Transcription du comité 1994-sept-07 | 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

Union of Injured Workers of Ontario

Phil Biggin, executive director

Sokhom Srey, staff member

Baldev Dhaliwal, member, membership committee

Anna Rizzetto, board member

Canadian Petroleum Products Institute, Ontario division

Gail Bolubash, director, environmental affairs

Cathy McCann, member, WCB task force

Rosa Fiorentino, chair, WCB task force

Building Trades WCB Services

Julie Nielsen, workers' compensation specialist

Injured Workers' Consultants

Marion Endicott, community legal worker

John McKinnon, legal counsel

Orlando Buonastella, community legal worker

Automotive Parts Manufacturers' Association

Elizabeth Mills, director, policy development

Paul Teeple, chair, people-systems committee

United Steelworkers of America, District 6

Henry Hynd, district director

John Perquin, health and safety coordinator

Ontario Natural Gas Association

Paul Pinnington, president

Jim Chuby, chair, WCB committee

Ontario Social Safety Network

Randy Ellsworth, representative

Canadian Auto Workers

Jim O'Neil, secretary-treasurer

Cathy Walker, director, health and safety, WCB and environment department

Mickey Bertrand, workers' compensation specialist

Ontario Public Service Employees Union

Heather Gavin, coordinator, membership benefits department

Marsha Gillespie, WCB benefits officer

Diana Clarke, benefits representative

Human Resources Professionals Association of Ontario

Mike Failes, member, government affairs committee

Asbestos Victims of Ontario

Edward Cauchi, chair

Hamilton Mountain Legal and Community Services

Hugh Tye, staff lawyer

Latin American Network Group

Constanza Duran, member

Alberto Lalli, member

Retail Council of Canada

Peter Woolford, vice-president, policy

Keith Lamson, manager, health and safety, A&P

Martha Brunning, claims management supervisor, A&P

Barrie Injured Workers Support Group

Joan Thorn, president

Paul Fudge, vice-president

Canadian Union of Postal Workers, Local 560; Injured Workers Association, Guelph-Wellington

Moe Dhooma, compensation coordinator, CUPE

Robert London, president, IWA

Emma Osso

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

Chair / Président: Vacant

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

*Acting Chair / Président suppléant: Klopp, Paul (Huron 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)

*Murdock, Sharon (Sudbury ND)

Offer, Steven (Mississauga North/-Nord L)

Turnbull, David (York Mills PC)

Waters, Daniel (Muskoka-Georgian Bay ND)

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

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Arnott, Ted (Wellington PC) for Mr Turnbull

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

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

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

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

Rizzo, Tony (Oakwood ND) for Mr Huget

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

Also taking part / Autres participants et participantes:

Murdoch, Bill (Grey-Owen Sound PC)

Clerk / Greffière: Manikel, Tannis

Staff / Personnel:

Fenson, Avrum, research officer, Legislative Research Service

Richmond, Jerry, research officer, Legislative Research Service

The committee met at 1009 in room 151.

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

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

UNION OF INJURED WORKERS OF ONTARIO

The Vice-Chair (Mr Mike Cooper): I'd like to call forward our first presenters, from the Union of Injured Workers of Ontario. Good morning and welcome to the committee. Welcome to the people you've brought and the people who will also be in the other three rooms throughout the Legislature who will be joining us in our proceedings this morning. Could you please identify yourself for the record and then proceed.

Mr Phil Biggin: I'm Phil Biggin. I'm the executive director of the Union of Injured Workers. With me are Sokhom Srey, Baldev Dhaliwal and Anna Rizzetto. We will all be making part of the presentation.

We're very pleased to be here today but we are not pleased with the way we have been treated by either this committee or the government of Ontario. You know well the history of the Union of Injured Workers. You know well how workers have come and participated in the process that I believe made this province a better place to live. The way that this was done today is we asked for a large space to give a presentation and you have effectively tried to divide us up, and I think you have seen some of the anger of the injured workers who are here today.

I will now proceed with the presentation.

The Union of Injured Workers was founded in Toronto 20 years ago to organize the fight for a better deal for injured workers. Initially, four demands were put forward: job security or full compensation; annual automatic cost-of-living adjustments; no board doctors; improved safety in the workplace and increased penalties for unsafe employers.

Of all of these demands, only one was met, and that was after 11 years of struggle in which many members of this current government supported us and we obtained the right to regular cost-of-living adjustments in the legislation.

The Union of Injured Workers cannot support Bill 165 as it has been presented by the government. Our detailed position is set out in the UIW-TIWAG clause-by-clause analysis, which you have. The purpose of this brief and today's presentation is to focus on three main areas of concern: (1) the lack of injured worker representation on the board of directors of the WCB, (2) reduction of benefit levels through de-indexation, and (3) the $200-a-month increase to old-act pensions.

Mr Sokhom Srey: The lack of injured worker representation: This law reform process has been flawed from the very beginning because of the failure to include injured workers. Workers' compensation reform is too far-reaching and too important to be left to bargaining between representatives of big business and organized labour. The failure to include injured workers on the Premier's Labour-Management Advisory Committee was a mistake and an insult to injured workers of Ontario.

It is injured workers who have firsthand knowledge of the areas most in need of reform. It is injured workers who are best equipped to assess the impact of any proposed reform on injured workers. As the different responses to this bill demonstrate, injured workers do not necessarily have the same interests or positions as organized labour. Injured workers must be formally included in any discussion about changes to the system. Bill 165 proposes to entrench a narrow concept of a bipartite system on the board of directors of the WCB. Injured workers could only participate at the grace of the business and labour leaders if they could agree to give injured workers a "community" seat on the board. This is simply not good enough. The formal exclusion of injured workers as a group represented on the board of directors will perpetuate the injustice created by the Premier's Labour-Management Advisory Committee. It would inevitably result in further decision-making that is unacceptable to those whom the system is supposed to serve: injured workers of Ontario.

The position of the Union of Injured Workers is that bipartism does not mean that decision-making is left up to business and organized labour. Injured worker organizations represent injured workers as do trade unions. Injured workers should be formally represented on the board of directors and not have to go begging for the approval of business and labour appointees.

Mr Baldev Dhaliwal: Ladies and gentlemen, benefit reduction by de-indexing: I'd like to start you off with a question. Where were you in 1985? The Union of Injured Workers was right here in Queen's Park. After 11 years of struggle, all parties finally saw the light: Automatic protection against inflation was necessary. The principle behind inflation protection is not a matter of partisan politics. It is simple justice that is reflected in the speeches of all parties about Bill 81.

The principle of automatic protection against inflation is no less just or fair today than when it became law nine years ago. What has changed is the motivation of the people who are playing with the lives of the injured workers.

We urge this committee not to abandon the principles of justice and fairness that stood behind full automatic protection against inflation in Bill 81. The failure to protect long-term workers' compensation benefits against erosion by inflation is a real reduction of benefits. The Union of Injured Workers will never support any legislation that reduces the benefits of injured workers.

The 4% cap on increases is a problem. A cap on inflation protection for injured workers is pure dirty power politics. When times get tough, cut the members of society who are least able to fight for themselves, the injured workers. The cap on inflation protection will hurt those who need help the most. The Union of Injured Workers has opposed this for its 20-year history and will continue to oppose this injustice.

The Friedland formula only partially indexes benefits and will significantly hurt injured workers regardless of whether benefits are capped or not. For example, after 20 years at an inflation rate of 2%, an injured worker who has been awarded a $400-a-month pension would need $596 a month to simply receive the same benefits as originally awarded. Under the Friedland formula, that injured worker will only be receiving $442 a month. This represents a real reduction in compensation benefits of 26%. At the lowest imaginable rate of inflation, injured workers will still lose more than one quarter of the compensation benefits to which they are entitled. The Union of Injured Workers will never accept a reduction in benefit levels for injured workers.

The effect on future economic loss awards is even more drastic. Probably no member of this committee could even demonstrate how the FEL awards are calculated and what happens during the reviews with the change in deemed wages, the adjustments to the pre-injury earnings basis, the 10% margin for no changes. Yet the Friedland formula is going to impact on these calculations so dramatically that by the time of the second review, many injured workers will find their monthly FEL cheques cut to a smaller amount, when their real loss of wages has actually increased. This committee must take the time to address the calculation of FEL benefits and to understand the impact of the Friedland formula. Injured workers' benefits will be reduced and the Union of Injured Workers cannot support this.

Mr Biggin: I'm going to speak now about the $200 increase to old-act pensions.

Many injured workers are unemployed and living in poverty. The workers' compensation system has in fact failed them. It has failed to get them back to meaningful employment. It has failed to compensate them for what they have lost. Many injured workers with permanent disability pensions under the old system suffer additionally because they were injured long ago when benefits were set artificially low because of low wage ceilings and kept low by the failure of the government to provide adjustments that kept pace with inflation. The Union of Injured Workers has fought for years to get the government to recognize the poverty of these injured workers and to increase their pensions.

The $200-a-month proposal in Bill 165 does not solve the problems of these injured workers. First, this is not an increase to the pensions of these injured workers. It is an addition to the supplement section, section 147(4), and it is just another supplement. The WCB or government can take away this $200 as easily as taking away the OAS. The $200 is only payable to someone who is entitled to the old-age supplement. A couple of years ago, when the WCB began its first review of these supplements, it cut 9,000 injured workers off. It decided that the 9,000 injured workers who were once receiving the supplement were not entitled to it after all. If those workers had the additional $200 proposed in Bill 165, they would lose this as well.

Every single pensioner with a section 147(4) supplement is coming up for another review. According to the government, there are 36,000 of them. We expect this review will be no different than the last, and we may see another 9,000 or even more cut off. Those injured workers will lose their entitlement to $200 as well.

The intention of the $200 increase was to provide some measure of economic security. This will not happen as long as it is tied to a supplement that the board can take away. Increases must be put on the pension under sections 43 or 45 of the old Workers' Compensation Act that continues to apply to the claims of the older workers. Attaching the increase to the supplement will guarantee that many injured workers will not receive their entitlement.

The WCB does not pay the supplement to everybody who is entitled, after all. Every day injured workers come to our office who should be on supplement since 1989, but they've never heard about it and they've never received any forms from the WCB. Every day we see injured workers who got turned down for the wrong reasons, but they never appealed. We see injured workers who were cut off in the last review and gave up in despair. Linking an increase to the supplement will only magnify the injustice created by the arbitrary decision-making and cash register mentality of the Workers' Compensation Board.

1020

Over the past several months we have conducted surveys of injured workers attending our public meetings. Some of you here have been present at those public meetings and have seen the great interest that injured workers have in reforming the workers' compensation system. Surveys of hundreds of injured workers at several different meetings have shown that approximately one half of the old-act injured workers who never returned to work after their accident never received a supplement.

This is consistent with the information that was given to us in a board study in 1980 that said approximately 40% of permanently disabled workers receiving pensions never returned to work. Our flesh-and-blood statistics have borne this out.

When the Premier announced these increases in the House in April, he promised that he would ensure that it would go to benefit those injured workers who were also on welfare and that there would be no social assistance clawback. Yet we have not heard anything about this assurance since the bill was introduced. The Minister of Community and Social Services has informed us in the course of our meetings that there are over 7,000 injured workers with permanent disability pensions who are now surviving on social assistance in addition to WCB benefits. If nothing is done to stop the clawback, they will just see their social assistance benefits reduced by a corresponding amount. Under the current social assistance regulations, the increase will be no benefit at all to a substantial number of the promised 40,000 beneficiaries.

