receiving a permanent partial impairment award and determine the quantum of the payment, having regard for regulation and disability.

Those are our opening comments. We thank you for the opportunity to present today. If there's time permitting, we welcome questions.

The Vice-Chair: We have time for about a minute and a half each.

Mr Steven Offer (Mississauga North): Thank you for your presentation. I basically have a two-part question, very briefly. It deals with the first part of your submission and the purpose clause. As you will know, on April 21, by a letter, Premier Bob Rae promised that, "A purpose clause will be added to a the Workers' Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility." That does not appear in the legislation. Is it your position that you would be satisfied if the government lived up to the promise that the Premier made on April 21?

Secondly, below the surface of all of this, dealing with benefits and the purpose clause, is the issue of the unfunded liability. As you know, we have been both in Toronto and travelling throughout the province, where this is an extremely real issue. Many people have spoken to it. I'm wondering if you might share with us your thoughts and comments on issues around the unfunded liability.

Mr Mandlowitz: One short answer and one lengthy answer that could take the rest of the day. The answer to the first question is yes, we support and have recommended that the PLMAC accord purpose clause be reproduced as the purpose clause for the act.

With respect to unfunded liability, the submission details why it's a problem. Our comment in London suggested that looking at 1994 data, the WCB established that the target assessment rate for schedule 1 was $3.20. Without the unfunded liability add-on, it would be $2.31. That would position us very competitively with other jurisdictions. So it is a problem from an assessment and cost perspective to the system and to employers in the short term and in the long term.

On the unfunded liability -- and I will speak very quickly -- let me tell you what I will tell the royal commission: that the time has come to take bold, courageous and controversial action to address the unfunded liability. It can only, in our judgement, be attacked if you look at the asset side and the liability side simultaneously.

I'll give you a bit of a shopping list, which I'll flesh out with the royal commission. On the asset side, obviously, aggressive, flexible investment strategies are required to enhance the portfolio on an ongoing basis. A courageous measure to bring more revenue into the system is to introduce an employer amnesty, allowing for employers who for whatever reason are not registered with the board and should have, to come forward at no risk. Today, if they do, they are facing a retroactive penalty of six years. They ain't gonna come forward facing that kind of penalty. We know that firearm amnesties have worked and we know book amnesties have worked in libraries. I think an employer amnesty is worth a try and is virtually a no-cost measure.

In addition to that, a third measure is to review the adequacy of the current discount rate that the board uses for valuing assets. I'll come back to that, if you like.

The Vice-Chair: We won't have time, so you'll have to quickly hurry. I've already extended time.

Mr Mandlowitz: On the liability side, look to jurisdictions that have been successful. What have they done? They've deindexed their act, they've reduced benefits, they've established waiting periods, they've looked at privatizing services. Most importantly, they've reviewed the definition of "accident" and have moved to ensuring that you only pay compensation where there's a predominant and direct relationship to the workplace.

Mr Gary Carr (Oakville South): Thank you very much for your presentation. You certainly have an impressive list of companies that you represent.

I was reading the Globe and Mail this morning, page 3, I guess, of the Report on Business. For those of you who may not have read it, there's a headline: "N.B. Plans Fee Cuts to Workers' Compensation Fund. Firms May Get Reductions of 18%." It goes on to say that their assessments are "$1.70 for each $100." This compares with "$3 for each $100 in Ontario." It also goes on to say that their unfunded liability is much better as well.

I think you're right. You don't need to reinvent the book; all you need to do is look at other jurisdictions. Alberta, Manitoba, New Brunswick are doing some good things. That's all you need to do if you have the political courage to do it. I think you realize this government does not; I think that's why the royal commission was set up, in order to fluff it off under another commission.

The good news is that as each day passes, we are slowly getting closer and closer to the end of the mandate of this government, and I don't think there's anybody in their right mind who believes that the NDP will be elected again.

I take it then what you would like to see done is some of the things that have been done in Alberta, Manitoba, New Brunswick, so that hopefully some day we'll be able to say the same things that we see here. Is that what you're basically saying to us?

Mr Mandlowitz: Agreed. Page 7 of our submission details some of the additional measures that other jurisdictions have taken.

Mr Derek Fletcher (Guelph): Thank you again, Jason, for your presentation. Some of what you say I agree with; some of it I don't. When we talked in London, we were talking about how difficult the job is.

The concept of workers' compensation, when it first started, was to compensate a working person for an injury, and also to try to get that person back to work. Somewhere along the way, since the beginning of workers' comp, something's gone wrong. Again, here we are, the government of the day, in the position -- as with many other things that have gone wrong from previous governments, we'll fix it.

I think the royal commission's the right way to go. The royal commission will really examine what workers' compensation is all about and how we can get back on track as far as the actual concept of what workers' compensation is all about. Let's forget the politics of everything else, about this government or that government; let's get to work on the issue.

I appreciate your presentation as far as some of the suggestions. What do you expect from the royal commission? When we finally get to that stage, the royal commission, what are you expecting?

Mr Mandlowitz: Assuming that the royal commission undertakes a serious review of the substance of workers' compensation and social program delivery and is allowed to do that, I am looking for a 20- to 30-year blueprint for the delivery of social programs and disability management programs in Ontario. It is a huge and difficult job. It takes people who are brighter than I and have a stronger and more developed sense of vision. I would say to the government, you have an enormous task in finding the people who can come to the table and do that.

Mr Fletcher: Well, you know, Jason, we have taken some difficult steps and made some difficult decisions over the past. I think we'll be doing that again. Thank you.

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

1030

GREATER KINGSTON AREA INJURED WORKERS ASSOCIATION

The Vice-Chair: I call our next presenter, from the Greater Kingston Area Injured Workers Association. Good morning and welcome to the committee.

Ms Elizabeth Jones: Good morning, ladies and gentlemen of the panel. My name is Elizabeth Jones and I'm the secretary and case worker of the Greater Kingston Area Injured Workers Association.

I want to thank you for this opportunity to present our views on Bill 165. I also want to express to you our deepest concern and disappointment with the decision by this committee to hold committee hearings in only four cities in the province. To sincerely comprehend the true impact this legislation will have on injured workers, it would be plausible to hear from those directly affected. To deny access to communities such as Kenora, Hamilton, Thunder Bay and Timmins, areas that should be participating, is a disgrace.

Our tiny office was opened March 7, 1994, and it has been inundated with workers' compensation claimants. As our phone was being plugged in, it was ringing, and it is still a persistent jangle.

The official opening for the Greater Kingston Area Injured Workers Association was April 28, the provincial day of mourning for Ontario workers who have died while performing their job, 6,000 in this province, and the 300,000 workers in Ontario who have suffered work-related injury and disease. Employers say they hear the message of occupational health and safety, but implementing and adhering to sound occupational health and safety programs is too costly and interferes with profit margins and production costs.

Daily, we see in our office injured workers who have had their lives almost destroyed due to a work-related injury or disease. Members have lost their homes, social lives, credit ratings, had their privacy invaded and are in need of psychiatric as well as medical care to cope with their life as they now know it.

Although the Workers' Compensation Board's mission statement reads "adjudication and justice in a timely manner," we have yet to see timely adjudication in our office. Claimants are placed in bureaucratic chaos, and time after time, when the claimant is reduced to complaining of their financial concerns, such as food, rent, mortgage, how to pay for prescriptions, they are told to apply for welfare. Welfare, in most instances, places the injured worker in the situation of having to take from the food allowance to maintain their mortgage or rent, leaving very little money for their utilities and sundry items. Entertainment is not a consideration.

In our small city of Kingston, we have five prison systems, federal and provincial. Inmates, levels 1 to 4, are paid $5.57 a day. Inmates involved in a rehabilitation program are paid $4 per day. Inmates involved in the system's work programs are paid minimum wage, and these inmates must pay a stipend for their lodging. This lodging includes all utilities and maintenance, three Canada Health Guide meals per day, recreation with the very best of equipment, entertainment that includes the latest films released, and most prison libraries have the books that are on the current best-seller list. Rehabilitation for an inmate is an option and courses of their choice are readily provided.

The injured workers' rehabilitation is based on their wage at the time of injury, and even though some claimants are given expensive physiological testing and may have an expertise that should be nurtured, if this expertise does not fall in the wage scale of pre-accident earnings, they are placed in a program "deemed" appropriate by the vocational rehab case worker handling the claim. Because of the internal fraud at the Workers' Compensation Board, injured workers are not provided with the much-needed tools that are required to excel at the courses provided.

Many injured workers, due to repetitive strain or traumatic injury, are diagnosed with a disease which is secondary to their compensable injury called fibromyalgia. I have included a news clipping from the Medical News, appendix A in my brief.

London injured workers have a regional office that appears to have an understanding of the disability known as fibromyalgia. Claimants in eastern Ontario dealing with the Ottawa regional office are not as fortunate. A fibromyalgia victim is considered only to have chronic pain and is paid a pittance under the board's chronic pain guidelines. This is very fiscally prudent for the board as the fibromyalgia victim is plagued for life with chronic muscle spasms, chronic insomnia, chronic migraine headaches, chest wall pain that feels like a heart attack, and irritable bowel and bladder problems. Yet fibromyalgia claimants are expected to get on with their lives as if they have not been affected at all and recover at the board's pace.

Fibromyalgia claimants have vocational rehabilitation closed and their benefits reduced to nil because they can't cope with the classroom regimen. If the board has not acknowledged the secondary component of fibromyalgia, VR closure is explained as "the claimant is uncooperative." Physio and massage therapy and chiropractic maintenance are denied to the injured worker who tries to maintain their employment. Physicians who suggest a reduced work week for their patients with fibromyalgia are astounded to hear this is not negotiable with workers' compensation. If the claimant requires a reduction in hours to maintain their job, they must use up their holiday time or expend their short-term disability pension, if they are fortunate enough to have this alternative.

A program such as London's and the comprehension that supports and sponsors a program such as London's are not available in eastern Ontario. Committee members, this inconsistency should not be permitted to continue.

There are so many inequities within the workers' compensation system, one really does not know where to begin, from the "compensationese" a claimant must try and decipher, the long wait when a claim is sent to decision review services, to the eternity it takes to get a decision from the complex cases unit dealing with diseases. By far, I feel what is most upsetting is the handling of our older injured workers. Far too many are told they are too old to rehabilitate. They are placed in a job search club sponsored by the March of Dimes, usually for a very short period of time, instructed on making a résumé, given six months to find employment in this computer age and after six months, if they are unaware they can ask for an extension, they lose their rehabilitation supplement and are reduced to extremely small pensions. Seventy per cent of our senior injured workers are living below the poverty line.

Germany, Sweden and Australia are excellent examples of compensation systems that work. These systems are just and are not punitive to the victims of workplace injury and disease. Ladies and gentlemen of the committee, Canadians need and want to be treated with the same dignity and fairness. I thank you for your time.

The Vice-Chair: Thank you. Mr Johnson, about four minutes.

Mr David Johnson (Don Mills): Thanks very much for your deputation. You don't paint a very pretty picture of the workers' compensation system, but --

Ms Jones: It is not a very pretty picture.

Mr David Johnson: -- I suspect you paint an accurate one of the system.

I was intrigued on the second page of your deputation when you indicated that, "Because of the internal fraud at the Workers' Compensation Board, injured workers are not provided with the much-needed tools that are required to excel at the courses provided."

There have been reports of various fraud within the workers' compensation system. I think one estimate is $150 million a year in terms of fraud.

Ms Jones: Internal fraud.

Mr David Johnson: All right. I wonder if you would expand on what sort of fraud you're referring to and what should be done to come to grips with this.

Ms Jones: The board places people usually in a very quick computer program. Many of these claimants have been out of the school system and have been in the workplace for a very long time. They're put into a computer studies course because they feel that that's the quickest way for them to go. The claimant is also put in the position where they become extremely frustrated, and there's a wonderful thing that happens at VR. They're made to feel very inadequate because they can't cope. They're never provided with computers in the Kingston area, but apparently in Toronto people were provided with computers because someone had an in with computers.

In our area, people aren't provided with a computer to work at at any great length. They're just told to look for time elsewhere. They're not even told that the board would help them with renting a computer for them. They're left with the frustration of trying to sort out a computer within a very small period of time, and usually they're people who have never been exposed to a computer.

Mr David Johnson: Let me go back to the first page of your deputation where you paint a picture of -- well, you use the word "chaos" and indicate that "adjudication and justice in a timely manner," and you have not seen that. "Claimants are placed in bureaucratic chaos." Time after time they're refused etc. I think again on the last page you use the word "eternity" to get decisions on certain cases. Why is this? You're painting a picture of a system that is simply not working. It sounds like it's broken down. In your experience, what's the problem?

Ms Jones: The problems are so many. One of the major problems I feel is that many adjudicators don't know diddly-squat about an industrial setting. They hear of a bobbin in an industrial setting, such as Dupont or Celanese, as being a bobbin that you put on a sewing machine. Little do they realize that it's 35 pounds. They wouldn't have any idea what a capstan is, and they have no idea that it might be six feet around. They have no idea that it runs at 780 revs per minute, and then it becomes just: "Well, I read your job description and you were picking up 15 of these" -- in their mind little, tiny -- "sewing machine bobbins every three minutes. What is the big problem with that?"

1040

Constantly you talk to them about kinesiology studies, ergonomic studies. Well, by the time you can get them to an ergonomic study or a kinesiology study, the claimant has waited five to six months because somebody has checked with their manager or checked with their regional medical adviser, and the claimant might have all kinds of medical information sent in from specialists, which Kingston is quite noted for their excellent medical specialty, and well, they have to get back to the medical adviser, who is usually a GP.

Mr Karl Crevar: Could I just expand on that a little bit? My name is Karl Crevar. I'm with the Ontario Network of Injured Workers Groups.

In terms of the other problem, we find it somewhat disturbing that in a society such as ours, in a free society, injured workers have to prove their innocence. They're judged guilty. They have to prove their innocence.

Let me just go back, Mr Johnson, to your question about the fraud. I think it's quite interesting that the previous speaker had noted and gave direction that maybe what we should be looking at is giving amnesty to employers who are not paying into the system who should be. Why are injured workers being attacked to have benefits lowered when we can clearly see where some of the revenue problems are that must be addressed?

Mr Gary Wilson (Kingston and The Islands): Welcome to Ottawa. I'd just like to --

Ms Jones: I got very lost, Gary.

Mr Gary Wilson: That's too bad. It's not as well laid out as Kingston in ways and --

Ms Jones: We're very spoiled.

Mr Gary Wilson: Yes. I wanted just to clarify your reference to the inmates. Are you saying that inmates are treated better than injured workers? Is that the point you're trying to make?

Ms Jones: I'm not trying to be punitive with inmates at all. I'm just drawing a parallel for you to go by. Someone can be rehabilitated at their leisure and have three meals provided for them a day, and excellent meals provided for them. They don't have to worry about their lodging, they don't have to worry about their heat, they don't have to worry about their taxes. They don't have to worry about anything really, other than rehabilitation.

An injured worker is usually put in the frustrated position of having to wait a tremendous amount of time for their claim to be processed and the financial impact of that is overwhelming. Certainly they don't have three Canada Health Guide meals a day when they're doing this.

Mr Gary Wilson: As I say, I just wanted to clarify that to make it specific because it occurred to me while you were going through your presentation that it's taken -- well, some would still obviously criticize conditions in Canadian prisons today, but there's been a long-standing movement to improve conditions in prisons, just as I think for injured workers your office opening in Kingston represents an important step towards improving rights and conditions for injured workers. So I want to commend you for the steps you've taken so far. I've heard from my office that you are taking a lot of the work that used to come to our office. So it's very helpful to have you there, somebody who's expert on the conditions.

I wanted, because we haven't got much time here, to ask you about returning workers to the job and what you think of the return-to-work committees, the benefits that can come to that from both employers and workers. Do you think that's something that could be worked on, that Bill 165 helps address that issue?

Ms Jones: The Human Rights Code quite clearly addresses that and basically, bottom line, it narrows it right down and says, "If you wreck these people, you have to maintain their employment." So why are we dancing around that mulberry bush? But employers very often go: "Well, we're downsizing. We'll get rid of our injured workers first."

I have a client who has had 29 years with a company. Twenty-nine years and she's told, "Well, your restrictions are too high," even though she was working the day they told her this. "Your restrictions are too high. You're out the door." Twenty-nine years. She hasn't gotten her severance pay yet. She has to go to the judicial system to get that. Do you think that that's at all fair? She's not quite 55. They could have kept her in place until age 55 and possibly considered early retirement; instead, to put her in the chaos that she's in is totally unfair. Twenty-nine years' service.

Mr Gary Wilson: And you'd say this isn't entirely unrepresentative, that there are other cases like this?

Ms Jones: Oh, this is just one of so many, it's overwhelming.

Mr Offer: Thank you very much, Ms Jones, and thank you very much for your presentation. I think it goes without saying, but I'd like to confirm that based on your concerns about the legislation, you are opposed to the particular bill before the committee?

Ms Jones: I'm opposed to it? I am not opposed to it. We have to keep Bill 165 in motion, to get it ironed out, to get it straightened out, because injured workers are being poorly represented with the bill that's already in.

Mr Offer: If the government does not propose any amendments to deal with the concerns which you have brought forward, would you be in favour of its passage or not? Are you in favour of the passage of the bill as it is currently before this committee?

Ms Jones: As it stands at this time?

Mr Offer: Yes.

Ms Jones: I will let Karl speak for me because --

Mr Crevar: I think your question -- I mean, why are we going through this process? I think we've indicated very clearly at the outset, the way the bill was introduced -- we're in this process to try and get something, to try and rectify a situation. We have some problems. It's no secret. We do have some problems with the bill and hopefully, through this process, we can get some of those problems resolved and pushed forward on some of the other initiatives which we think are positive.

Mr Offer: I understand that full well, Mr Crevar. The question that I have is important for me because you have very clearly put forward your concerns. In the event that the government does not address the concerns as put forward in your particular presentation, if the bill, after these hearings, is put before the Legislature in basically the same form as it appears now, are you or are you not in favour of its passage?

Mr Crevar: Let me just say again very clearly, we're into this process; how can I turn around and say to you, because I cannot anticipate what this committee is going to do in terms of recommendations? We don't know. If and when at that time the position is the same, we'll have to take a look at it.

Mr Offer: Thank you for that response. There are four purposes to the bill, all of which are referable to injured workers. The governance of the bill creates a board of directors composed of a great many individuals, none of whom represent primarily injured workers. Would you be in favour of an amendment to the legislation which statutorily gives to injured workers in this province a seat at the board of directors of the Workers' Compensation Act?

Ms Jones: That injured workers haven't been represented on the board is a travesty. They have to have a seat on that board. The board has to hear consistently from injured workers.

Mr Offer: Thank you. As you may or may not know, our party conducted an outreach, not only throughout the province but indeed spoke to different provinces in the country, and one of the things that was found from the participants is that the most inexperienced person at the board is rendering the most important decisions ie, the adjudicators. I would like to get your thoughts on that position or conclusion that was reached as a result of my party's outreach.

Ms Jones: Mr Offer, I'm from industry. The board's lines of progression are: You go into the workers' compensation system at entry level, which I believe is an access specialist, which means a photocopying clerk, or you can go in as a junior file clerk and then from photocopying files or being a file clerk, you can become an adjudicator. You can become an adjudicator at age 22 when you don't know diddly-squat about industry; you don't have any idea what goes on in an actual workplace.

Mr Offer: Thank you very much.

1050

Mr Crevar: If I may, Mr Offer, just to expand, I guess the answer to your question, the people who are making decisions should be fully trained to make those types of decisions. When you're sitting there talking about making a decision that will affect an individual for the rest of their life, they should know what the heck they're talking about and what they're supposed to be doing.

I just want to comment quickly on Mr Wilson's question before. We've been talking about the unfunded liability and how to cut benefits in order to bring that down. I think if we expand and invest in the long term on prevention -- I have not seen the cost figures on a long-term basis, but on a short-term basis it saves the system a hell of a lot of money. So if we look at expanding the long-term forecast to accident prevention, the costs will be drastically reduced by the year 2014. There are only two key issues: the re-employment provisions and compensation benefits -- and prevention.

The Vice-Chair: On behalf of this committee, I'd like to thank the Greater Kingston Area Injured Workers Association for the presentation to the committee this morning.

PUBLIC SERVICE ALLIANCE OF CANADA
ALLIANCE DE LA FONCTION PUBLIQUE DU CANADA

The Vice-Chair: I call our next presenters, from the Public Service Alliance of Canada. Good morning and welcome to the committee. Once again a reminder, you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you would leave a little time for questions and comments from each of the caucuses. Please identify yourself and then proceed.

Ms Joane Huruns: Good morning. I'd like to make my presentation in French.

Au nom des 73 000 membres de l'Alliance de la fonction publique du Canada qui travaillent en Ontario, j'aimerais remercier votre comité de nous avoir permis de nous présenter devant vous ce matin. Si le comité le permet, je prendrai quelques minutes pour présenter le contenu du mémoire de l'Alliance qui vous est remis. Par la suite, nous serons bien sûr disposés à répondre à vos questions.

Les membres de l'AFPC qui travaillent en Ontario le font soit pour le compte du gouvernement fédéral ou dans des établissements provinciaux, tels que les secteurs hospitalier, de la recherche et de la sécurité. La majorité des personnes à l'emploi du gouvernement fédéral à travers le Canada sont protégées par la Loi d'indemnisation des agents de l'État. Cette Loi offre une indemnisation pour toute lésion professionnelle au même taux et aux mêmes conditions que celles prévues à la législation de la province où la travailleuse ou le travailleur est employé.

En 1993, 10 000 réclamations ont été soumises pas des travailleurs et travailleuses de la fonction publique fédérale en Ontario seulement, dont quatre pour accident mortel. Ces réclamations représentaient un total de 44,16 millions de dollars en coûts pour l'employeur, soit le coût direct des indemnités, le remplacement du revenu pour accidents du travail, les frais d'administration et les frais médicaux.

Comme vous pouvez le constater, les membres de l'Alliance qui travaillent en Ontario et qui ont le malheur d'être victimes d'une lésion professionnelle seront affectés par les dispositions du projet de loi 165, et c'est la raison pour laquelle nous sommes ici aujourd'hui.

Au départ, l'Alliance endosse certains des amendements proposés dans le projet de loi 165. Par contre, d'autres amendements se situent bien en deçà de l'intention première décrite dans le rapport Meredith de 1915 au parlement ontarien. En plus, le projet de loi oublie certains points importants, comme la reconnaissance de toutes les maladies professionnelles et la simplification légale du système de révision.

Compte tenu du peu de temps à notre disposition, nous avons distribué le mémoire avec les amendements proposés et nos commentaires préciseront certaines de nos inquiétudes.

Toutes les personnes membres du comité sont conscientes que le projet de loi 165 concerne le bien-être financier et émotif de centaines de milliers de personnes qui ont le malheur d'être blessées au travail. Aucune solution ne sera complète sans qu'on prenne de véritables mesures visant à prévenir les accidents du travail si la prévention échoue. Elles coûtent moins cher en ressources humaines et en capital, en argent, bien sûr. Il faudra compter donc sur une indemnisation adéquate et un programme sûr de réadaptation.

Il va sans dire que les principaux objectifs des victimes d'accidents et de leur famille concernent le niveau de revenu pendant la période d'invalidité, le protocole de retour au travail et les programmes de réadaptation professionnelle.

Les employeurs ont assez bien réussi à réduire les prestations dans les autres provinces. Le gouvernement de l'Ontario ne doit pas se plier à des pressions similaires de la part des employeurs. Ces derniers nous font croire que le système actuel d'indemnisation des accidents du travail doit être revu en mettant en péril les prestations versées aux personnes accidentées. Les groupes d'employeurs ne veulent pas que ce comité étudie le véritable problème, à savoir le manque d'intérêt des employeurs pour la prévention et les programmes de retour au travail.

La pauvreté est toujours assez répandue dans la communauté des personnes victimes d'accidents du travail et de maladies professionnelles. Ces personnes sont doublement victimes lorsqu'elles voient la Commission des accidents du travail réduire leurs prestations en estimant ce qu'aurait été le revenu de la travailleuse ou du travailleur. Le taux de chômage pour les personnes invalides dépasse toujours les 40 %.

Néanmoins, certains groupes patronaux voudraient nous laisser croire que les problèmes financiers de la CAT sont dûs à des prestations beaucoup trop généreuses et à des demandes abusives pour des lésions professionnelles douteuses. À notre avis, si la CAT a des problèmes financiers aujourd'hui, c'est en raison du sous-financement des employeurs et de l'échec de la prévention.

L'amendement proposé qui vise à augmenter la rente des travailleurs et travailleuses victimes d'invalidité permanente est un pas dans la bonne direction. De manière ironique, cet amendement proposé est accompagné d'une formule d'indexation au coût de la vie totalement inacceptable. Si elle est adoptée, cette formule pourrait exposer certaines personnes accidentées à des taux d'inflation élevés et les priver d'une augmentation de leur rente qui ne peut, au contraire des salaires, être rehaussée autrement. D'autres mesures seront nécessaires pour corriger certaines injustices, incluses antérieurement dans le système d'indemnisation, adoptées dans le cadre de projets de loi auxquels les syndicats se sont catégoriquement opposés, par exemple le projet de loi 162.

La réalité statistique alarmante demande que le gouvernement réagisse de manière tout à fait non partisane pour corriger à la fois la situation en ce qui a trait aux accidents du travail et aux maladies professionnelles, ainsi que la situation déplorable et déhumanisante qu'est le lot des personnes accidentées. Cette vision est gravée à tout jamais dans l'esprit de toutes les personnes qui doivent aider les travailleuses et les travailleurs accidentés dans ce qui semble être une quête interminable de justice.

Nous n'appuyons pas l'article 56, étant donné que cet amendement ne constitue pas un conseil d'administration bipartite, c'est-à-dire patronal-syndical. Nous nous opposons à la participation de deux membres représentant l'intérêt public. Tous les membres devraient être choisis parmi les partenaires en cause, encore une fois syndicat et patronat, qui devraient mieux comprendre les accidents et les maladies reliés au travail.

De plus, nous ne croyons pas que le conseil d'administration devrait prendre des décisions fondées strictement sur ses propres considérations d'ordre financier. L'usage abusif de cette disposition pourrait entraîner des problèmes financiers plus graves pour un groupe de personnes accidentées déjà maltraitées.

Quand les parties ont accepté le compromis historique, le principe Meredith qui a donné lieu à la Commission des accidents du travail, elles n'ont jamais voulu que les considérations financières soient le principal enjeu ou sujet de préoccupation des administrateurs de la Commission alors que les employeurs font peu de choses pour prévenir les accidents et réintégrer les travailleuses et les travailleurs accidentés. Leur responsabilité demeure pleine et entière.

1100

L'amendement proposé au paragraphe 51(2) semble proposer un plus grand accès à l'information médicale. Les renseignements diagnostiques ne devraient jamais être exigés si nous voulons protéger le droit à la vie privée du travailleur et de la travailleuse. Son médecin devrait pouvoir refuser de divulguer les renseignements non diagnostiques s'il y a un problème. Nous avons besoin de garanties pour assurer que les renseignements, s'ils sont fournis par le médecin, serviront au rétablissement de la travailleuse ou du travailleur blessé et qu'ils seront conformes au programme de retour au travail de l'employeur.

La CAT doit reconnaître, élaborer, approuver et contrôler un tel programme. Cet amendement ne doit pas être une occasion facile pour les représentants patronaux qui cherchent constamment un moyen possible pour contester une demande de réparation, qu'elle soit légitime ou non. Le droit à la vie privée d'une personne est un droit sacré, surtout quand il s'agit de renseignements médicaux. On parle toujours de réinsertion ici.

Le projet de loi 165 ne fait rien pour redresser des frustrations de longue date liées au refus de la Commission des accidents du travail de reconnaître certaines demandes, surtout pour des maladies professionnelles. La maladie professionnelle est le principal domaine où le fardeau de la preuve incombe injustement au travailleur ou à la travailleuse. Nombre de travailleurs éprouvent des problèmes de santé graves de plus en plus reconnus par des spécialistes de la médecine. Des affections comme la «polysensibilité chimique» et le «syndrome des édifices hermétiques» ne sont pas encore comprises ni reconnues ou sont simplement ignorées par toutes les disciplines médicales. Bon nombre de ces cas sont encore pris dans l'enchevêtrement juridique de la Commission pendant que des travailleurs et des travailleuses malades perdent leurs économies, leur maison, leur famille, leur emploi et leur santé mentale. Elles sont présentement des otages du débat médical.

Les membres du comité devraient noter que l'Alliance n'a pas de but intéressé en proposant la réintégration au travail ou la réembauche. À la suite d'amendements législatifs ou de conventions collectives négociées entre l'Alliance et les employeurs fédéraux, la grande majorité de nos membres ont des droits de réintégration et de réembauche. C'est très récent toutefois. Les personnes à l'emploi d'établissements fédéraux ont récemment obtenu une protection légale en matière de réembauche dans les amendements à la Loi sur l'emploi dans la fonction publique et à ses règlements, ainsi qu'à la partie III du Code canadien du travail.

Pour les membres qui relèvent de la juridiction ontarienne, les droits de réintégration et de réembauche sont prévus dans la Loi sur les accidents du travail de l'Ontario, et notre mémoire a déjà souligné nos préoccupations.

La création d'une commission royale nous réjouit, mais l'Alliance croit que ce comité pourrait sans attendre régler d'autres questions grâce à des amendements supplémentaires.

Nous vous remercions de l'intérêt porté à nos revendications et nous vous prions d'éliminer toutes les injustices à l'égard des victimes d'accidents du travail et de maladies professionnelles et de respecter ainsi le pacte social de 1915. Merci.

Je vais indiquer que mon nom est M^me Joane Huruns. M^me Louise Hall, qui est notre chef en santé et sécurité, pourrait répondre aux questions, ainsi que M. Denis St-Jean, qui est un de nos agents en santé et sécurité, si les questions devenaient trop techniques pour une politicienne.

Ms Sharon Murdock (Sudbury): Thank you very much. Actually I was reading ahead as you were speaking. I'm looking at number 22, and it is in relation to your comments regarding agreement with the Industrial Disease Standards Panel.

Ms Huruns: With what?

Ms Murdock: The Industrial Disease Standards Panel. Also 22, where the alliance is calling for regard to occupational diseases and many of the workers are experiencing serious health problems which increasingly are being recognized by specialized members of the community.