And yet there is another group who could never get the supplement because, by no fault of their own, they turned 65 before it was introduced in 1989. You'll remember that Bill 162 produced subsection 147(4). You've heard from several of them at these hearings. It's rather ironic, I believe, that the poorest of the injured workers will not be entitled to the increase which is meant to relieve the poverty of injured workers. These are the very workers who built the roads, the skyscrapers, the subways and the pipelines of this province for $1 an hour or less. Now they are trying to stay alive on pensions which are based on their low wages when cost of living has left them far behind and in poverty.

When we were talking to the government prior to the establishment of the legislation, we wanted a system established which would take into effect all of these people, particularly the injured workers injured prior to any form of indexation in 1975. Those workers are suffering. Even a worker with a 100% pension prior to 1975 has a very, very small pension, and these people also are excluded from receiving the $200. This is a real insult and injustice to injured workers who most deserve an adjustment to their pension.

The Union of Injured Workers urges this committee to correct this mistake. Don't tie the increase to the supplement. Put the increase where it should be: directly tied to the pension through sections 43 or 45 of the old act. This would clarify all of the confusion. There's no point in kidding ourselves. As long as it's tied to subsection 147(4) -- yes, this can be used as a reference, but the way it's tied in this legislation, it is going to penalize many, many injured workers who are suffering and who have very, very small pensions. This I do not believe was the intention of the government when the legislation was proposed.

For many years we've been fighting for justice for injured workers. You can move in this direction by ensuring that all old-act injured workers with permanent pensions and who have not returned to work or who are underemployed get a $200 increase. This can be done by putting the increase on the pension and not on the supplement.

Anna Rizzetto will just speak briefly about her situation. This kind of encapsulates exactly where things are at with the $200 increase with respect to the older injured worker.

Mrs Anna Rizzetto: I was injured in 1968 when I was working for 60 cents an hour. I could not stay on that job because it was too heavy. In 1969 I find a job at Philco-Ford. Since it was a union plant, I started at $1.96. When finally I had to stop working because I couldn't stand up, and I had another operation, my wage was $9.12 an hour, but my permanent pension was set at the 1968 level finally. After many battles, I was awarded a 55% pension, but because my basic earnings in 1968 were so low, I cannot receive the supplement. After this law is passed, I will not get the $200-a-month increase. This is not fair.

Mr Biggin: So you see, this situation repeats itself time and time again, and many people have come before you and presented their cases. This is not an exception; it's quite a number of injured workers. Certainly, as our statistics have shown, supporting the statistics presented by the WCB, close to 50% of injured workers with permanent disability pensions are unemployed, in other words, have never returned to work or returned to work and couldn't continue working. So we're talking about 36,000 people for the $200 increase. That's certainly not close to the number of 180,000 permanently disabled workers; 50% of 180,000 is not 35,000. So a lot of people are going to be gypped out of this unless we redirect and rewrite the legislation to put the supplement directly on the pension, section 43 or 45.

The question of indexing: I don't think you would ever expect the Union of Injured Workers to come before you after we fought so many years, demonstrating outside year after year to get the year-by-year increase in the cost of living and then finally achieving it in 1985, Bill 81, and now you're asking us to roll this back and take away from injured workers what everybody -- Mr Gillies from the Conservative Party; Mr Wrye, who was the Labour minister at that time; Bob Rae; Floyd Laughren -- said was a victory for injured workers which would never be taken back. Do people in the Legislature have no honour, that they would come before us and expect us to accept a package in which there is de-indexation? The Union of Injured Workers cannot accept this.

There's much more to be said about Bill 165, and there are some very, very positive aspects to it and some negative aspects. More will be discussed in the presentation by Injured Workers Consultants later today and by the Industrial Accident Victims Group of Ontario tomorrow. A more detailed analysis can be found in the UIW-TIWAG clause-by-clause brief, which accompanies this brief and you all have before you.

Let me just remind the employers of Ontario -- because really this is why we are here today, because the employers are setting about on a campaign of hysteria around the unfunded liability. I'm not saying there aren't financial problems at the compensation board, but any insurance plan has an unfunded liability; it is an actuarial projection. This is something that should not be used against the injured workers to take away the benefits that have been fought for, year by year. These are flesh-and-blood members of our society who have shed their blood and have built the Ontario that we enjoy today. Some of them may be in your own families.

So examine your consciences and consider the fact that this legislation should be addressed in terms of providing the increase that has been promised to the old-act injured workers for so long. Then we have the royal commission, where we can go on to other things. But do not couple that increase that you give some of the older injured workers with the de-indexation which is going to hit many of the old-act injured workers and all of the injured workers who were injured after 1990. I don't want to come to the situation at the end of 1994 and say, "We're going backwards rather than forwards." Let's be positive: Increase and improve the legislation, improve the funding basis for it, make the system work and also address the tremendous problems that we have at the Workers' Compensation Board, which many people addressed and I'm not going to talk about, but every one of you knows the delays and the suffering and the suicides. It's a disgrace.

I can't believe that in the wealthiest province in Canada we cannot come up with a solution which would benefit all of the members of society. We want the employers to stay in Ontario. We want them to be viable. We want to have a healthy environment. We want to have a healthy economy. We want people to stay here, but we want people to have some kind of social protection that does not force them below the poverty line, and that's what we see with workers' compensation today. For God's sake, try to make it right.

1030

The Vice-Chair: Our time's up, so a quick comment from each of the caucuses.

Mr Steven W. Mahoney (Mississauga West): Thank you for your presentation. Since I don't have time for a question and answer, perhaps I'll just put on the record, for your thoughts and anyone else who cares to think about it, that the entire structure of Bill 165 -- we've heard from managers who say they are totally opposed and want the bill withdrawn. We've heard from injured workers in London, Sault Ste Marie, Ottawa and here in Toronto who are unhappy for different reasons, but they want the bill withdrawn.

I guess my question would be, considering that we have a process coming up under a royal commission, presumably beginning this fall, would it make sense to have this committee recommend tabling of this legislation and refer it to the royal commission as one aspect that the royal commission should look into, rather than passing this bill, then going to a royal commission and having to uproot the tree and take a look at the whole system again? What do you think?

Mr Biggin: No, that's not what we're talking about. It would be rather dangerous and reckless to table the bill and ask these people -- the statistics show, and why people want to give the $200 increase is because people are dying off day by day. Address the issue of the older workers. In fact, table the de-indexing and leave that to the royal commission. But we're not asking to sabotage the increase for the older workers.

Mrs Elizabeth Witmer (Waterloo North): I just want to note that I don't have that clause-by-clause brief which is supposed to accompany this and neither does Mr Arnott.

Thank you very much for your presentation. Your presentation focuses exclusively on membership on the board and financial compensation. Are you not concerned as well with the service delivery and rehabilitation?

Mr Biggin: Yes, I said that, but I thought that would be better left to another forum. We've been over this many times, the question of service delivery, and we run into it every day. We have 30 to 40 people through our office every day. They're suffering, and they're suffering really badly, as you well know; all of you have your own offices. I'd like to see that fixed up.

Mrs Witmer: This bill doesn't address that at all.

Mr Biggin: No, and that has to be addressed. That is why, my friends, it's very important that injured workers be represented on the board of directors, because we are the major stakeholder group and we should be there, representatives of our organizations, particularly the provincial organization, the Ontario Network of Injured Workers Groups.

Ms Sharon Murdock (Sudbury): Good to see you again, Phil. You are right that the intent of subsection 147(4) was to be used as criteria to determine the $200 supplement, so we will look at that.

I just wanted to clarify for you, on page 6, that it has been discussed and brought to our attention about the clawback, and until something regarding that is passed -- it's regulatory, so it's not in the legislation -- we have guarantees from the Minister of Community and Social Services that the regulation will be ready to go when the $200 section is passed. So just for your edification, it will be there.

Mr Biggin: I think it's important to make that publicly known, because people are very worried about it, and rightfully so.

Ms Murdock: It was raised in the Sault, and I stated it there.

The Vice-Chair: Thank you. Just at the beginning of your brief, where you mentioned about the accommodation, I'd like to remind you that we did try and accommodate you by having extra rooms in here, and also, in fairness to all the other injured workers across the province and the public, this is the room that is televised, so it was being brought to other people who couldn't make it here today. So we did try to accommodate you.

But on behalf of this committee, I'd like to thank the Union of Injured Workers of Ontario for bringing us their presentation this morning.

Mrs Witmer: The day that the hearings began I had asked for copies of the discussion papers dealing with the activities of the transition team. Now, I have not received those papers as of yet, and I just wondered if someone could tell me when I'm going to be receiving those discussion papers.

The Vice-Chair: I don't believe there's anybody from the ministry here in the room at the moment.

Mrs Witmer: There have been three circulated: return to work, governance and financial targets. I'm wondering what the holdup is. I asked Mr Thomas, the former Deputy Minister of Labour, for those papers. Those papers had not been signed off by the business community, so I was quite anxious to get copies of those discussion papers from the transition team.

The Vice-Chair: The clerk will check with the ministry and see if we can get the answer. Ms Murdock.

Ms Murdock: I believe that the ministry is trying to answer the questions as we go. In the second batch that came from the ministry, I think the letter would have been signed by Marg Rappolt or Mitch Toker in that package. It should be included.

Mrs Witmer: All of those?

Ms Murdock: The transition team information and the proposal.

The Vice-Chair: The package that we've already received from the ministry?

Ms Murdock: Yes.

Mrs Witmer: When did you get that? I don't have that.

Ms Murdock: Whenever she puts it on our desk.

The Vice-Chair: There was something handed out to the committee members, and if not, then it would have been mailed to your office. The clerk will check on that. Okay?

1040

CANADIAN PETROLEUM PRODUCTS INSTITUTE, ONTARIO DIVISION

The Vice-Chair: I'd like to call forward our next presenters, from the Canadian Petroleum Products Institute. Sorry about the delay. Welcome to the committee.

Ms Gail Bolubash: Thank you.

The Vice-Chair: Just a reminder that you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd leave a little time for questions and comments. Could you please identify yourself for the record and then proceed?

Ms Bolubash: We're representing the Canadian Petroleum Products Institute. The Canadian Petroleum Products Institute, or CPPI, would like to thank the standing committee on resources development for the opportunity to present our views on Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act. Our presentation will be made by myself, Gail Bolubash of CPPI; Cathy McCann, who is with Petro-Canada and a member of the CPPI-WCB task force; and Rosa Fiorentino, who is with Imperial Oil and chair of the CPPI-WCB task force.

The Canadian Petroleum Products Institute is a non-profit association representing Canadian companies involved in the refining, marketing and transportation of petroleum products. The mission of CPPI is to proactively serve and represent these sectors of the industry on environmental, health, safety and business issues affecting the industry and Canadian society.

The institute has a national office in Ottawa and four regional offices located in Dartmouth, Montreal, Toronto and Calgary. The work of the institute is supported by an extensive network of committees and task forces made up of industry representatives.

The industry generates approximately $24 billion in annual revenues and directly employs 100,000 Canadians and indirectly employs 200,000 in supporting industries.

CPPI, Ontario division, represents seven refineries, over 300 bulk plants and terminals and over 4,000 service stations.

CPPI has been supporting the business caucus of the Premier's Labour-Management Advisory Committee through participation in the working groups in the development of the employer proposals for workers' compensation reform. We are, however, very disappointed that the government has ignored the accord reached by business and labour and has introduced a bill that is not fiscally responsible.

CPPI endorses the submission of the business steering committee which was presented to the standing committee on August 23, 1994, and does not support Bill 165.

In conjunction with the proposed amendments under Bill 165, we will now address the following issues of significant concern to CPPI. Cathy.

Ms Cathy McCann: The purpose clause: The purpose clause, through Bill 165, does not include financial responsibility as a purpose of the act. This exclusion will only serve to broaden entitlement and increase the unfunded liability, which currently stands at $11.7 billion.

Currently, our industry pays one of the lowest assessment rates in Ontario, which is directly attributed to our good safety performance. Putting this rate in perspective, it is still double the industry rate in other jurisdictions and thus affects our competitiveness across Canada. A large percent of the makeup of our rate is the unfunded liability. Without the unfunded liability in Ontario, the average assessment rate would be approximately 25% lower. The UFL has also been identified as a factor which contributed to the lowering of Ontario's credit rating. We must address this crisis today. Future employers must not be unduly burdened, and injured workers must not have their benefits jeopardized.

The business representatives of the PLMAC presented to the Premier a financial responsibility framework which would have balanced the workers' compensation system between fair compensation for an injured worker and financial responsibility and accountability within the system.

The government claims that financial responsibility is addressed in section 12 of the bill, which states that, "The board of directors shall act in a financially responsible and accountable manner in exercising its powers and performing its duties," and in subsection 15(3.2) of the bill, which states that, "The board shall evaluate the consequences of any proposed change in benefits, services, programs and policies to ensure that the purposes of this act are achieved."

However, as written, these sections of the bill apply only to the board of directors and do not require the WCB administration or the government to exercise financial responsibility when evaluating any proposed changes to benefits, services, programs and policies. Therefore, financial responsibility must be included in the purpose of the act to ensure a more competitive and sustainable workers' compensation system in Ontario.

Experience rating: Section 28 of Bill 165 proposes major changes to the current experience rating programs, the new experimental experience rating program, NEER, and the council amendment of draft #7, CAD-7. The proposed changes will alter the experience rating programs from measuring employers' performance based to results to measuring processes.

The current experience rating programs are proven catalysts in reducing the frequency and severity of workplace injuries and enhancing the level of individual liability. They promote health and safety initiatives in the workplace.

The proposed changes, including the new amendments proposed by the government to the standing committee on August 22, 1994, will create an administrative nightmare for both the WCB and employers by complicating what has been a relatively simple and highly effective program. Why would anyone want to change one of the few successful programs at the WCB? Experience rating must remain in its current form.

Ms Rosa Fiorentino: Before we leave the experience rating area, I would like to help clarify some conflicting facts that were presented to this committee.

First, the accident frequency rate is measured relative to man-hours worked. Therefore, the rate takes into consideration any decrease or increase in the workforce. Second, employers are aware of the NEER off-balance and agree it should be addressed. Third, the WCB's own studies have demonstrated that the experience rating programs are meeting their objectives and that there is no evidence that the experience rating programs have contributed to the hiding of claims by employers.

Return to work: Bill 165 unnecessarily introduces new return-to-work and vocational rehabilitation obligations on employers. The current legislation already provides for re-employment obligations. This bill should concentrate on providing incentives for employees to return to work and resources necessary to assist employers in returning these workers to work, for example, some type of services or programs within the WCB to assist in developing effective return-to-work programs. Incentives and rewards will encourage positive behaviours, not penalties.

Policy direction: Section 16 of Bill 165 compromises independent administration, a founding principle upon which the workers' compensation system was built, which is one of empowering the minister to issue policy directions and not requiring the government to be financially accountable or responsible for such directions. The workers' compensation system must be allowed to function independent of any government intervention or interference.

In conclusion, the Canadian Petroleum Products Institute cannot support Bill 165 in its current form for the following reasons:

(1) The unfunded liability will increase with the implementation of Bill 165, which will further affect the competitiveness of business, as well as put the security of injured workers' benefits at risk.

(2) It will not restore accountability or financial responsibility to the system.

(3) It will not encourage positive practices aimed at accident prevention, rehabilitation and re-employment of injured workers.

(4) It totally undermines the principle of an independent administration.

For these reasons, CPPI believes Bill 165 should be withdrawn and the proposals presented to the Premier by the business community last fall be implemented. The business proposals would ensure the viability of a workers' compensation system by securing benefits for injured workers and improving the competitiveness for business in a global marketplace.

Also, to help clarify some of the issues around compensation benefits, I have attached an article from an actuary which explains how an injured worker can receive over 100% of his or her pay while off work due to a work-related injury.

Mrs Witmer: Thank you very much for your very concise presentation. I think the more I hear from the presenters such as yourself, the more I become aware of the fact that this bill simply does not set out a clear vision for reform of the system. Instead of having a bill which responds to the modern workplace, where we're looking for cooperation and consultation between management and workers, we're seeing a bill here which is certainly more confrontational. It gives unions more power, but there's absolutely no attempt to deal with the improvement of service delivery.

1050

I want to take a look at the purpose clause here because you've pointed out, and I've heard this now for several weeks, that this does impact on the competitiveness of business in this province. That's one area the government doesn't seem to be terribly concerned, because we heard from some of the other presenters, and maybe you could respond as well, when they are looking now to expand investment opportunities, they're not going to stay in Ontario. They're going to have to take a look at where the rate is more competitive. Is this something that will impact on your industry as well?

Ms Fiorentino: Yes, it definitely will. As we state in our presentation, right now almost 30% of the assessment rates in Ontario is made up because of the unfunded liability. Our petroleum industry is affected because in other jurisdictions, for the same industry, the same type of work, it's approximately 50% lower than what we're paying here, even though we are paying one of the lowest rates.

In Ontario, there's definitely something wrong. The average claim here in Ontario is $26,000, versus $12,000 in other jurisdictions. There has to be a problem with the system and it has to be looked at in its entirety.

Mrs Witmer: Of course, the experience rating is the one program that's been very effective, and now the government's going to tamper with it. Really, instead of augmentation and providing more incentives, we're going to see a subjective audit and some other factors enter into it. What's that going to do to your industry?

Ms Fiorentino: The industry right now is very concerned with the NEER program and the way it will be changed under Bill 165. Right now, it's the only way that ensures us that we get rebates according to our results. We've got a very, very low accident claim record for industry. We always have had, even prior to the NEER program, so it's only fair that we get some of the rebate which demonstrates the definite results of our low frequency rate of accidents.

Mr Ted Arnott (Wellington): You went through the Premier's Labour-Management Advisory Committee process.

Ms Fiorentino: Yes.

Mr Arnott: That's the process which supposedly allows both sides to come together in a partnership arrangement; at least, that's what the government tells us. It didn't work in this case. What do we need to do to make that process work, or is there any way to make it work?

Ms Fiorentino: Right now the only way it's going to work is if we go back to the accord that was reached by both labour and management. It was an accord that was struck through heavy negotiation through all parts. Sure, there are areas that the labour groups were not totally happy with, there were areas where management wasn't, if you look at the individual areas of the accord. But if you look at it as packages of a whole, we definitely believe it was a balanced accord, and only if the entire accord is adopted will it be a balanced bill.

Ms Murdock: I just wanted to go back to the aside that you put in with regard to some of the concerns that have been raised. Just so you know, I don't think anybody in this room doesn't agree that any program that improves health and safety in the workplace and reduces accidents is good, and we've heard NEER referred to that. But then in the same paragraph you said you agree -- or correct me if I'm wrong -- that it contributes to the hiding of claims.

Ms Fiorentino: No. I said, "There is no evidence that the experience rating programs have contributed to the hiding of claims by employers."

Ms Murdock: Okay.

Ms Fiorentino: That study can be obtained either through the board or through the business steering committee, the business proposals that were handed to the Premier last fall. A copy of the study is included.

Ms Murdock: Yes. I'm sure that if we haven't seen them already, we will at some point.

The other thing, the offsetting on NEER: You and I both know that 1992 was $25 million over the surcharges; last year it was over $150 million over the surcharges. The reality is that this is contributing to the unfunded liability, which is a concern.

Ms Fiorentino: Yes.

Ms Murdock: So when you say that business agrees it must be addressed, do you have any ideas as to how it can be?

Ms Fiorentino: Yes. Basically, what the NEER system needs is a maintenance program. Right now we're probably the only province that has a merit rating program and doesn't have full-time people who are maintaining that program. So obviously, when there are any bills or legislation passed that makes any changes that affect the NEER program, it has to be more maintained.

Some in-depth analysis has to be done on the program. We know that one of the things contributing to the NEER off-balance is the FEL awards. Basically, that's all it needs. It's a good program. It should be kept in place, but all the board needs to do is contribute some resources to that area, which will definitely fix up the off-balance. Employers agree there should not be an off-balance to the NEER program.

Ms Murdock: So when you say the board should contribute to that, where does it get the money from?

Ms Fiorentino: Through the administration. I believe there are other areas. I cannot say right now, but I definitely realize that there are areas where resources can be shifted, where you don't need as many resources right now within the board, and I know that the strategy the board of directors has been working on does look at some of those areas.

Ms Murdock: In trying to save money to apply to the unfunded liability which exists.

Ms Fiorentino: Yes, but sometimes --

Ms Murdock: It's just a spiral that's non-ending.

Ms Fiorentino: No, you're quite right, but you have to look at the areas where the most impact can be made, and I think NEER is something that has to be looked at, as well as the FEL and NEL, and hopefully that can be addressed.

Ms Murdock: Do I still have any time?

The Vice-Chair: Yes.

Ms Murdock: I agree with you. For those employers that have been instituting health and safety practices -- and there are a number, many -- there are also, unfortunately, equally those that aren't. How do you address them, since Bill 162 made it voluntary and yet there are still many, many companies out there that are not instituting any kind of health and safety other than what they have to do, or minimally, and even then with people arguing for it? How do you address that?

Ms Fiorentino: I believe there are enough incentives, especially penalties, to employers that do address that through reinstatement obligations that are already present in the legislation through the experience rating programs. Maybe the employers you're talking about are the ones that haven't entered the experience rating programs yet, which I know will be extended to all employers next year.

Mr Mahoney: Thank you for your presentation. The example you give of the worker getting 111% of his net pay: Have you looked at how we could flat-line to make sure it's 90%, bearing in mind that I know these discussions took place at the PLMAC group? I believe Gord Wilson has said he does not support anyone profiting from an injury and would support some kind of system. If this James Clare can analyse this actuarially in the way that he has done this, why can we not implement a system that ensures that a worker gets no more and no less than 90% of his or her net pay?

Ms Fiorentino: I honestly believe that we can do that. That has to be, again, addressed with the professionals, consulting actuaries, working with the board to try to put together a program that looks at the benefits received by workers from all sources to ensure that there is no disincentive for an employee to return to work.