When you say that delays of 18 to 24 months are common for such cases and affected workers must not be held hostage to the medical debate, where some of the diseases -- and I'll use my riding because it took 40 years for gold dust lung disease to be accepted, and it's only in 1992 that we finally added asbestosis to the schedule 4 list. If there are no real data, what do you suggest -- that you pay the worker while the debate is going on?

Ms Huruns: What is happening -- and Louise will be able to complete -- is that we are collecting, particularly in the union movement, more and more data on the specific industrial disease that we are referring to, particularly -- what is it in English? -- multiple chemical sensitivity, although the medical community has a problem accepting it and it's merely lack of knowledge and not because the data are not there.

We are ready to admit it's kind of a new issue. It's an old problem, but now because of the new buildings that we're living in and probably pollution problems, we can see the multiplication of problems related to sensitiveness to different products. We're working in this direction with doctors who have a strong -- I would say -- social conscience in this regard and that diseases are not due strictly to the imagination of the workers.

Ms Murdock: Do you have return-to-work program committees in your workplace or anything like that, re-employment committees?

Ms Huruns: What we have is, we have health and safety committees that are being regulated by the Canada Labour Code.

Ms Murdock: So they are health and safety committees for health and safety in the work site?

Ms Huruns: Yes.

Ms Murdock: But I'm thinking more -- you don't have committees, say, when someone gets injured, that you could look at a job site, see how it could be accommodated?

Ms Huruns: No. If I may add, just up until recently very often the union had to defend a worker who had been injured going back to work, not being able to perform the work and being dismissed for incapacity and it was a real tragedy. So with the new legislation we think that it's going to be corrected.

Ms Murdock: So you support --

Ms Huruns: Yes.

Ms Murdock: Particularly the provisions on return to work?

Ms Huruns: Yes.

Mr Offer: Thank you very much for your presentation. I see on page 2 that there are 73,000 members of the PSAC employed in the province of Ontario. I guess I have basically two small questions. I note on page 8 where you say that you are in complete disagreement with section 148, which would be the Friedland formula.

Ms Huruns: On page 8?

Mr Offer: Page 8, number 17, that you're in complete disagreement with the formula as established in section 148.

Ms Huruns: Okay.

Mr Offer: On the basis of your representation of 73,000 members, and your complete disagreement with section 148, if the government proceeds with this particular piece of legislation in its current form, is the alliance in favour of the legislation, of its passage?

Ms Huruns: I'll let Mr St-Jean respond to your second question, particularly for indexation. If the legislation is passed, then of course we'll love the legislation and try to do the best with it. That provision, in my view, is reducing the capacity of the worker to maintain his living standards and why this worker should pay for --

Mr Offer: I understand --

Ms Huruns: You understand this?

Mr Offer: I understand that. I'm just trying to glean from the presentation the fact that you're in complete disagreement with section 148 and what the Public Service Alliance's position would be if the government proceeds with the legislation which contains 148.

Ms Huruns: Oh, I see. Obviously it would be full indexation, like for the pension, for example.

1110

Mr Offer: Okay. My last question deals with the representation on the board, the governance. We have heard in the past through our hearings that whether injured workers are part of a union or not is not the issue, but that they strongly feel that they have a particular interest, a community of interest almost, where they should have legislative statutory standing as being part of that board.

I'm wondering, based on the fact that the four subsections of the purpose clause are all referable to the injured worker, would the alliance be in favour of giving to injured workers in this province statutory recognition on the board?

Ms Huruns: I'll try to be short on this one. Through their unions, in my view, the injured workers should have a representative, and if other members of the public, as a whole, want to have a say, in my view, they should have a consultative role, but in the decision-making, when a major decision needs to be made, I think the two parties, the union and the employers, should work that out together.

One of the dangers, and let's call a spade a spade here, is that with the composition of the board, the voice of those who are the first affected, the injured workers, will be flooded in an overrepresentation of two individuals being chosen in the public.

Mr David Johnson: Perhaps to get to the previous question, maybe to put it more simply, if we were voting on this bill, the way it is here today, and you were sitting over here, would you vote for this bill, yes or no?

Ms Huruns: I would propose amendments.

Mr David Johnson: And if those amendments were voted down, then what would you do?

Mr Carr: You only get a yes or no vote.

Mr David Johnson: That's all we get.

Mr Carr: You can't say "maybe."

Ms Huruns: I really don't like that question, to tell you the truth.

Mr David Johnson: Yes. I don't like it sometimes either, but that's the way it is.

Ms Huruns: I'm not trying to be facetious here. I think it's the role, particularly from an NDP government, to -- I don't want to get into the politics, but I --

Mr David Johnson: All right. I think you've answered the question.

Ms Huruns: No, no.

Mr David Johnson: Mr Chairman, I think we've got her answer on that.

Ms Huruns: No, listen. I talked earlier about a pact which is very important. I have not listened to the presentation of the former people here from the manufacturers. There was a pact agreed in 1915, and if we continue to see the erosion of the protection of that pact, one day the union will say: "That's enough. We're going to sue you and it will cost you a bundle of money." That's going to be very, very good for the economy of this province.

Mr David Johnson: Okay. That's a clear answer.

What I really wanted to ask, though, you've indicated that the primary problem with the system is the underfunding in terms of the employers. But I have to put it to you that we listened yesterday, for example, to the owner and director of Seamless Cylinder International. She represents 45 employees; you represent 170,000, but there are many, many more people in her situation than there are in yours -- there aren't many unions of the size of yours -- and where the jobs are going to come is more in her field. The small businesses in Ontario are going to create the jobs in the future.

The problem they have is, they not only have to compete here in Canada, but they have to compete on an international basis, and at $3 per $100, the workers' compensation here in Ontario is the highest. To put that up even more from the point of view of small business is going to be a disaster. We even heard here today that if it wasn't for the unfunded liability, it would be $2.30 per $100. New Brunswick today is putting its assessments down to try to be competitive, to try to allow businesses an opportunity to grow and create jobs, and that's good for all of us. I wonder if you've taken that into account when you think that the assessment rate should go up.

Ms Huruns: Obviously, even though we are a public service union, we are very interested in the wealth of the private sector to create jobs in the private sector. There's no doubt about it, just in the case of revenue for the federal government and the provincial government.

The high cost of compensation at the moment, and I think it's similar everywhere, in our view, is mainly caused by the lack of prevention. Prevention is the key. We should invest more in prevention. It would cost less, as I said earlier, but also in a lot of systems in the other provinces we see an overlegalized process, and I think the two parties, as well as the unions, we should see a process where they sit down and they really look at what you're doing now and they really look at simplifying and reducing the cost. The only people now who really gain from it are the lawyers and not the victims and not the employers.

Face to face, I think there are ways to cut down these costs. The first one is prevention and the other one is to cut down on the overlegalized system.

The Vice-Chair: On behalf of this committee, I'd like to thank the Public Service Alliance of Canada for bringing us their presentation this morning.

OTTAWA NEW CAR DEALERS ASSOCIATION

The Vice-Chair: I'd like to call forward our next presenters, from the Ottawa New Car Dealers Association.

I'd like to apologize now for not announcing it, but there are interpretation devices on either side of the room that are available to anybody sitting here and following the proceedings of the committee.

Mr Jean-Yves Laberge: For the sake of time, for those following our presentation we will be skipping a few paragraphs only.

From Campbell Ford, Mr Gord Hoddinott is the president; Irene Thomson is from Citiwest; Mr Alan Hollingsworth is from Bytek Automobiles; I am from Turpin Pontiac-Buick; and Mr Don Mann is the executive director of the Ottawa New Car Dealers Association.

Mr Chairman, members of the standing committee, ladies, gentlemen, good morning.

Monsieur le Président, membres du comité, mesdames, messieurs, bonjour. Nous vous remercions de nous avoir donné l'opportunité de vous présenter nos observations sur des amendements proposés.

We wish to express our sincere gratitude for the opportunity given our group to bring forth a series of observations which will shed some light on the detrimental effect the proposed amendments would have, should they be permitted to be integrated into the present WCB act with the passing of Bill 165. We will also allow ourselves to provide you with a few recommendations.

Prior to engaging in our observations, however, we would like to better inform you as to who we are and whom we represent.

We represent the Ottawa New Car Dealers Association and this association comprises 56 franchised dealers representing both domestic and import products, situated in the regional municipality of Ottawa-Carleton. The 56 franchised dealers presently employ 2,753 employees and generate a sales volume of approximately $1.9 billion in this region, a very important contributing factor to the overall economy of this area.

Not to burden you with unnecessary statistics, but to give you a very good understanding, the overall annual projected payroll for the 56 dealerships for this year 1994 is forecasted at $92.7 million, again a very significant injection of capital disbursed in our area of responsibility, helping this community to progress.

Our dealer group, in addition to having its own association, is supported by the Ontario Automobile Dealers Association, better known under the acronym of OADA, which has a membership of over 1,000 franchised dealerships which employ approximately 55,000 employees. Through our associations, we pride ourselves with having a solid reputation for participation, cooperation and, at times, providing a leadership role in working with the Ontario provincial government, regardless of political colours.

A few examples:

-- The creation of our own college, funded in part by manufacturers, dealers, fund-raising events etc. Georgian College today is well recognized and offers a full three-year college education geared to our very specific needs. After only nine years of operation, 540 students are actively working in our dealerships.

-- More recently, our own contribution to the workplace, the workplace hazardous materials information system, known as WHMIS.

-- The pay equity program, developed in part through Georgian College.

-- Lastly, currently under the new legislation, employment equity, also with the assistance of Georgian College.

As you can see, we take all these issues very seriously as they impact the community we work and live in. It is important for us to participate and contribute to the overall development of our industry and address everything that may affect it.

1120

In the past years, we have worked very hard to create a safer and healthier work environment. In tandem with our association, meetings were held, training seminars were offered and a series of independent groups, such as the St John Ambulance, were recruited to help us create and foster an awareness towards good health and a safer work environment. To us, this makes very good sense. After all, the success of our own businesses is predicated upon the quality of our workforce, white- or blue-collar alike. Our greatest investment is in our manpower, as it represents our greatest asset.

This brings us to the specific reason for being here today.

The 1992 headlines from the Ottawa Business News, Mr Mike Kronick: "Workers' Compensation Board: Out of Control?"

"In spite of a 92% increase in assessment rates over the past 12 years, the board had an unfunded liability of $10.3 billion at the end of 1991.

"Ontario already has the highest compensation cost per worker of any Canadian province."

Given this article, supported by many others, you can understand why we are extremely concerned with the most recent turn of events, particularly with the total collapse of the Ontario Premier's personally appointed PLMAC, the Premier's Labour-Management Advisory Committee. The obvious undertone here is that the present government, starting from Premier Rae, fully recognizes the perilous situation the WCB currently faces and, more importantly, the seriousness of its future indebtedness and its unfunded liability of $31 billion forecasted by the year 2014. All this when not too long ago, after some radical increases in premiums, we were to resolve the unfunded liability by the year 2004.

Our own industry leader, Mr George Peapples, who until the summer of 1994 was president of General Motors of Canada, wrote the following upon the collapse of PLMAC:

"For the past two years, at the request of the Premier, we have invested thousands of hours to develop constructive proposals for reform of the system. Hundreds of business representatives have been involved in analysing the present precarious financial situation of the system, doing root-cause analysis of the problems and developing alternatives to ensure the future viability of the system. After intensive weekend meetings with the labour representatives in early March 1994, we reached a framework agreement on the fundamental reforms necessary to basically eliminate the ballooning unfunded liability over the next 20 years."

We, as small business operators, welcomed this breakthrough that would permit the resolve of this financial chaos and, at the same time, the removal of threats of further increases in costs.

It should therefore come as no surprise to all why we rejoiced at the prospect of seeing a solution to this significant problem. In fact, during the period of 1983 to 1988, we have faced serious premium increases to supposedly bring the deficit at the time under control by the year 2004. For three years in a row, 1983, 1984 and 1985, in addition to the normal increase, we saw a 15% surcharge applied to our yearly premium, followed by another three years, 1986 to 1988, where the surcharge was levelled off at 10%.

Reluctantly, at the time we had agreed, for it carried the promise of resolve, and this action, coupled with a great emphasis on educating, training our employees to reduce our accident frequency, would produce the desired results; that is, a self-sufficient fund that would completely assure the financial protection for those employees who would find the need to access the fund for medical and/or vocational retraining purposes.

As business people, this was extremely important to us. If you remember earlier what we said in this presentation: Our greatest investment is in our people, for they represent our greatest asset.

Ms Irene Thomson: With much concentrated effort, energy and training, we've been successful at curbing the level of work-related accidents and health-related problems. As our claim experience improved, we did not see a reduction in our premium assessments; on the contrary, they've continued to escalate.

While the number of claims submitted clearly indicate a major improvement, we are now faced with a substantial increase in the amount of benefits being awarded, to the point where our efforts are negated by the largess in the awards.

Far be it from us to want to deny benefits that are due to our employees; however, one must understand clearly that fraud is not acceptable under any circumstances, and to further view this program as a guaranteed retirement plan is entirely wrong. We will work hand in hand with the WCB to protect the integrity of the fund for those who are clearly eligible for benefits.

Obviously we are seriously concerned with the new direction the WCB and this government intend to take, particularly in view of the findings of PLMAC.

Remember 1983-1988. We made the sacrifice, we bit the bullet in exchange for the resolve. Where are we today? Facing a greater financial dilemma than we faced at that time.

Like Ontario Hydro, the WCB is supposed to be free of political interference.

Premier Bob Rae had the right idea. He recognized the gravity of the problem, so he decided: Let labour and management resolve this once and for all. Their mandate was to offer recommendations that would correct the problem.

What happened? We have the right to know. After all, if the government is ready to impose upon us measures that will not solve the problem but increase our liability, we want to know why and certainly why the promise was broken. What happened to the willpower to bring this under control?

If you are an employer, and we are, the proposed measures are irresponsible. If you are an employee, and some of us are, you have the right to be concerned, because what happens when the well runs dry?

We are concerned that a further erosion of this fund may in the future require the government to ask participation from our employees to share in the cost.

Realizing the difficult economic climate this province has recently known and the very slow recovery that ensued, we the business community are extremely worried about the financial health of the WCB.

We have the right to ask why not one of the recommendations put forth by the management side was accepted, and why, instead of exercising financial prudence, the government unilaterally decided to increase benefits, completely forget the unfunded liability and appoint a bipartite board which will have no apparent power since the Minister of Labour will now take direct control and responsibility for the next 12 months.

It was certainly our clear understanding that the rule for no political interference applied.

In this day and age where the public demands better fiscal controls from all levels of government, municipal, provincial and federal, we are at a loss to understand the sudden change in direction. Where did the Premier receive his mandate and power to toss aside all the sound advice and choose to augment benefits, thereby increasing the deficit?

If the government were to pass legislation, we would comply. But this is not the case. These changes are being railroaded into place without the proper enactment.

Labour and management had an agreement. Remember the accord, March 9, 1994.

In essence the accord called for the creation of a functional bipartite board of directors, the establishment of a financial responsibility framework, the de-indexation of pensions according to the Friedland formula, and the development of a template of best practices for return to employment.

Today the unfunded liability of the WCB now stands at $11.5 billion. In 1993, the Workers' Compensation Board posted a loss in excess of $500 million. Also of extreme importance is that the WCB for the first time experienced a negative cash flow of $74 million last year, which means the unfunded liability went up, and more importantly, the board had to dip into its assets to meet the cash requirements.

We as business partners have just gone through four very difficult years where sales have tumbled, profits have been squeezed to a dangerous level, with many experiencing loss positions. Our workforce has been reduced by sheer necessity in the face of a very sluggish economy.

Nevertheless, we have found the strength and resources to re-energize, recapitalize in some instances and certainly rebuild our businesses. We have learned to do more with less. We have also adapted to the need to retrain and refocus our business to face the challenges of the year 2000.

Mr Gordon Hoddinott: More than ever before, we invest in retraining and retooling to assure ourselves and our employees of continued employment.

In partnership with our manufacturers, our associations and, yes, our employees, we've learned to better control our expenses and seek new opportunities.

It must be clearly understood, however, that all this did not happen without some very painful decisions: Reducing our head count was necessary, limiting salary increases to the minimum, acknowledging that we needed to change in order to improve both efficiency and productivity.

This could not have been achieved without the full support of our employees, who understood and accepted the reality of the situation. They have agreed, just as we have, to accept these sacrifices today for a guarantee in the future.

How can we explain to them, may we ask you, why the government has made a unilateral decision, in spite of financial chaos, to add an additional $200 a month for older workers for life? This excess in largess will add immediately another $1.5 billion to the unfunded liability from day one and is projected to cost $86 million in cash each year thereafter.

We fully recognize that this additional benefit cost would not impact our employees directly; however, since the government has no money, we presume it will turn to us again for additional revenue in the form of increased premiums.

Even the government understands very well, we're sure, that companies, and in particular small businesses like ours, need to generate a profit, and a reasonable one at that, if we're to stay competitive in a marketplace like this. Staying competitive means many things: It means investment in retraining, investment in retooling, investment in new technologies and investment in new and modern facilities. Without sound profitability, our ability to create continuous employment is placed in serious jeopardy.

1130

We're not saying that the proposed changes alone will be cause for lack of profitability; no, what we're saying is that the increase in taxes levied by all levels of government is bringing a serious threat to our small business operations. If there is a government that should understand the rationale for financial responsibility, it should be yours, which has undergone a tremendously difficult financial period.

Permit us to cite a few lines from the bulletin of William M. Mercer Ltd, consultants in employee benefits. This bulletin is dated April 1994, and I quote: "A successful workers' compensation program must work as a fair benefit system and also be economically viable."

They continue by saying: "In Ontario, the enormous unfunded liability, $11.5 billion currently and projected to $31 billion by 2014, is a cause for concern. Curiously, some specialists on public section debt have suggested the unfunded liability is just a big number and that, as long as revenues provide enough cash flow each year to meet the cash benefits disbursements, the situation is not critical."

However, we know from the WCB's own report that last year it had sustained a negative cash flow of $74 million.

The bulletin further says: "Pay-as-you-go can be defended if the cost is paid by the government with the power to raise taxes, but workers' compensation is entirely paid for by the employers. In Ontario, there are only enough assets to cover payments for two and a half years of cases currently in payment; by 2014, assets will cover only one year's payments. Payments for past claims are being borrowed from future assessments -- a significant claim on future employees."

If, as employers, we're expected to fund 100% of the Workers' Compensation Board, should we not at least have an opportunity to have a say; and, given the current situation, which is well understood by all parties, should we not use good judgement and sound business practice to put our house in order first before arbitrarily deciding to expand it?

The province of Ontario has the dubious honour of presently having the worst track record of all provinces in Canada in terms of average premium paid per $100 of payroll, benefits paid and lost time per claim.

Under the new modified work program, in case of illness and/or accident, the employer must have in place a modified work policy. Translated, this means that at the exact moment an employee notifies his or her employer of the nature of his work-related illness or accident, we must provide the employee with an alternative work proposal which the employer will submit to the proper medical authority, and hopefully, with the doctor's permission, the employee will return to work within hours or days to this alternative work offering.

The wages, as recommended by WCB representatives, must be determined by the employee pre-accident illness earnings, and the duration of this temporary placement is not to exceed six months. Earlier in our presentation we stressed the importance of protecting our workforce, since it represented our most valuable asset. We fully agree with and support a retraining program that would protect this valuable investment and at the same time the dignity of the employee. However, the point we wish to stress here is that as an employer we must pay the premium and are fully encouraged now not to process a claim -- inform, yes, but not process a claim -- instead, pay the employee to do filing, review work-related material and pay him or her their ongoing wages. This is how broke the program is.

I'll continue on the next page. There exist too many innuendoes, too many areas in the proposed changes that leave us at risk. We also face severe threats of penalty in the form of audit, surcharge and precise guideline for reward for a healthy and safe track record.

Again, to the next page. As small business entities, we are accustomed to evaluating our fixed costs. With the proposed amendments, you not only totally disregard the current financial problem but defiantly you continue to add to our financial burden. You make all the rules; we get to pay for all the mistakes -- certainly not a due process.

In conclusion, we respectfully urge you to reconsider and refrain from passing these amendments. Rather, we strongly suggest that you ask labour and management to go back to the table; you provide them with concrete instructions to anchor their discussion on financial responsibility first and foremost; perhaps you consider privatization of all or part of Workers' Compensation Board; and most important, have a totally separate class for franchised automobile dealerships, separate from independent mechanical repairs and bodyshops.

What we're asking you for is a just understanding and an equitable burden of the total cost of WCB. Thank you for your patience and your understanding.

Mrs Yvonne O'Neill (Ottawa-Rideau): I just want to say that I think I understand your business. My father-in-law was a car dealer. He's been dead for 15 years and some of his employees are still in touch with our family, so I know the way you relate to your employees.

I really feel that you have hit the nail on the head when you talk about the broken promises, and we've got them in writing on several occasions from the Premier himself. Is there any way in your mind that Bill 165 can be fixed? I know the answer that the government's going to give to your suggestion to go back to the table, and that's a royal commission. Do you feel there's any hope for either of those channels for yourselves, particularly for automobile dealers in this province?

Mr Laberge: Well, we certainly prefer the royal commission to Bill 165.

Mrs O'Neill: You prefer the royal commission?

Mr Laberge: Yes. Hopefully they'll get back to the table and recognize that the problem is a financial one. You have to look at assets and liability and add the two together.

Mr Carr: Thank you very much, sir, for your presentation. You talked a little bit about the Premier and the broken promises. I think one of the mistakes that business has made is that they've trusted this Premier. I've watched while the police, 6,000 of them, came to the Legislature and protested, and I watched him back down when he was confronted. The same thing over auto insurance. Business has tried to work like they did with the Liberals and the Conservatives in dealing practically and constructively. I tell you, the only thing this man understands is when you confront him and when you come at him head-on, and that's what you need to do. The good news is he won't be around six months from now.

You talked about anchoring. What I think needs to be done is you need to say very clearly: "The assessments have to be competitive and you can't run an unfunded liability; now you tell us what needs to be done." The advisory committee that the Premier set up basically did that and came up with a program, and as we saw, other jurisdictions are doing it. You don't need to be a rocket scientist. We could take plans in New Brunswick, Alberta and Manitoba and we could fix the system today. The next government, whoever it will be -- it won't be these guys but it will be one of these two, and whichever government comes in, do you think they should take that advisory committee plan, put it together, keep the assessments competitive, don't run an unfunded liability, and then you tell us how to do it?

Mr Laberge: Absolutely. I can give you one example, very quickly, indulge in your patience. In 1983, our premium at a dealership was $23,000; in 1994, $192,000.

Mr Fletcher: Thank you for your presentation. Let's forget the politics about who's going to be fired next year, and look at --

Interjection.

Mr Fletcher: -- the problem of workers' comp --

Mr Laberge: Excuse me.

Mr Fletcher: I know, I know. That's what we put up with, and look --

Mr Carr: You won't have to put up with it much longer.

Mr Fletcher: -- at the problems with workers' comp. You have some very interesting ideas. I think some of them that you look at are good and some I can't agree with. One statement is that the economic viability of the program is first and foremost, but if we go back to what the Meredith concept of compensation should be, it is to compensate the worker for the time lost and also to try and get the worker back on the job as soon as possible.

Ms Thomson: But someone has to pay for it, though. There has to be money to pay for it.

Mr Fletcher: Oh, I agree, and that's what I'm coming to. When we look at how we can do that in that context of looking at what the objectives of compensation are, then we can look at the fiscal responsibility of it, and I think the Premier in his statement has said, "We have to look at the fiscal responsibility of the Workers' Compensation Board."

Mr Laberge: Permit me to interject here. Is it reality to spend the money first and find out if we have it after?

Mr Fletcher: I think that's what's been happening over the years and that's why we are where we are.

Mr Laberge: We need to really sit down, both sides, regardless of party or colours, and fix the problem --

Mr Fletcher: You're absolutely right.

Mr Laberge: -- because the small business, and I would like to reiterate this point, dealerships employ between 20 and 150 employees, a lot of small family businesses. We do not have the financial resources. This province changed the OHIP program, which was to share costs with employees, and turned it into a health tax, again a burden to the employer. There is only so much we can charge our customers and we're not going to be competitive, so we have to fix it.

Mr Fletcher: Let's hope the royal commission gets into that.

The Vice-Chair: On behalf of this committee, I'd like to thank the Ottawa New Car Dealers' Association for their presentation to the committee this morning.

1140

SOUTH OTTAWA COMMUNITY LEGAL SERVICES

The Vice-Chair: I'd like to call forward our next presenters, from the South Ottawa Community Legal Services.

Mr Will Ferguson (Kitchener): Mr Chair, while they make their way up, I just wanted to advise the committee that earlier this morning I met with two injured worker groups that could not get on the agenda for today, one from Ottawa and the other one from Arnprior. I have advised the groups that they ought to write the committee. They wanted me to advise the committee, in a nutshell, of one thought: They said that --

The Vice-Chair: I don't think that's appropriate at this time, Mr Ferguson, because they are allowed to send in a regular submission, in fairness to the people who are scheduled and are presenting to the committee.

Good morning and welcome to the committee.

Mr Charles McDonald: Good morning, ladies and gentlemen. My name is Charles McDonald. I'm a lawyer from a community legal clinic in the south of Ottawa. This is Ms Caroline Harris-McDonald. She's a lawyer from a community legal clinic in the west of Ottawa. Ms Harris-McDonald will be making our presentation this morning, following which I'll try to answer any questions that you may have.

Ms Caroline Harris-McDonald: Due to the constraints of time, we will be limiting our oral presentation to four aspects of Bill 165 which we consider the most critical. Our written submissions address these and other aspects of the bill.

I'd first like to address my comments to the de-indexing provision contained in section 33 of Bill 165, which seeks to limit the indexing of most injured workers' benefits. At the present time, workers' benefits are increased once per year, based on the change in the consumer price index. This is at section 148 of the present act. Bill 165 introduces a new formula which is three quarters of the consumer price index minus one, to a maximum of 4%.

It's clear that this section was introduced to cut costs; however, we must address the other effect of this section, which is to decrease the value of workers' benefits. This effect may not seem so drastic in periods of low inflation such as we are experiencing presently; however, in periods of high inflation, the value of workers' pensions could decline dramatically.

We recognize that many people presently are experiencing frozen salaries or wage reductions; however, injured workers are an especially vulnerable group. Their benefits are often their only source of income, they often will not be able to return to any form of gainful employment as a result of their disabilities, and they've lost not only their immediate income from their job, but their ability to return to work or to be promoted in their work. Thus, while others may retain the ability to change jobs or be promoted in the future, injured workers often do not have these opportunities, and they deserve to be protected from inflation.

We also have other concerns regarding this section. This cap on indexing not only limits increases in benefits; in some cases it may actually cause decreases in a worker's benefits. This is as a result of the manner in which a future economic loss award is calculated. A future economic loss award is set at 90% of the difference between a worker's net average earnings before the injury and the net average earnings a worker is likely to be able to earn, as deemed by the board after the injury.

With respect to the second aspect of this calculation -- the deeming part -- the board uses real wages for jobs in deciding how much the worker is likely to be able to earn after the accident. These wages will go up with inflation. With respect to the first part of the calculation -- the net average earnings of the worker prior to the accident -- these will be subject to the Friedland formula, the cap on indexing. So if the deemed post-accident earnings are y and the pre-accident earnings are x, then the future economic loss is calculated as 90% of x minus y: 90% of the difference between what the worker earned before the accident and what the board deems the worker could earn after the accident.

As the pre-accident earnings are subject to the Friedland formula, they will go up at a rate less than the rate at which the deemed post-accident earnings go up. So if we look at the calculation 90% of x minus y, if x increases at a rate less than y, the future economic loss award goes down and can eventually be wiped out altogether. This is based on section 43 of the present act, which defines how you calculate the future economic loss award.

In our opinion, there are better ways to save money if that is the goal of this section of the bill: one, cut down the number of accidents. They went up 45% between the years 1992-93 and 1991-92. That is a dramatic increase.

Secondly, get injured workers back to work. Presently the board's success rate is extremely poor. Only 21% of injured workers with future economic loss awards were actually employed two years after the initial future economic loss award determination.

We should be addressing these problems and finding out why the return-to-work rate is so low. Real savings are here, not in cutting workers' benefits and redirecting them to the welfare office.

We could also increase money taken in by the board by expanding coverage of those sectors of the workforce that are presently not covered, or getting rid of the experience rating discount which gives employers more incentive to dispute claims.

I'd now like to address the issue of the $200 supplement increase.

When we are looking at the present 147(4) supplement, we are discussing workers who were injured prior to 1990. These workers are for the most part surviving on small monthly pensions which were supposed to compensate them for their loss of earning capacity. However, these pensions have failed to achieve their end and many of these workers have to supplement their meagre benefits through social assistance.

Some of these workers were assisted by the former subsection 45(7), the older workers' supplement, paid to older workers who in all likelihood would not return to gainful employment. This was limited to the equivalent, approximately, of the old age security pension, which is between $300 and $400 per month. Now it is the 147(4) supplement which is paid to all workers who in all likelihood would not benefit or have not benefited from vocational rehabilitation.

Unfortunately, many workers were often found not to qualify for these supplements. There are many cases where someone who is in receipt of a pension and is not working has been refused a 147(4) supplement on the grounds that at some time in the past he received some vocational rehabilitation assistance and that he should be able to find a job, even though he can't find a job. So he's not eligible for a 147(4) supplement. He's in receipt of only a pension, and it's not enough on which to survive financially.

The other thing the committee should know is that 147(4) supplements are subject to arbitrary determination by the board and, in any event, terminate when a worker reaches the age of 65.

It seems that this bill is attempting to assist some workers injured prior to 1990. However, this section arbitrarily excludes other workers who generally require some further financial assistance. These groups are listed at pages 3 and 4 of our brief.

If we really want to assist workers injured prior to 1990, we should be tying this $200 increase to their pension awards, not to their supplements. We should be granting an increase to anyone who has received a pension and who is not working or is working at a wage loss. If we do this, then these $200 increases will be permanent and not tied to the present 147(4) supplement, not subject to arbitrary termination by the board, and not terminated at the age of 65.

The other thing we must do is fulfil the promise made by the government that this $200 increase will not be subject to a clawback by welfare or family benefits agencies. Presently, there is nothing in the legislation to prevent this.

I'd now like to address the issue of employers' access to medical information.

Section 8 of Bill 165 proposes a change to section 51 obligating a physician, with a worker's consent, to provide medical information about a worker to the worker's accident employer. On the surface, many may feel that employers should have this type of access. However, how many of us here would like our employer to have unfettered access to our medical file? Yes, the employer requires our consent, but what happens if we refuse this consent?

Our major concerns with this aspect of the bill are as follows:

First of all, the confidentiality of the patient-doctor relationship is destroyed.

Secondly, although it can be argued that the worker has the right to withhold consent, the question remains, what repercussions will the worker face if he or she exercises this right? Will she be deemed uncooperative by the board, or will she face repercussions at work?

Thirdly, the section does not require that the employer have a specific reason for obtaining the medical information. Should an employer who is not interested in arranging modified work have unrestricted access to the worker's medical file?

Fourthly, unlimited access of an employer to confidential medical information has a tremendous potential for abuse.

1150

We're not saying that the employer should never have any access to medical information. However, as with any type of access to private information, there must be safeguards. The circumstances in which an employer can obtain this information and the type of information the employer can obtain must be controlled.

What we suggest has to be established is that the employer is genuinely interested in setting up some type of modified work to assist the worker in returning to the workplace. The reason the employer wants the information must be to assist in accommodating the worker in a board-approved return to work. The medical information should only be that which would assist the employer in this regard; that is, information as to medical restrictions and medical abilities.

The medical information should come from the board. There should be no direct access to the doctor by the employer.

This committee should also remember that the employer already has some controlled access to medical information when the employer decides to dispute a claim, and this is already in subsection 71(3) of the present act.

Finally, I'd like to address some comments to employer participation in vocational rehabilitation; that is, the new proposed subsections 9(4) and 9(5) of the bill.

Our position on these subsections is simple and straightforward. If the employer is unwilling or unable to provide modified work to the injured worker, the employer should have no role in determining a vocational rehabilitation program for the worker.

Vocational rehabilitation is necessary only in situations where the employer has indicated that he or she cannot or will not take back the worker. Therefore, the only interest is financial. It is a direct conflict of interest in participating in the designing of the vocational rehabilitation program to get the worker back to work.

In conclusion, in assessing this bill we must determine what it is we wish to achieve. If what we wish to achieve is simply to cut costs, the bill may be satisfactory. However, I honestly believe our goals are a little more sophisticated, a little more progressive.

We know that simply reducing workers' benefits and sending them off to be dealt with by welfare offices is not the answer. We ask you not to simply address cost cutting without looking at the big picture.

Our concerns regarding the bill are real, and if they cannot be addressed the bill must be scrapped.

Mr David Johnson: I thank you for your deputation. Just starting at the beginning with de-indexing and the concern with regard to cost, my suspicion is that what's happening here is an attempt to balance financial reality, in terms of injured workers but also in terms of all other workers, because all other workers are represented through the businesses that -- for example, the car dealers who were here just before you. They employ a lot of people, and they have to be competitive, and they have to meet the realities. If they don't, they're out of business and their employees are out of a job. So I think there's a balancing act going on there in which workers' compensation is part of their cost, and there are all sorts of other costs -- health premiums etc that they have to pay -- and when they throw all those costs together it has to be a package that works, and I think this is part of it.

Prevention: Everybody is in favour of prevention. I've been on this committee now for almost a day and a half, and I haven't heard one deputation that has not emphasized prevention. The numbers I see in terms of the annual report indicate that the number of registered claims are going down. From 1991 through 1993, each year, the claims have -- actually going back further than that, the claims are going down. Maybe I'm misreading that, but it seems to me that maybe prevention is slowly starting to work and it's a reality, but there is that balance that has to be achieved, and I wonder if you've given thought to that.

We'd love to pay the injured workers twice as much, I'm sure, and I'm sure the WCB would, but somehow we have to survive in the real world, and the businesses have to be competitive. If we jack their rates up, then jobs are going to be lost.

Mr McDonald: I can answer that. Yes, we have given thought to that, and I'm happy that the number of claims has gone down. I'm wondering whether that's a result of real prevention or whether it's the result of the recession, but it's a good thing that claims are going down.

I think what we're saying, though, is this is not the right way to cut costs, especially for the workers after January 1, 1990, who have been injured. That's when the previous administration brought in Bill 162, which was the dual award system. Part of that is future economic loss, the wage-loss system. What we're saying, for that wage-loss system, it's the difference between two numbers: what you were making before the accident and what you're able to make after the accident.

It's reviewed every few years by the board. When it comes time to review, the wages out there will have gone up with inflation; what you were making before is controlled by the de-indexing formula, the Friedland formula. So that doesn't go up as quick. What you're actually looking at is a position where not only are these benefits not keeping pace with inflation but they might actually go down with this formula.

You might have somebody who's going to have future economic loss now, $500 a month, because the board agrees he can't go back to his old job. In five years, that might go down to $350. You're just not keeping up with inflation.

Mrs O'Neill: Inflation doesn't always go up.

Mr McDonald: No, inflation doesn't always go up and I hope it doesn't. We're in a time of low inflation right now. But there's no guarantee that's going to stay that way. Just in recent memory, we've had times of quite high inflation.

I'm glad you brought that up because that brings me to the 4% cap. That only kicks in at an inflation that I calculate about 7%. So that's going to hurt injured workers the most when there are times of high inflation, because that's when they're going to lose the most.

So what's the purpose of the cap? If we think that inflation is beaten, then why do we need the 4% cap? If it isn't beaten, if sometime in the future we're going to have high inflation, then what are we doing? We're just hurting them even more.

Ms Murdock: On page 4 of your submission, I know that you identified that the government had indicated that the $200 increase would be tied to the worker's pension, but the rest indicates that you don't think it is. It is. It is not ending at age 65. That's number one, the $200 for those workers who are exempted.

The other thing that I wanted to talk about was the clawback. We had a question yesterday on that very subject. I clarified for the record at that time that the Community and Social Services ministry -- it's a regulation that determines the deductions in terms of whether or not there will be clawbacks and that there will definitely not be any clawback on the $200. For the purposes of your presentation, I wanted to just clarify that.

In the return-to-work concept on page 5, number 2 -- and I know it's in regard to the medical information, but if it's a prescribed form that is specifically designated for restrictions only, which has been said by labour and management and everyone, everyone is agreed that you need the limitations of what the worker can or cannot do in terms of capability of doing any kind of work -- and early intervention, a key here -- if it's that kind of thing, then I can't think of any worker who doesn't want to go back to work as soon as he or she is capable. Why would you believe that they would say no to a medical report that was very specific?

Mr McDonald: Okay. You've raised a couple of things. On the $200 supplement, first of all, it is correct that you have to be receiving the permanent disability pension to get it. But the bill also says that you have to either be getting the 147(4) supplement or that you would've been getting it if you didn't reach 65 on or before July 26, 1989. That's when supplements started. There are two preconditions.

1200

What we're saying is that we feel there are groups of workers out there who are on a permanent disability pension who are not back to work or are back to work at a job that's paying less, who never got the 147(4) supplement, and those ones are going to be left out. If the board --

Ms Murdock: They have to apply. They can still apply for it.

Mr McDonald: They could still apply, but the way the board works in that kind of case is like this: You're injured. If they say you are permanently injured, you're assessed for a permanent disability pension. If they think they can help you get back to work, they open a vocational rehabilitation file and you get a full supplement, up to 90%. That doesn't last for ever. At some point they say, "We think we've given you enough help, so we're going to stop the vocational rehabilitation file, whether or not you're back to work."

These days, the recession is often blamed, saying: "We've helped as much as we can. The fact you're not back to work is not our fault; it's because of the recession." At that point, you're left with your pension, and you won't get a 147(4) supplement, because the board says: "You should be able to get back to work. We've done everything we can to help you. It's not our fault you're not back to work. We're not going to give you the 147(4) supplement." Those people are not going to get this $200.

Mr Offer: Thank you for your presentation. I guess just as an outset, you say, based on your concern around the Friedland formula, that there are actual calculations that have been prepared by Michael Green and Nicole Godbout. I'm wondering if you might be able to share those calculations, send them in to the committee so that we might all --

Mr McDonald: I certainly can. Michael Green is a lawyer in Toronto.

Mr Offer: I guess we'd like to just see those.

Mr McDonald: Sure.

Mr Offer: I'm sorry, but in terms of the limitation of time, I'd like to deal with the employer's access to medical information. We have heard a variety of concerns around that, but there has also been some suggestion that maybe in section 8 what we should be doing is getting into some, I think the word was, "demedicalized" information. In other words, a doctor would provide information about injury and what the person can't do and then go from there, make it demedicalized. I'm wondering if you have a response to that position that was brought forward in terms of the concerns around --

Mr McDonald: That's what's being done now. The doctor sends medical reports to the board. The board has physicians on staff who look at these medical reports. Based on those, they determine medical restrictions and that's communicated to the employer. They tell the employer: "These are the medical restrictions. Are you able to find modified work to get this person back to work?" So that information should be communicated to the employer now by the board.

Mr Offer: So you're saying that there is sort of a demedicalization that's now going on from the board out to the employer.

Mr McDonald: I'm saying the board gives information to the employer on medical restrictions that the worker has as a result of the accident, so what's the purpose for the direct communication between the employer and the physician? That's just taking the board's role away from it, and we don't agree with that.

The Vice-Chair: On behalf of this committee, I'd like to thank South Ottawa Community Legal Services for its presentation to the committee this morning.

UNITED TRANSPORTATION UNION -- CANADA

The Vice-Chair: I'd like to call forward our next presenters, from the United Transportation Union of Canada. Good afternoon and welcome to the committee.

Mr Michael Hone: Good morning, Mr Chairman and committee. My name is Michael Hone. As you'll note on our submission, there were two other persons, but they were called away on other business, one of them being the technical expert on the act.

With respect to our submission, the United Transportation Union is an international union representing rail and bus workers in Canada and the United States. Approximately 4,000 of the UTU-Canada members are situated in the province of Ontario. Although they are for the most part under federal jurisdiction for health and safety, they do come under the Ontario Workers' Compensation Act for coverage of workplace accidents and injuries.

By its very nature, the rail business is a dangerous occupation and the work is quite physical in nature. Injuries to our members who are in the operating end of the business -- conductors and locomotive engineers -- tend to be quite serious. When serious injuries occur, our members are off for lengthy periods and they often require retraining and placement elsewhere if their injuries preclude the pre-accident employment. UTU-Canada has established an office for its Ontario members which deals almost exclusively with workers' compensation problems. I can tell you, there's no shortage of work for that office.

UTU has participated actively in the reform process that has taken place over the past several years. The participation involved protesting against Bill 162, participating in the Chairman's Task Force on Service Delivery and Vocational Rehabilitation, and before that, making submissions to various standing committees and the Majeski-Minna task force.

We recognize that there are problems in the system. Some of these problems are real, some are perceived to be real, and we recognize that the government is attempting to resolve some of those problems by the introduction of this bill and by the royal commission that it has struck.

Because of the nature of the work that our rail members are involved in, remuneration can be quite high, often considerably beyond the maximums allowable in Ontario for workers' compensation purposes. When those members cannot be returned to their pre-accident jobs, they are left to jobs that pay considerably less than their pre-accident employment paid them, or quite often they were left with a future economic loss that inadequately covers their new circumstances.

Older members were often worse off, in that they ended up with meagre WCB pensions and, depending on the circumstances, with a supplement, but often without, and in addition, vastly reduced railway pensions, if they even qualified for such a pension. In short, they found themselves often in a situation of abject poverty. We know that prior to the introduction of Bill 162, employers were not obligated to return workers with disabilities to the workplace. Statistics suggest that there are over 40,000 workers receiving WCB pensions who have been judged as not being likely to benefit by rehabilitation assistance, and because of that determination, have remained unemployed. Many of those workers are getting social assistance in order to survive.

Even though Bill 162 was supposed to be revenue-neutral, and one of the main features that would have made it revenue-neutral was the obligation to return workers to the workplace after their injuries, almost the opposite had occurred in many workplaces. Workers have not returned to work; 78% of workers who have been off work for a year remain out of work. Statistics like those would certainly obviate any benefit that could have been derived from the supposed revenue neutrality of Bill 162. We know that a worker who is away from work for a lengthy period is very much more difficult to return to meaningful employment.

Couple that with diminished work opportunities due to recession and cutbacks, particularly in the rail industry, and factor in the WCB's deeming of injured workers into jobs that they may be capable of working but which are not available to them, and we find major income loss and unemployment that is in the area of 40% for disabled workers.

Health and safety is another area of concern in the system. Rail members are under federal jurisdiction for health and safety and they are employees of schedule 2 workplaces, which means that the companies employing our members pay the entire cost of workers' compensation. To us, that is a problem in itself which was not addressed by the bill. However, the current system of financial incentives and penalties and experience rating encourages those employers who are experience-rated to do things like hide claims, appeal decisions, encourage workers to claim sick and accident benefits, and to not report accidents and injuries.

As representatives for schedule 2 workers, our union has long said that those things happen regularly in our workplaces. We have gone so far at times as to document the fact that the railway line officers' pay raises and promotions depended on keeping their departments' accident statistics at a minimum. If it was accomplished by good health and safety practices, it was great, but often it was just as noted above.

1210

Experience rating does not consider occupational disease claims with long latency periods. It does not even factor in good health and safety practices, because the measurements are not set up to measure things like the effectiveness of health and safety committees, return-to-work programs and committees and other prevention techniques.

We support the initiatives to make the WCB an arm's-length agency from the government. There has been too much interference by way of appointments to the board of directors. We believe that the WCB should be responsible to the parties that workers' compensation was put in place for: workers and employers.

The unfunded liability has been a cause for concern. UTU notes that the funding of the WCB is better now than it was 10 years ago. In 1984 there were sufficient assets to cover 32% of the WCB's liabilities, and presently the ratio is 37%.

Our union believes that better emphasis on health and safety, improved rehabilitation practices, early return to work and a greater emphasis on prevention will allow the funding ratio to continue to improve.

We hear that some are saying that the bill will cause the unfunded liability to increase from the present $11.6 billion to $13 billion in 2014. If those proponents of that theory were telling the whole truth, they would have had to tell you that the funding ratio will have actually increased to 55% from 37% and the figures that are being suggested are in 2014 dollars, which are inflated.

UTU-Canada does not come here to suggest that Bill 165 addresses all of our concerns, but it does cover a large part of the problems that we see. While we were not part of the Premier's Labour-Management Advisory Committee, we do believe that the bill adequately reflects the agreement that was negotiated. As a labour union, we believe that our word is bond and we continue to support what was negotiated even though it does not cover all of our concerns. We have to respect that negotiation process.

There are some concerns with the drafted language of the bill. We have an attached appendix. The clauses that give us concern are highlighted there simply because we do not have sufficient time today to go over those concerns clause by clause.

With respect to subsection 51(2), this is the section which deals with the prescribed medical information. We do not believe that an employer who has rejected the concept of cooperative return to work, who has not implemented a WCB-approved program, should have access to the worker's medical information that is contemplated by the legislation. In that case, we ask how the worker's doctor can feel comfortable in providing medical information to that kind of employer. The doctor must be able to be satisfied that the information provided will help in the worker's recovery and is being used in a program that is approved by the WCB. The information provided by the doctor must be limited to functional limitations and restrictions and contain no diagnostic or other medical information.

There are other sections of the bill which we would like to note:

Does subsection 8(7.1) eliminate the value of private disability insurance?

Will subsections 53(10) and 53(13) allow a non-cooperative employer to interfere in a worker's vocational rehabilitation?

Does subsection 95(6) allow the Occupational Disease Standards Panel to achieve independence as contemplated by the act?

Can clause 147(14)(b) be expanded to include those workers who are now beyond age 70 who were already 65 years of age in 1989 when Bill 162 provided for supplements under subsection 147(4) but excluded them?

Do we actually need the cap as called for in the Friedland formula?

Should we eliminate section 93 to give the Workers' Compensation Appeals Tribunal the independence that it needs to be a truly final level of appeal?

The bill provides for a $200-per-month increase to those disabled and unemployed workers who were injured prior to 1990, but as noted above, some workers who were already 65 years of age when 147(4) supplements were put in place will be excluded from receiving the increase. UTU believes that the numbers are small and that as a matter of justice and equity, those workers should also receive the $200-per-month increase to their pensions.

Friedland will not apply to the most vulnerable of injured workers, nor to their survivors, but will affect approximately 150,000 workers who have returned to work. We hope that the bill will provide better return-to-work potential and better vocational rehabilitation services to mitigate the erosion of benefits that will be caused by applying the Friedland formula.

The Friedland formula will reduce workers' benefits. We declare that UTU-Canada does not subscribe to any formula or philosophy that reduces workers' benefits. We support initiatives in the bill which will reduce costs by providing a greater emphasis on prevention and re-employment.

We again reiterate that the union reluctantly endorses the Friedland formula because it came about as a result of the negotiations. The formula adopted, though, is more suited to a pension plan where benefits are provided at or near a normal retirement age, as opposed to benefits being required to be paid to workers who become disabled at a much younger age and who will feel the effects of inflation over a longer period than one who retires later in their life.

We are fearful that the capital will erode benefits while, at the same time, revenues that are available to the WCB are tied to workers' wages that are increased due to collective bargaining and general wage increases designed to protect wages against inflation. The result would be that workers get less in inflationary times while the WCB revenues rise with inflation. On the basis of the foregoing, we suggest that the cap should not be allowed to remain in the bill.

UTU-Canada supports the notion that Bill 165 addresses the poverty issue somewhat and we support the fact that the provisions for increased penalties for non-cooperation will assist in making workplaces safer and there will be more timely re-employment of injured workers. Just as important, we believe that the initiatives will have a significant impact on the unfunded liability. Not only will experience rating measure the things that it does now, but it will encompass the measurement of health and safety practices and return-to-work programs. As we have already stated, we believe that prevention and effective re-employment are the only true ways to reduce the costs to the system.

As we have noted already, UTU-Canada supports the bill with respect to the governance issue. A bipartite board of directors will allow the two stakeholders -- workers and employers -- an equal say. Decisions made by the board of directors will reflect the wishes of the respective stakeholders' communities.

The government has considered the larger concerns that have not been addressed by the bill: issues such as coverage, universal disability insurance, entitlement, occupational disease, benefit levels and indexing. We believe that the royal commission should investigate and report on those areas that are beyond the scope of Bill 165. We look forward to contributing our thoughts and ideas to the royal commission. We hope that there would be an all-party agreement to implement the report of the royal commission. Thank you for allowing us the time to present our views.

Mr Daniel Waters (Muskoka-Georgian Bay): Okay, I'll try to do this quickly. I have two questions that I'll put forward and then get you to respond to.

The first thing is that we recognize that there's a problem with finances at the WCB. If you look back and go back in history, what happened was in the late 1970s and early 1980s, employers didn't pay the proper assessment, and now they're having to pay for that. So you see assessments going down elsewhere around the country. But I would ask at the same time, because you deal with people across the country, is there any progressive legislation going on anywhere in Canada at this point in time to help the injured workers? That would be the first question.

1220

The second one was that yesterday when we were in Sault Ste Marie, UTU did a presentation there and they talked about how the Sault Ste Marie Transit Commission had a return-to-work joint committee and how it worked. They had protocols set up, a way of doing it and it seemed to work well and it was a win-win: The workers were back to work; it was cutting their costs. Do you have any experience in that here or is that just an isolated, local thing at Sault Ste Marie?

Mr Hone: With respect to other areas in the country, I am not the technical expert on the WCB. I do know, however, that through the initiatives of the Ontario government there have been changes made, the one being at Sault Ste Marie and promotion of those types of things to happen, that have helped cut costs and helped the injured worker.

In the first part of your question, you talked of the costs and that being very important, and from our perspective that certainly is important. My experience also takes me into the US and I'm talking in terms of rail carriers in the US. Their assessment is under the federal employers' liability act. The US railway carriers, class 1 carriers, made a submission to the Supreme Court that their cost per employee was $3,700, in the area of $2 billion, I believe. If you break that down in Ontario, I believe the cost works out to about $1,800. I think there's quite a difference. While the costs are significant, there are other areas and other jurisdictions in other countries where it's much, much more.

Mr Offer: Thank you for your presentation. It's interesting to see on page 5 that the United Transportation Union of Canada endorses -- reluctantly so, however -- the Friedland formula because it came about as a result of negotiations at PLMAC. I think that will be interesting information.

My question is basically twofold. The first is an "if" question. If there had also been an agreement at PLMAC that the purpose clause was to have financial responsibility, would you be in favour of that? If the purpose clause of the act was to contain a clause dealing with financial responsibility and if that had been negotiated and agreed upon, would the United Transportation Union of Canada be in agreement?

Mr Hone: I understand there was some discussion on that and there were negotiations on that particular issue. Correct me if I'm wrong; I'm sure you will.

Mr Offer: No, I'm just asking a question. I'm trying to get the answer.

Mr Hone: Whether we support being efficient and effective --

Mr Offer: In the purpose clause.

Mr Hone: -- and putting that into the purpose clause, I'm sure we could live with that, yes.

Mr Offer: Thank you. I just would like to get your thoughts on one other thing, and it's not part of your brief, but we have heard from injured workers -- and I don't want to speak collectively, but we have heard suggestions from some injured workers that, dealing with the governance of the board, they would like to have a seat at the table, statutorily. The purposes of the act are all geared towards injured workers and some are in unions, some are not. We have heard, I think in fairness, that they would like to have a seat at the table guaranteed by statute and not at the whim of anyone else. What would your position be on that? If you haven't directed your mind to that, that's fine.

Mr Hone: No. Our position is that the injured worker is in fact represented. In fact, two of the representatives on the panel are injured workers themselves. But I also understand, to go a little beyond that, that there has been a commitment made by the OFL that one of the public positions could be designated for the injured worker and someone could be put in there.

Mr Offer: Thank you very much; I appreciate that.

Mr David Johnson: I also thank you for your deputation and your emphasis on prevention and re-employment, which I see clearly within the presentation, and it's one that we've heard, I think, from all groups: injured workers, employers, union representatives. Those are probably the three key deputants and your brief is consistent in that.

You've also brought some new information, perhaps, that I've heard at any rate, with regard to the ratio of the assets to the WCB's liabilities. You've pointed out on page 3, I guess it is, that the projection is that the assets will cover 55%, by the year 2014, of the liabilities. That would be, I presume, and perhaps question, with the implementation of the Friedland formula.

Mr Hone: That's correct.

Mr David Johnson: So that if the Friedland formula was not introduced, number one, your ratio would no longer hold. Maybe you could comment on that.

Secondly, we've heard from the car dealers' association, earlier today, that the assessment rates have gone up 92% in the past 12 years and they've indicated in their brief that that was to remove the unfunded liability, but obviously it didn't happen and the unfunded liability has grown. So I think it indicates that circumstances can arise whereby, even without the Friedland formula -- or even with the Friedland formula being introduced -- indeed the liability could be greater than 55% of the assets. I wonder if you would comment on that.

Mr Hone: With respect to the liability and the change, I think you're correct that it could change; it could also go down.

Mr David Johnson: It hasn't been the history, but I suppose it could happen.

Mr Hone: I think the projections were based on very conservative estimates in calculating the unfunded liability. The one thing that wasn't factored into that was a growth rate. I think the growth rate was 4%. Today's paper indicates that the projected growth rate is 6.4%. I think that that will have a tremendous impact on what happens to the unfunded liability in the future. So it can go up but I'm very hopeful that it'll go down, and I think that there are some clear indications in the economy that in fact that will happen over a period of time.

Again, I emphasize that when the calculations on the unfunded liability were done, the estimates were done very carefully. We get into that with railway pensions and how they calculate their unfunded liabilities, and a 1% change in the interest rate back in 1969 on the CN pension plan meant that $374 million were removed from the CN pension plan by the railways. So there are major changes that can take place with 1%. In fact, it's 2.4% right now.

The Vice-Chair: On behalf of this committee, I'd like to thank the United Transportation Union of Canada for their presentation this morning.

This committee stands recessed until 1:30.

The committee recessed from 1229 to 1338.

OTTAWA-CARLETON PUBLIC EMPLOYEES' UNION

The Vice-Chair: I'd like to call this committee back to order. I call forward our first presenters for the afternoon, the Canadian Union of Public Employees, Local 503. Good afternoon and welcome to the committee. Just a reminder that you will be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd keep your remarks somewhat briefer to allow questions and comments from each of the caucuses. As soon as you're ready, could you please identify yourself for the purposes of the record and then proceed.

Ms Victoria Jenkins: I'm Victoria Jenkins. I work with CUPE Local 503 here in Ottawa. With me is Mr Clarence Dungey, who is the national representative for CUPE, also at Local 503.

Many challenges face the Workers' Compensation Board. High unemployment and a changing makeup of the labour market have contributed to declining revenues. The recession and economic restructuring delay re-employment of injured workers and increase costs.

Internally, the board must deal with the complexity of administering three separate acts. Changes in Bill 162 which dramatically amended the Workers' Compensation Act in 1990 are still being implemented and their full impact is not yet known.

Administrative delays, difficulties with re-employment and new areas of entitlement add costs for employers and workers. The unfunded liability continues to be a concern even though the board's funding ratio is gradually rising.

The Ontario government has now come forward with Bill 165, in conjunction with the royal commission, to deal with some of the more pressing problems in the system. The changes were drafted following negotiations between labour and management. Some compromises were required from both parties. Although the bill reflects the negotiated agreement, some further changes in the proposed language are required to ensure that the act is workable.

What can the Ottawa-Carleton Public Employees' Union contribute that would be useful in a 20-minute presentation?

By way of introduction, we represent about 5,000 inside and outside municipal workers in Ottawa-Carleton. Our focus is on workers recently injured and those who are in the process of returning to work. Our greatest concerns are prevention of work-related accidents and illnesses, administration of claims and return to work, and the continued viability of the system.

Prevention of work-related accidents and illnesses: The union and the employers of our members believe that prevention is the best way to reduce the human and financial cost of occupational injuries and illnesses. We have jointly developed occupational health and safety policies and programs. These build on an established joint approach to health and safety. There is extensive training, support for the work of health and safety committees, and a commitment to proactive measures by management and staff.

As an attempt at prevention, the WCB's experience rating process uses the wrong criteria for rating employers' WCB claims records. By focusing on costs -- we see these as the symptoms rather than the causes of WCB claims -- experience rating encourages underreporting, challenges of claims and appeals of decisions. The costs of diseases with latency periods or delayed onset are not considered, thus discouraging attention to the sources of these illnesses within the working environment.

The proposed additions, subsections 103.1(1) and (2) promote and reinforce efforts aimed at the cause rather than the symptoms of workplace accidents and illnesses. They also support proactive measures and requirements already established under the health and safety act. Consideration should also be given to connecting experience rating to the accreditation program now being developed by the Workplace Health and Safety Agency.

Administration of claims and return to work: Where differences arise in a claim, the resolution process is slow and cumbersome. Strengthened and streamlined return-to-work provisions and penalties for non-cooperation in Bill 165 will promote a safe and timely return to work.

We would like to see greater emphasis on a cooperative approach to return to work. This could be accomplished if joint re-employment committees were required, similar to those in occupational health and safety. Their role would be to coordinate the return-to-work process and represent the interests of claimant, coworkers and employers. Regardless of how close the apparent match between the worker's needs and the proposed modified duties, a cooperative or hostile working environment will be a deciding factor in any return to work.

Provision of medical information directly to the worker and the employer will assist in early return to work. However, the proposed wording of subsection 51(2) does not encourage a cooperative approach. It should be amended to read:

"A physician who receives a request from the worker or from the employer via the worker should provide each of them and the board with such medical information as may be prescribed, where the employer has implemented a board-approved return-to-work program."

Although consent of the worker is required for the physician to release information, we are concerned that the worker may be deemed uncooperative by the WCB if he or she refuses. Greater focus on a cooperative approach involving the injured worker in planning for return to work would assist the worker to contribute positively to the process.

Provision of diagnostic information is a violation of right to privacy. Clause 63(2)(h.1) should be amended to read:

"prescribing non-diagnostic medical information for the purposes of subsection 51(2)" and so on.

Employer participation in vocational rehabilitation: The changes to section 53 require greater involvement by the employer in the vocational rehabilitation process. However, if the employer is uncooperative, the proposed subsection 53(10) might give the employer the right to interfere in rehabilitation. It should be amended to read:

"...the board in consultation with the worker, the employer where it has been established that the employer is cooperating in the worker's rehabilitation" and so on.

If the worker is no longer employed by the accident employer, does subsection 53(13) still allow the employer to participate in decision-making on vocational rehabilitation assistance? This should be changed to:

"At the request of the worker or on its own initiative, the board may extend the period during which a worker is to be assisted in seeking employment for a further period of up to six months."

Under "Appeals," many workers are not in a position to take advantage of appeals available to them under subsection 54(11), and access to assistance from a union, legal clinic or other agency may be limited. Allowing the board, on its own initiative, to inquire into whether the employer has fulfilled its obligations under section 54 will address this issue.

The proposed mediation services under section 72.1 will facilitate the resolution of differences and promote savings through early return to work.

There are many other problems with re-employment provisions in the act. Employer size and time limits exclude many workers. About 90% of Ontario businesses have less than 20 employees. High unemployment rates make it more difficult to return injured workers to the labour market. In fact, there is a 78% rate of unemployment for post-Bill 162 workers at future economic loss review 1 stage. Where the injured worker is unable to find employment, deeming wages of non-existing jobs in calculating future earnings loss imposes a double penalty on injured workers. We're looking to the royal commission to address some of these issues when it begins its work.

We'd like to also propose something with respect to section 93. There is growing pressure for the WCB board of directors to use section 93 to challenge decisions of WCAT. As a court of last appeal in workers' compensation, WCAT decisions should not be subject to any review by the board. Section 93 must be repealed to guarantee WCAT independence. Only this form of legislative independence will ensure a free and unbiased workers' compensation appeals system.

Ongoing viability of the WCB system: We recognize that the Friedland formula arose as part of a negotiated package and that some compromises had to be made to reach an agreement. Although 45,000 vulnerable persons will be exempted from its provisions, 134,000 other workers who do receive WCB disability pensions will see them eroded. Over a long period, particularly in times of high inflation, the proposed reductions would result in rapid erosion of the value of benefits, especially for younger workers. WCB revenue would continue to rise at the rate of inflation because it is tied to wages; thus we see no justification for the 4% cap under the Friedland formula in subsection 148(1). It should be removed. The maximum CPI increase recognized by the original Friedland formula was 10%, with any excess adjustment carried forward to a year with less than 10% inflation. The last sentence in subsection 148(1) should read, "The indexing factor should not be less than 0%."