Mr Mahoney: But on the other side of the disincentive coin is the issue of the suffering that we see here this morning, the suffering that we see in all of our hearings in my outreach across the province. At every one of the hearings we had absolutely legitimate concerns put forward. We've seen people being forced to live on $300 a month out of a pension award and clearly unable to return to any kind of meaningful employment. It's not just this disincentive and it's not just this level of benefit. It's also the real, human issue. How do we ensure on both sides of it that a worker's not getting 111% of their net take-home pay but at the same time that they indeed are getting 90% of their net take-home pay?

Ms Fiorentino: First of all, I'd just like to address the fact that employers agree that there are cases that need to be addressed where injured workers are not receiving benefits at the levels they should be, and that was something in the accord as well that looked at addressing these types of issues.

This particular article addresses only the temporary total disabilities where workers are receiving 90% of net, and through the tax brackets, the way it works is they end up receiving much higher than that. This also excludes companies that are topping up in labour agreements where employers have to top up to 100%. That drives it up to about 120% now; you're looking at 120% of your pay.

The Acting Chair (Mr Paul Klopp): On that note, the committee thanks the Canadian Petroleum Products Institute for taking the time to come here today to put forth your views. I'm sure you'll be watching as we proceed.

1100

BUILDING TRADES WCB SERVICES

The Acting Chair: I now call the Building Trades WCB Services to come forward with their presentation. You have 20 minutes, and if you could make it shorter, we'd have time then for questions from the three caucuses. Get your name on Hansard, please, and it's your dime.

Ms Julie Nielsen: My name is Julie Nielsen and I am with the Building Trades WCB Services. These services actually are a project of the Toronto-Central Ontario Building and Construction Trades Council. Nine construction locals, whose jurisdictions cover not only the greater Metropolitan Toronto area but the province, are participating in this project. This service represents over 7,000 workers.

No matter where these workers live in this province, one thing common to all construction workers is that the present system does not work for them. With Bill 165, these workers will be even more disadvantaged.

The government is to be commended for initiating reform of the compensation system. All sectors within our economy have been affected by the recession and recent trade agreements. Other provinces have reported increased employment, but workers in Ontario have not felt that same upswing. Construction in Ontario is at an all-time low and accidents continue to happen. The accident frequency rate is lower due to the high unemployment within this sector, given the economic times.

Construction sector employers are demanding more from their workers today. As a result, workers are continuing to experience serious compensable injuries. Back injuries, which constitute over 60% of all claims, are a major problem for both the worker and the board. Repetitive strain injuries are disabling construction workers at an increasing rate.

The areas addressed in Bill 165 demonstrated to construction unions that their input was lacking when the Premier's Labour-Management Advisory Committee met to look at reforming the compensation system. It is inexcusable that representation from construction unions was not requested. Employers within the construction industry were asked to submit their concerns and recommendations, but those who perform the actual everyday labour for those employers did not receive equal treatment.

Local 183 of the Labourers' International Union has recommended the establishment of a bipartite committee composed of members of the construction industry to address the specific and unique needs of the industry. We support this recommendation because our concerns are not only with Bill 165 but with the present compensation system, which is not meeting the needs of construction workers across this province.

Any advocate representing injured construction workers knows the difficulties that are faced on a daily basis simply to have a workplace injury recognized. Construction workers perform a unique job. Their bodies are the main tool of their trade. The board recognized this and created a separate unit for construction, ISU 4.

Construction is fundamentally different from other sectors in that the industry is subject to seasonal and cyclical fluctuations and that workers within the industry require mobility and flexibility to move from one work site to another. Their work is specialized and strenuous.

With few exceptions, the adjudicators, managers and medical personnel at the board could benefit from sector-specific training that would provide them with an understanding of the work processes involved in the construction sector. The Toronto building trades council is interested in providing some of this training. Presently, claims for injuries that are a result of a work process are denied on the basis that they are not compatible with the job description.

Let me give you some examples. A wallpaper hanger performs his trade for many years. He now suffers from bilateral tendonitis of the shoulders. Tendonitis is the painful inflammation of a tendon or a ligament. It is the opinion of the unit medical adviser, and accepted by the adjudicator, that this worker's job description of a wallpaper hanger/painter is not compatible with the disabling injury that he now suffers. This worker has now been without any income for several months and remains unable to return to work because of his condition.

Construction workers are required by the Occupational Health and Safety Act and its regulations to wear approved protective footwear when on a construction site. Recent medical findings are indicating that this footwear, worn over an extended period of years, is damaging the covering of the muscles of the feet. Workers usually wear these boots for over eight hours per day. When workers suffer from blisters and ulcers that render them disabled and are directed by their family doctors and specialists not to perform the work as a result of these injuries, it is expected that the board would acknowledge these injuries as work-related. These injuries affect all workers within the construction trades. We represent one such worker who has had his claim denied on the basis that there is an underlying non-compensable condition that has caused the problem.

Back injuries are very debilitating for construction workers. Very often in these claims, injured workers receive decisions that their back injury and subsequent ongoing problems are due to degenerative disc disease. The board has denied workers benefits from the time of their injuries to when their appeal is heard at a hearing. This time period could take from eight to 10 months. Meanwhile, workers suffer great financial losses. We represent workers who because of these board decisions have lost their homes, cars and sometimes their families. Yet when the appeal is heard at the hearings branch level, benefits are granted, as they should have been from the beginning of the claim.

The Workers' Compensation Board is not held accountable for its decisions and there is nothing that can be done to restore the worker to the standard of living that he or she had prior to the accident. The bank does not reverse its action in the power of sale it commenced, nor does the board return to the injured worker his or her savings that were used as income while benefits were denied or cut off. The creation of a bipartite committee to address the concerns of this sector, as well as providing practical training for staff at the board, could well alleviate some of the problems that are experienced today.

Vocational rehabilitation services for construction workers are a nightmare. Once a worker's claim enters this phase, it's safe to say that benefits can be quickly terminated. Workers are ruled to be "uncooperative" or "not to benefit from vocational rehabilitation services" for a whole host of reasons. Workers are deemed not to benefit from retraining because of their educational background or because, even if retrained, they would not approximate their pre-accident earnings.

We represent many injured workers who, because they cannot return to their lifelong trade and because of their physical restrictions as a result of their injury, cannot work in a field that would earn them 70% of their pre-accident wages. Approximation dictates that these workers must be able to earn within the 70% bracket to qualify for retraining and thus continued benefits.

These are some of the problems that we're presently facing with the current legislation. Bill 165 does not address these inadequacies.

But it does address the employer's need for vocational rehabilitation. Bill 165 now includes the employer in every aspect of a vocational rehabilitation program for an injured worker, even if that employer has indicated to the board that there's no intention to re-employ the worker with the company. The changes to this section would allow the employer to interfere with the worker's rehabilitation. It is difficult to comprehend why an employer would require vocational rehabilitation services. It is the worker who is injured. The amendments to vocational rehabilitation services will hinder construction workers in their attempt for retraining and re-employment.

A major problem for construction workers is the deeming provision used in determining future economic loss awards. Employers have hired expensive lawyers and consultants who help guide them in this FEL process. Employers indicate to the board that they have suitable and sustainable work that an injured worker can do with the company. The worker, when able to return to work, even if not fully recovered from the injury, must go back to work for the accident employer.

In this time period, the board has been told by the employer that there will be no wage loss for this worker, as work has been made available. Thus, the future economic loss award is determined at zero or possibly $1 a month for the next two years. Weeks, possibly days later, the injured worker is then laid off because of shortage of work. We then have an injured worker who cannot be gainfully employed because of the compensable injury.

1110

There is no check and balance system in place within the board for any repercussions on such employers, and unfortunately this situation is becoming far too frequent. The worker turns to the social assistance system, and again the cost is turned back to the taxpayers, not where it rightfully belongs, on the employer.

The provisions within section 54 of the existing legislation eliminate most construction workers from benefitting from it. Construction workers are discriminated against by section 54 today. Workers within the construction trades rarely work for the same employer for 12 continuous months and most contractors today have less than 20 employees. Therefore, injured construction workers are denied re-employment rights. Bill 165 does not address this wrong. In fact, the new amendment simply allows the board on its own initiative to determine if the employer has fulfilled its obligations to the injured worker.

It is our understanding that the Deputy Minister of Labour is rescheduling a meeting to discuss this concern. We welcome the opportunity to meet and discuss any issue that affects the construction trades. Other topics we are interested in addressing are the multi-employer benefit plan, independent operator status, earnings basis issues that deem construction workers to be seasonal or casual in nature and experience and merit rating programs.

The $200-pension increase was a negotiated item at the PMLAC table. This concept is sound except that the criteria attached to this provision will limit the number of injured workers who will actually be awarded this increase. Pre-Bill 162 pensioners are receiving such small monthly benefits that any increase will help.

We are representing a construction worker who earned $70,000 in the eight months prior to his brain injury. Currently, he is now receiving only $200 a month from the Workers' Compensation Board. He can't even meet his basic monthly expenses on that pension and he would not qualify for the $200 increase because he would not meet the criteria as outlined in Bill 165.

It is our recommendation that if it is determined that an injured worker is not receiving an adequate permanent disability award, the additional $200 payment be given.

The Friedland formula has been introduced as a method of capping benefits, which would result in savings in the compensation system. We are opposed to the use of the Friedland formula as well as the deindexing of benefits. Employers pass on through their businesses the yearly increases we are all faced with. The benefits paid to injured workers are a reduction from their regular paycheque. Workers did not ask to be injured or restricted in their earnings capacity. Due to a workplace injury, their earnings ability can be temporarily or permanently restricted. To take away their right to a cost-of-living allowance is unfair. If the assessments and penalties levied against employers in this province were collected by the Workers' Compensation Board, there would be no need to de-index or to cap injured workers' benefits.

There have been many issues addressed to the standing committee since August 22 regarding Bill 165. You have heard that the present legislation is not serving injured workers in this province. Compensation legislation in 1915 took away our rights as workers to sue our employers if injured on the job. The act speaks to decisions being made in accordance with the real merits and justice of each claim. Too many workers today are being denied that basic right, and with the implementation of Bill 165, injured workers will again continue to be denied their right to a fair compensation system.

It is felt that Bill 165 does not address issues and concerns that affect workers as a whole and in particular the construction sector. A royal commission would look at what we have now, what has been suggested through Bill 165 and offer both labour and management further opportunity to work together to create a fairer compensation system that would reflect the needs of all sectors in this province, including the construction industry.

On behalf of the nine locals that I represent, I thank you for listening to our concerns today.

Interruption.

The Vice-Chair: Just a reminder, this is an extension of the House, and you're welcome to watch the proceedings but not participate.

Mr Randy R. Hope (Chatham-Kent): I want to first of all thank you for your presentation, as you're absolutely right, we've heard a number of concerns with Bill 165, employers saying, "Bear the cost on the injured worker." We're hearing different viewpoints, especially from the construction industry.

In your presentation, on page 4 you make reference to "a bipartite committee to address the concerns of this sector." Just for more information for myself and maybe for the committee, you're talking particularly about training. You talked about the appeal process. You had to go through an appeal process and in the meantime the individual has suffered financial loss, had to dip into savings, may have lost family or whatever.