Savings resulting from the application of the formula will help in improving the board's funding ratio to 55%. Although we are uncomfortable about the application of the formula, there is some consolation in the purpose to which the savings will be directed. However, we note that there is no effort in Bill 165 to address the unfunded liability through adjustments to the assessment rate for employers.

The $200 increase to persons receiving a subsection 147(4) supplement: Savings from Friedland will also provide for a $200 monthly increase to 40,000 unemployed disabled persons who were injured before 1990 and who receive supplements under subsection 147(4). A small group of workers were excluded from 147(4) supplement because they were age 65 or older in 1990. Paragraph 147(14)(c) should be amended to include them. It should read:

"if the worker is in receipt of a permanent partial disability award under subsections 143(1) of the pre-1985 act or 45(1) of the pre-1989 act, and had reached the age of 65 before July 26, 1989."

In summary, the most effective way to reduce WCB costs, as I know you've already heard from many other people, is to prevent accidents and illnesses through effective health and safety programs. Improved return-to-work provisions are needed for those workers with occupational injuries or illnesses. Bill 165 will move Ontario employers and injured workers in this direction. We look forward to the royal commission inquiry into financial viability, entitlement, benefits, alternate systems, coverage and so on.

Thank you very much for the opportunity to participate today. Any hard questions, and how about a few easy ones?

1350

Mr Offer: Thank you very much. You've touched on some of the major aspects of the legislation, not to say that other aspects are not. But you've certainly touched on an aspect of the legislation which, as I don't think will come as a surprise to you, is most often talked about, that dealing with the Friedland formula. I just want to get your position on that, although I think it's fairly clear. You're saying that the Friedland formula as is found in section 148, as amended, should be removed?

Ms Jenkins: No, we're not saying that at all. We're saying that we're uncomfortable about the provisions of the formula but we recognize that in order to get an agreement on other areas that were of importance to us, this provision was necessary.

Mr Offer: Okay. If you could just then help me with this: In point 3 of your presentation you say, "There is no justification for the 4% cap under the Friedland formula in section 148(1)," and then you say, "It should be removed."

Ms Jenkins: The 4% cap should be removed, not the Friedland formula.

Mr Offer: So that portion of subsection 148(1) that has the 4% attachment should be removed.

Ms Jenkins: That is correct.

Mr Offer: My question is, if it is not removed, should the bill be passed?

Ms Jenkins: Mr Offer, no piece of legislation is going to meet all of our requests or all of our wishes. We will live with it if that is included in the legislation.

Mr Offer: If injured workers of this province wish to have a seat on the board of directors of the Workers' Compensation Board, if they wish to have a say in how matters and issues are discussed at the board, what is the position of your particular union to that?

Ms Jenkins: This is, I'm sure, a very important one to you, Mr Offer, because I've heard you ask it several times before. Yes, I think that would be a reasonable thing to do.

Mr Carr: Along the same lines, I said in the Sault yesterday that if any other government had brought this bill in, every union would have been swinging from the chandeliers and we would have had to peel them off the roof.

On page 4, it says 134,000 workers will have their pensions reduced and eroded. Now that we've gone through the social contract, where you had contracts opened up, how can you justify to your membership something that takes away money from injured workers? How can you say, as you did to Mr Offer, we should still vote for it?

Mr Clarence Dungey: Let me answer this way: I've been around for 43 years and any successes that I have had were on the basis that is compromise. Sometimes that flies in the face of labour unions and their principles and policies.

Let me give you an example. My answer to you is this: When the social legislation came down, Local 503 met with the employer. We said: "It's inevitable. It's going to happen. Let's not hassle. What's our bill?" We established what the bill was and we took a 1.5% reduction in wages. Some 78% of the 5,000 people voted in the process and 93% supported it. So you can't be inflexible.

Mr Carr: As you know, the business people on the Premier's Council feel they weren't consulted. You say there is an agreement. They feel, to use a quote, "stabbed in the back" on it, because that isn't what they agreed to. So there isn't agreement on this. How can you say there was an agreement when the business groups have been coming through, and the Premier's Council, saying: "No, wait a minute. There was no agreement. We didn't agree to this"? How can you say there's been an agreement when in fact the groups and the participants on the Premier's Council said: "No, this isn't what we agreed to. The bill we got was not what we agreed to"? I know there are going to be disagreements, but you know that's what they are saying. How can you say this was a compromise when in fact business is saying: "It is not a compromise. This is not what we agreed to in this bill"?

Mr Dungey: My answer to you, sir, again, is that whenever two bodies meet, if they're totally inflexible, they will get nowhere. I don't know what really happened at those times at those meetings; I wasn't there. What I do know is what I involve myself in and what my membership says to me. I am here today with Victoria to present a position, and she has said to you very clearly some things we're unsatisfied with. The question from the previous speaker was, "Will you live with this bill if you don't get that?" The answer is yes. Come on, it's a real world out here. Let's not hang ourselves in the chandeliers for the sake of hanging ourselves in the chandeliers.

Mr Fletcher: Thank you for your presentation. Again, swinging from the chandeliers: I think everyone realizes this is the first government that ever did invite labour to the table when it came to a negotiation for workers' compensation. I can understand why there would be swinging from the chandeliers if it was another government, because they wouldn't be invited to the table in the first place.

The New Brunswick plan that the Conservatives are pressing so hard is cutting benefits to injured workers to 80% a day for the first 39 weeks, and workers off the job are getting 85%, and you don't get paid for three days, and stress is not going to be covered any more. So the cuts that New Brunswick is doing are something the Conservatives have been talking about, and what the Liberals have also advocated is to put it on the backs of injured workers.

This Bill 165 may not be the end-all to all of the problems, but from what I can see, I think it's a start to start putting into place some of the controls that have to be put into place, and then we get to the royal commission, which will take a deeper and better look at what workers' compensation is all about.

When it comes to the royal commission, and I asked this question this morning, (a) if we're around, I know you'll be at the table; that's a given, and (b) if you're at the table, what kind of changes to workers' compensation do you see as being fundamental to helping getting people back to work and also making sure that they're compensated at the right level of pay?

Mr Dungey: To your first observation, let me repeat what I've already said publicly and provincially. I've got a case of Scotch that Bob Rae's getting back in anyway, with a minority government. So we will be there, and yes, we will participate in the royal commission.

Ms Murdock: He wants us to bet our mortgage and our house on that last comment, but I agree with him.

The Vice-Chair: On behalf of this committee, I'd like to thank the Canadian Union of Public Employees, Local 503, for bringing us their presentation this afternoon.

OTTAWA-CARLETON HOME BUILDERS' ASSOCIATION

The Vice-Chair: I call our next presenters, from the Ottawa-Carleton Home Builders' Association. Good afternoon and welcome to the committee.

Mr Richard Lee: Good afternoon. My name is Richard Lee, and I'm the executive director of the Ottawa-Carleton Home Builders' Association. I was expecting Brian Rowley, our safety committee chairperson, to be with me, but he hasn't made it. That's fine; I can continue on.

Very briefly, the Ottawa-Carleton Home Builders' Association represents the residential construction sector in the Ottawa region. Our 360 members account for about 85% of the new home construction in the city.

One other point I'd like to make in an introduction is that the residential construction group is in the assessment rate group, I think it's 764, and they pay $7.16 per $100 of payroll. That is the highest rate group in the construction sector and I believe in the WCB. So our members are coming at this with a bit of a prejudice, knowing they are paying the highest rate, I guess in Canada in effect.

We have provided to Tannis today copies of a written brief that's more detailed than what I'm going to give you today. In the brief we've commented on many aspects of the legislation and we've offered some solutions that we feel would be more appropriate.

I will note, however, that we have not provided a clause-by-clause review in detail of Bill 165. It's our belief -- and Brian is going to join me, if he may -- that the legislation as tabled is seriously inadequate and it does not solve the very, very profound problems at the WCB.

So we are coming today to ask that Bill 165 be withdrawn and replaced with a new, more fiscally responsible legislation that better addresses the problems at WCB. Let's not defer WCB reform to another day and another government, and Bill 165 does not provide the reform that we need today.

Our written brief does address a number of issues, but I'm going to focus on two issues that we feel most strongly about, the CAD-7 experience rating system and the general issue of financial and fiscal responsibility. I'll cover CAD-7 first.

1400

If we had to put it into one sentence and stop there, I'd say CAD-7 has been proven effective and should not be altered, period. In the construction industry, as well as all other groups of industry, the CAD-7 rating system has worked. There's been proven accident reductions, there's been proven cost savings to business, the volume of lost-time claims has dropped by over 50% in recent years, and it's quite difficult to understand how Bill 165 can think of altering such an effective program.

The change that Bill 165 is proposing is a merit rating system, and that is simply unacceptable. The experience rating must remain performance-based, not audit- or merit-based. The merit base does become punitive in nature, and it fails to offer the incentive to business, and we've seen the benefits that the incentives have provided up till now.

We're also concerned that a merit system will be unfair to smaller businesses, or prejudicial to smaller businesses and smaller companies. Some firms that are small will find it difficult to implement vocational rehabilitation programs. They won't have the resources to do it and compete with the larger companies. Other smaller companies that have a lot of seasonal workers and therefore a high worker turnover will find it quite difficult to compete with larger firms when it comes to the implementation of health and safety programs. These companies will have programs, but on an audit on a merit review they won't be as effective, or won't appear to be as effective, as the larger companies, so these smaller companies may be unfairly penalized even though have an otherwise excellent safety record.

I've heard the argument in recent days from some groups that the CAD-7 rating system simply offers rebates to companies just for following the law. I don't support that, and our members don't support that. Construction safety is not an issue of right or wrong. It's not an issue of following the law or breaking the law. The CAD-7 is a penalty for the bad, and we're totally in favour of that, and it's a well-deserved bonus for companies that have good safety records. So please maintain the existing experience rating system as it now stands.

The second point that we'd like to address today is the issue of financial soundness. I'm sure you've probably heard as much of this as you want to hear, but the single greatest problem facing the WCB, in our minds, is the deficit, the staggering $11.5-billion unfunded liability, and it's growing by $2 million a day. It's growing today, right here, at $2 million. We can't comprehend how Bill 165 basically ignored this immense, staggering problem. I'm at a loss for words. How can Bill 165 just disregard this issue to the extent that it does? Again, I find it difficult to put that into words. It's just beyond belief. In fact, the legislation increases benefits for approximately 40,000 workers and the costs are being increased by $86 million a year at a time when we know something has got to be done to bring costs down.

The legislation does project future savings, but there are no immediate savings or no immediate cost reductions in the legislation. Any future savings, if they are ever realized, and I think some people may have some concern at whether these future savings will ever be realized, are not enough to even start to bring the unfunded liability under control.

Even with the legislation as it is now proposed, the sustainability of the WCB system is in jeopardy. We believe that the target of a zero unfunded liability must be a fundamental goal of the WCB reform. Without it, we may not have a WCB in the future. In our brief that we've presented to Tannis, and it goes into it in more detail, we've identified some of the tough cost-cutting measures that will have to be addressed to get the unfunded liability under control.

The Friedland formula must be adopted without exception. We support the formula as it's proposed, but without exception. I do want to stress the "without exception." We support the reduction of worker benefits to 85%; the WCB must decrease administrative costs; and the definition of "workplace injury" must be narrowed to cover injuries caused by workplace accidents and start to pull in what that definition is. As I mentioned, each of these are discussed in more detail in the written brief we've provided.

At the risk of repeating myself, and I'm sure you've heard this over the last number of days, the unfunded liability must be brought under control as a fundamental goal of the WCB reform of Bill 165. The bill must address the financial sustainability of the system and it must require financial and fiscal responsibility not only in the day-to-day operations of the WCB but in an effort to get the $2-million-a-day deficit under control.

Tied into the whole issue of the WCB's fiscal roles is the issue of competitiveness. Already in Ontario, which has the highest average assessment rates in Canada, businesses are unfairly disadvantaged, and we are in a North American global economy now, and that means something significant. Without some major fiscal reform in the WCB, Ontario will be losing employment opportunities and business opportunities to other provinces and other states. The result will be -- and I hazard a guess the result may already be -- some lost jobs and lost business opportunities in Ontario. Everyone's going to lose: business, labour. There'll be no winners.

In conclusion, I'll go back to what I said at the beginning, that the changes necessary to Bill 165 in our opinion are so extensive that they cannot be made through amendments at the committee stage prior to third reading. Bill 165 must be withdrawn, and we ask that it be replaced with legislation that better ensures the long-term sustainability of the workers' compensation system.

This belief is shared by our 360 members, and I have with me, and I'll present this to Tannis on my out, a petition signed by many, many of our members. This petition is asking that Bill 165 be withdrawn and I'm providing original copies of the petition to Tannis today.

Those are my comments. We've touched on the two most important issues as we see them, and the written brief we've provided addresses a number of other issues as well. That's all. Brian and I will now be available to answer some questions.

The Vice-Chair: Thank you. Just for your information, that letter you sent to Tannis has been passed out to all the committee members.

Two minutes each.

Mr Carr: Thank you very much for a good presentation. First of all, I want to also welcome my colleague Leo Jordan from Lanark-Renfrew, for those members who don't know Leo. He's joining us on this as well.

Today, I mentioned earlier -- I don't know if you were here -- in the Report on Business the Globe and Mail had a report on what happened in New Brunswick. As you see there, they're cutting the assessments by 18%. Their rates are now substantially lower than Ontario, $1.70 per $100 versus $3 here. Their unfunded liability, if you look at it, is much better than ours is.

So the solutions, as I said earlier, aren't that difficult. What they take is political will, and there are other jurisdictions that have done it -- Alberta, Manitoba -- and I say this goes across all party lines, because, as you know, in New Brunswick it's a Liberal government, Frank McKenna, although many people say he's more conservative than a lot of Conservatives. But there are other areas as well that are doing it.

The plan in New Brunswick I think is something that has been very successful. When you look at it and you see the fact that they are attracting businesses -- Federal Express is down there with its telemarketing program -- they've done very well in terms of job creation. Would you like to see what happened in New Brunswick, or some of the measures they took, happen here in the province of Ontario, and can it be done that simply, or am I being a little bit too simplistic? Can it be done?

Mr Lee: I'm familiar with the New Brunswick changes on a cursory basis, but I'm familiar with the reductions they've got, and I think it is that simplistic. Keep in mind as well that as Ontario becomes more competitive, if there are more jobs and there are more business opportunities, then the amount of revenue into the WCB will increase as well. If we have a situation where business is being driven out of Ontario, the assessments are going to go down and the rates will have to go up to cover it. So it's a vicious circle. I think we've got to take an immediate step, and if we can promote Ontario and become more competitive, the jobs and the opportunities will be there.

Mr Carr: Thank you very much. Good luck.

1410

Mr Waters: I guess Mr Carr forgot to read the next paragraph, where it says $9.49 for each $100, and this is in the construction industry in New Brunswick, so for a certain portion of construction --

Interjection: Aha.

Mr Waters: The next paragraph says $9.49.

Interjection.

Mr Waters: Yes, there it is. Read it. The next paragraph, $9.49, pier construction.

Mr Ferguson: Yes, $9.49.

The Vice-Chair: Order.

Mr Waters: Amazing. Reads one paragraph, forgot the next. Anyway, I guess I have a couple of questions.

So far the injured workers have contributed into this reworking of WCB $18 million. That's what injured workers have lost. That's what they've contributed.

I hate to pick on you, but I happen to know that in central Ontario, and indeed I checked with people in Toronto too, the construction industry is plagued by people who take advantage of young people out of school who are labourers and they're all of a sudden subcontractors. They're not paying compensation. These people are in there as subcontractors. They don't realize that they have to be insured. They don't realize that they have to be insured in case somebody gets hurt.

Don't you think that these people being injured and nobody paying in in advance is adding to the unfunded liability? And the fact that employers openly say, "We're going to challenge every case that comes forward. We don't care if a guy loses his arm, his leg. We don't care, we're going to challenge that," doesn't that add to the unfunded liability?

Mr Ferguson: Good question.

Mr Waters: Like, where does it end? And when you talk about redefining accidents, what about the people who work in the plastics and the chemical industries and other industries who have lung diseases or their bodies are full of cancers who aren't getting any compensation? They're getting welfare. Don't you think the employers are responsible for some of that?

Mr Lee: It's a tough point to answer. I'd like to ask Brian to respond --

Interjections.

Mr Lee: I've been saving up for four days. I'll even turn his mike on for him -- to the issue of the young people. I think that's the one we're most able to address, perhaps, the issue of young people in construction, and I'd like Brian to address that.

Mr Waters: Well, it happened to my son. That's how I found out about it.

Mr Brian Rowley: The tougher regulations get, I think the more often we'll find people trying to duck them. We passed out through our association a while ago a checklist which determined whether subcontractors were subcontractors or they were actually working for us. It determined who would pay. So we've taken measures to try to determine who is responsible and make sure that people are covered. But the more punitive the fees are, the more people are going to duck them.

Mr Waters: But doesn't that add to your costs?

The Vice-Chair: Thank you. Ms O'Neill.

Mrs O'Neill: Thank you both for coming. I think your comments on the experience rating are very well placed, and certainly the fiscal responsibility; we can't hear it too often.

I have been in the Legislature for going on eight years and I've sat on committees many, many days. The purpose clause and definitions I have never heard questioned on legislation like I have this summer, and I'm not just talking about this one piece of legislation. People are actually beginning to question the purpose of the legislation and the definitions in legislation because in both cases they're very unclear and nebulous, and I'm talking about several bills.

You must have been surprised -- and that's what I want you to respond to -- when you saw Bill 165. You likely have heard the Premier, and I quote again from his letter of April 21, "A `purpose clause' will be added to the Workers' Compensation Act which will ensure that the WCB provides its services in a context of fiscal responsibility." The Premier signed his own personal note on that. And then you see Bill 165.

Do you think the royal commission's going to save this situation? What do you feel is going to help, because we don't seem to be able to get the message of fiscal responsibility. We put people like you out of business or have them avert the law, as has been suggested, because it's so prescriptive. Then how do we solve that?

Mr Lee: I think, very briefly, especially with the social contract and seeing that, even though there were some pretty tough measures, the government was trying to make some commitments to some fiscal control -- putting that comment aside -- and then looking at the original purpose statement back in, I guess it was, the spring of this year, we were extremely excited, like: "Oh, finally, something's going to be done. This is fantastic."

The purpose statement seemed to be what we wanted to hear and we were quite excited. Then when the legislation came out, we just fell off our chairs. We couldn't believe what we -- and the first thing we turned to was the purpose clause and, like, "Hey, what's happened here?" After reading it a few more times and I guess trying to read into the clause a little bit, we were quite shocked.

We're quite pleased to see that there is a purpose clause. There was so much legislation in the past with no purpose clause, so it's nice to see that, but at the same time -- even the press release that announced Bill 165 used the term, I believe, "fiscal reform." There is no reform in the bill.

Mrs O'Neill: Is the royal commission going to solve that? Do you think the royal commission's going to bring the point clear?

Mr Lee: I don't know. I'm quite discouraged, to be honest with you.

The Vice-Chair: On behalf of this committee, I'd like to thank the Ottawa-Carleton Home Builders' Association for bringing us their presentation this afternoon.

UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION, LOCAL 1000A

The Vice-Chair: I'd like to call forward our next presenters from the United Food and Commercial Workers, Local 1000A. Good afternoon and welcome to the committee.

Ms Pearl MacKay: Thank you. My name is Pearl MacKay. I'm executive assistant to the president of UFCW, Local 1000A, and with me today is Sterling Seward who's a staff representative with UFCW, Local 1000A, for the eastern area of Ontario.

On behalf of the United Food and Commercial Workers, Local 1000A, I thank this committee for the opportunity to make this presentation to you regarding our position on Bill 165.

We would like to note at the outset that we support the brief tabled on August 23, 1994, by Brother Tom Kukovica, our Canadian director for UFCW, and the Ontario Federation of Labour presentation submitted by Brother Gord Wilson earlier in London, Ontario.

The UFCW, Local 1000A, is a local union with approximately 12,000 members throughout the province of Ontario. Our members work predominantly in the food retail and food processing industries. Some of the employers we have collective agreements with include Kretschmar, Brandt Meat Packers, Cambridge Canadian Foods, Loblaws Supermarkets Ltd, Supercentres, Sunnybrook Foods and Your Independent Grocer.

Many of our members suffer from injuries such as carpal tunnel syndrome, bursitis, frozen shoulder, trigger finger, low back injuries and herniated discs. These injuries are often caused by the repetitive type of work that they perform and often permanent damage has occurred by the time these injuries are diagnosed.

When a worker is ready to return to some type of work, it is often difficult to find accommodations due to the nature of the work. However, it's not impossible. I would like to share with you a real-life example of an injured worker who is a member of Local 1000A and his experiences with the workers' compensation system and why the amendments enshrined in Bill 165 are critical to injured workers in assisting them in returning to their workplace with permanent accommodations.

Previous amendments to the Workers' Compensation Act, via Bill 162, provided for the first time a mandate for employers to return their injured employees to work wherever possible and subject to certain time restrictions. Unfortunately, it did not go far enough and, at best, only a small fraction of injured workers have returned to work with their pre-accident employer. The current legislation does not have enough teeth to ensure employers authentically attempt to return injured workers to work.

Prior to Bill 162, most of the employers we have under collective agreement took the attitude that: "If you're not 100% better, then go home till you are, because we don't have light duties available and we can't accommodate you. If you're not able-bodied, then we don't want you." As a result of this, many injured workers found themselves on the outside looking in after a work-related accident that left them with some permanent disability.

When employers took that approach, some of them did so without understanding the Human Rights Code for the province of Ontario, and we appreciate that in many cases employers needed to have some form of education on what the law of the province required and human rights in general in Canada. There were others that were well aware of what their obligations were via the Human Rights Code and still chose to take this approach. Bill 162, however, I believe, when it came into effect, clearly pointed the direction to employers that there was a responsibility to accommodating injured workers.

1420

As a result of this, we were forced to look at other alternatives, though, in returning injured workers to work. Prior to Bill 162, we regularly recommended that injured workers who were denied an opportunity to return to work file a complaint with the Human Rights Commission. Unfortunately, the commission has its own problems and delays are such that it could take several years before a resolve is reached.

Those workers injured prior to Bill 162 becoming effective only had recourse before the Human Rights Commission. As a result of the recent Ontario Labour Relations Act amendments, however, under Bill 40, whereby the Ontario Labour Relations Board now has the jurisdiction to take into consideration the provincial Human Rights Code, the grievance procedures in our collective agreements can now be utilized.

In addition, what we've done is negotiated, in some of our collective agreements, articles that call for accommodation. I'll get to why we put so much emphasis on accommodation near the end of my presentation.

This leads me then to the injured worker's history that I'd like to share with you today. He immigrated to Canada from Turkey in 1975 and began working with the accident employer in 1976. He injured his lower back in August 1988 when he slipped lifting a 20-pound barrel.

He was off work approximately three months and returned to the accident employer in December 1988 to accommodated duties with restrictions in bending and lifting and a gradual progression to full hours. In April 1990, he was required to perform lifting and bending duties beyond his restrictions with the result that he was ordered off work by his doctor in April 1990.

In June or July -- we're trying to make that determination -- 1991 he was deemed by the Workers' Compensation Board to be partially disabled and therefore he was capable of doing some kind of work, and the restrictions are listed.

A meeting was held with the WCB case worker and the employer. The union attended as the worker's representative and presented the case before the employer to have the worker come back to work on accommodated duties. The company did appear compassionate. However, the end result, after much deliberation, was that they decided they could not accommodate this worker on a permanent basis, despite the fact that the worker, the WCB case worker and the union had identified several jobs in the workplace we believed the worker could do and should at least be given an opportunity to try.

This decision was formalized by the company in May 1992, and the reason cited, which is interesting, for why they were not prepared to provide the accommodation is that for them there was no real financial incentive to take this worker back as his claim was what they called a pre-NEER file, and they were not obligated as well under Bill 162.

The union representative tried to reason with the accident employer, without success, and on August 12, 1992, we filed a grievance on the injured worker's behalf. In addition, we also advised the worker to file a complaint before the Human Rights Commission. He did so in June 1993. What took the delay in him actually filing a complaint with the Human Rights Commission was that he did not want to upset his employer. He felt that if he filed a complaint with the Human Rights Commission, he would only be upsetting the employer. We had to explain to him that basically the employer had fired him because they weren't prepared to take him back to work, when we believed that there was work he could do.

Meanwhile, the WCB case worker was working with this worker, and the union representative as well was involved, to provide the worker with vocational rehabilitation, as we know. The downside of not being accommodated by the accident employer is you then have to go on this long pathway of vocational rehabilitation assistance. At the end of the day, that may or may not be successful and we found that in a lot of cases there isn't a great number of successful cases that talk about people actually finding work.

However, back to this worker, he was sent to vocational pathways for a 10-day assessment of testing his skill levels. This ended in June 1992. He was provided with a six-month English-as-a-second-language program and at the end of this he was enrolled in a MIG and TIG welding program for an eight-week trial basis to see if he could perform the work within his restrictions that were required by the course.

Unfortunately, he had a recurrence during this time and that program had to be stopped. He was then enrolled in a 20-week industrial building maintenance program with LIUNA, Local 183 training centre, and in January 1993 he successfully completed this program. It's interesting to note here that actually it's a 16-week program but, because of his restrictions -- and what's not often taken into account, sometimes the workers can't cope with the full day's work involved in a training program and sometimes that period does need to be extended. In this worker's case, it did need to be extended by four weeks, but he was able to complete the program. During this time, as well, he was assessed for a permanent disability award by the board and was granted a 15% pension.

Back at the arbitration -- because, remember, we filed a grievance -- we've now finally in December 1993 gotten to an arbitration board. However, the arbitration started, but it didn't get completed. On that day the arbitrator discussed with the accident employer in a private conservation in the hall -- and whatever took place in that conversation I don't know, but the result of that conversation was that the accident employer decided that perhaps they could accommodate this injured worker. So the panel remains seized so that we could try and work things out again.

It should've been a simple return to work at this point, but the company insisted on the worker now going through a second functional abilities evaluation to see what level he was operating at. We agreed to this, simply to not waste any further time, to go back to an appeal process.

The second evaluation was done in the late spring of 1994 and, when the result came in, the company and the union, with the assistance of the WCB, matched up the injured worker's restrictions and precautions with an appropriate job at the workplace. As it turns out, the company was able to accommodate the worker in his pre-accident job. He was placed on a work trial with progressive increases in hours and was provided with accommodation within his restrictions and, at the end of July 1994, finally went off WCB benefits. He has now returned to this pre-accident job accommodated.

This story at least has a somewhat happy ending in that this now 49-year-old worker is employed within his restrictions with comparable pre-accident earnings. He still suffers 24 hours a day, day in and day out, as a result of his work accident. This he has managed to cope with, and we can tell you that the road for him to return to work would've been more worker-friendly had the amendments outlined in Bill 165 been in place to encourage the employer to return him to work without frustrating our attempts. Had this worker not had a union supporting him, it is unlikely that he would be employed with his accident employer today.

The single most effective way to reduce WCB costs that we are aware of is to reduce the accidents. In the event, however, that there is an accident, the employer, through the joint return-to-work committee, should provide authentic appropriate accommodated work. This will clearly reduce the duration of claims and as you are aware will impact on rebates to which the employers could be entitled.

I sat on the PLMAC secretariat, which was the group that worked below the PLMAC, to try and find cost-saving measures in the system that was what was coined a win-win situation, and the single most effective factor we could find that would reduce costs to the WCB system and would assist injured workers was early return-to-work programs where you have joint return-to-work committees in place to get injured workers off benefits so that you shorten the duration, and that's crucial. When you look at assessment rates and what they're based on, duration is one of the factors so, if you can reduce the duration of the claim, you're definitely going to see a saving for the employers through their rebates.

The other side of that is the benefit to the injured worker, that he will be back to work more financially secure and feel much more comfortable. A lot of workers when they get injured are at the weakest they'll ever be in their lives. They don't know what's going to happen tomorrow; they don't know if their accident employer is going to be able to take them back or accommodate them, and that's why we support the Bill 165 amendments that clearly enshrine further what Bill 162 started to do. Bill 165 carries further to enshrine workers returning to work.

What should've been for this worker a 16- to 17-month period of time off on a recurrence stretched out to a duration of 39 to 40 months. That's over three years. This worker received full benefits during that time from the compensation board. He participated in retraining and assessment programs costing several thousand dollars. The one at LIUNA -- the tuition fees alone for that were $4,600.

In addition to the financial cost of a claim like this one, there are many hidden costs on the injured worker and his family in the uncertainty of future job prospects and the lack of financial stability. In this worker's case, he did not have a family outside of his young daughter to look to for support through this very difficult period in his life.

Bill 165, although it will not help this worker regarding his last accident, will protect his rights should he have a future work accident.

1430

Subsection 54(11.1) of the amendments will assist injured workers as the board will be empowered on its own initiative to determine whether the employer has fulfilled its obligation to the worker. This subsection enables the board to be proactive in assessing penalties on employers who do not fulfil their obligation to re-employ an injured worker. This subsection will be especially important for workers in that it should create some incentive for accident employers to return injured workers to work.

The benefit in this is the incentive that it creates. If we can at least get employers to start to look in a different angle and have them look at this, "I could be fined or penalized in some way if I don't," then at least we can get them to start thinking in those terms, that there's an incentive here to do it. Once you then start down the road to accommodation, you'll actually find the accommodations are not that difficult. It's turning that corner, to get the employer to look at that, so a worker who may have some permanent partial disability can still be a fully productive worker for them.

In addition, I'm pleased to say that this particular injured worker will not be needing the $200 a month, for example, that is enshrined in Bill 165, as it is today, because he's back to work. Unfortunately, his story is the exception, rather than the rule. We consider this a much-welcomed increase and support the amendment for injured workers who are less fortunate.

As time does not permit, I will leave you with some anonymized injured worker profiles that I hope will help you to put a human face to these hearings that are being held throughout the province regarding the bill. In closing, I would like to note that joint return-to-work committees are essential in getting injured workers back to work, accommodated or otherwise. Local 1000A has had a somewhat similar structure in place with most of our employers since 1990 and have seen the benefit of such a committee in assisting injured workers to return to work. But I caution you that the committees must have training. You just can't strike a committee and say, "Here, you're responsible for accommodating injured workers." The committee needs to be trained on what is accommodation and how to go about that.