Do you see the training of staff improving that appeal process, that the appeals won't be there? Are the appeals being lodged on decisions by the adjudicator or the appeals by the employers? I'm just trying to get a better understanding of where you're coming at.

Ms Nielsen: The appeals are from the workers. It's the quality of decisions that are being made at the adjudicator level that's causing the claims then to go on to the appeal system.

Mr Hope: What do you mean by quality, in just better terminology?

Ms Nielsen: I gave you examples of a wallpaper hanger who has performed his job using his arms above his head, and the medical adviser within that unit has deemed that is not related to his job. If possibly the doctors and the adjudicators and the managers and even the directors of the different units could get out and be trained as to the work processes, then we might not have the terrible decisions that we're having at the client services level.

Mr Mahoney: First of all, just by way of comment, your statement on page 7, "The $200 pension increase was a negotiated item at the PLMAC table," I understood from the reports I've been given that it sort of fell off the table and they just handed it back to the government to deal with. There was no agreement.

But my question is around the establishment of the bipartite committee. The Labourers' International Union, as you point out, made the recommendation here at this committee. I agree with it. I think it makes some sense. COCA has said they agree with it and it makes some sense.

Just a question. We recommend, in a report we put out entitled Back to the Future, that the Ontario building trades council, COCA and indeed the Union of Injured Workers all should have a seat on the board. Would you be better off having a seat on the board, say, a 12- or a 15-person board, and dealing with it as one of the multistakeholders involved in WCB, or would you be better off with a committee such as what the international union has recommended that pipes into the board?

Ms Nielsen: We would be better off with a committee that would pipe into the board and would then feed into our representative on the board.

Mr Mahoney: Oh, I see. So you'd like both.

Ms Nielsen: Yes.

Mr Mahoney: You'd like a seat on the board as well as a committee to deal specifically with those issues.

Ms Nielsen: The concept of the committee was that it's the workers who know the process, and as I explained to Mr Hope, the adjudicators have no idea as to the work that these workers actually perform on a daily basis.

Mrs Witmer: On the final page, are you suggesting that the royal commission should come before Bill 165?

Ms Nielsen: Yes.

Mrs Witmer: Okay. Thank you very much.

The Vice-Chair: On behalf of this committee, I'd like to thank the Building Trades WCB Services for bringing us their presentation this morning.

1120

INJURED WORKERS' CONSULTANTS

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

Ms Marion Endicott: Good morning. Injured Workers' Consultants is a community legal clinic funded by the Ontario legal aid plan which has been providing services to injured workers in this province, free of charge, for over 20 years at this point. My name is Marion Endicott and I will be presenting to you today along with my colleagues at Injured Workers' Consultants. On my left is John McKinnon and on my right is Orlando Buonastella.

Our presentation represents a continuation of what the Union of Injured Workers of Ontario had to say earlier this morning. As you will have already gathered, we are extremely disappointed in Bill 165 and indeed have some serious reservations about it. Instead of addressing the real needs of injured workers, this bill has ended up fending off a mythical monster. Like any mythical monster, the unfunded liability is much talked about and worried about, but we haven't yet heard much about the nature of it and its proportions to give us some real concern.

In order to come to terms with this monster, we commissioned a study on the unfunded liability, which was conducted by Michael Webster, who along with his background in economics brings a law degree and a PhD in rational decision-making to his work. Do you all have copies of it at this point? This study explores the history of the WCB's financial structure and points out why a pay-as-you-go system, which is what the board uses at this time primarily, makes the most sense for Ontario's employers. This study deals with many of the myths surrounding the unfunded liability.

For example, there is an idea that the unfunded liability must be paid off to avoid higher assessment rates for future employers. This study shows that even with indexation, the pay-as-you-go system will have assessment rates that are lower than full funding.

There is an idea that the unfunded liability is a provincial debt which will have to be paid off by the people of Ontario with their taxes. This study shows that in reality the Workers' Compensation Act expressly prohibits such a thing from happening, and I guess the bond raters in New York should be told that.

There is an idea that unless the unfunded liability is paid off, the WCB will not have enough money in the future to pay benefits to injured workers, that like a private insurance company, it is essentially bankrupt. The study shows that a private insurance company would indeed be bankrupt with a similar unfunded liability. Private insurance companies must be fully funded. The WCB cannot be compared to a private insurance company. It is a monopoly which operates on a collective liability system, and as long as there is employment in Ontario, there will be premiums to pay the benefits of injured workers.

The study shows that the unfunded liability is not a monster, and we submit this report to you now, and it should be appended to the brief that was submitted to you by the Union of Injured Workers of Ontario this morning. We would welcome the opportunity to discuss its contents with you as you make your deliberations on this bill.

Now, having said that the unfunded liability is a mythical monster, we do not mean to say that the WCB and Ontario's employers do not face financial problems. They do. One of the problems is the eroding funding base of the WCB.

With only 20 minutes to talk, and my portion of that is even less, I was hoping that maybe a diagram would help. This is a stream of injured workers -- can you all see it? -- who are being injured and go in and out of the system. Some stay in the system longer and some who have permanent injuries stay in the system for quite a long time. The accident fund, down here, must cover the costs of their compensation.

The accident fund is based on a collective liability system. The benefits of injured workers are protected from the possibility of these companies going out of business because, since it's a collective liability system, as companies go out of business, new companies come along and take up the paying of premiums where the ones that went out left off, the benefits continue and the injured workers continue to be paid. That's the essence of a collective liability system and a pay-as-you-go system.

Now, here's the problem. In this day and age, as these companies are falling out of the system with the changed economy in Ontario, they are not being replaced. So we don't have any new companies coming in to take up the paying of premiums to pay these injured workers. These companies that are left in the traditional industry of Ontario are left paying the whole shot for all these injured workers who have come on stream. This means they are going to have to pay higher premiums. Obviously, fewer people paying the same costs means higher premiums. That is a problem.

But there's a solution to the problem. There's a whole base, in this province, of companies that are not part of the compensation system. We have the banks, the insurance companies, the service sector, law firms, many, many areas of industry that operate without coverage from the workers' compensation system. It is here that all the new jobs, employment opportunities, payroll etc in Ontario are appearing as our economy transforms, spurred on by the free trade agreement and all that kind of thing.

It's all coming in here, but these companies are not paying anything to the compensation system, so why not make them? Just bring them right up here, and they come up and bring all the companies with them, begin to pay premiums into the system just as these people used to pay premiums into the system and they cover injured workers as the years go by.

Now you say, "Why should these companies have to pay the costs of the accidents that occurred with these companies?" That's the way the system works. When these companies were going out of business, who paid the costs for the workers who were injured in their employ? The new companies that came in. It's the same thing that's happening here. It's just new companies coming in, taking up the costs of the premiums and carrying on.

Our recommendation, our very strong recommendation to you today is that Bill 165 include full coverage of all types of work, all workplaces in Ontario. In BC they've done it; in other jurisdictions they've done it. It takes guts. You have to stand up to the banks, but who should pay the costs of the changing economy: the injured workers of Ontario or the banks?

I've made all my points there. I'd like to draw your attention to another point, another financial issue, and that is the one of experience rating. Employers have been talking to you a lot about why they like experience rating and labour and injured workers have spoken for many years about why they don't like experience rating.

Basically, if this committee wants to improve the financial situation of the WCB, it will move quickly and decisively to get rid of it. There is no evidence that this system is achieving the intended goal of improving health and safety. The employers like to quote a study done by the board, and I highly recommend that you read that study. You will find in the same study a lot of evidence about how the experience rating system is producing a tendency for employers to hide claims and to challenge claims. Certainly, the concrete evidence among injured workers and in unions is that that's what happens.

1130

It's quite understandable that the employers of the province like it, because while the challenging of claims by employers is costing injured workers and the WCB a lot of money -- because when you have a complicated system it becomes more costly, and certainly for injured workers waiting for their benefits it's very costly -- employers are benefiting. This is an extract of some of the payments that were made out by the WCB last year. Here is the amount of money, $100 million, that was required to totally cover all the costs for the Workers' Compensation Appeals Tribunal, the office of the worker adviser, the office of the employer adviser; all those agencies the board must cover by its legislated obligations.

Here is the amount that the board paid last year, the total amount for non-economic loss awards. Here is the amount for future economic loss awards, this is the amount for the administration of the WCB and this is the amount that employers are getting back, from the WCB, in rebates under the experience rating plan.

This is the net amount. It is a total extraction from the accident fund of $295 million last year and it's expected to be about the same this year.

What we say is that there's a much better use for that money. If you put the $295 million that employers are actually being paid out of the accident fund, which is actually intended for injured workers, and put it next to some of the costs, you can see that with that same money you could pay all of the FELs, all of the NELs, the total cost of the Workers' Compensation Appeals Tribunal and all those other agencies and the $200 a month to the pre-1990 injured workers at the cost of $85 million a year without raising premiums one cent. Just stop giving that money back to the employers. You could also pay twice as many injured workers $200 a month from pre-1990 and you still won't raise premiums one cent.

So our very strong recommendation to you today is, once again, that you get rid of experience rating. At least get rid of experience rating that's based on claims frequency and costs, which is essentially duration. With that, I'll turn to John, who is going to be speaking primarily on rehabilitation issues.

Mr John McKinnon: I'm going to be highlighting some of the points that appear in our joint brief, the joint submission by the Union of Injured Workers, Injured Workers' Consultants and Industrial Accident Victims Group of Ontario. You received that earlier on. Specifically, I'm just going to highlight the points about job search provisions, about the mediation provisions, about voc rehab for employers and about employer access to injured worker doctors.

Voc rehab is important because the financial consequences are very clear. Employers have the means at their disposal to reduce workers' compensation costs by reducing accidents and by employing more injured workers. It's a simple formula. Either you hire more injured workers or you pay higher assessments. Everyone knows there are big problems with voc rehab at the board. If the board set up a 1-800 number to call with complaints about voc rehab, I'm sure it would take all 4,700 employees just to deal with the calls.

But it's important to remember, as Phil Biggin pointed out on behalf of the Union of Injured Workers, that this is not a new problem. It's been studied in great detail, commencing in the early 1980s with the Weiler study. I just wanted to remind you of the history, because it's been studied by Weiler, and Weiler studies have been analysed and responded to by the legal clinics. Following that, the government put another commission, the Minna-Majesky task force, on voc rehab, then we got Bill 162 and then we got the Chairman's Task Force on Service Delivery and Vocational Rehabilitation by Odoardo Di Santo.

There's a lot of history in looking at the problems of voc rehab at the board. Phil Biggin pointed out what Paul Weiler found. In 1981 he did a study: 39.5% of permanently disabled injured workers are unemployed. What do you think we have now? The board released the figures in a recent study. Injured workers who have been off work for more than a year and have permanent impairments: 78% unemployment, twice as appalling as it was before.

The amazing thing about the provisions that we see here in Bill 165, these limits on job search, the mediation voc rehab for employers' to access injured workers, is that they come right out of left field. All this stuff is still sitting on a shelf in spite of the fact that a lot of preliminary work, massive amounts of government money and huge public hearings have gone into addressing how to fix voc rehab. The measures in Bill 165 ignore that. They ignore it. It looks like someone is trying to reinvent the wheel.

I just want to comment specifically on some things. Our proposals are in more detail in the longer brief, but let's start with the job search proposals.