In addition, there has to be the will; there has to be the will from both workplace parties to authentically look at appropriate accommodations. When I get to the will, what I'll tell you is that I cochair, for labour, a committee struck by the Workers' Compensation Board called the vocational rehabilitation advisory committee. We had a meeting that was set yesterday and we were advised that the four employer representatives were directed -- and I quote the word "directed" -- not to attend that meeting. We were very disappointed.

Our last meeting was held in April of this year. The committee was struck by the compensation board last September. We had been making some good headway in working out some common areas of interest and had just set an agenda in place in April of issues we were going to look at as they relate to injured workers' return to work. We were asked at our meeting yesterday -- that's the reason I understand the employer people were directed not to attend -- by the compensation board to review a Ministry of Labour document on new directions on return to work and to present our opinions to the board.

The VRAC employer side took the position that this was not within the mandate of the VRAC. We disagree with that; it's exactly what the VRAC was struck to do, to provide recommendations. We don't set policy, but we do certainly make recommendations, or that's our mandate.

When I talk about will, I need to talk about -- there's a way to improve the WCB system and the way of doing that right now, especially in the short term, is to get these joint return-to-work committees in place, but unless you have the will from the employer side to participate in that -- and the labour side, the worker side, to participate in those initiatives, it's not going to work. What you can enshrine in legislation may not end up meaning anything if the will isn't there to carry it forward. I think it's important that it get enshrined. It's unfortunate it had to come that we need to see legislative amendments to have sort of an attitudinal approach in our workplace, but that's the way it is.

The other thing I've included for you is some sample accommodations.

The Vice-Chair: Just two minutes left.

Ms MacKay: Oh, I'm sorry -- some sample accommodations that we've been successful with, with our workers, that I hope you'll take the time to read to show that it is possible. A couple of these workers have been at work for over two years now and accommodated and fully productive workers.

The Vice-Chair: If all caucuses could share the two minutes. Ms Murdock.

Ms Murdock: Actually, that's sterling, Pearl. I couldn't say it any better and I'm not going to ask a single, solitary question, because I think what you've said says it all.

Mr Ferguson: Well done.

Mr Offer: I must agree. I think that by agreeing with what Mr Kukovica and Mr Wilson said at earlier meetings says it all.

Interjections.

The Vice-Chair: Order.

Mr David Johnson: I don't know if I should be the voice of discord, but I will agree to the extent that you've been a very eloquent speaker in terms of injured employees and you bring a point of view and you bring reality. The case you've brought forward, I'm sure, is a real one and there's a great deal of merit in what you're saying.

But at the same time, I've been on the other side of the fence, as an employer in a sense, being in a position as the mayor of a municipality and being on the hydro commission. I know that we have had injured workers who we've had to try to accommodate back in the workforce and I don't sense a level of understanding or sympathy on behalf of the employer, because it is difficult.

I know that, for example, in the municipality that I represented, we didn't have spare positions, we didn't have open positions. The taxpayers were beating up on me every year because of tax increases. Senior citizens were calling me saying they couldn't afford the taxes. They live in their little house, but they either have no pension or very --

The Acting Chair (Mr Daniel Waters): Mr Johnson, if I might, the two minutes was for all caucuses.

Mr David Johnson: Yes, but I had a minute and a half left. You just don't like what I'm saying, that's all.

Ms MacKay: I hope I'll have time to respond.

Mr David Johnson: The business community in Metropolitan Toronto is saying the number one problem in making businesses competitive would be the property tax. A good chunk of the property tax is to pay people, so it's not easy to find a position when you don't have them there. Yes, you can create an extra position --

The Acting Chair: I'd hate to turn the light off on your mike, Mr Johnson, so please.

Mr David Johnson: I just ask for a little sympathy for the employer too. It's very difficult.

Ms MacKay: Actually, what may be missing here, with respect, is that accommodation is not about creating work, it's not about finding a spare position. It's about taking the pre-accident job and looking to see if it can be modified in some way, whether the worker is provided with tools to help the person do that job, or it may be a change in hours to reflect a certain way the work process takes place, or as simple as -- and you'll see it in the document that I've attached -- a $250 chair so that a cashier can go back to work because she's got a low back injury and all she needed was a $250 chair to have her accommodated. Quite frankly, what it would have cost the compensation board and the employer in the end in terms of training her to do something else would have been far greater.

The Acting Chair: Thank you, Ms MacKay, and thank you, Mr Seward, for a most enlightening presentation.

QUINTE AND DISTRICT INJURED WORKERS

The Acting Chair: I would at this time ask the Quinte and District Injured Workers group to come forward. If you could introduce yourself for the purposes of Hansard and for the members and if you could leave enough time at the end for some interaction, it would be appreciated.

Ms Dorothy Ellis: I'm Dorothy Ellis and I'm the past president of the Quinte and District Injured Workers. Somewhere on some of the paper that you may have received, it may say Belleville. That's home.

I take great pleasure in being able to present to this illustrious group today. I'm sincere in that. For that, I'd like to thank the Chairperson.

I want to speak about two specific concerns; namely, one is the erosion of indexation through the Friedland formula and number two is to make provision in Bill 165 to amend the Workers' Compensation Act, and the Occupational Health and Safety Act if necessary, to provide spousal survivor benefits to those workers who are injured and became disabled and unemployable prior to Bill 162 in 1990.

I have been directly associated with the Quinte and District Injured Workers group for the past eight years. During this time I have observed injured workers experiencing varying degrees of physical, organic-type loss, as well as emotional trauma caused by both the injury and the loss of self-respect in not being able to return to their pre-accident employment and earnings. In many cases there is no suitable job, which creates another whole kettle of fish that we'll not get into because I only want to deal with the two concerns, and I think you've already heard those.

1440

I will attempt to voice my concerns and opposition through a very concise approach.

Concern number one, erosion of indexation: The right to full indexation was won by labour as recently as 1985. Now, in 1994, under what was once perceived as a supportive labour party, the NDP government wants to take money away from workers through the Friedland formula to provide assistance to some, and a very few, a selected group of workers, injured pre-1990.

It is imperative that every worker injured pre-1990 receive the $200 increase that was proposed in Bill 165 to simply help bring them closer to the poverty line. It is my expectation that the NDP government bring in the best possible legislation to place injured workers in an improved position.

It is intolerable to think that any government, regardless of who they might be, would consider tampering with the rights of injured workers to full indexation, CPI, while at the same time give millions of dollars to large corporations, which I believe to a large extent helped to create the huge deficit that hangs over us. I find it disgusting to think that people targeted for cutbacks are those already living under the poverty line through no fault of their own.

These injured workers were contributing members of society. They contributed significantly while they were able to work to the economy of this province prior to their accidents and/or injuries, and certainly would still like to. I ask you, have they not suffered enough?

The pensions of the pre-1990 injured worker must continue to receive full indexation if they are to survive at all. Folks, I am talking about the right to survive. I'm not talking about the reduction of an already luxurious type of lifestyle.

Concern number two is the spouses and families, especially the spouses, who survive the injured worker. Presently, there are no provisions under the act to provide a survivor pension to the spouse of a worker who was injured pre-1990. In many cases the family lives off the pension because that is their only income. It's in lieu of salary received by the injured worker, as that person was the sole support of the family. If the injured worker becomes deceased, then under the present system the family is destitute, with the exception of a partial Canada Pension income.

In a recent survey of 157 workers in the Quinte region of those injured pre-1990, only 11% of the spouses were holding positions which enabled them to contribute to any type of pension plan. Therefore, if the pension or the income of the injured worker terminates with the death of that person, then 89% of their families would be placed in financial jeopardy.

The financial loss suffered by the injured worker takes its toll in a variety of ways, and for the purpose of illustration I have provided a case study which I, time permitting, would like to talk to you about. The possibility of an injured worker being able to contribute to any type of investment plan, ie RRSP, any other kind of a personal, private plan, is remote since the organic pension is already far less than the earned income.

I believe the NDP government must amend the act to provide a survivor benefit of at least 50%, equivalent to that of the Canada Pension, to those victims of injury prior to Bill 162, ie, 1990. My inquiries to all three political parties have lead me to the same conclusion: I believe that this is the only pension paid by the provincial government that does not already provide some type of survivor clause.

So the recommendations to this group are (1) as the concerns that I outlined stated, the right to full indexation won by labour in 1985 must not change, and (2) to make provisions under Bill 165 to amend the Workers' Compensation Act to provide a minimum survivor pension of 50%.

I would like to just go through briefly the case study that I have provided for you, because I believe it addresses clearly both of my concerns.

The client in this case is a construction worker who travels extensively from one job site to another. The spouse in this case, being a wife, doesn't work outside of the home because of a young family. The client injures his back severely in 1974, but is able to return to his pre-accident job after extensive therapy and rehabilitation provided very succinctly by WCB.

In 1979, the client receives further injuries to his back, and again after extensive therapy and rehabilitation is able to return to work. Remember, of course, that this client is a construction worker.

In early 1986, this client was working and earning an hourly rate of $20.46 per hour, contributing significantly to the economy. Hotel accommodations and meal allowances were paid by the company. In addition, 80 cents per hour was being paid by the company for a comprehensive family benefit plan.

By March of that same year, 1986, at the age of 49, the client could no longer tolerate his back condition. After soliciting the opinions of three well-renowned orthopaedic surgeons to make sure of what had to be done, who shared the same opinions and prognoses, the client was faced with back and hip surgery that rendered him totally disabled as far as his pre-accident job was concerned.

This client had a double problem. He was a welder by trade and lacked formal academic education. He had initially chosen a skilled trade because he was born with a handicap, a learning disorder known as dyslexia. That was the reason he had to choose a trade of this nature. It's the only way he could earn a living. The dyslexia is so severe that spelling is impossible and reading is very slow and uncertain. To provide vocational rehab in a meaningful way for this client was virtually impossible. Note that I said "in a meaningful way."

An organic pension was eventually established at 60% of the salary he was receiving at the time of the initial accident, which was 12 years prior. So without indexation, the pension that he would have received in 1986 would have been so minimal that he could never have survived. As you can see, there was a significant loss of income, as well as the loss of the 80 cents per hour, and the 80 cents an hour was only greatly missed because of the benefit it provided.

I have provided you with a brief overview. There are pages of details in between that won't help or hinder you in seeing the picture, so I've not included those. The social and emotional trauma is the same as in every other case you would have heard, I'm sure, but I do believe this illustrates the need for indexation and for some kind of survivor pension for the spouse who remains.

I'd be glad to entertain any questions or concerns. It's as concise as I could present, because I know time is of the essence.

1450

Mr Offer: Thank you for your presentation. I think the points you make are extremely important. I want to, if I can, deal with the case study, especially the line that says, "To provide vocational rehabilitation in a meaningful way for this client was virtually impossible."

It just so happens that I think the last submission we heard yesterday, and we were in Sault Ste Marie yesterday, was from educators who were involved in providing vocational rehab to injured workers who, for instance, had a learning disability. The point they made, and I'd like to get your thoughts on this, was that vocational rehab is possible and it can be done, I think they were saying "meaningfully," but they can't be confined to the time limits that are prescribed under the act itself. In certain circumstances there must be a flexibility to deal with, for instance, injured workers, giving them vocational rehab if they happen to have learning disorders.

But your point would be exactly right if you still had the same time constraints. They said you just couldn't do it, and I think you might have been even a bit charitable by saying it just wouldn't be meaningful. It would be a waste. You just have to give the people who give that type of assistance the proper time frames and time lines. I am wondering if you might be able to comment on that.

Ms Ellis: Yes, I would love to. I am an educator, and I might add that I taught high school students with learning disabilities for 25 years. I do agree there's a place in society for them. They do need time. They all have a useful purpose to serve. You'll note that I said "in this case." A 49-year-old who has been trying, who has been tutored privately when he was earning an income, went to private institutions to see if there were any breakthroughs in dyslexia that would enable him to improve his academic ability. So that is why I said "in this case."

Mr Offer: I appreciate that, because I think the message is clear that for people who can provide that assistance, such as yourself and others, such as the people we heard yesterday, the best way to do that is to allow you to do it, but within a realistic time frame.

Ms Ellis: Time frame, yes, for sure.

Mr Carr: Thank you very much for an excellent presentation. You did a terrific job. As you know, there have been some discussions about the financial stability of the unfunded liability.

Ms Ellis: Yes.

Mr Carr: And we can disagree on how bad it is, on various sides. The parliamentary assistant doesn't think it's so bad and so on. But when you look at it, it's not the employers who are responsible if the system doesn't have enough money to pay for it; it's the injured workers who are owed the money. As we saw through the social contract, when there's no money, it doesn't matter what the government is. They never thought they'd roll back wages and open up contracts. When the money ran out, they had to do it.

As a representative of the injured workers, are they concerned about the viability, since it's they who, if the system does, God forbid, collapse, will be getting absolutely nothing as a result if we don't do something?

Ms Ellis: Yes.

Mr Carr: Are they concerned?

Ms Ellis: Very concerned.

Mr Carr: How shall we deal with that?

Ms Ellis: I can't quote statistics on this and I should have done my homework better, I'm sure, before I came. I don't know what it will cost a company, a private organization, a corporation, in insurance to provide independently through an insurance company the same type of benefit that they receive from the workers' compensation. I don't believe that companies could afford to provide what is provided by the Workers' Compensation Board, through the government, independently.

Now, I don't, as I say, have statistics on that. I did work for an insurance company many years ago and I know the cost was phenomenal at that time, but workers' compensation wasn't as well used then as it is now. I think the whole picture of our social net has to change, but until that happens, I think it would be very neglectful of us to penalize the people who are already hurting the most to save a system from collapse.

Mr Carr: As you know, there are some people, some groups that looked at the insurance situation that say universal coverage, not at work but 24 hours a day, seven days a week, can do it cheaper than what you're getting through the WCB.

Ms Ellis: I'd like to see that first. I'm sure the insurance companies --

Mr Ferguson: You and I both, I think, would like to see that, and I certainly appreciate your presentation this afternoon.

I'd like to ask you one question. The government has received a whole lot of suggestions on how we can improve this bill, and as opposition parties are wont to do from time to time -- I'll give you these examples -- the Liberals have told us that instead of giving a $200 increase across the board, what we ought to be doing is looking at these increases on a case-by-case basis; rather than a flat increase right across the board, making a judgement on a case-by-case basis. The Conservatives, on the other hand, have suggested that what the government ought to be doing is taking the 90% of net paid benefit level down to 80%; and not only that, saying to the injured worker we ought to put a 72-hour moratorium in place from the time the accident occurs to the time the benefit is payable prior to anyone being eligible for benefits.

Those are suggestions that we're looking at. I would hope that we don't look at them all that long.

Ms Ellis: I'd hope not.

Mr Ferguson: But I'm wondering what effect that would have on the Quinte and District Injured Workers and particularly your membership. What effect would that have on your members?

Ms Ellis: To answer that simply, I would hope that the 46,000 people in Belleville would be behind me as we drove on the 401 to Queen's Park.

Mr Ferguson: Thank you.

Ms Ellis: I guess if I had one plea I could make to you, it is that for 35 years, as I tried to develop the minds of the young people in the areas in which I taught, there was one lesson I always tried to impart: If we don't care for each other, who is going to care for us? I'd like to leave you with that as well.

The Vice-Chair: On behalf of the committee I'd like to thank the Quinte and District Injured Workers group for its presentation to this committee this afternoon.

INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793

The Vice-Chair: I call our next presenters from the International Union of Operating Engineers, Local 793. Good afternoon and welcome to the committee. Just a reminder that you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd leave a little bit of time for questions and comments. Please identify yourself for the record and then proceed.

Mr Rick Kerr: My name's Rick Kerr. I'm a business representative with the International Union of Operating Engineers, which represents approximately 10,000 people across Ontario. I service and look after the eastern Ontario region.

The majority of the union's membership is engaged in the operation, repair and maintenance of cranes, shovels, bulldozers and similar heavy construction equipment. Local 793 also represents employees across the entire employment spectrum, including the employees of municipalities, scrapyards, industrial cleaning contractors and waste disposal companies.

On an industry-wide basis, construction is Ontario's second-largest employer of workers, next only to the retail trade industry. Based on 1991 Canada census data, 658,000 workers make their living from construction in the province. This includes tradespeople, engineers, architects, suppliers etc. This works out to approximately one out of every eight Ontario workers. Also, in 1993 almost $33 billion of construction work was performed in Ontario. This was more than any other province and made up more than one third of all construction work purchased in Canada. Without a doubt, many Ontario workers derive their employment either directly or indirectly from construction. Consequently, the effect of Bill 165 on the industry will be significant.

In order for this committee to fully appreciate the impact of the proposed changes on our members and other construction workers in the province, it is necessary to sketch briefly the unique characteristics of our industry and how it differs from the industrial sector. We believe this is particularly important, especially in view of the fact that construction industry representatives were not part of the original negotiations which eventually formed the basis of Bill 165.

In 1962, the Royal Commission on Labour-Management Relations in the Construction Industry (Ontario) identified three ways in which construction differed fundamentally from manufacturing:

-- The construction industry was subject to seasonal and cyclical fluctuations in the economy.

-- The workforce was characterized by mobility, flexibility and the specialized ability to perform construction industry tasks.

-- The products generated by the construction industry were not easily transformed from place to place, that typically workers moved from job sites to job sites. In the manufacturing industry, the location of the work does not change and it is the product that moves.

1500

These characteristics remain as true today as they were 32 years ago.

With this framework in mind, I would like to begin my presentation by applauding the provincial government in recognizing that the workers' compensation system is one in need of a major overhaul. Bill 165 I feel captures the main areas of consensus reached by the Premier's Labour-Management Advisory Committee. More importantly, it makes a good attempt at balancing the Workers' Compensation Board's twin challenges: maintaining costs and making the system fairer to injured workers.

In terms of achieving real fairness in the system, I particularly favour the purpose clause, section 0.1, as it will be of benefit to our members in dealing with the board at all levels. This clause finally addresses what many of our injured members have been denied years: that is, reasonable compensation and equal access to rehabilitation services. Having this purpose enshrined in the legislation itself will give injured construction workers some leverage in their claims and the confidence that fair treatment lies at the heart of the board's mandate.

The bipartite board, sections 56, 59, 60 and 66, is an amendment which also pleases Local 793 in its attempt to placate both labour and management by giving each an equal voice in determining the Workers' Compensation Board policies. The bipartite structure is commonly used in our industry with great success -- health and safety committees, grievance arbitration boards and many government tribunals such as the Ontario Labour Relations Board. In fact, the trustees of Local 793's pension and benefit plans and training trust funds are jointly represented by the union and our contractors. With the bipartite board, both labour and management will be on an equal footing to make the system more effective and responsive.

Since we live in a dollars-and-cents world, I would like to discuss what for us is perhaps the most important amendment for our members. Subsection 147(14) allows the additional $200 a month to injured workers on pensions who are in receipt of the equivalent to the old age security. We feel that this is an issue of primary concern for the members of Local 793. To understand why this particular change is so important, the committee must appreciate the incredible injustice that the system put upon our permanently disabled members who were injured prior to 1990. Through no fault of their own, these members have been financially devastated simply because they worked in construction.

Why? This goes back to the unique characteristics of our industry, as I noted earlier. When those characteristics are combined with the fact that our members are paid relatively high wages to perform specialized and strenuous work, yet have few transferable skills, the end result has the effect of automatically denying them access to rehabilitation services because, according to the Workers' Compensation Board, they could not approximate their pre-injury earnings if the Workers' Compensation Board were to offer training.

In other words, when the Workers' Compensation Board deemed that our injured members could only earn $9 per hour as parts assemblers and that this didn't come close to their previous wages, they were consistently cut off the system with no help. Instead, they were simply given a subsection 147(4) supplement, presently $387.74 per month, and a small pension, nothing else.

Clearly, the system failed them terribly. These members can no longer work at their trade because of the permanent injuries, have many families to support and, like all of us, have bills to pay, yet the Workers' Compensation Board closed the door shut on them. I ask you, where is the fairness in this?

The $200-a-month pension increase is in Bill 165 to right this past wrong. In no way will this rectify what the system has put them through, but at least it will provide some financial relief and give hope to their standard of living.

The next point I'd like to address is the Friedland formula. This is another aspect of Bill 165 that will dramatically affect the income of our members. Subsection 148(1) deals with the de-indexing of pensions to 75% of the consumer price index minus 1% with a cap of 4%. This is problematic in several ways.

First, most of us will collect our pensions from work at the age of 65. When we retire, we only have approximately 20 more years to live. What about the workers who were 40, 30 or 20 when they were awarded a pension? To de-index permanently disabled workers to a lifetime of increasing poverty is anything but fair compensation.

Second, to put a limit of 4% indexing is frightfully unjust. This low percentage will continue to penalize further in times of high inflation. As the cost of living rises, injured construction workers will be caught in a downward spiral year after year. This aspect of our amendment is most certainly not in keeping with the purpose of the act as outlined in section 0.1.

However, we are well aware that the Workers' Compensation Board is struggling financially and changes must be made to get it back on its feet. Cutting benefits by implementing the Friedland formula is not the answer. Pure and simple, this approach would be reforming the system on the backs of those who need help the most: injured workers.

In our view, the answer lies in strengthening those sections in the act that address prevention and re-employment. Preventing accidents must be the number one priority. Only when total accident frequencies begin to decline and those who are injured get re-employed by their employers more quickly will you achieve a true balance between fair compensation and fiscal responsibility.

In short, we agree with certain aspects of the legislation and I have outlined those for you. However, there are amendments of a more technical nature which cause us more concern. These are the experience rating, the concept of jurisdictional compensation, the absence of union representation in the vocational rehabilitation process and the fact that re-employment obligations of the employers have not been strengthened for the construction industry. How can we attempt to lower the unemployment rate of injured workers which currently stands at 40%?

Further, in our view, several other problem issues need to be addressed in the proposed legislation. The deeming provision as it applies to the future economic loss serves only to further reduce incomes of workers who have not returned to phantom jobs and continues to be a punitive measure which hurts more injured construction workers than it benefits.

With regard to experience rating, there need to be stronger provisions which penalize employers who fail to fulfil their obligations to re-employ injured workers fully. In fact, employers who encourage their employees to collect private disability insurance and not file Workers' Compensation Board claims are doing so at an alarming rate. Many employers are exploiting loopholes in the legislation to avoid higher assessments and rely on the board's slow administration process and action to levy penalties.

The current funding ratios of 37% would be better addressed if these employers paid their fair share. Section 103.1 of the proposed changes is a move in the right direction in terms of closing existing loopholes. Strict enforcement of the experience and merit rating programs, however, will be crucial if the programs are to be truly effective. I trust these matters will be the focus of the royal commission and I look forward to discussing them in the future so that labour, management, and government can work together in developing a fair compensation system, one which more accurately reflects the needs of the construction industry and our society as a whole. We have attached an appendix which details our position concerning these and other changes contained in Bill 165.

Thank you for this opportunity to present the view of our members and the leadership of Local 793. Unfortunately, because of last-minute notice received about today's hearing, Mr Ken Lew from our legal department, who represents our members at the WCB, was not available to be here today to answer any technical questions. None the less, I look forward to responding to any general questions you may have.

1510

Mr David Johnson: Thank you very much for the deputation. I was just thinking about page 6, towards the end, where you indicate that, "Many employers are exploiting loopholes in the legislation to avoid higher assessments" and the "slow administrative process," I guess.

I don't know to what extent that's true, but from deputations I've heard, it's occurring. What's also occurring is that taxpayers are avoiding paying taxes. There's a huge underground economy. The question is, why are people doing this? The answer is, because they're being taxed out of existence. They can't afford it.

Businesses, particularly small businesses, I guess, are in many cases just hanging on by their fingernails. Any tax, such as workers' compensation and the payroll tax, for example, in some cases would push them right over the edge. Then not only do they go out of existence, but all of those people who are working for them are unemployed. That's the problem and that's the rationale we're hearing time and time again with regard to payroll taxes, with regard to the tax system in general. That's why this has occurred.

I wonder if that's the kind of message you've been getting, and if it is, don't you have some -- don't get me wrong. I'm not condoning it, but it's a fact of life and businesses are trying every way they can just to stay in business and to employ people.

Mr Kerr: We see it existing here in the Ottawa area and in eastern Ontario. Perhaps an example is a member who receives an injury, is called in to answer the phone for a week or two -- you know, maybe at that time it's not recognized as a major injury and later on it is -- and usually he's not back employed with the contractor.

Mr David Johnson: But I guess my question is, don't you recognize that maybe employers are not avoiding taxes and finding the loopholes in WC for some machiavellian purpose? It's because if they don't take advantage of every situation, they're gone. They're not competitive. In Ontario we're just taxing everybody out of existence.

Mr Kerr: My only problem with that is, I would hope that if they're avoiding that, they're not also avoiding spending money on safety precautions within their companies.

Mr Fletcher: Thank you for your presentation. I'm particularly interested in this part about how much in 1993 -- "$33 billion of construction work was performed in Ontario," a third more than any other province, or whatever, construction in Canada, which is great. I think Jobs Ontario Capital has a lot to do with that and I'm very pleased to be part of a government that introduced that program.

You do have some concerns. The Conservatives have been advocating that we should perhaps follow what New Brunswick is doing. Let me just ask you simply this as directly as possible: Should we be cutting benefits to injured workers to 80% of net pay for the first 39 weeks --

Interjection: Hammer the workers.

Mr Fletcher: -- for workers who are off the job for 40 weeks it goes to 85%, it limits stress claims and the three days which they've also been advocating, there's a 72-hour grace period where you can't file a claim.

Interjection: Mike the Knife.

Mr Fletcher: Are these things that we look at when we look at a fair compensation system?

Mr Kerr: Definitely not.

Mr Fletcher: Thank you.

Mr Waters: Let's go back and talk about funding. I always have a problem where I go back -- to me, what compensation was meant to do was indeed stop it so that employees could no longer sue their employer, to save their employer dollars. Right?

Mr Kerr: Yes.

Mr Waters: Therefore, the employer was to compensate employees for their loss of wages. What happens when an employee -- and we've just gone through a very tough time, a recession where people have been earning at a lot lower level than they traditionally would have. Now we're going back in the other swing and business is coming up. These people will never be compensated at the rate at which they would normally be working. Like students who lose an arm at age 15 in a corner store and their compensation for life is based on a minimum wage: Do you think that's fair?

Mr Kerr: No, I don't. We see the struggles here in Ottawa of our members on WCB.

Mr Waters: Then who should pay: the injured worker, society through the welfare program, or the employer who bought into compensation?

Mr Kerr: Maybe what we should be looking at is savings through prevention and education.

Mr Waters: You're absolutely right.

The Vice-Chair: Thank you very much. Mr Offer.

Mr Offer: You've acknowledged that the board is "struggling financially" -- you say this -- "and changes must be made to get the board back on its feet." The reason I bring that out is that it may sound strange but there's been a whole discussion around whether this thing called the unfunded liability is something that one should be concerned about or not concerned about. There are others who say, "Well, it's just something out in the future that isn't a real debt." I take it from your statement on page 5 that it is something that one really should be aware of and concerned with?

Mr Kerr: That's correct, yes.

Mr Offer: And I take it further that in dealing with this, you should not deal with that debt on the backs of the injured workers?

Mr Kerr: Correct.

Mr Offer: And I take it, further, that you feel that the implementation of the Friedland formula does in fact that?

Mr Kerr: Correct.

Mr Offer: And I take it that you would be opposed to the bill because it contains the Friedland formula?

Mr Kerr: I'm not opposed to the whole bill as it's written.

Mr Offer: I take it that you were opposed in an earlier bill to deeming, to the deeming provision? I think you mentioned that.

Mr Kerr: Yes.

Mr Offer: Do you view the implementation of the Friedland formula as in some strange way deeming injured workers to a pension that is not going to keep up with the potential inflation rate in the province?

Mr Kerr: Yes.

Mr Offer: And you're still in favour of the bill?

Mr Kerr: No, I didn't say I was in favour of the bill. I said we're in favour of certain aspects of the bill. We're not in favour of other aspects of the bill. I didn't say we support the bill.

Mr Offer: Thank you.

Mr Kerr: Maybe you misquoted me, but --

Mr Offer: No, I appreciate that.

Mr Kerr: There are portions that we are in favour of in Bill 165.

Mr Offer: Thank you.

The Vice-Chair: On behalf of this committee, I thank the International Union of Operating Engineers, Local 793, for their presentation to the committee.

1520

OTTAWA CONSTRUCTION ASSOCIATION

The Vice-Chair: I call our next presenters, from the Ottawa Construction Association. Good afternoon and welcome to the committee.

Mr Dan Greco: Thank you, Mr Chairman, members of the committee. I'm Dan Greco, the director of labour relations for the Ottawa Construction Association.

The Ottawa Construction Association represents the interests of approximately 900 construction and construction-related firms in the Ottawa area. We are a member organization of the Council of Ontario Construction Associations, also known as COCA, representatives of which appeared before this committee on August 25 in Toronto. We fully support the submissions made by COCA with regard to Bill 165.

Today we wish to emphasize two particular aspects which are of concern to our members as employers in the construction industry: experience rating for the construction industry and financial accountability of our workers' compensation system.

Turning first to experience rating, construction industry employers generally share a common dissatisfaction with Ontario's workers' compensation system as it exists today, with the exception of one aspect of the system. The CAD-7 experience rating program for the construction industry is seen as the one positive element of the WCB scheme. More important than being popular with employers is the fact that CAD-7 works. Since CAD-7 became fully implemented in the construction industry in 1987, the industry's accident frequency rate has been reduced by more than 60%. This is no coincidence. With CAD-7 as one of the key factors behind this reduction, it is fair to say that the program has been an unqualified success. Proposed amendments to section 103.1 of the Workers' Compensation Act would tamper with and dilute the success of this program.

Bill 165 proposes to give the board broad powers to vary the amount of rebate or surcharge established under an experience rating program based on the employer's practices and programs in the areas of health and safety, vocational rehabilitation or return to work, or based on "such other matters as the board considers appropriate."

Employer requirements with regard to health and safety, voc rehab and return-to-work practices and programs are already dealt with in the Occupational Health and Safety Act and elsewhere in the Workers' Compensation Act. Penalties are already set out for failure to implement proper practices and programs. Consequently, it is troublesome to think that these subjective considerations could also play a part in experience rating.

Even more troublesome is the broad discretion that the board would have through the catch-all provision to vary the amount of a refund or surcharge. This introduces the ultimate subjectivity to a program which has achieved unqualified success based only on the objective criteria of work injury frequency and accident cost.