Bill 165 makes some proposals to change the word "shall" to "may" in the section dealing with the extension of job search for an additional six months when an injured worker is unable to find work. Clearly, as a matter of statutory interpretation, changing the word "shall" to "may" is an invitation to the board adjudicators to use their discretion, and clearly all experience shows that they'll use that discretion to refuse an extension of job search. It's clearly a signal to the board adjudicators that they can and should start reducing the time allowed to look for work.

But wait a minute. The problem is that injured workers aren't getting back to work, and we see here a proposal to reduce the job search that's available to injured workers. That's incredible and it ignores the problem. If an injured worker completes the voc rehab process and follows the rules, diligently looking for work to the satisfaction of the voc rehab case worker, whether it's for six months or whether it's for a year, and still there's no job, should we just cut that person off and make him go away? Is that the way to deal with the problem? That's ridiculous. Obviously, either the search has to continue or else the job isn't actually available, contrary to what the statute requires, and therefore we have to reconsider either the future economic loss award or the voc rehab program.

I wanted to touch on mediation too, because this is a bold new move, but again it's misguided. This proposal, mediation in the voc rehab process, comes out of nowhere. We've got the Weiler reports, we've got the Minna-Majesky task force chock-full of really good recommendations, and instead we see mediation in the voc rehab process which is not one of these recommendations.

The deputy minister said, from the Hansard, "It reflects contemporary and successful trends in dispute resolution in Canada and across the world." But look, have you seen any evaluation of whether mediation in the voc rehab process is effective at solving the problem we have with the Workers' Compensation Board? I don't think so. There's been a lot of study and that evidence just isn't there.

Mediation, in our submission, is misguided because this is a process that helps two equal parties on a level playing field to complete a bargaining process, to reach a conclusion that they both find mutually beneficial. But voc rehab, in our view, is not necessarily a subject that is amenable to wheeling and dealing, because the whole injured worker's future is at stake here. It's not just another sale or another term in a contract that's going to be up for renewal in a year or so.

The problem is, of course, that the parties are not equal. This is particularly true for the unrepresented injured worker, and that's most of the injured workers, since only 37% of the workforce is represented by trade unions, and some of those unions don't do WCB cases. The legal clinics and the office of the worker adviser can't handle a fraction of the people with problems left over outside of the trade union movement. Our experience is that it's the nature of the mediation process that injured workers get pressured to settle for less than their rights under the act.

As you know, without changing the act, the board already introduced mediation into the re-employment process. The calls we get are from injured workers who feel they're being pressured by the mediator to settle for less than they're provided under the act. In our view, they're generally right. In fact, we get calls regularly from injured workers in the middle of mediation who are being urged by the mediator to accept cash payment in return for giving up their re-employment rights. Why? Because the employer has indicated that they're taking a hard line and because the mediator has indicated that the appeal process down to the end of the WCAT is a very long road. Mediation pressures injured workers to make deals that go against their long-term best interests.

You don't need to change the act to use mediation. It was introduced in re-employment without changing the act. If you think it might work, fine. Set up a pilot project and evaluate it properly, but don't change the act when none of the research so far gives us any reason to expect that mediation is the solution to the problem. Don't change the act on a hunch, because we should not gamble with the future of injured workers.

1140

The Vice-Chair: If I may interrupt, you have about two minutes left for your presentation.

Mr McKinnon: All right. I wanted to mention voc rehab for employers. Employers don't need voc rehab. This cut-and-paste approach is ludicrous. At most, they need assistance in fulfilling their obligations under the act and they have a different interest.

Employer access to injured workers' doctors -- should we, the people of Ontario who pay your salary, have access to your doctor if you're injured on the job? In essence, we feel the amendment in Bill 165 is a significant and unnecessary intrusion into doctor-patient confidentiality.

I think I'll wrap up my comments now and turn it over to Orlando.

Mr Orlando Buonastella: In the one minute I have left, I will simply tell you that there are many injured workers today. Some of them are in this room and others are in other rooms. I'm sure that you, as politicians, have detected the emotion that's there. That emotion signifies that they want justice. They want a law that really addresses them. I think the message they're telling this committee is that they're not satisfied at all with Bill 165.

What injured workers want is a law and a process that are not driven by faceless actuarial people but a law that's driven by real people with a face, with a name, often with a family, with dependents, with a lot of dignity and a lot of intelligence. These injured workers want something good done for them because they were good, before they were injured, for this province. They were very good, and after they got their injury they were no longer any good.

We talk about: "They cost too much money. We have to find ways to reduce their moneys." We want to send you the message that you should not, you must not, cut their moneys. You should not de-index their benefits, because we're not talking about Bill 165 here; we're making a statement about what kind of a province we have. Are we a province that respects and protects the people who got injured on the job? Surely we are, and therefore we need a law that doesn't cut benefits and doesn't cut their dignity. I would urge you to think of injured workers and do something for their dignity.

Most important, don't divide injured workers. Don't pay one group of injured workers by taking the money away from another group of injured workers. Don't pit older injured workers against new injured workers. Don't pit the injured workers of yesterday against the injured workers of today or the injured workers of the future. As Marion said, there's enough money there to do something for the older injured workers without cutting benefits to other injured workers.

We want unity. We are a family. Injured workers are a family and we don't want one child to get something and the other child to get something taken away. We want unity and we want some justice. We appeal to you to think and do something good for injured workers. Thank you very much.

The Vice-Chair: You went a couple of minutes over, but on behalf of this committee I'd like to thank the Injured Workers' Consultants for bringing us their presentation this morning.

Mr Hope: Mr Chair, would it be possible to obtain the study by the board that was brought up by the --

The Vice-Chair: I'm sure that would be available.

Mr Hope: If research could get us a copy of the report. Their presentation made reference to the study done by the board.

AUTOMOTIVE PARTS MANUFACTURERS' ASSOCIATION

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

Ms Elizabeth Mills: Good morning. The Automotive Parts Manufacturers' Association is pleased to have this opportunity on behalf of its members to provide its comments on Bill 165, An Act to amend the Workers' Compensation Act and Occupational Health and Safety Act.

I understand that the committee has been overwhelmed with requests to make representations and that your provincial tour responded to a large demand for attention as well. It would have been more effective, in our view, to extend the duration of the hearings on this controversial topic rather than to limit the duration of each presenter to 20 minutes, a time frame I am sure you have recognized limits your opportunity for an exchange of ideas.

Today I have with me Paul Teeple, director of human resources for Hayes Dana Inc, a member of the APMA. He is also the chair of our people-systems committee. My name is Elizabeth Mills. I'm the director of policy development for the association. I draw to your attention the brochure in which you find a copy of our remarks today. The brochure lists on the back cover all of the members of our association for your information.

The APMA is a national association representing OEM, that's original equipment manufacturer-producers, of parts, equipment, tools, supplies and services for the worldwide automotive industry. Founded in 1952, we have 400 members accounting for 90% of the independent parts producers production in Canada. In 1993, our automotive parts sales were $16.3 billion and our industry employed 77,000 people. Our projected sales for 1994 are $18 billion and employment of 84,000 people. Eighty-eight per cent of the independent parts production and employment is currently located in Ontario.

The APMA's fundamental objectives are: to promote the automotive parts manufacturing industry both domestically and internationally through liaison with the vehicle manufacturers' and labour groups; representation to both federal and provincial governments; to provide information and educational programs; to promote international trade and business opportunities and to develop globe awareness programs.

The global character of our industry cannot be undervalued when determining the long-term success and competitiveness of our businesses. Paul will return to this point momentarily, but before Paul begins, I would like to draw your attention to one final document which outlines our associations's positions on issues of public interest, including our thoughts on workers' compensation and health and safety on pages 4 and 5.

Mr Paul Teeple: Our industry in Ontario employs approximately 67,200 people. In 1993 the firms employing these people paid $148 million to the compensation board, while the automotive manufacturing industry overall contributed $291 million. From 1990 to 1993, our industry has reduced the frequency of injury by over 50%, and yet our rates continue to soar well beyond inflation.

These increases are in stark contrast to the business realities our companies face every day. The pressures of restructuring within the global business sector have had and will continue to have a significant impact on Ontario and its companies.

Let me illustrate. Despite the recent reversal of trends, the major change in market share away from the Big Three to the Japanese brand vehicles, whether they're produced in North America or imported, has given rise to a much more customer-focused industry with quality, cost, delivery and customer service as the primary criteria for success.

To meet these competitive challenges, we are converting from mass production to lean production, a very difficult task due to the major changes in culture, philosophy and values involved with both labour and management.

This is resulting in a tier structure in the parts industry. Tier 1 suppliers at the top of the structure are full-service suppliers with R&D and design-in engineering capabilities, while the tier 2 suppliers are learning to market their capabilities to many new companies, a number of which used to be their competitors.

Continuous improvement everywhere, while meeting the competitive demand for price reduction, is now a way of life for all of us. As an example, one assembler stated that they have obtained average price reductions of 15% from their suppliers over the last three years. The APMA are those suppliers.

What has the impact of all this been? Today the Canadian auto parts industry has 54 fewer companies and 25,000 fewer employees than it did in 1989. Branch plants have consolidated, companies unable to adjust or cope financially have shut down or merged. The balance, however, have developed into globally competitive companies that are lean and customer focused.

What do I want you to take from all of this? The compensation system is a direct cost to the bottom lines of the employers of this province. It is a cost seemingly out of control and one which is not to be addressed by the proposed reforms of Bill 165. This direct cost has a larger impact than the costs which I'm sure you have heard about in the past three weeks.

1150

The decisions to invest or establish an investment in this province are ones made every day, decisions that are frequently not in our province's favour because to establish a new business here means to adopt a portion of the debt created by a system as yet unused by that new employer and obviously out of control. For the current employer, it is a debt which we have been attempting to eliminate with excessive increases in our assessment rates with the incredulous results of an expanded debt with an undefinable end.

The Workers' Compensation Board needs to be run as a business, managed with the principles of lean production in mind, and a focus on its sustained ability to meet the demands of the customer: the injured worker and the Ontario employers. There are relatively few options for a merger for the WCB, and yet, this massive institution continues to be steered along a course to shutdown.

I would like to tell you what our association does promote and encourage our members to act upon when it comes to the Workers' Compensation Board. The APMA is committed to and actively supports efforts that enhance the health and safety of the individual automotive parts worker, and establishes methods and workplace practices that identify and prevent accidents.

In advocating this policy, the APMA encourages its members to seek and participate in training and workplace programs that reduce the incidents of injuries to the automotive parts worker, and wherever possible, ensure that the workplace meets or exceeds current standards and regulations.

The APMA advocates that members strive to minimize adverse impacts of workplaces on the employees through training, accident prevention, rehabilitation and rapid re-employment. We care about our employees and their families, but the APMA believes that, where practical, voluntary actions and market instruments are preferable and more efficient than regulatory means in addressing health and safety issues. The APMA believes that the WCB should strive to recognize through appropriate rebates and assessment rates those investments of employers whose accident rates are declining, so that awarded resources can be spent on training and workplace improvements.

If the WCB is to achieve a system that is financially sustainable over the long-term, it is essential that all parties to the system accept the principle that a framework of financial responsibility is the cornerstone to any meaningful reform. Without this critical understanding, the APMA believes that modifications or changes in any of the policy issues can at best only amount to short-term fixes.

We believe that the current workers' compensation system has four main problems: Continued confrontation is driven by the trend to compensate non-acute trauma; the level of expectation for benefits and services is beyond the scope of the single service program; the system is not financially sustainable; time, energy, and financial costs incurred by all concerned to deliver complex administrative services to injured workers makes the system cost-ineffective.

The APMA is actively seeking measurable results from the workers' compensation system that will reduce costs without hurting the injured worker. Through our participation in the Premier's Labour-Management Advisory Committee and various reference groups and committees and a focus on cost-reduction, it may be possible to regain stability in a system currently in crisis, beyond the control of its administrators and beyond the ability of employers to support it.

The APMA is convinced that the viability of the system and ever-increasing costs to employers put both the system and jobs in Ontario at risk. Equally, it is threatening an employer's ability to compete in a global marketplace which will result in further employment loss and loss of revenue that is needed to support the system. The APMA seeks the development of a competitive system that balances inputs and outputs, which is financially sound, responsive to the shareholders, and is enshrined in law and free of political involvement.

In addition to the beliefs we have just stated, the APMA has found that many other associations and employers share our views. As a member of the Employers' Council on Workers' Compensation, the APMA would like to reaffirm our commitment to the solutions and proposals previously outlined by many of our previous members.

I am now going to focus the remainder of my remarks on some specific aspects of Bill 165. The bill does not relieve the concerns my association members have shared with me since the government's May 1994 announcements. Indeed, the unified and common reaction to these proposals is as follows:

-- The government has lost the opportunity to present and move forward with meaningful reform as suggested in Bill 165. This bill ensures that costs and problems of doing business in Ontario will decrease our ability to compete globally and cause them to look in alternate provinces and countries for their next investment.

-- This bill ignores the well researched and documented reality that the compensation board is broke and adds an unprecedented $1.5 billion to the unfunded liability at a time when the board is experiencing negative cash flow.

-- The bill scuttles an experience rating system that has motivated and produced significant and meaningful change within the workplace for injured workers and all employees without interventionist regulation and red tape and throws back the investments made by employers to meet the changing needs and demands of its workforce.

-- This bill ignores the united business community's proposals in the fall of 1993 and it cherry-picks from the temporary accord from March 1994, casting aside the volume of comprehensive research undertaken by the Premier's advisers, which is workable, actuarially supported and fair to all stakeholders. Without repeating unnecessarily what has been heard many times before, the APMA supports the recommendations of the PLMAC.

-- The government should withdraw Bill 165 and return to the discussion table to develop a concrete, competitive path of reform measures that ensure the viability of the system for the workers.

-- The government should get out of the WCB process, take politics out of the decisions and allow it to be run as a business, not like it has for the past 10 years or even before.

In regard to the purpose clause, the bill's purpose clause focuses solely on the benefits to workers. It binds the board to expanded benefit entitlements, and in the absence of a financial responsibility framework, creates no standards for improving the accountability standards or the efficiency of the system. The purpose clause is not one developed from consensus, but is one that is being hoisted from a proposal that also promotes fair compensation, health care benefits and rehabilitation services with regard for the impact of changes to benefits or programs on employers. To put it simply, this clause is ridiculously politically one-sided.

Vocational rehabilitation is the core element of Ontario's workers' compensation system. This element has been examined twice in recent past: in 1987 under the Ontario Task Force on the Vocational Rehabilitation Services of the Workers' Compensation Board and in 1992 in the Chairman's Task Force on Service Delivery and Vocational Rehabilitation.

Currently, employers are subjected to stringent obligations to re-employ workers, and we do have responsibilities in that regard. The proposed amendments in this area do nothing to address the WCAT criticisms of the WCB in this area, but instead expand the powers of the board to intervene in the absence of a specific complaint, serving no policy purpose or need. The APMA sees no gain in the expansion of the WCB powers. In fact, in our view, it gives the WCB greater powers than the police have during criminal investigations.

The APMA does not believe in the abilities of bipartism. The government has many working demonstrations of how this system does not currently work, including the board itself. It has failed at the Workplace Health and Safety Agency, the Joint Steering Committee on Hazardous Substances and PLMAC. One of the key founding principles of the compensation board in Ontario is a clear division of powers between the board and the government. The bill's proposal offends this safeguard, and with the additional proposal of the memorandum of understanding, it is a dangerous precedent and risk that politicizes the functions of the board rather than separating the government from them.

Bill 165 contemplates a broader protection for members of the board of directors, officers and employees of the board. Incredibly, the bill proposes to extend the protection afforded to board representatives to any proceeding brought as a result of the exercise of judicial responsibility. In an era of rhetoric surrounding greater accountability in government and in decision-making, this recommendation is offensive to the need to make employees and members of the board aware of the statutes that bind them and to understand the unfolding jurisprudence in determining claims for entitlement. An independent WCB, removed from political influences, should be required to meet the rules and expectations that guide the functions of any board of directors in the province.

1200

Bill 165 introduces changes to how the experience rating system is administered. The development of experience rating in Ontario represents one of the best examples of joint policy development between business and government. Since its inception, the NEER program has been supported by the automotive parts industry. Under the amendments, NEER will no longer help to promote fair distribution of the assessment dollars and encourage employer accountability for accident prevention and WCB claims. I remember talking to the hearings when NEER first came in about how it was going to be revenue-neutral. It doesn't appear to be.

The NEER program has motivated significant numbers of parts producers in the province to reorganize company medical departments to take proactive roles in occupational health and safety, to introduce sophisticated and workable modified work programs, to develop and implement sound ergonomic principles and to initiate many other successful programs based upon a high level of employee involvement in health and safety awareness.

Several internal board studies as well as careful PLMAC review fully endorse the current administration of the NEER program. Under the amendments, refunds may be eliminated and surcharges increased through purely subjective investigations by the board. This move undermines the integrity of experience rating and provides the board with unsurpassed interventionist powers. This is not needed, not warranted and not productive. This type of government interference will further damage Ontario's competitiveness.

Our message to the government is clear on this: Experience rating works. Do not try to fix something that's not broken. Simply leave experience rating alone.

Indexing: Section 33 of the bill proposes to provide a new formula for calculating all compensation payable, the Friedland formula. Introduced by the business caucus of PLMAC, this idea has been cherry-picked and violated by exemptions. There can be no exemptions from the formula, for the reality is that the PLMAC proposal creates an immediate elimination of $3.3 billion of the unfunded liability and complete retirement of its debt by 2014. The APMA fully supports the original PLMAC business caucus proposal.

In conclusion, the APMA has long recognized the need for reforming the compensation board, and efforts in this area have been ongoing for over a decade when the unfunded liability was at $2.7 billion. The APMA is committed to and actively supports efforts that enhance the health and safety of individual auto parts workers and establish methods and workplace practices that identify and prevent accidents.

The APMA advocates that its members strive to minimize the adverse impacts of the workplace on employees through training, accident prevention, rehabilitation and rapid re-employment. These practices make good business sense.

The APMA represented its members in a great deal of work that was undertaken during the PLMAC process last fall, believing that research, documentation, analysis and meaningful discussion would lead to meaningful and workable proposals. It is beyond the capability of these words to express the outrage and betrayal felt by our members at the end of the PLMAC process.

The proposals that were developed required everyone to give and everyone to hurt, and most importantly, created a clear path towards meaningful reform. Critically lost among all of this is the continuing need to ensure that benefits necessary for injured workers are available long into the future. These are now at risk.

Bill 165 fails the injured worker, it fails to meet the objectives provided by the Premier to PLMAC and it fails to address the competitive nature of the global economy. Left as it is, the bill will bankrupt the system and cause workers to eventually lose the benefits they justly deserve. We urge the government to withdraw the legislation and reconsider the recommendations of the PLMAC.

Mr Mahoney: When the unfunded liability is the difference between the assets on hand and the long-term debt, ie the pensions over the lifespan of the injured workers etc -- and you obviously don't have to pay those out right away today; they come due as the worker lives and stays on compensation -- I wonder if you could explain, because we hear both sides of this argument, why it's so important to business to fund that 100%. It would seem to me that taking money from the business community, putting it into a fund to fund it 100%, and yet it won't be drawn on actuarially for many, many years -- why would business want to tie their money up?

Mr Teeple: I don't think it's a matter of tying up money; it's just making promises into the future that may not be able to be kept. There is a history at the compensation board of not only promising a dollar value into the future, but going into the future enhancing that dollar value and adding more and more and more liabilities. It's not what's promised to the injured worker -- and well deserved in many, many cases -- in 1994; it's what that promise increases. Many times by 1997, somebody's gone back and said, "Gee, what we told you in 1994 was not sufficient; we're going to give you more now." That liability just continues to grow, and now you've got fewer and fewer employees in an industry such as ours paying the same debts. Where at one time we had 100,000 people in this province, now we've got 67,000 people paying the same debt that was incurred when we had 100,000 people.

Mr Bill Murdoch (Grey-Owen Sound): I want to thank you for your presentation. I certainly appreciate it. I know Monroe automotive will appreciate it in my riding.

You mention now that this bill should be withdrawn, and try again. I just wonder, how much consultation did the government or anyone have with you before they introduced this bill, with your group?

Ms Mills: The PLMAC process was a process in which I think a lot of employers in the province, a lot of labour groups in the province did a tremendous amount of consulting work. I know of over 80 individuals who sat through horrendous, long committee hearings and meetings throughout the course of last summer, and certainly we've seen this morning a wealth of knowledge that this government has already developed on a variety of issues on the workers' compensation system. The answers have been provided to the government time and time again, and that the government would then have been able to produce this bill as its view of the solutions is incredible to our members and those of many of the employers in the province. The bill does not represent much of the discussion and much of the work that was undertaken.

Mr Murdoch: So it would be safe to say that they consulted.

Interjection: But they didn't listen.

Ms Murdock: You want the November business proposal in regard to benefits, as stated in your brief, which is to drop benefits from 90% to 85%, strictly limit eligibility requirements for benefits, as well as -- I'm trying to remember -- the Friedland formula on everyone, with no exemptions, and all of that will eliminate the unfunded liability. And at the same time, there is an increase to the unfunded liability through the NEER program, because last year the surcharges created were about $95 million and the payouts were over $150 million. There is an offset that is not being met. I mean, I could talk to you for hours on your entire proposal --

The Vice-Chair: Briefly, Ms Murdock.

Ms Murdock: -- but on that section alone, how can you ask for all of those things to be taken off of injured workers, who injured themselves on the job, and do nothing on the other side?

Ms Mills: I'd like to correct your view perhaps through a longer discussion about where it is NEER gets its funding from. It's not generated out of the revenues from the board.

Ms Murdock: No, I know that. It's surcharges.

Ms Mills: NEER was designed to be revenue-neutral, and the employer community has told the board -- the ECWC has presented the board with the solutions to the formula development within the NEER program. Documentation can be provided to the committee about how it is this can be fixed so that the surcharges that you're experiencing at the board will no longer be a problem.

Ms Murdock: There's a long story there.

The Vice-Chair: Thank you very much.

Ms Mills: That's right. That's why I suggested a long discussion.