An experience rating program should be nothing more than a program that rates experience. While this sounds too simple, it is worthwhile reflecting on the purpose for which experience rating programs were introduced. The primary goal of experience rating programs must be the reduction of frequency and cost of workplace injuries. This goal is achieved by providing the employer with the incentive of an opportunity for a meaningful return. The incentive is established through an assessment system which must be perceived by the employer as being predictable and equitable.

To date, CAD-7 has achieved this goal by providing the incentive for return through a predictable and equitable assessment system. Bill 165 threatens to introduce a subjective element to the assessment system, potentially diminishing or eliminating its predictability and equity and thereby putting the incentive in doubt.

By being predictable and equitable, experience rating has given employers some control over the substantial costs of workers' compensation. Experience rating gives employers the message that if they reduce accidents and bring workers back to work, they will reduce their costs. The real potential for reduced costs through rebates justifies the significant expenditures made on safety planning, safety training, the hiring of safety personnel and other safety initiatives. Once again, it sounds too simple, but CAD-7 works because it is a simple program. It should be left that way.

Turning to financial accountability, it's difficult to know where to begin in addressing the financial woes of our workers' compensation system. COCA and numerous other presenters have already appeared before this committee and revisited important figures such as unfunded liability, which we've heard about today, cost per employee, cost per claim, administrative expenses as a percentage of revenue, and assessment rates.

While we continue to be alarmed by these figures, what we find most alarming is the one thing they all have in common. From bad to worse, all of these numbers keep moving in the same direction, and despite the ongoing outcry from groups on all sides of the equation, very little is being done to change this situation. In particular, Bill 165 offers little in the way of real improvement of the board's financial predicament. The lack of commitment to improve the board's lot financially is reflected in the fact that financial accountability is not even referenced in the proposed purpose clause.

The one attempt at a cost-saving measure contained in the bill can best be described as tinkering, as it is largely offset by exceptions. Tinkering with the system is not the answer. Ontario's workers' compensation system requires fundamental reform.

Turning to conclusions and in summary, we would submit that the proposed legislation does not properly address the important issue of financial accountability and that experience rating programs should not be undermined by the introduction of subjective considerations. We support the position advanced by the Council of Ontario Construction Associations that Bill 165 must be withdrawn. We recommend that an appropriate alternative to Bill 165 be developed through meaningful consultation with all stakeholders.

Mr Waters: I wanted to ask this of someone earlier on in the construction industry, and I didn't think it was a fair question to ask of an individual construction person, but you represent the association?

Mr Greco: Yes.

Mr Waters: The question is that first off you're assessed. The assessment, I think the other gentleman said, in his particular case was $7 or something like this; $7.65 I think was his rate. Then, if you're a good employer, you get a rebate.

Mr Greco: Correct.

Mr Waters: In your industry, across the industry, can you give us some idea -- 5%, 2%, 10% -- what the rebate is?

Mr Greco: I don't have the exact figures because there are rebates and there are surcharges throughout the industry.

Mr Waters: Okay, and that's right. So if you're a good employer and you're getting a rebate, you're not paying $7.65. You're paying somewhat less.

Mr Greco: That's correct.

Mr Waters: Where do you get that money back from, a lot of that money? Where does that come from?

Mr Greco: Where does the money come from on the rebate?

Mr Waters: Yes. From the whole program.

Mr Greco: That's right.

Mr Waters: Because it's exceeded the surcharge; like, it's exceeded the pot that it was to come out of. So obviously I think it must come out of the general revenue of WCB, doesn't it?

Mr Greco: Well --

Mr Waters: And if it does, sir, does that not add to the unfunded liability?

Mr Greco: Perhaps it does. I believe that's taken into account when the assessment rates are established.

Mr Waters: No, it isn't. I don't believe it is.

Mr Greco: I also believe that the rebate and surcharge system was established to be revenue-neutral so that rebates are offset by surcharges.

Mr Waters: Originally it was.

Mr Greco: Whether they are now or not is another story.

Mr Waters: Originally it was, but I believe we've already received figures that say that the rebates have now exceeded the surcharge system and are now coming out of general revenue, which means that it's adding to the unfunded liability of WCB.

Mr Greco: I agree with you, and my intention here is not to tell you that we should add to the unfunded liability by giving more rebates. If there are some adjustments to be made, it should be looked at, the figures and the calculations, but not by adding subjective considerations to the system.

Mr Waters: Indeed, some of these employers have come forward and have rebates in their corporations of several million dollars and they're saying, "We're paying this price," but they forget to tell us that when they're rebated several million dollars, that is not really the price they're paying.

I guess I get a bit concerned that no one's really -- like, how do we get to the actual figure so that we know what people pay?

Mr Greco: Well, please be reminded as well that most often the money that's received by rebate is put back into safety programs and into hiring safety personnel.

Mrs Joan M. Fawcett (Northumberland): Right.

Mr Waters: Yes, it goes back in, but now it has outstripped the other so now it's coming out of somewhere else. I guess the problem is that it -- I don't know. You're saying on one hand that you've got to do something about the unfunded liability, but then everybody wants the rebate and therefore you're increasing the unfunded liability.

Mr Greco: I'm not saying everyone wants a rebate. Everyone would love to have the rebate, but that's not the way it works. You have to perform to get the rebate. The way the system is set up now, if you perform, you get the rebate.

Mr Offer: I want to just carry on in that line. I find it absolutely amazing, the point that Mr Waters has brought forward. I think we've heard from the government representative that the rebates over the surcharges are now something in the area of $150 million. In other words, the board is giving back to employers $150 million based on the current rating system. And the reason they're doing that is because there are good employers, there aren't the accidents.

The government is now changing the only thing in the act that works. They are changing the rating system. They are going to be changing the whole situation. They are going to be adding subjective measures, and we know the reason they're going to do that. They want to cut back on the amount of money they are giving good employers in cases where there haven't been any accidents. We hear day in and day out: "You really want to deal with the financial situation of the board? Cut down on the accidents. That's your biggest saving. If there isn't an accident, there isn't going to be an assessment and a growth in the unfunded liability."

1530

Here we have in the act, under the NEER and CAD-7, a situation which works. The government acknowledges that it works. The good employers are receiving back some of their assessment, and they are receiving some of that money back because they are doing the things that I would have thought we were all in favour of: making the workplace safer. The government in this bill is changing that, and I have no doubt it is to scoop the loot.

I would like just to suggest to you if you could possibly express to the committee what this change might mean to your association. I'm still awaiting the government's response to what sub (d) means in the rating system. What does "such other matters as the board considers appropriate" mean?

Thank you very much for your presentation, and thank you, Mr Waters, for your questions.

Mr Greco: I'm not sure that's a question, but thank you.

Mr Offer: It just drives you nuts.

Mr Leo Jordan (Lanark-Renfrew): Thank you for your excellent presentation this afternoon. I would like to follow up a little bit also on the incentives that the employer is receiving for having a safe workplace.

I've listened to two union representatives here this afternoon stress that the one way to cut the cost is to cut out the accidents, and here we have an incentive program that it's quite obvious the government wants to eat away at and eventually do away with, that allows the employer to invest some money in staff and other safety measures on the job with the employees so that he ends up with, if not no accidents, then definitely fewer accidents, and receives a rebate that helps him reinvest in safety measures on the job. Again I would ask, how do you see that affecting the industry generally as we see it being implemented by this government?

Mr Greco: I think our previous speaker was one of our local business representatives from one of the local unions and he mentioned to the committee that we live in a dollar-and-cents world. I would agree with that comment. In a dollar-and-cents world there's no better way to reduce accidents than to provide a dollar-and-cents incentive to the employers. That's what CAD-7 currently does, very simply, and the bill proposes to muddy those waters and to put that system in doubt.

Mr Jordan: In your brief here you've presented several good ideas and you've very clearly identified the debt problem that's facing you as an employer with WCB. Do you have some suggestions for this committee? Before all the nice things that we'd like to do for the employee are taken into consideration, somehow we have to get our books in order so we have some money to keep the whole dang thing functional. So would you offer some suggestions to us in the government on how we're going to deal with this debt and how we're going to maintain a reasonable return to the employee? I understand at the present time he's getting 90% of his net income and it's going to be indexed so that eventually, in fact, the employee could be taking home more pay than he would have had he been able to be on the job.

Mr Greco: That's certainly one problem, and that has to be stopped. But I think the best suggestion I can make to the committee is that PLMAC had a group together. They spent thousands of hours looking at the system. They made many recommendations. For example, with regard to future economic loss, I believe they made something like 14 recommendations. I would suggest to the committee and to the government that they listen to these people; that when they put a committee together to provide recommendations, they give them their ear and that they do something about the recommendations and they don't put together a bill that completely ignores a group like that.

The Vice-Chair: I thank the Ottawa Construction Association for their presentation.

In order to help the members get through this afternoon, this committee will stand recessed for 10 minutes.

The committee recessed from 1536 to 1547.

FEDERAL EMPLOYERS TRANSPORTATION AND COMMUNICATIONS ORGANIZATION

The Vice-Chair: Our next presenters are from the Federal Employers Transportation and Communications Organization. Good afternoon and welcome to the committee.

Dr Roger Rickwood: Thank you for allowing us to attend today and give presentation on behalf of the Federal Employers Transportation and Communications Organization, otherwise known as FETCO.

I have here with me today Mr Curtis McDonnell, the solicitor with Canadian National Railways; Mr Miguel Bruno, with Canadian Airlines International Ltd; and Mr Ted Robbins from Air Canada.

We are going to go through our brief picking out parts of it, because we don't want to try and repeat a lot of material that has been covered elsewhere. You've seen some of this material in other formats. We want to try to focus in on things that we particularly have a concern in.

Let me read just for the first couple of pages from the brief and then we'll jump to parts that we think we want to highlight. It doesn't mean that anything we don't highlight isn't important; it just means that we want to focus on a few points.

FETCO, through the business steering committee, has been supporting the business caucus of the Premier's Labour-Management Advisory Committee, which the Premier of Ontario asked for advice on how the government could reform the Ontario compensation system.

The Premier asked business and labour to work together to produce a new system which will pay injured workers fairly and meet the test of being financially sound. We believe that Bill 165 fails to meet that objective.

FETCO is an alliance of major transportation and communication companies with operations in Ontario and across Canada. It regularly expresses employer community views on workers' compensation issues. Members of FETCO are set out in schedule A attached to this submission. FETCO members come under federal labour, human rights, employment standards and health and safety legislation but receive workers' compensation services through provincial workers' compensation boards. FETCO includes both public and private sector employers. FETCO employers are mainly in schedule 2, but many of our subsidiaries are in schedule 1.

FETCO is deeply committed to reforming the Ontario worker's compensation system in order to maintain the costs of the system at a level employers can afford to compensate workers reasonably and to ensure security of future benefits for workers.

The members of FETCO support the principles of a no-fault program which provides reasonable levels of income security and rehabilitation to workers who sustain legitimate injury in the workplace and protection from legal proceedings for individual workers and employers. FETCO is seeking real fairness and fiscal responsibility in this system.

This submission is a summary of our concerns with both the reform process and Bill 165. You will note that our brief adopts some of the language of the business steering committee brief. FETCO also commends to your reading a copy of the clause-by-clause analysis prepared by the office of the employer adviser which we have found most useful in preparing our brief. If you will see appendix B, you will find that clause-by-clause analysis. Incidentally, I am the chairman of the advisory committee to the office of the employer adviser, and FETCO is a major actor in the OEA system.

Bill 165 is not a product of the bipartite group from which the government asked and received advice. This despite the fact that the PLMAC process produced an accord that had substantial support in both the labour and employer communities. The government's solution, in the form of Bill 165, is a clear breach of faith against the very group from which the Premier sought advice.

The bill as presently drafted will not address the fiscal crisis of the system nor the lack of financial responsibility or accountability that exists. Bill 165 does nothing to restore the lack of confidence that all stakeholders have in the system.

FETCO, in conjunction with the business steering committee, the Canadian Manufacturers' Association, the Council of Ontario Construction Associations, the Retail Council of Canada, the Canadian Federation of Independent Business, the Employers' Advocacy Council and the Employers' Council on Workers' Compensation, does not support Bill 165 and asks that it be withdrawn.

We could go through a long description of the reform process. You've heard that before. It has been a tortuous process. It has taken over a year to get to where we are today. I think you're well aware of the step-by-step that happened.

One comment I would make is that I personally, and I'm sure my FETCO colleagues, note a certain lack of incorporation into this document of recommendations made by the task force on occupational disease. This document was given over a year ago to the government and the only indications of action on this document we see and hear are the changing of names and one reference to funding. We ask you to inquire of the government as to when the recommendations from the task force will be put into legislative format.

Moving on through the government response section, I will not go into all the financial issues on the next page. We'll go over to the purpose clause, which is found on page 9, item 2, and I will ask my colleague Ted Robbins from Air Canada to comment on it briefly.

Mr Ted Robbins: Mr Vice-Chairman and members of the committee, I appear here not only as a member of FETCO but as a concerned representative of a major Canadian air transportation company which is federally regulated. I would like to enunciate to you that portion of our FETCO brief which deals with the purposes clause of the amendment.

One of the main components of the purposes clause of the accord reached by the Premier's task force was cost and the need to enshrine cost and financial responsibility into the act and to ensure that it applied not only to the WCB board of directors but to the crown and all the agencies of the crown. The present draft of Bill 165 is flawed in that it does not require cost to be taken into account when new policies are considered by the government or the board.

We would encourage this committee to initiate changes to the purposes clause of this bill. These changes should truly reflect the views of the Premier's task force and ensure that financial responsibility and control of cost are enshrined in the compensation system, and not just simply from an administrative or a governance perspective.

We do not believe that simply requiring the board of directors to act in a financially responsible manner, as set out in section 12 of the new bill, is sufficient. To ensure that overall cost control and financial responsibility will occur, we believe this entire section should be amended.

Dr Rickwood: We're now going to move to page 15, item 7, which is government authority to impose policy. I'll ask Curtis McDonnell from Canadian National to speak to that.

Mr Curtis McDonnell: I'd like to thank you, Mr Chairman, and members of this committee for the opportunity to permit us to come before you today and speak to you about our concerns dealing with this legislation to amend the Workers' Compensation Act. The area that I'd like to address you on is actually section 16 of the bill, amending section 65 of the act.

As you're aware, the Workers' Compensation Board is a body corporate. It has statutory powers and duties. It has a board of directors, officers and employees that the board is empowered to hire. It has been in existence for about 80 years now, and during that period of time it has enjoyed and has been at arm's length from the governments of the day as it carried out its duties.

This provision in the act which empowers the government of the day to dictate policy to the board is a dramatic and extraordinary departure from the traditional arm's-length relationship that the board has enjoyed and worked under with the governments of the day. We really do feel that this ends up putting the whole policymaking issue out of the hands of the board, where it is statutorily authorized to be done, and actually into the cabinet; not just into the Legislature but into the cabinet.

From our perspective, one of the problems we see is that it's going to compound the confusion that already exists about who really is in charge of policymaking. From our perspective as employers, there really is confusion out there because we see on a daily basis what appears to be almost a duel between the board, which from our perspective has the statutory authority to make and enforce policy, and the Workers' Compensation Appeals Tribunal, which has a statutory authority to review decisions of the board making policy. It is confusing and it is unsettling.

One of the problems that we also see is that WCAT has no statutory mandate to be fiscally aware of how its decisions impact on the finances of the board or the employers of the province. So as it tries to make policy and dictate it to the board, we now have the government making policy and dictating it to the board. We have a board that is basically going to be very, very difficult to operate. It's difficult legislation as it is. There's no question about it. The people at the board who try to carry out their duties will be doubly confused.

Accordingly, it's our recommendation, if we can put it that way, that this committee recommend to the government that this section be amended and actually deleted. If the government is going to have a compensation board, it should empower it by legislation to carry out the policies that it sees fit, to carry out the purposes for which the board has been created. But to have the government coming along and being empowered to involve itself in policymaking simply adds to the confusion.

It appears from the legislation, when you look at section 65.1, that it's for a short period of time, but I would suggest to you that when you look at 65.2, in fact the memorandum of understanding is going to allow the policy dictation process to go on for at least five years or more, because the memorandum of understanding which is legislated into existence provides in paragraph 3, "Matters of government policy that the board shall respect in the conduct of its affairs." That memorandum would appear to be in effect for at least five years after the date of coming into force.

I want to say more, but I think I should end there. Thank you very much for your time.

1600

Dr Rickwood: We would like to deal with the return-to-work issue, which is a major concern to the federal employers. We employ some 400,000 people across Canada, about 200,000 in the province of Ontario -- 60% of our workforce is unionized.

I'll go to page 13 of the brief at item 6, "Return To Work." The re-employment provisions of Bill 165 are inconsistent with the accord and do not reflect the understanding reached by business and labour on this very complex issue. The accord recommended that the current provisions of the act be enforced by the WCB and that positive initiatives be pursued to encourage and promote re-employment. Bill 165 distorts the spirit of the agreement.

The government has failed to provide any explanation or legal opinion as to why the wording of the current act does not provide the WCB with the necessary authority to enforce the re-employment obligations. We understand the government has obtained a legal opinion on this issue but, despite requests, has failed to provide it to stakeholders.

The mandatory mediation provisions in section 21 of Bill 165 were not recommended or agreed to in the accord and will impose yet more bureaucracy in an already overly complex system. Through these provisions, the bill is moving the WCB away from the role of being an adjudicative body to an agency that is focusing on return to work and mediation as its primary function. This was not part of the PLMAC accord nor is it part of the board's historical mandate. The WCB's primary mandate is to determine entitlement to benefits and services under the act and then to provide these services, not the other way around. It is not in the WCB mandate, nor was it in the accord, that the WCB's vocational rehabilitation mandate change from one of rehabilitating the worker to the point of employability to securing employment for the worker, which the government appears to be attempting to achieve in this bill.

The penalties proposed for employers who do not participate in WCB vocational rehabilitation programs were not part of the accord either, yet the government proposed them for its own reasons. The accord attempted to promote positive incentives and cooperation as a way of improving the effectiveness of these programs, not imposing penalties on employers for non-cooperation in programs that are of questionable value and effectiveness.

The bill does nothing to address the problems with the shortage of services available to employers, the regional disparities that exist in availability of medical and vocational rehab services or the lack of internal services and programs within the WCB to assist employers in developing effective return-to-work programs. There is also nothing in the bill which encourages the worker to cooperate in a voc rehab program. This places the employer in a very difficult position where the worker is not cooperative.

Bill 165, as presently written, will in fact make returning to work for injured employees more difficult, more time-consuming and more costly. This issue has already been put before you in a brief by Dr Michel Lacerte at your London hearings on August 29. We have attached that brief -- see appendix C -- because we find the text very useful in getting the idea across that we must have effective return-to-work programs, not legalized, penalty-based return-to-work schemes.

Subsections 51(2) and (3) require for the first time that doctors must have the consent of the injured employee before they can transmit a fitness assessment form to the employer. This is in contradiction to our obligations, as employers, under the Ontario Occupational Health and Safety Act and the Canada Labour Code, to provide a safe workplace. If we cannot assure ourselves the worker is fit to work, we cannot meet our safety obligations to our workers, to co-workers and to our public and customers. We do not need diagnostic information on the fitness assessment form. We need only restrictions. We have other means under the act to obtain medical information to determine work-relatedness, although we are not happy with the way that WCAT administers section 23, which deals in medical information. Further, the cost savings estimated by the government are not supported with objective data and are purely soft estimates.

I know my time is running out here -- three minutes left. I would just point out that in the document Dr Lacerte has prepared and tabled in London he refers to challenges linked to the collective agreement. We are concerned at FETCO that this aspect of dealing with the collective agreement has not been dealt with in this legislation.

In Toronto, Mr David Brady brought to your attention the Supreme Court of Canada decision by the name of Renaud, which puts an equal obligation on the employer and the union to end discrimination. We think that the collective agreement provisions should be looked at in the light of Renaud.

That's the end of our submission. We thank you very much for the opportunity to come to you. I think this is a tremendous process. Only one comment I would have on it: The TV cameras are not on, and in the communication industry, which we represent, we think all of Ontario should get a chance to see what we're saying here in Ottawa, in London and Sault Ste Marie. So, please, when you go back to Queen's Park, get the camera turned on.

The Vice-Chair: Thank you. A brief comment or question. Ms Murdock.

Ms Murdock: Mr McDonnell, it's your comments I'm going to address, although I could address any one of you. We just have to sit down and talk.

Actually, it's not unprecedented. It already exists in OTAB and for Hydro, and there is no one-year time limit in both of those bills. I would have thought it would be understandable to have a transition period where a board of directors consisting of labour and management would be able to sit down over a period of time and work out protocols of how they're going to work if consensus can't be reached on certain issues and so on. The experience in BC, when they set up their joint board, was that it took over a year for their board to work out those kinds of protocols. In the meantime, somebody has to be running the show so that you have that one-year period. That's why it was put in and I would have thought that would have been understood. The other thing is the MOU --

The Vice-Chair: That's all for an introduction. Let me just thank you.

Ms Murdock: Okay.

Mrs O'Neill: Thank you for being so clear about this not being the accord, and that accord is not an old document that you were very involved in. It's very important that you talked about the changing roles, mandates and powers of the WCB. I don't think too many presenters have brought that forward as explicitly as you have, and the shortages of services in return-to-work programs were all going to recreate those, or create them, I guess.

I would just like to ask you one question. You must have been surprised when you saw Bill 165, especially having been involved in the accord. Where do we go from here? What is your suggestion? Bill 165 can no doubt pass with the government's majority. Do you have any faith that the amendments that are proposed will be helpful or that the royal commission process will iron out some of these very serious things you've brought to our attention?

Dr Rickwood: As briefly as I can, we have asked that the bill be withdrawn because we think the bill is fundamentally flawed. It does not mean that this committee cannot recommend constructive amendments that the government could take back to another venue. The venue could be the royal commission, but what we really believe is that the best way to deal with the issue is to get the five major employer associations in this province to sit down with the five major union coalitions in this province. This is how you solve problems. You get people who are knowledgeable on the issue who know each point and can work it out.

Unfortunately, that was not the process the Premier chose to do. We went along with the process but we believe this is the best way to do it. A royal commission, as presently configured under the chair, who we hear is going to be the chair, will not give you that kind of an outcome.

Mr Carr: On that same point, thank you for the presentation. It's obviously very comprehensive and in great detail, which should help with some of the amendments. I want to follow up with what Yvonne said because I want to be very clear. We've heard the government, and I think even today we heard unions; I think it was the UFCW that came in today and said this bill reflects the agreement that was put together. I want to hear from you very definitely -- I know it's similar to Yvonne's question as well -- as far as you're concerned, this bill does not reflect the agreement?

Dr Rickwood: No, it does not.

Mr Carr: Okay. Thank you very much. One other thing too -- boy, that's straight and to the point.

The Vice-Chair: See if you can do it in like 10 seconds.

Mr Carr: I can't say anything, but good luck and all the best.

Dr Rickwood: Thank you very much.

The Vice-Chair: I thank the Federal Employers Transportation and Communications Organization for bringing us its presentation this afternoon.

1610

STORMONT, DUNDAS AND GLENGARRY INJURED WORKERS RESOURCE CENTRE

The Vice-Chair: I call our next presenters, from the Stormont, Dundas and Glengarry Injured Workers Resource Centre. Good afternoon and welcome.

Mr Sydney Gardiner: Mr Chairman, members of the standing committee, fellow injured workers, members of the House, members of the media and fellow taxpayers, on behalf of the Stormont, Dundas and Glengarry injured workers and indeed all injured workers, I thank you for the opportunity to present this brief. My name is Sydney Gardiner. I have been trained to level 3 by the OFL as a worker representative to protect injured workers and ensure their rights under the Workers' Compensation Act. I use the word "protect" as for the most part injured workers need protection against employer badgering and mounds of forms, policies and procedures which are foreign to most injured workers and extremely intimidating.

There are a number of issues which I would like to address. The first one is administration. Although it is impossible to deal with this problem in the short time allotted, at least it's better than the 12-question paper sent to me recently. I've got a little more time and I thank you for that.

I question the amount of training received by the claims adjudication department, as unions, injured workers and their representatives have for years complained about how long it takes the WCB to process claims and award benefits. How often are injured workers and their families forced to apply for social benefits, social assistance, when claims are not resolved for months and sometimes years? It is my understanding that WCB adjudicators are often responsible for as many as 150 cases at one time, which certainly must and indeed do account for untold delays in processing claims.

Board personnel have said, and it is my experience, that the current level of adjudicator training is not sufficient to equip adjudicators with the proper skills to interpret the WCB act. Adjudicators are considered entry-level personnel, yet these inexperienced workers are making the most important decisions.

Since the real decision-makers are the decision review specialists, I would make two recommendations:

(1) That adjudicators spend a minimum of three months working directly with decision review specialists as part of their training;

(2) That the panel seriously consider eliminating initial adjudication personnel, as this is a duplication of work, since most adjudication decisions are overturned by decision review specialists.

These two steps would eliminate inefficiency and duplication of work.

I would like to acknowledge also that the responsibility for the inappropriate training of adjudicators lies squarely on the shoulders of WCB's upper management and is no fault of the adjudicators.

My next issue deals with initial paper decisions. It has been my experience that most initial denials of claims stem from the fact that employers' files are used to form those negative decisions. More often than not, the employee is not contacted for his input and the employee's family doctor's testimony and medical specialist's comments about the injury are completely ignored.

The denial decision is reached by a panel of experts including medical specialists. The injured worker is then forced to appeal, which usually results in the board's decision to overturn the initial decision. This normally happens at the hearings level, where all medical information, including the worker's doctors, opinions, witnesses and the injured worker can present the truth. Again, the original denial causes hardship to the injured worker and his family, it causes undue delay to claims being processed and is more duplication of work at lower levels. There begins to emerge a sense that a paper empire has been built up over the years.

I offer my opinion that the present system needs a complete restructuring to eliminate inefficiency and duplication, which in turn will reduce costs. There is presently an eight-month backlog of hearings outstanding at WCB.

Next, I would implore you that the standing committee ensure that the new health and safety certification act be fully enforced.

For the last two to three years we have been inundated by employer propaganda, which has been spoonfed to the media, about the woes of the ever-growing burden of the cost of maintaining the WCB programs. The media have bombarded us with the WCB deficit (unfunded liabilities) and information again made available by employers, yet many refuse to take the responsibility for:

(1) Training their new employees how to use industrial equipment, therefore reducing accidents;

(2) Refusing to deal with the new health and safety certification program and, instead, opting out for the "Stay alive till 95" slogan;

(3) Refusing to allow employee input when it comes to health and safety issues; and

(4) Not upholding and abiding by present laws in place regarding legislated programs such as WHMIS, workplace hazardous materials information system.

I recently asked a number of young workers in a number of places what WHMIS meant, and the response from one was that it might be some type of women's movement. That's how much they know. Most others didn't know, and some thought it had something to do with chemicals. So much for training.

It becomes obvious that health and safety is totally disregarded by many employers, not all. When are legislators of this province of Ontario going to enforce the existing health and safety regulations? What is it going to take to get through to the employers that if there is a 20%, 30%, 40% or, God forbid, 50% reduction in accidents in the workplace, their costs will be reduced to almost as much and that maybe the $11 billion -- and that was tongue in cheek; I'm sorry about that -- unfunded liability would be reduced to nil, and "nil" is a word I put in there because somebody's had it coming.

If we reduce accidents, we will reduce costs. If we enforce existing laws, we then reduce accidents and again we reduce costs. Is this too simple for many employers to understand?

I must beg, if need be, that this standing committee help to and indeed fight to ensure injured workers are not discriminated against because of their accident. Legislation must quickly be introduced that will protect injured workers from the indignity of having to beg for a job after they are completely rehabilitated. Legislation must force original employers from the accident site to re-employ the injured workers. Legislation must also include complete confidentiality of the worker's case. Legislation must include that the injured worker be completely retrained to do other types of work if he or she cannot return to his or her original employment because of his or her injury.

NAFTA and the American influence, which is growing in Canada, make it imperative that the above issues are legislated to protect injured workers' rights. Witness that there are companies in the computer information highways existing now which pay $50 to the US workers' compensation and then they sell the information to prospective employers. Needless to say, the employees who have used workers' compensation or have used sickness insurance, who are perceived as possibly having any kind of disability, or sickness, for that matter, do not get hired. This is direct discrimination and completely disregards human rights.

Legislation dealing with the above issues could be simply explained to some employers as recycling. In Ontario, we have a blue box recycling program for our garbage. Surely we should be responsible enough to recycle our injured workers and give them back their dignity. We must examine the retraining programs offered to injured workers. It has been my experience that courses which are worthwhile and would provide the injured worker a good living are ignored. Time and time again, workers who have had good-paying jobs prior to their injury are steered in the direction of gas pump attendants, and we only have so many gas pumps in Cornwall. Once again, I blame WCB's upper management for poor training programs.

With regard to the royal commission, I am totally in agreement that it be set up as soon as possible. It is obvious that there is a need for formal efforts being made to review the ongoing problems. Over the years, persistent problems have only been resolved as a direct result of persistent complaints. It is my understanding that a royal commission will review the WCB of Ontario.

Over the past nine years of change, review, selection of qualified individuals to participate in a task force or other provincial inquiry groups, not one has been included for eastern Ontario. I guess Ontario, again, ends in Kingston.

I would formally request that Mr Fred Empey, chairman of the Local 212 compensation committee, be considered as an invaluable member of your task force. Mr Empey is one of the most knowledgeable representatives in eastern Ontario who would contribute immensely to any task force dealing with delivery of service, policies and procedures, delivery of service through integrated services and bureaucracy which needs serious review. Mr Empey's 25 years' experience would be a positive move.

Hopefully, Bill 165 will eliminate some of the hardships and indignities -- with some changes; I have to add that, please -- suffered by injured workers in Ontario. Can we be proud of our discrimination and unfair labour practices levelled at our disabled workers? Should we feel compassion for those whose families have been destroyed? Should we feel compassion for those who've lost their homes, compassion for those who have attempted suicide, or those who have succeeded? I've dealt with some of these people, so I know what I'm talking about here. Should we continue to ignore the causes and responsibility for those whose lives have been destroyed by an accident?

1620

Let's in Ontario be leaders in progressive laws and in legislation which will protect everyone. Let us not accept the fact that 800 workers in Canada die in work-related accidents each year. Let's show leadership in Ontario and work towards a zero death rate and zero deficit. Let us not try to erase our deficits by eroding the benefits of the poorest citizens, who are the least able to protect themselves, the injured workers.

I cannot in good conscience collaborate with any ideology that unemploys injured workers, degrades, punishes, oppresses, exploits and dehumanizes men and women, not only in their workplace. Instead, I want to affirm my opposition and resistance to it.

In conclusion, I would ask the standing committee to report back to the legislators that Ontario look seriously at universal WCB coverage. There are many institutions which lobbied successfully to be exempt from coverage: banks, funeral homes, worm pickers, taxi drivers. Recognize that statistics show 20,000-plus small businesses are not registered with workers' compensation -- 700,000 workers. There's some money there. The Ontario government should enact legislation to cover every worker in our province. Furthermore, when a business sets up in Ontario, when it applies for work permits, it should automatically be registered with Ontario's Workers' Compensation Board. Everyone would then pay their fair share and reduce the unfunded liability.

Finally, the standing committee here today must take full responsibility for the information given to you by these people, by myself, by everyone. Injured workers' dignities and human rights issues now rest with you. We must, as givers of information, trust that the committee will forward the truth to the legislators, who will deal fairly with injured workers of Ontario. Please do not, as in the past, collect your paycheques and then ignore the work which must be done to ensure that this was not just an exercise in futility.

On behalf of the injured workers of SD&G, I thank you for allowing me the opportunity to express our views. Please understand that what has been expressed today is just a minuscule part of the issues which need resolving and that I and the SD&G injured workers are available at any time to help you wherever we can.

The Vice-Chair: Thank you. About a minute and a half each.

Mr David Johnson: I thank you very much for your very forceful, powerful deputation. It's hard to know exactly where to begin, but right off the bat, you mentioned the adjudicators. We had a deputation yesterday before us in Sault Ste Marie indicating in much the same manner about the adjudicators, that they really weren't -- well, I think she used the word they didn't know diddly-squat or something like that. At any rate, I just wondered if your experience in that regard is rather uniform. I don't how many of the adjudicators you've dealt with, but is this a common situation?

Mr Gardiner: To me, it is, yes. The people I've dealt with, what I've dealt with, there's a lot of confusion.

Mr David Johnson: Again, you put the problem here in terms of not having enough training, I guess.

Mr Gardiner: Definitely.

Mr David Johnson: You put it on the WCB management in terms of not --

Mr Gardiner: Yes, absolutely. It's their responsibility. It's what they're getting paid for.

Mr David Johnson: All right. Now, in terms of the funding, I guess you make it clear that the money for the improvements you're looking for -- you're looking for universal WCB coverage, which more than likely would be extremely expensive, and you're saying the money should come from those institutions not presently in the plan.

Mr Gardiner: Some of the money.

Mr David Johnson: Is it your view that this is where all the money would come from or --

Mr Gardiner: No, sir, but it would help.

Mr David Johnson: Where else would the money come from?

Mr Gardiner: Well, the money would come from investment losses that are really substantial, and the new castle in Toronto, which shouldn't have been built to start with. That's where a lot of the money has gone.

Mr David Johnson: Yes. That's unfortunate. That's where the money's gone, but where would it come from now?

Mr Gardiner: Partially from these people, and partially, as you can see in my brief, if there's a reduction of accidents, definitely the payout will be a lot lower.

Mr Waters: I guess everybody's preoccupied with cost, so we'll talk about it for a couple of minutes.

The Vice-Chair: No.

Mr Waters: How long then?

Mr Fletcher: A minute and a half.

Mr Waters: Okay, a minute and a half then.

You know, I came out of the labour movement, and I remember having employers in central Ontario say to me: "We're going to fight every case. We don't care whether the person loses their arm. It doesn't matter. We're going to fight it -- a back injury -- we're going to fight every case." Therefore, you have to have all this bureaucracy there to deal with all of those cases, because it doesn't matter whether it's a justified case or a questionable case, they want to fight it. Wouldn't that add to the unfunded liability, the cost?

Mr Gardiner: The bureaucracy you're talking about, according to what I put in my brief, should be reduced, because there's an awful lot of duplication in it. That's your job, to find out where it is and bring it apart, and there is duplication of work, because you see one or two people prior to getting to hearings, and when you get to hearings they completely disband whatever was done before. Why do you need the first two steps, and how many employees there? I'm not an advocate of people losing their jobs, but there should be a hell of a restructure, and some of them don't belong there. It needs to be changed. I've dealt with people, when we're talking about experience, who were photocopy people 10 weeks prior to adjudicating a case. That's my experience.

Mr Offer: Thank you for your presentation. We've heard, and I'm just using some round numbers, that on a percentage basis, 20% of the adjudicators basically get through 80% of the cases because they're pretty in and out types of situations. It's how you manage those last 20% of the cases which cause all the delays and the layer upon layer of appeals from adjudicator to decision review specialist and things of this nature.

I'm not critical, to be very frank, of the adjudicators, because I recognize they're people just trying to do their jobs. The concern that I have is, are we putting the least experienced individual at the front line when that first decision, which is so crucial, is made and should we really be taking a look at providing more training for adjudicators so they can deal with the most difficult of decisions in a way which is realistic and rational and helps you move with those cases? I'd like to get your thoughts on that.

Mr Gardiner: I have to agree with what you're saying, and it's in the brief. Again, we're talking about duplication. You have just reiterated something that I have in here, and that's what happens down there.

The Vice-Chair: On behalf of this committee, I'd like to thank the Stormont, Dundas and Glengarry Resource Centre for Injured Workers for its presentation this afternoon.

1630

LABOURERS' INTERNATIONAL UNION OF NORTH AMERICA

The Vice-Chair: I'd like to call forward our next presenters, from the Labourers' International Union of North America, Canadian tri-fund. Good afternoon and welcome to the committee.

Mr Daniel McCarthy: My name is Daniel McCarthy. I'm with the Labourers' International Union of North America, and the tri-fund represents our three major funds: health and safety, training and labour-management cooperation. Prior to this present position, I was in charge of the WCB cases for Local 183 in Toronto, and I also sat on the chairman's task force on service delivery.

I've provided you with some background information that I won't go into in detail, but it does give you a flavour for why construction has to be considered unique, how it is a significant employer in this province and that it requires specially adapted legislation. My remarks will obviously be from a construction perspective.

At page 3, the obligation to re-employ: Bill 162 left us with two hurdles that virtually exclude construction from re-employment. Section 54 needs amendments, and may I suggest it would be rather simple. In subsection 54(9), subsection (1), one year's continuous work, and subsection (16), 20 employees, need only to be added to the exemption of subsections (4) to (8), and then the construction regulations could be reviewed.

I gave you some facts on page 4 as to how these hurdles work, and I hope you appreciate that these data on page 4, the 41.2% of workers being with the same contractor in any given year, were just part of a major study which was funded by the federal and provincial governments. COCA's own statistics show that 75% of their member companies have between nine and 15 employees, so you're virtually excluding the construction industry with 20 employees.

I'd like to move on next to vocational rehabilitation services at page 5. First I would like to give a caution. There is a problem with putting in specific legislative amendments when it comes to how the board should operate. I'll give you an example. The last legislation put in a 45-day provision. The volume of cases was so high they couldn't do it. When I was on the task force, we found out the 45-day letter was generated by a computer. Now you're suggesting that the computer write both the employer and the worker. It was very unsuccessful. I don't think it should be repeated. Clearly, what you want is the resources that are necessary to the cases that need it, and when you put in blank legislation, the board has no option but to meet it in one way or another.

I would suggest that under vocational rehabilitation services, you can probably put them into three categories. The first are employer incentives: an onus to cooperate, the power of the board to judge that initiative and the establishment of those criteria in the experience rating. I think those are good and would recommend it. Where the employer is uncooperative, the workers should be advised of their rights under the Human Rights Code and that they should be launching an appeal immediately, because it takes a long time to get through that.

With regard to the section 53 amendments that are listed, I think it's important to understand that vocational rehabilitation can roughly be lumped into three categories. There are those cases where the worker is going to return to work with the accident employer. It may require some accommodation. It may require what they refer to as transitional work programs and some kind of interim period before they're able to do their full duties.

The second one is where the employer may find they've got alternative employment that meets the sustainable and available and all those case criteria. It's not the same job, but it's acceptable.

The third instance is where due to a number of factors it's quite clear the injured worker is not returning to the accident employer. In those cases, you're looking at returning towards an alternative career. If you keep those categories in mind, I think it's very important when you look at the recommendations and you look at the medical reporting.

In the construction industry, we have specific problems. Accommodation is difficult, if not impossible, on most building sites. Our members have a lot of barriers -- non-transferable skills, education, language -- and they require special treatment. They should not be denied retraining on the basis that they cannot duplicate their earnings profile quickly. And those who return to the accident employer face the obstacle of a lack of light or modified work. Transitional work programs are not impossible; they require innovative thinking and cooperation, and we should be doing more research in this area.

The problem we encounter because our industry is project-oriented and seasonal and cyclical is that very often a worker is returned at no wage loss. They may be doing a flag person's job, generally at $10 an hour, and being paid $20. They are kept till either the end of the project or the end of the season.

By the time they are laid off and come back looking for work, their file is history. They may never have recovered. They're denied retraining; they're denied rehabilitation. It's a huge problem in the construction industry. I think we have to start looking at recommendations where in order to overcome the seasonality and the project orientation, we start dealing with associations and not individual employers.

In terms of the medical reporting, when I gave you those three rough categories of vocational rehabilitation, if you look at section 51, which is poorly drafted, in conjunction with 63(2), where the medical report should be available is where some kind of transitional work program is being worked out where accommodations need to be made, not in the case where the employer is not going to rehire for valid reasons. They may be off being retrained for something else. The employer doesn't need input and they don't need access to the medical reports. Clearly, they never need access to the medical report; it simply needs to go to the vocation rehab counsellor, who can look at it, place a summary and bring the important facts to the table when they're trying to work out some kind of transitional work program.

In terms of the board of directors, changes on composition, its relationship to the Ministry of Labour and the clarification of its duties, I think these are positive. They were recommended by a labour-management task force in July 1992. They should move forward immediately. I would hope the construction industry remains as part of the board of directors.

In terms of mediation services, maybe it's just the drafting that uses the mandatory shell and uses the word "objection," which is associated with after the decision is made. If you're going to have mediation services, I think it should be a resource to a vocational rehabilitation counsellor or part of the rehab counsellor's training. Mediation is effective before, not after a legal decision has been made, and the appeal route is simply delayed at that point.

The payment to older workers is long overdue. It's a step in the right direction. But I must add that the regulatory adjustments required in social assistance legislation must be done in order to ensure that the money reaches the workers. Otherwise, it's just going from one administrative function to another.

In terms of the indexing formula, I think it's unnecessarily punitive. Consecutive years of low inflation freeze a fixed income with a cumulative impact. Then, when inflation rises rapidly, as is now being predicted, the 4% cap creates a large impact in a single year. At a minimum, I would like to see the cap eliminated, but preferably there should be no de-indexing of pensions.

I've provided also an appendix, which simply gives the recommendations. I've tried to keep my remarks brief so you can ask me some questions and I am hoping that they'll be directed towards the specific considerations for construction.

Ms Murdock: First of all, I want to thank you. LIUNA has a reputation for a lot of good training and so on, so I'm glad to see you. Admittedly, and I think it's pretty plain, construction is such a distinct and unique kind of group that under OLRA it has its own sections, and I know there are negotiations going on to talk about the kinds of things under workers' comp that have to be looked at, but it's sort of interesting, the idea of sectoral groupings of employers for return-to-work or re-employability provisions. Are you saying that even though you're separate business persons, you are going to have to form a coalition or an association in order to have return-to-work programs?

Mr McCarthy: Clearly, if we started with the ICI sector having an association which represents all the companies as a bargaining agent, it is already legislated, it's already enshrined, that body is already in existence. What I'm suggesting is that same concept in the non-ICI. I mean, those associations already exist in the non-ICI as well. The form work, the road builders; they all have associations.

What I'm simply saying is that if you've got a small employer whose site closes down -- it's a six-week project, there's an injury, the worker's ready to come back in seven weeks and he has nothing on the go. Then somebody else in the association -- they're going to be rated together, so it would seem to me that we can begin to look at construction in those things.

1640

The biggest obstacle when the construction regulations for re-employment -- the attempt was made to draft something and it took over a year -- was that we had the statutory impasse. We had subsection (1) and subsection (16). You can't change the statute and regulations and we got nowhere trying to get around that. I think if we could remove that with this present legislation, then we could have a more successful go at the construction regulations.

Mr Offer: Thank you for your presentation. I'd like to talk to you, in the specific context of the construction industry and the bill, about section 72.1, the mediation aspect. I think it was in London that we heard that the mediation as proposed is a difficulty because it's being called into play after a decision has been made, as opposed to prior.

I'm wondering if you can share with us -- I know you discussed that part. I think it's important, if there can be a change in this legislation, that to be effective mediation must be prior to a decision being made.

Mr McCarthy: The difficulty with the way it's drafted is that objection has a very long and specific historical meaning in WCB parlance. Everybody who has seen a letter that accompanies a rejection -- it says "if you wish to object." The whole concept of objection is identified with a decision; a decision in the negative. The way this is drafted is, after a series of five decisions you can bring in a mediator and then the mediator is mediating between a decision-maker and it becomes literally a level of appeal.

I really think mediation is a good thing, but it certainly has to come before the decision is made. It certainly has to be kind of part of the educational process, and what's interesting is, in the re-employment part of the act, clearly mediation comes before a decision is issued and it is set up that way in the act.

I might add one thing I missed in: the five sections that list the decisions that should be made. One is where a worker is uncooperative. We're introducing the concept of an employer being uncooperative, but it's not mentioned in there as requiring mediation and I think it should be. We're adding balance. Let's keep the balance when we introduce something like mediation.

Mr Offer: Just one other point, and it has to do with the ratings: This is not a part of your presentation. We have heard from the construction industry that the rating system, the CAD-7, has worked well, that the changes that are being proposed should not be instituted because there has been, on a results scenario, a positive effect. I'm wondering, since we have you here and since you are giving information from the sphere of the construction industry, your thoughts on CAD-7, and does it work well.

Mr McCarthy: My experience has been negative, and for two reasons. One scenario is the employer who uses the no-lost-time injury and keeps the person on the payroll, and I've had too many experiences of that when I was doing case work. The extreme case was a chainsaw into the hand, and he was on no lost time. He had three hours' surgery at the same time and he only came to us three months later when they tried to bump down his salary. But those kinds of things happen because they begin to look at their measurements so closely.

The other problem is more structural and it's that CAD-7 again uses the manufacturing-industrial paradigm. I know of a number of employers who got huge amounts of money back because they had improved safety records. What it really meant in the recession is they didn't have much work. They used to have several projects on the go at any given time, so in 1991 and 1992 they had almost no projects on the go and they got big rebates because the number of injuries was reduced. I don't think that's a very good revenue saving; they like it but, quite frankly, it's typical of CAD-7. This is CAD-7 that applies to everybody, even if you've got projects -- you've got projects if you win the bid. But they looked at it as if you were an uninterrupted business over a 12-month period and based your performance on that. Let's face it, we went from in 1989 not being able to supply enough workers, to 1990. The statistics are that we're down 76,000 workers as of the end of 1993 from 1989. We're supposedly in a recovery mode and we're still down 76,000 construction workers in Ontario. So you can imagine how CAD-7 did not work for construction. They used the 12-month measuring thing and it just -- the usual problem.

Mr Carr: Thank you very much for your presentation. When the construction industry came in, they focused a great deal on the financial concerns and you alluded that it did, and what's happened to your industry. I don't need to tell you what's happened in the construction industry. They were focused on the financial aspect for a lot of reasons -- with the unfunded liability, their assessment being one of the highest, 100% employer-funded. They realize that they've gone through tough periods and they're very, very concerned about the financial situation because they are fearful with the unfunded liability assessments going up and all the things that have happened.

Surely your membership, having gone through -- and you alluded to the problems that you've faced -- must be concerned, as the employers in the construction industry are, about the costs. You didn't mention it in your brief. Would you like to comment on the overall financial stability? Obviously, with what you've been through, your membership is going to be affected if costs go up through the WCB. It potentially could be one of the reasons that they won't be employed, because of the increased costs. There are a number of reasons, but it's a big, big factor, particularly in your industry. Would you like to comment on that aspect of it?

Mr McCarthy: I could give you three comments. It's unfortunate that when the deficits began to appear in the early 1980s they were not addressed at that time because, quite frankly, anywhere from 1984 to 1989, there was so much work going on no one would have batted an eye at paying appropriate premiums during those years and not having the deficit get out of hand the way it did.

My second comment is that I am sort of tired of hearing the $11.4-billion deficit because I don't know of an insurance company that has a dollar in the bank for every dollar it owes. My understanding is that they basically go on some kind of thing around 65% or 70%, which means that if we're funded approximately a third right now, there's another third out there that we should be concerned about, but not the remaining two thirds.

My last comment is that the biggest cost that's going to hit the construction industry is FEL. It is not neutral. I know it was introduced as being neutral, but it is not neutral. Anywhere, whether it be in construction or the resource sector, where you have a combination of high wages, non-transferable skills, educational barriers and language barriers, you're going to be having high FEL awards because they're deemed to be school crossing guards. It used to be they were given jobs as school crossing guards when a construction worker got injured. Now they're being deemed to be school crossing guards at minimum wage, and you could imagine that if you were a form worker at $22 an hour, that's quite a difference for a company to be paying you $12 or $14 an hour until you're 65.

That is a concern of mine and it underscores the importance that we better make the changes on the obligation to re-employ in the construction industry and we'd better make changes in vocational rehabilitation so that we are not statutorily restricted because they can't get back to their earnings profile within 12 months. Either we make those changes or that's going to really kill our employers -- not the mega issues, but that particular one, because that goes on their private bill.

Mr Carr: One of the things the construction industry's concerned about is, they feel their assessment is higher compared to other industries. Do you agree with them that assessment for your industry is too high?

Mr McCarthy: Unfortunately we're still a high-injury risk. Until that is changed, the premiums are going to have to be paid.

1650

EMPLOYERS' ADVOCACY COUNCIL, OTTAWA CHAPTER

The Acting Chair: I would at this point in time call the Employers' Advocacy Council to come forward.

Mr Ferguson: While they're doing that, Mr Chair, I was just wondering if we would have available from research generally what the unfunded liability ratio would be for company pension plans in Ontario.

The Acting Chair: We can ask research to supply that for you.

Mr Ferguson: I don't want anyone to spend a whole lot of time on it.

The Acting Chair: If you could introduce yourself for the sake of Hansard and possibly leave a few minutes at the end of your presentation for some questions and interaction with the committee, it would be appreciated.

Mr Ray Bordeleau: My name is Ray Bordeleau. I'm the chair of the Ottawa chapter of the Employers' Advocacy Council. With me today is Madeleine Meilleur, who is the vice-chair. Our submission on Bill 165 is limited to six specific topics. I won't be reading the submission that was handed out, I'm just going to elaborate on some of the points. I'm sure you will keep the submission for bedtime reading tonight.

We'd like to discuss the powers of the government to intervene in the affairs of the board, the structure of the board of directors, vocational rehabilitation and reinstatement, the experience rating system, the purpose clause and mediation.

The power of the government: Under section 65.1 the minister has powers which could significantly alter the fundamental operation of the board. The ability of the government to influence and change directions and policies of the board without being accountable is unprecedented. These extraordinary powers could cause irreversible damage to the administration of the board.

The structure of the board itself: We believe the board of directors should reflect the reality of the employers who bear the burden of the workers' compensation. Board members should represent stakeholders and not groups which may not fully understand the complexity of the administration of the workers' compensation.

The provision of the chair of WCAT to sit on the board seems, in our opinion, to hamper the review of policies as provided in section 93. The board of directors has a financial responsibility but cannot control the directions given by the minister and therefore may not be able to control the expenditures for which they are supposedly responsible.

On vocational rehabilitation and reinstatement: It is unfortunate that the notion of confrontation has been introduced into this already complex process. Section 51 requires that a worker must consent to the release of medical information. As you will see in our submission, the vast majority of workers wish to be reinstated. Section 51 will only assist those workers -- and I would like to emphasize -- the very few workers who may wish to abuse the system. This is in relation to the employer reinstating the employee and not necessarily the original employer.

The absence of vital medical information will create difficulties for employers in their attempt to reinstate workers. These difficulties may well be considered failure to cooperate with the possible penalties provided for the employer.

The experience rating system: The introduction of incentive systems is one that has been recognized as effective by most jurisdictions in Canada. The NEER program and CAD-7 are no longer an experiment; they have reduced accidents by some 30% since 1989 and have reduced costs, both being what incentive programs are supposed to accomplish. Replacing this with an audit system which only can be seen as punitive, like the voc rehab and reinstatement programs, will be another retrograde and confrontational process.

The purpose clause: Rather than being a statement which would guide the future of the board by establishing clear guidelines and responsibilities, the clause simply adds to the uncertainty by raising more questions such as: What is fair and who decides? Will medical services be defined and respected, particularly nowadays when even OHIP is trying to redefine its function? And who will interpret what are reasonable efforts to reinstate workers?

As far as mediation is concerned, to be successful, mediation should be voluntary. Not only is the mediation process flawed in this respect, but two areas of great concern to employers are excluded: section 65.1 which prevents the examination of ministerial decrees and subsection 51(2) where the workers fail to participate in their reinstatement process by refusing information that could be vital.

I would like to ask Madeleine to expand a bit on the reinstatement process.

Ms Madeleine Meilleur: I wanted to address the mediation process. I think that same question was asked before, if the mediation should be done before a first decision or after. I can tell you that by experience in another board which our company had some dealings, there is this process for the past two years and it's very successful and it's done after the first decision. The mediator called the party and asked them if they want mediation and suggested why they should have mediation, but it's on a voluntary basis; it's not forced to the individual and it's very successful. I could say that 50% to 70% of cases are settled at mediation. It's a very successful process and I applaud this proposal.

Mr Bordeleau: In conclusion, I would like to say that Bill 165, like some of the other legislation before, attempts to patch up some of the deficiencies in the workers' compensation. However, I think it has created more holes than it's patched. In doing that, I think the increase of $3 billion in the unfunded liabilities is portrayed as an improvement through some creative accounting, I presume.

Our recommendation is that Bill 165 be withdrawn and leave the full restructuring of the Workers' Compensation Act to the royal commission, because we believe that changing the act so close to the royal commission sitting may cause these changes to be viewed as sacrosanct and not up for grabs in the changes proposed.

In the interim, we suggest that the members of the board, where there are vacancies, should be appointed even if it's on a temporary basis to make sure that the employers are properly represented on the board. I would also like to say that the Employers' Advocacy Council has in the past participated actively in drafting suggested recommendations for the board and we are certainly prepared to work with any group that has a better system at heart.

I'd like to thank you all for your time to listen to our presentation. As the next portion of this is a question period, I would like to ask a few questions myself, perhaps rhetorically, but nevertheless -- one is why is it so urgent that Bill 165 be passed now when we're on the eve of a royal commission fully studying the situation? Why the extraordinary powers vested in the minister? I heard prior comments that it might be to oversee the board during the interim period; however, I don't see the wording in there which would cause us to believe that this interim period would be to resolve impasses or anything of the sort which would give it some credibility.

Why is the cooperation only in one direction? The failure to cooperate obviously appears to be a penalty only to employers. Why can't employers have all the necessary information they require for reinstating workers? Why were the recommendations of PLMAC ignored, in large part?

1700

Mr Offer: Thank you for your presentation. There are two areas that I'd like to touch upon, and the first would be the issue of the purpose clause. I'd just like to indicate that I take it from your presentation that the purpose clause requires some fixing, in that there is not the financial accountability or responsibility aspect in it that you feel should be in it.

Mr Bordeleau: That is correct.

Mr Offer: Now, on April 21, the Premier of Ontario wrote to the Employers' Council on Workers' Compensation, and in that letter he said, "A purpose clause will be added to the Workers' Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility." It goes on to say, "This clause will also address the principles of fair compensation and benefits for workers, as well as enhanced rehabilitation and return to work." Would you be agreeable that the government amend the legislation so that it will comply with the words of the Premier of Ontario?

Mr Bordeleau: I believe the Premier was going in the right direction in having a companion clause with the direction and the financial responsibility to go with it. As most employers obviously have responsibilities, they also have financial accountability for their decisions.

Mr Offer: My last question deals with the board of directors and the interrelationship between the chair of WCAT. Section 58, as I think you have quite rightly pointed out, provides or sets a financial responsibility and an accountability to the board of directors. The question is, how does that interrelate with WCAT, which can, on appeal, make some far-ranging, far-reaching decisions? Is it your opinion that the present wording of the legislation does not include WCAT in the financial responsibility, section 58?

Mr Bordeleau: Our contention, as stated, is that it's a missed opportunity to further explain the responsibility of WCAT, because it is in fact creating policies and financial burdens, without the responsibility to balance the books and to respond to another authority as to the nature of its work.

Mr Offer: We have asked the government to provide information to the committee as to whether WCAT is within the financial accountability of section 58.

Mr David Johnson: Thank you for your deputation. The best I can do in terms of answering your five questions is, I think we all agree that the workers' compensation system is in urgent need of overhaul, but obviously we are agreed that it's not this overhaul that it needs. So in that sense I don't believe this is urgent at all.

Your second question is on the powers of the minister. Frankly, you'd have to ask the government. As a matter of fact, you'd have to ask the government on all four of the last questions, because our position would certainly differ from the government's position. I can't explain their rationale, but I agree with the intent of your question on them.

In terms of your brief, you've mentioned the replacement of the experience rating system with what you call an audit system, which I think is an appropriate term, and indicated that it would be retrograde and confrontational. I wonder if you would expand on that. You really didn't have much opportunity during your brief.

Mr Bordeleau: The NEER program or the CAD-7 was designed as a carrot in encouraging employers to provide a safer work environment and reduce the overall costs to the board. Obviously, in the haste to return money to some employers, overpayments, if we can call it that -- and I think the previous speaker alluded to that -- did occur.

I think an incentive program is always better than threats; however, I think Lotto 649 doesn't give out more money than it takes in, so there would have to be some way of ensuring that the rebate to good employers is based on real performance, and as stated by the previous speaker, if there is very little work, obviously the experience rating of accidents is going to improve. But that should be tied in to hours of work or some real connection between the exposure to injury and the savings that are accrued.

So the incentive program should be real in terms of what it is rewarding. As far as the audit principle is concerned, if it's not a reward system, then obviously it has to be someone who goes about auditing employers to find fault and probably assess penalties, because that's the only thing that is left.

Mr David Johnson: That's not a very good system.

Mr Fletcher: Thank you for your presentation. I'm just reading from the last page, the last sentence in fact, about your suggestions: "Their intent is to reduce costs, introduce fairness, while ensuring that workers and employers are treated in a fair and equitable manner." I'm just wondering, what is a fair and equitable manner of compensation for an injured worker as far as the Employers' Advocacy Council is concerned? Is it 100%, 90%, 80%, 70%, 50%?

Mr Bordeleau: The numbers game is played across the country and there are various jurisdictions that employ different numbers. I don't think the number in itself is significant unless it's tied in to all of the other items that go along with it. So I don't think that you can just change the 90% to 80% and that's going to fix something or other.

I think being fair to people is to ensure that they do not suffer unduly, that they can look after their families and all of those things that everybody believes to be fair. The equitable portion of it is that the employer must be in a position to actually be able to do that and not simply being apparently fair to the employee while the employer is going broke trying to meet the increasing cost of doing business. So "fair" has to be fair for both and equitable for both to make sure that the employee has a place to go to work and, secondly, that if there is an injury, then that person should be looked after in a proper way.

Mr Fletcher: I think that's one of the answers why Bill 165 is so important and so urgent.

The Vice-Chair: Ms Murdock, can you answer the five questions in a minute?

Ms Murdock: Well, the five questions in a minute?

Why now before the royal commission? I think that, reality speaking, once the royal commission is set up, it'll have an 18-month mandate, as far as I know. By the time those recommendations come forward and then the government utilizes those recommendations or determines which ones, you're looking at, I would say, at least four or five years down the road. So the reality is that the board has status quo. I think every group -- management, labour, injured workers -- agrees that the status quo at the board is just not acceptable and I don't think they want to wait four or five years, operating under this existing system.

Why powers with the minister for the one year? I think it's self-explanatory, and if you were in the previous employers' presentation, I explained at that time that the BC group found that it took over a year for their board, when they put management and labour together, to work out protocols as to how to deal with non-consensual decisions, so somebody has to be in charge.

You see, we fundamentally disagree that we didn't follow the PLMAC agreement. There were four areas out of that accord of March 10 where both labour and management said, "We can't come to an agreement so we'll leave it to the government," and we made a decision as a government. I won't have time to tell you what those four areas are, I know he's going to cut me off, but I'll be happy to go out in the hall with you and I'll show you.

The Vice-Chair: On behalf of this committee, I'd like to thank the Employers' Advocacy Council for bringing their presentation to this committee this afternoon.

Ms Meilleur: Mr Chair, I have a last word to say, and it's regarding perhaps not the structure of the board of directors but the composition. As a woman, I cannot miss the opportunity to say that we need fair representation on the board of directors. I was shocked the last time I looked at the picture of the board: 16 members and one woman. So I hope that the women will be fairly represented on the board of directors.

Ms Murdock: You're the first one and the only one who's mentioned it.

The Vice-Chair: Thank you very much.

1710

CANADIAN LABOUR CONGRESS

The Vice-Chair: I'd like to call forward our next presenters, from the Canadian Labour Congress. Good afternoon and welcome to the committee.

Mr Dick Martin: I'm Dick Martin, secretary-treasurer of the Canadian Labour Congress. I'm accompanied by Ms Amber Hockin-Jefferson, who is the national representative for our safety and health department in the Canadian Labour Congress and responsible also for the workers' compensation subcommittee.

I'm not going to go through all of what the Canadian Labour Congress represents, except to say that we have 2.3 million members. We cover workers and represent workers from coast to coast in the country and are reasonably familiar with basically all the workers' compensation programs of every province since our national reps and field reps work with the respective federations of labour on those workers' compensation schemes and so are very much involved.

I might say, in a presentation of 20 minutes it's going to be rather difficult to go through all of the bill but we will try to be as concise and precise as possible. I'm sure that you've heard many of the arguments we will be making, or you will hear them, I might say, in future hearings across the province. That is because in fact the problems facing workers dealing with compensation systems are indeed well known. They are encountered all too frequently by workers claiming due benefits, only to be faced by companies trying to lower their assessments by fighting these claims tooth and nail.

Attached as an appendix is a comprehensive document entitled the Canadian Labour Congress National Policy Position on Workers' Compensation in Canada, which outlines all the elements that a workers' compensation system should contain. I might add, that policy was developed -- it took well over a year -- in consultation with our members from coast to coast: those who sat on workers' compensation boards, those who are active in our occupational health and safety committees and indeed injured workers across the country. It was endorsed by all the affiliated unions of the Canadian Labour Congress and represents a complete compensation package. I highly recommend that the members of the committee spend some time reviewing its recommendations.

We'd like to look at what is usually referred to as the "historic compromise" upon which the compensation system is based. In the early 1900s, a system was devised whereby injured workers would give up their legal right to sue employers for injuries suffered in the course of their employment, and in return, the employers of the province of Ontario would set up a no-fault compensation system which would make workers whole in financial terms when they were not whole in physical terms. This no-fault system was not to be based on decisions of the courts or proving in an adversarial system that the worker was qualified for benefits.

I might even add that many of you will be aware that April 28 each year is a national day of mourning in recognition of workers injured and killed on the job. That's based on the first reading of the workers' compensation system to be introduced in the province of Ontario, and I believe the year was 1914.

However, unfortunately it is an adversarial system that has evolved and that was exacerbated and is exacerbated by experience rating. Companies now either fight compensation claims or they try to convince or pressure workers into not filing claims in the first place. Inducements such as light duties are used to encourage under-reporting. The employer is rewarded by the experience rating system for hiding claims. They are also rewarded for challenging entitlement decisions and appealing claims. Of course, the worker is still not entitled to go to the courts in order to obtain payment or to sue a negligent employer. The erosion of the system has been all one way: in favour of employers.

The other major fault of the experience rating system is the lack of any penalty for employers arising from claims due to occupational disease. If employers are not financially penalized for poor industrial hygiene, they have no incentive to clean up their production processes. In a society where the bottom line is the only criterion, the employer will only begin to exercise sound industrial hygiene practices when it becomes an economic necessity. In other words, when it becomes cheaper to clean it up than to pay the compensation costs, then they'll be cleaned up. The only way this will ever happen is to make employers more fully financially responsible for the occupational diseases and injuries that they cause.

This will also ease, to some terms, the financial strain on the medicare system, which currently bears the costs of many of these illnesses. The CLC suspects that the costs to the health care system for work-related injuries and diseases are enormous.

In cases where employers are successful in deterring workers from filing claims, any medical attention required comes directly from OHIP. In cases where workers are reinjured or have a recurrence of unreported symptoms, the public system once again foots the bill. In cases of occupational illness, of which very few are compensated, the sick worker is cared for totally out of the medicare budget and not out of the workers' compensation funding. This provides no incentives for employers to look at their plants with a view to improving industrial hygiene.

One of the most serious and largely unreported charges to health care is occupational cancer. Few of these are accepted by compensation boards, even though the very conservative estimate of the Canadian Cancer Society states that nearly 10% of all cancers are contracted as a result of occupational exposure. A recent study by the National Cancer Institute in the United States estimates that 20% to 40% of all cancer is caused by substances in the workplace. Even working with 10% to 20%, this is an enormous number and a tremendous cost to the health care system. If employers were charged for the damage that they are causing, I am sure they would find a way to improve their operations. The bill paid by the health care system for occupational diseases must at least be partly responsible for the crisis in medical funding which exists in the country today.

The CLC has a number of comments on specific changes proposed in Bill 165.

Subsection 1(1): We support the change of the term "industrial disease" to "occupational disease," both here and in later sections, as a number of workers outside of the industrial workplace suffer from occupational diseases.

Section 43: We are disappointed to see no proposal to restrict the Workers' Compensation Board's practice of deeming. The practice of deeming, whereby the board determines that a worker could work at a non-existent job and then deducts this portion from the worker's future earnings loss pension calculation is indeed a great injustice.

We recommend that section 43, which incorporates the practice of deeming, be revoked. If a worker turns down a real job, not a job that does not exist in the job market but that the board feels that the worker could somehow procure, then that case should be able to be considered in the calculation of future earnings loss.

Section 51: The CLC has a great deal of concern with the proposed subsection 51(2) which provides for the release of medical information. Why should an employer who has not implemented a cooperative return-to-work program have access to a worker's medical information? The doctor-patient relationship should not be violated by the release of information to third parties who are not entitled to this information. A physician should feel comfortable that any information provided is used to aid in the recovery of the worker and that it is to be used primarily to aid the workplace accommodation of any impairment suffered by the worker and that this accommodation has been approved by the Workers' Compensation Board.

Section 53: The CLC is concerned that subsections 53(1), (2.1), (3), (9) and (10) divide the responsibility for vocational rehabilitation between the board and the employer, whereas it now rests with the employer. It is our opinion that workers and their unions should work with the board to develop an appropriate vocational rehabilitation program.

We are also concerned with the proposed change to subsection (12) and would suggest that the present mandatory requirement for the board to provide assistance to workers who are seeking new employment be maintained. We recommend the word "shall" be retained in place of the proposed "may."

Section 54: This section attempts to address the question of the return to work by injured workers, the idea being that there will not be large groups of workers with disabilities who are unemployed in the future. The strengthened and streamlined return-to-work and rehabilitation provisions, along with increased penalties for non-cooperation, will indeed assist in safe and timely re-employment of injured workers. The CLC is of the opinion that measures such as these are a far better way to tackle the problem of unfunded liability, rather than denying due benefits to eligible workers.

1720

Section 56: We support the proposal to create a bipartite board of directors. Ownership of the compensation system must be turned over to the two parties, labour and business, who have a stake in the system. Each party must have equal voice and vote in the operation of the WCB. Only then will decisions reflect the reality of the workplace and meet the needs of the workers and the employers as well.

Section 58: We are opposed to the proposal in subsection 58(1) requiring the board of directors to "act in a financially responsible and accountable manner in exercising its powers and performing its duties." It's assumed that they're going to do something like that; they don't have to put it in and direct them to do it. This subsection will be used by the employers at every opportunity to frustrate the entitlement of injured workers and to narrow the board's claims policies and procedures. The end result of this section will be further reductions in benefit entitlements to injured workers. We strongly recommend that the proposed section be deleted.

The CLC, in section 147, supports the proposal that would allow many permanently injured workers who exist on small pensions to receive an increase of $200 per month. However, we believe there will be many injured workers who require but do not qualify for this increase because the qualifying requirements are tied to the supplementary payment award. We would suggest that a clause be added which allows the board to determine if other workers are receiving an adequate partial disability award and, if not, allow the board to take action to rectify this situation.

In section 148, the new inflation protection formula does not require the 4% cap that Bill 165 applies in subsection 148(1). The original Friedland formula was designed for pension funds and did not have any cap on the maximum increase the formula could provide. The CLC views this as a regressive proposal of de-indexing which could take billions of dollars away from the incomes of injured workers.

It strikes at the very fabric of the historic compromise for which workers' compensation was designed. Workers are prohibited from suing their employers, but in turn are to be provided with fair restitution for injuries and diseases caused by the workplace. Section 148 and the Friedland formula restrict that restitution due to injured workers beyond what is reasonable or fair. It provides employers with yet another means to escape their obligation to fully fund Ontario's workers' compensation system -- to the extent, some have calculated, of projected savings of up to $27 billion. The CLC objects to this section in the strongest possible terms and requests that the present section be maintained.

There are numerous problems with the Workers' Compensation Board system which require immediate attention, and Bill 165 goes some way to redress some of those concerns the labour movement has had for many years. However, Bill 165 does not deal with some of the largest issues which are of fundamental importance in bringing the WCB into the 21st century.

Some of these fundamental issues are coverage (who is included and excluded), entitlement to benefits, occupational disease, the question of universal disability programs, benefit levels, indexing, financing, and the relationship between the board and various other programs. These issues have been crying out for review for many years now but resources have not been committed to their examination.

The CLC welcomes the establishment of the royal commission to study the entire system and to deal with these larger questions. Indeed, the compensation system of the future may be much different than the present system. There may be many changes which can and should be made to the benefit of injured workers and to control the unfunded liability of the board. We have made many suggestions over the years which would result in both better benefits for workers and less expense to the system by improving health and safety and the return-to-work procedures.

It is readily apparent that major changes in the system will not come about without a detailed look at the present setup with all its good and bad features. We believe the only inquiry mechanism which will have the authority and the ability to examine the organization in depth is a royal commission, and we urge the government to waste no time in implementing it.

I'd go on, but I see I'm running somewhat out of time and want to leave the members of the committee time to answer questions. We have run into a diatribe about the chamber of commerce, which is well deserved by the chamber of commerce. I would recommend that everybody read it -- some good wisdom -- and maybe the chamber can straighten out its ways.

With that submission, I am prepared to answer questions by the members of the committee.

Mr David Johnson: I just noted that you seem to point out quite a number of criticisms of the bill in its present form, yet you support the bill?

Mr Martin: We support the bill with the amendments that we put forward.

Mr David Johnson: I asked this question of somebody this morning. If you were sitting here in this position -- you might be sitting over there, more likely -- and voting on the bill the way it is right now, would you vote for it or against it?

Interjection.

Mr Martin: If I was sitting there, you'd take a picture? Well, you're not going to get a picture; I can assure you of that.

The answer is we'd probably vote for the bill.

Mr David Johnson: You'd vote for it even with all the criticisms?

Mr Martin: Yes. In balance, it's going in the correct direction, but obviously in making this presentation we would hope the committee would see its way to pass the bill with the desired amendments.

Mr David Johnson: When you're talking about the chamber of commerce, one of the criticisms I think you have is about their concern about the unfunded liability. You are against the Friedland formula. Some of the things that you're recommending would add to the cost of the workers' compensation system. I guess what I'm trying to get my mind around is, where is this money going to come from? How are we going to pay for this? The injured workers deserve to have protection, and yet where is the money going to come from when already there's a hugh unfunded liability? I mean, I have great concern for the future.

Mr Martin: I think, first of all, the last part of your question, the unfunded liability is something like the great debate around the national deficit. Indeed, it is money that is going to be owed, but it is not owed right now, it's not owed in the immediate future, and really to some degree it's an accounting feature that you may or may not disagree with. I've had a lot of experience with actuaries and I've had actuarial reports given to me that would differ literally in the tens of millions of dollars if you did it in this way in terms of calculating that percentage and put that amount of premiums into it.

I would say to you, though, in fairness, there are going to be two places where the money is going to come from. There can be great savings. I repeat -- we're like a broken record on this -- clean up the workplaces so there are less claims. That's the number one place to do it in terms of making sure there are not going to be further claims on the compensation system.

The second one is what we applied and the commission applies to the bill: trying to get a speedier return to work of injured workers. That really is very important, and if there's some cooperation and dedication by all concerned, mainly employers, they will get off the workers' comp system and you will have less moneys that have to be paid out.

The final part is that premiums have to be paying the system. Ontario's not the only place, but the fact is that employers have underpaid in terms of the premiums for workers' compensation. I see you frowning, but the fact of the matter is that if you went and took a look at the United States, where they have a great private enterprise insurance system in, they pay premiums way beyond what any Workers' Compensation Board in Canada pays. So I would say to you premiums, and pay their fair share.

Mr Robert Frankford (Scarborough East): I was interested in your comments about occupational diseases and other types of injuries. I speak with some interest because I am a physician and I've had to deal with this.

Just as perhaps a thought for you to comment on, should we be looking perhaps at making the actual clinical care something which is all part of the medicare system? Because frankly it's not that easy in the regular run of things. I don't think physicians are primarily thinking in terms of the underlying cause, although I certainly hope they don't neglect it overall, and I think there's plenty of opportunity to have that advocacy role with that physician or through unions and the whole sector that we're talking about here. Would you have any thoughts on that?

Mr Martin: In terms of political, I understand that most of the time we're reactive. I assume that when a patient comes into a doctor's office, your first thought is, "How am I going to cure him or her and take care of this particular disease?" We have insisted for years that the prevention side of things is not looked at closely enough. Over the years I think a general system has been developed that is reasonable in terms of prevention of accidents: Wear your safety belts, have proper stairs and such like that. But in terms of addressing ourselves to the prevention of occupational disease, I think we are far, far lacking in it.

1730

We've only used cancer as one area. It took us years and years and years of appeals for the cases of asbestos, for example, to be rewarded in terms of workers' compensation. It was a big fight. It was clear what was causing it, but we couldn't get the -- it was a problem of cause and one of treatment. It was the same thing with silicosis. I came out of the mining industry and silicosis was a case in point. For heaven's sake, it was generally accepted what was causing it, but we could never get it through the workers' compensation system. So literally tens of thousands of miners died horrible deaths because there wasn't a prevention side. It was basically caused by drilling dry, so to speak, with rock dust in the air.

So in terms of the medical profession in particular, we believe there should be a lot more education of what is happening in factories and mines and offices and such in terms of cause. They simply aren't taught in school, as far as we can determine, many times.

The second part that we think has been a big advance is the occupational health and safety clinics that have been established in the province of Ontario and in the province of Manitoba, and to some degree in the province of Alberta. We think they go a long way to helping advocacy in terms of cleaning up the workplace and in fact will help the employers in the long run reduce their premiums.

Mr Offer: Thank you for your presentation. I just want to be very brief in terms of my question. I want to go to your national policy position, which you've been so kind to provide. On page 7 you say -- it's your first recommendation, the first recommendation of the Canadian Labour Congress -- that the historic compromise on workers' compensation needs to be restored and refined. On page 6 of your presentation, talking about the Friedland formula, you say that "strikes at the very fabric of the `historic compromise' for which workers' compensation was designed."

My question very simply is, if the government does not remove the Friedland formula, which you have said strikes at the very fabric of the historic compromise of workers' compensation, is the Canadian Labour Congress still in favour of this bill?

Mr Martin: Well, it's similar to your fellow member's question. We want Bill 165 passed with the amendments that we're suggesting to it. Otherwise, we would come here and just say, "Pass 165" or "Defeat 165." We think that it has merits to it. I've been asked the question: On the balance, is it a good bill? I would say to you that it's not a bad bill, but it could be an awful lot better if a lot of the amendments were made.

Mrs Fawcett: I'd like to continue with that recommendation where you say in particular that workers' compensation boards need to be independent of government and be composed of equal numbers of representatives of the two parties of direct interest, labour and business. I would suggest from all of the groups of injured workers that we have heard since I've been on this committee, why would it not be the three interests and injured workers be included on the Workers' Compensation Board? Because then I think we would get real balance and we would get their input directly because they're right on the board.

Mr Martin: In answer to you, I don't have strong objections to that, but the fact is that we represent tens of thousands of injured workers who are coming through our union offices, our occupational health centres. We work very closely with the injured workers' groups. But we don't have any big, violent opposition to having them involved. It just sometimes gets a little awkward when you get into a three system in terms of the representation and the guidance of the administration of the Workers' Compensation Board.

I guess my point is, we do represent an awful lot of workers.

Mrs Fawcett: I would like to see a few others represented on that board too, like the medical professions as well.

Mr Martin: Well, don't get too wild about that. You might be in trouble.

The Vice-Chair: On behalf of the committee, I'd like to thank the Canadian Labour Congress for bringing us their presentation this afternoon.

COMMUNICATIONS, ENERGY AND PAPERWORKERS UNION OF CANADA

The Vice-Chair: I'd like to call forward our final presenters for the afternoon, the Communications, Energy and Paperworkers Union of Canada. Could we have some order in the committee room, please. Order, please.

Good afternoon and welcome to the committee. Just a reminder that you'll be allowed up to 20 minutes for your presentation. The committee would appreciate you leaving a little time for questions and comments. As soon as you're ready, could you please identify yourself for the record and then proceed.

Mr Fred Pomeroy: Dick Martin and his colleague are a hard presentation to follow. My name is Fred Pomeroy. I am a member of the PLMAC and was involved in the discussions that led to the development of Bill 165.

I'm also executive vice-president and treasurer of the Communications, Energy and Paperworkers Union, which was formed in November 1992 by the merger of three major Canadian unions. With approximately 140,000 women and men in 645 local unions, we're one of the largest private-sector unions in Canada. Occupational health and safety and the fair treatment of injured workers are subjects of high priority for us, and we welcome this opportunity to comment on the amendments to legislation in these areas as proposed in Bill 165.

The average annual number of workplace fatalities since 1980 recognized by the Ontario Workers' Compensation Board is about 250. This number is generally believed to be a gross underestimate, for several reasons.

Fatalities are underreported by workers and employers. Often an occupational fatality is not identified as such. For example, road accidents and acts of violence in the workplace are sometimes not recognized as occupational deaths, and doctors have difficulty recognizing the occupational origin of many diseases.

Once reported, a fatality has to be accepted or recognized by the WCB to be counted in the statistics. The Canadian Centre for Occupational Health and Safety, in its Statistics Infogram 02, points out as an example that only about 77% of claims for fatalities were accepted by the Ontario WCB in 1987. No one can say exactly how many people die of fatal work injuries and illnesses each year. In addition, there are a large number of workers whose work is exempt from WCB coverage, an estimated 700,000 Ontario workers whose injuries are neither recorded nor compensated.

Workers' compensation statistics in general recognize workplace deaths that are immediate and obvious. Deaths due to illnesses that have an occupational origin are rarely recognized. In 1992, a national task force using the working title Canada 2000: Strategies for Cancer Control in Canada concluded that occupations are the cause of 9% of all cancer deaths in Canada. This estimate was based on work done for them by a Dr A. Miller, the department of biostatistics, University of Toronto. The 9% estimate is now generally accepted in Canada. Since about 60,000 people die of cancer per year in Canada, that means that occupationally induced cancer alone would account for 5,400 workers' deaths per year. Based on its share of the Canadian workforce, Ontario may account for over 2,000 of these deaths.

There are a host of other occupational diseases, ranging from asbestosis and asthma to destruction of the liver, kidneys, immune system or nervous system, that are virtually impossible to estimate. It's therefore quite easy to believe that several thousand Ontarians die as a result of their work each year. The true number may well be as high as 6,000 Ontario workers per year, as estimated by Dr A. Yassi for the Weiler inquiry into Ontario's WCB.

As for injury statistics, the average number of workplace injury claims per year since 1980 recognized by the Ontario Workers' Compensation Board is 419,134. Although over 400,000 injuries a year may seem like a staggering number, this again is an underestimate, since it counts only those reported to and accepted by the WCB. Underreporting and underacceptance is a problem for injury statistics, just as it is for fatality statistics.

Sociologists S. Brickey and K. Grant of the University of Manitoba, attempting to find out the true rates of occupational injury and illness, found an injury rate of 18.7% of the workforce in 1990. They used surveys to obtain their figures. If their findings indicate a national pattern, and given an Ontario labour force of over 4,400,000 workers, there could be an injury total in the province of over 822,800 workers annually.

1740

Full-time employment involves about 50 weeks per year with 40 hours per working week. There are 3,600 seconds in an hour, so that means about 7,200,000 working seconds per person per year. Dividing this total by the official injury number of 420,000 per year, it can be seen that there is an occupational injury in Ontario every 17.2 seconds of every working day. If, as Brickey and Grant suggest, the true rate is about double the official rate, there is a workplace injury in Ontario every 8.8 seconds of every working day.

Examining numbers such as these makes it apparent that whatever is done to reform the Workers' Compensation Act and the Occupational Health and Safety Act must place the interests of these unfortunate victims first and foremost. It must be remembered that behind every one of those statistics stands thousands of human beings, individuals whose only crime was to try and earn a living.

The changes proposed in Bill 165 must be seen in this light. Although many serious and immediate problems with the Ontario WCB are addressed in this bill, many broader problems are not, issues such as coverage, entitlement, occupational disease, benefit levels, indexing and the board's relationship to other programs or the possibility of a universal disability insurance system. Indeed, the most important aspect of the introduction of Bill 165 in the Legislature may have been the concurrent announcement of a royal commission to study the system. We welcome this announcement and hope that its report will form the basis of a system which will look quite different than the one we know today.

Dealing with board administration and finances, a bipartite board of directors will give the two parties who have a direct stake in its operations an equal say in the board's administration and policy direction. Workers and employers will have the opportunity to make decisions that reflect the real needs of the workplace. This will reduce the interference in the board's daily affairs that governments have made directly or indirectly through government appointments to the WCB board of directors. We support this change and believe that it will result in a more efficient and effective WCB through improved decision-making.

The subject of WCB finances cannot be ignored. We refute claims that the board is on the verge of financial collapse and that the number one issue is the so-called unfunded liability question. While not trivialising the question of financing the compensation system now and into the future, it should be noted that reserve assets as a percentage of liabilities have improved from 32% in 1984 to 37% today. Improvements in occupational health and safety, re-employment and rehabilitation programs will further increase this ratio. It is projected that the funding ratio will rise to 55% of liabilities by the year 2014 with Bill 165.

Some employers have argued that the fact that there is any unfunded liability at all is a major problem. They like to use inflated future dollars rather than funding ratios in their statements in order to make it sound as though the WCB's finances are in a state of crisis.

There is no logical reason why the WCB system should be fully funded against all future liabilities in current dollars. The Ontario Federation of Labour has proposed a standard whereby the WCB would operate based on a balance between current revenues and current expenditures, with reserve assets equalling 50% of future liabilities. This is akin to a householder who is able to meet all monthly payments and at the same time keep a sizeable reserve in the bank. We don't require people to have sufficient funding on hand to be able to finance all of their future mortgage payments before allowing them to buy a house, yet that is precisely what we would require of home buyers if we accept the logic of the unfunded liability doomsayers. And even this is not a fair comparison for the WCB, since operating in this manner does not require it to borrow any money whatsoever.

Of course, funding could be dramatically increased by policing employers who cheat on their payments or escape registering altogether and by bringing presently excluded sectors into the system. Oddly, this is never suggested by the alarmist employers. Their goal is the reduction or elimination of benefits to the very people whose health and strength have suffered and rely on them.

On inflation protection, Bill 165 offers an increase of $200 per month to the lifetime pensions of disabled workers who are unemployed and who were injured prior to 1990. The same increase should be extended to a small group of workers who were over 65 years of age when Bill 162 was passed and subsection 147(4) was included in the Workers' Compensation Act. These workers, who are all over 70, need and deserve this increase.

A system of inflation protection for workers who now receive a WCB disability pension and who have returned to work, known as the Friedland formula, was negotiated by business and labour in the development of Bill 165. As such, it was part of an overall compromise. However, in spite of the agreement, we're not happy with the Friedland formula as it will erode the pensions of this group of injured workers. Especially for younger injured workers, the economic loss due to the Friedland formula can be severe in times of high inflation and will hurt them for a lifetime. Since the WCB's income is inflation-protected, as it's tied to wages, the 4% cap is unnecessary and unjustified.

On re-employment, despite the existing obligation to re-employ injured workers, 78% of workers who have been away from work for one year, and are therefore eligible to be considered for a future economic loss award, remain unemployed. The unemployment rate for people with disabilities is 40%. The WCB's deeming process continues to threaten these workers with major income reductions.

Bill 165 improves and streamlines return-to-work and rehabilitation provisions. These provisions should help injured workers with disabilities to re-enter the workforce in a timely and safe manner. Along with increased penalties for non-cooperation, these provisions will improve the finances of the WCB, while offering injured workers the dignity of employment and a better quality of life.

On medical information, subsection 51(2) of Bill 165 raises the question of the potential misuse of confidential medical information. Doctors should not be required to share information with employers who may be uncooperative with respect to re-employment programs and have not implemented such a program. Potentially, this provision will create a situation where threats and coercion will replace the cooperation necessary for a successful return to work.

Only when medical information is necessary to help the worker's recovery and to make appropriate adjustments to the work or the workplace in the context of a WCB-approved re-employment program should it be made available to employers. Even then, the medical profession should provide only information that is necessary and useful for these purposes, not, for example, general diagnostic information.

Experience rating: The present system of experience rating rewards employers who challenge entitlement decisions, appeal claims and hide claims. Changes to the experience rating system will reduce the ability of unscrupulous employers to hide their problems by bringing injured workers back to the workplace using threats and coercion or by fighting, as a matter of course, every claim.

An audit system augmenting experience rating will start to reward employers who honestly and accurately report workplace injuries while making genuine efforts to improve or maintain good occupational health and safety standards. The existing system rewards confrontation and intimidation. Labour has long believed that a workplace where the employees are well represented by a strong union and where there's genuine commitment to health and safety on the part of the employer and where employees are well trained in hazard identification and where best practices are the norm may have a larger number of reported incidents than an employer who is a marginal performer in the field of workplace health and safety but is unscrupulous about reporting practices and combative before the board. Meanwhile, the bad employer may be earning lower WCB rates by artificially maintaining good performance statistics. This change will therefore encourage occupational health and safety and the adoption of best practices benefiting all Ontarians.

1750

We have some miscellaneous comments that cover other concerns with Bill 165, which include whether subsection 8(7.1) eliminates the value of private disability insurance; whether subsections 53(10) and (13) allow uncooperative employers to interfere in rehabilitation programs; and whether subsection 95(6) assumes an achievable level of independence on the part of the Industrial Disease Standards Panel.

On the business-labour agreement of the PLMAC, the question is, does Bill 165 address some of the more pressing problems in the WCB system? As a member of the Premier's Labour-Management Advisory Committee, which negotiated the agreement that spawned this bill, I can say that it addresses the main concerns which business and labour brought to the bargaining table last March. Contrary to much of the hysteria we've seen in the media and at this committee's hearings, Bill 165 closely mirrors the business-labour agreement negotiated by the PLMAC. Attached to our brief is a comparison of the PLMAC agreement and Bill 165, as appendix B. If you have an opportunity to read it, you'll find it includes a lot of give and take by both sides.

Although the legislation's drafters worked hard to mirror the PLMAC agreement, they have made some serious mistakes in the legislative language which results in the intent of certain amendments being defeated by the way in which they are written. We have attached an appendix A with some suggested amendments in 10 clauses, because there's not enough time to go into them in the 10 minutes allotted today.

In conclusion, too many workers with disabilities live in poverty. The scope of workplace injury and death is consistently underestimated, as is the human suffering it represents. Our economy is changing and the sectors which traditionally fund the WCB are shrinking. The non-covered service sector, meanwhile, continues to grow, leaving 700,000 Ontario workers denied compensation coverage.

The Legislature should pass Bill 165 into law with amendments which clear up the intent of some of the clauses. Then we should begin the important work of a royal commission to rebuild the system so it will reflect the needs of our society in the future.

Thank you for this opportunity to present our views to the committee. I look forward to your questions.

Mr Fletcher: Thank you, Fred, for your presentation. Since you were on the PLMAC -- I've heard from Gord Wilson and from yourself, who were members of the committee, that this Bill 165 closely mirrors the agreement. Then in London, Sault Ste Marie and today in Ottawa, business groups come in and say it's totally different from what was agreed upon. I'm trying to grasp where people are coming from. Was the agreement negotiated at the table with both sides finally coming out and saying, "Yes, we can live with this," or did we deviate from what the committee had negotiated?

Mr Pomeroy: No, I don't think so. This was a process where you had a group of people get together and try to deal with a very complex set of problems and develop not a panacea for everything for the future.

Going into this process, there were a number of people who thought that we should just deal with it through a royal commission, the whole thing should be fed to a royal commission. When we had our discussions between business and labour, we agreed readily that there were just too many immediate problems that needed to be dealt with, so we would work on those and we put together a framework of understanding which I think is reflected in Bill 165, as it's presented here.

I haven't had the opportunity to tune in on all of the proceedings but I have watched some of them on television on occasion and, frankly, many of the people who are saying that it doesn't reflect it weren't around when we were having our discussions and weren't part of those discussions.

Mr Offer: Thank you for your presentation. Recognizing the shortness in time, on page 4, you speak about the funding and you talk about "escape registering altogether." The first presentation that we had today suggested that there be an amnesty for employers which otherwise should be into the system, because right now if they come forward there's a six-year penalty. I'm wondering if you would be in favour of that amnesty.

Secondly, the financial responsibility framework of the PLMAC, number III on your appendix B, says, "Business and labour have agreed that there be a financially responsible framework for decision-making and operation of the system." We have now been told by the government that the decisions by WCAT are outside of that. Was it not the intention that all decisions in and around the board would fall within a financially responsible framework, and shouldn't WCAT decisions also fall within that?

Mr Pomeroy: On your first question, I haven't actually had an opportunity to investigate what the ramifications would be of waiving that. It may have some merit, but I am not competent to comment on it. On the second question, we're not talking about someone's small bank account here where every time you take 10 cents out of it, you make a calculation in your ledger and you can keep close track of it. We never discussed having WCAT fit into this on a day-to-day basis. Obviously, overall there has to be some financial responsibility and the board has to take that into account. But it would make the WCAT process meaningless if you were to say that they could never, ever come up with a decision that, for example, increased the cost that was envisioned by the WCB in any of its decisions.

It has to be a rolling process where the WCB is having to take into account, the board is having to take into account the fact that they're having cases that go to WCAT and are increasing the costs. It's not then a problem of WCAT being irresponsible necessarily, it may be a problem of the board not making the appropriate assessments in the first place.

Mr Carr: Thank you very much for your presentation. I'm a little bit discouraged when I -- and not to ascribe any blame -- see labour come in and business come in and we can't agree whether the unfunded is a problem. One says it is, one says it isn't, one says the committee did reflect in the bill, the other side says it doesn't. In the long term, we all suffer as a result of it. I wonder if there are days we could even agree what the day was. It's very discouraging.

I want to ask you a question about the bill as it stands. You talked about the poverty of the injured workers, as a result of the de-indexing. If that provision is still in the bill, would you like the bill to still pass?

Mr Pomeroy: Obviously, we're in favour of the bill. We've said that. That's a nice question, but we wouldn't have this process if you didn't want us to come and say, "Are there things that you think ought to be improved?" If that's the bottom line, we're not going to walk away from the bill and say, "No, we don't want it." We believe it reflects generally what we agreed to at the PLMAC and that the next step in the process is the royal commission review which hopefully will deal more extensively.

We believe that there are some urgent things that need to be done in the short run. Hopefully, you'd see clear to increase the Friedland.

The Vice-Chair: On behalf of this committee, I'd like to thank the Communications, Energy and Paperworkers Union of Canada for bringing us your presentation this afternoon.

Seeing no further business before the committee, we will stand adjourned until 2 pm, Tuesday, September 6.

The committee adjourned at 1759.