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

1210

UNITED STEELWORKERS OF AMERICA, DISTRICT 6

The Vice-Chair: I'd like to call forward our next presenters, from the United Steelworkers of America, District 6 office. Good afternoon and welcome to the committee. Once again, a reminder that you'll be allowed up to 20 minutes for your presentation. The committee would appreciate if you'd leave a little time for questions and comments. Could you please identify yourself for the record and then proceed.

Mr Henry Hynd: My name is Henry Hynd.

Mr John Perquin: My name is John Perquin. I'm the health and safety coordinator for the district.

Mr Hynd: Good afternoon. On behalf of the United Steelworkers of America, I would like to take this opportunity to commend the government of Ontario, and in particular the Minister of Labour, the Honourable Bob Mackenzie, for having the will to put forward this piece of legislation even in the face of opposition from the business community.

Injured workers in this province have been suffering due to the injustices of a faulty compensation system, especially since the introduction of Bill 162 some five long years ago. Bill 165, although not perfect, seeks to correct some of those injustices. In particular, it seeks to strengthen the rights of injured workers to return to work in their pre-accident employment, a right that we have been pressing for for many years.

I want to share with you a few of the thoughts we have about Bill 165 and the government's intention to establish a royal commission. I want to give some examples of why changes are needed to the existing Workers' Compensation Act. At the end of our written submission, you will find an appendix which deals with some specific items of the bill and our suggestions for improvements to those items.

While Bill 165 makes a good attempt at addressing some of the more pressing problems of the Workers' Compensation Board system, and while it appears to closely mirror the business-labour agreement negotiated by the Premier's Labour-Management Advisory Committee, we believe the legislation's drafters have made some serious mistakes in the legislative language. As a result, we believe the intent of certain amendments has been lost. I trust that you will have an opportunity to examine these points more fully in your ensuing deliberations following these hearings.

The United Steelworkers of America represents some 60,000 members in the province of Ontario. Our members work in a variety of occupations and industries ranging from clerks to miners, hotel employees to assembly line workers, security personnel to truck drivers; from banks to steel mills, from nursing homes to retail stores, from manufacturing plants to warehouses, and in these manufacturing plants we have some from the automotive parts industry. Our members' experiences with the Workers' Compensation Board range from good to bad, from no problems to very frustrating problems. In my capacity as director, I have come to you today to express those frustrations and to urge you to set about your work of reporting back to the government.

Workers who have suffered the hardship of becoming permanently disabled as a result of workplace injuries have a very serious problem indeed. Not only do these people suffer from constant pain, with all of its associated difficulties, but more often than not they also suffer from poverty.

I am sure you are aware that there was no obligation on employers to return injured workers back to work prior to 1989, when Bill 162 was introduced. The consequence of this is that some 40,000 workers are being forced to survive on meagre disability pensions and welfare, if they are eligible. These are workers who have been judged by the Workers' Compensation Board to be unlikely to benefit from rehabilitation. One could say that for these workers, the employers have been able to shift the costs of injury to their workers on to society as a whole. We say shame on them. Some of those employers are employers that our union has dealt with in the past and in many cases still deals with today. Bill 165 seeks to repair this injustice by topping up the pensions for these injured workers and by giving full indexing protection.

Bill 165 also seeks to strengthen the obligations on employers to re-employ their injured workers and to cooperate in meaningful rehabilitation programs where they may prove to be beneficial. Our union can tell you many horror stories about employers who have refused to re-employ injured workers even after the implementation of Bill 162. We can tell you of an employer in Toronto that openly and outrightly refuses to re-employ injured workers and would rather pay the penalties set out in the act. We can tell you about another employer in the Weston area that challenges each and every claim filed by its employees, irrespective of when and where and under what circumstances the injury occurred. We can tell you of other employers in the province who have taken the approach that their workplace is a workplace in which no accommodations can be made, irrespective of the nature of the disability.

Should you wish to discuss these examples with us or have us provide greater detail and more examples, we would be more than willing to do so.

For employers in this province who are seeking to bring about savings in the compensation system, we say to them that rehabilitation and re-employment are the two main areas where significant cost savings to the system can be achieved without impacting negatively on the benefits for injured workers. The work done earlier by the PLMAC estimated that savings in the order of $1.5 billion to $2.5 billion could be achieved by the year 2014 if employers and workers cooperated in early intervention leading to meaningful rehabilitation where necessary and to meaningful re-employment. We say that Bill 165 seeks to address these concerns.

The financial health of the Workers' Compensation Board system is often said to be in a near-disaster state. By whose accounting? Certainly not by labour nor by injured workers. Let us examine this for a minute.

Today, the unfunded liability is estimated at $11.6 billion, and some unscrupulous employer lobbyists say that the unfunded liability will grow to $13 billion by the year 2014. These numbers are being used to argue for benefit cuts. These numbers are used to portray a system that has runaway costs. However, these lobbyists are not telling the full story. Ten years ago, the Workers' Compensation Board assets covered 32% of its long-term liability. Today, its assets cover approximately 37% of its liabilities. By the year 2014, it is projected that the board's assets will cover approximately 55% of its long-term liabilities if the provisions of Bill 165 are implemented. The $13-billion figure is actually inflated dollars for the year 2014. This is hardly a runaway system in danger of failure.

We are pleased to see that the bill calls for a newly constituted board of directors, one that will be truly bipartite in makeup. Our experience has been that bipartism, while difficult, does work, and it brings about meaningful solutions.

The United Steelworkers of America has long been an equal participant on the Mining Legislative Review Committee. More recently, since the inception of the Workplace Health and Safety Agency, we have had a representative on its bipartite board of directors. Currently, I am the representative. I can tell you categorically, from my own personal experience, bipartism does work. The Workplace Health and Safety Agency has had to make in excess of 300 decisions since its inception, and only once has one of those decisions had to be made through a vote. Consensus has always been the approach used, both at the Workplace Health and Safety Agency and the Mining Legislative Review Committee. The Mining Legislative Review Committee has made countless recommendations for changes to the mining regulations. There too, in almost all cases, consensus has been reached on recommendations.

I am convinced the proposed bipartite structure of the Workers' Compensation Board board of directors will be a successful one, resulting in meaningful accomplishments for the system and its stakeholders.

In the discussions leading up to the government's introduction of Bill 165, the stakeholders recognized that reform of the system needed to take place in two stages, short-term and long-term. Bill 165 attempts to address those short-term issues, and when the government announced its intention to form a royal commission to look at the bigger picture and issues such as coverage, entitlement, occupational disease, universal disability insurance, benefit levels, indexing, finances etc, we in the Steelworkers welcomed such a royal commission.

1220

We hope that the commission's recommendations will result in a comprehensive Workers' Compensation Board system, a much different system than we have today: one that will see injured workers being able to live out their lives with dignity and respect; one that will see almost every injured worker returned to meaningful employment; one that will see us no longer having to argue about causation, particularly when looking at occupational disease; one that will see all workers covered; one that will see an end to the human misery and suffering caused by poverty among injured workers.

It is rumoured that Lynn Williams, retired president of the United Steelworkers of America, has been asked to act as chairperson of the royal commission. We are hearing rumblings coming from within the business community that if Lynn Williams is chosen to head up that commission, then the commission is doomed to failure because business will boycott the process. We say, "Shame on the proponents of such a boycott."

Having known Lynn Williams for many years on a personal level as well as a professional level, I know that Lynn Williams would do an outstanding job in heading up the royal commission were he to be appointed as the chairperson. Lynn has earned the utmost respect from people all over the world, including workers, those from business and from government. His integrity is beyond reproach. Lynn is held in the highest regard as being a fairminded individual, a person who listens and who is open to new ideas and change, an intellectual with an amazing capacity to get the task accomplished. Needless to say, I personally and my organization, the Steelworkers, strongly urge the government to formally announce his appointment as the chairperson of the royal commission.

I want to take a brief moment to highlight two areas in which we see some shortcomings with the bill. The United Steelworkers of America is not overly enthused with the fact that the bill contains a provision known more commonly as the Friedland formula. This formula, which was originally designed to deal with the indexing of retirement pensions, will be applied to injured workers' benefits upon the passing of this bill. Other than those exempt from this formula, injured workers will see their benefits rise at a lower rate than that of inflation and consequently will risk falling behind and possibly being saddled with having to accept a lower standard of living.

We do not believe that this will be particularly healthy for anyone. However, we do recognize that this formula was agreed to in the spirit of negotiations between the stakeholders during the PLMAC discussions. We also recognize that, when coupled with the stronger re-employment and rehabilitation provisions of the bill, those workers affected will, in the main, be those who are back at work.

Nevertheless, there is one aspect of the formula to which we are strongly opposed. We feel that the inclusion of a cap in the formula is punitive to injured workers, particularly in times of rapidly rising and high inflation. Given that typically during periods of high inflation wages also increase at similar rates, and given that the Workers' Compensation Board assessments are based on payroll, the system is adequately protected against increased costs, and thus there is no need for a cap to be contained in the formula. We strongly believe that the cap cannot be justified and it must be removed.

Lastly, while Bill 165 takes special measures for those disabled workers who are unemployed and were injured prior to 1990, it misses a small group of injured and permanently disabled workers who were over the age of 65 at the time Bill 162 became law and subsection 147(7) was included in the act. These disabled workers, who are now over 70 years of age, live in extremely difficult circumstances. Bill 165 denies them the $200 increase in their pensions solely because of their age. An increase in the pensions of this group is a matter of justice and dignity, to say nothing of equity.

The time has come for change to the current workers' compensation system. Injured workers deserve nothing less than respect and dignity; today they do not enjoy that. Bill 165, with our suggested amendments, indicated in the appendices, will go a long way to ensuring that respect and dignity becomes inherent in the system. With Bill 165 passed into law, the royal commission can then begin the important task of making recommendations for rebuilding the system to reflect the needs of tomorrow's society.

On behalf of the over 60,000 men and women who make up the Steelworkers in Ontario, a number of whom are themselves injured and disabled, I want to encourage you, the members of the standing committee on resources development, to take the recommendations contained within this submission to the government. I also urge you to encourage the government to get on with the task of system-wide reform through the royal commission.

Thank you for the opportunity to present to you the views of the United Steelworkers of America on this bill.

Mr Arnott: Thank you, Mr Hynd, for your presentation. I want to pick up on your suggestion about the royal commission head. You're suggesting that Lynn Williams be the head of the commission. I'm not surprised that you might make that assessment; you know him personally and you've worked with him, I'm sure, for many, many years. Do you not, though, think that it would be preferable to have someone appointed who is considered to be independent and is not a direct stakeholder in the process to come up with a series of suggestions which are completely impartial and perceived as such?

Mr Hynd: Quite frankly, I think that Lynn Williams would be impartial. I think Lynn Williams, in a role as head of a commission, would play that role as well if not better than anybody I can think of. There have been many heads of commissions established in government over the years that I would say represent the business community, while people weren't enthraled with that. I wouldn't consider Dr Ham, as an example, to be independent, and he headed up a commission on safety and health, a commission that delivered results that we were quite pleased with. We would have gone further had we had control of that commission, but we lived with the recommendations made. So I have no fears that Lynn Williams would make a significant contribution to improving the system of workers' compensation in the province of Ontario.

Ms Murdock: I celebrated the 100th anniversary of Labour Day at the Steel picnic on Monday, so good to see you.

We've heard much about the PLMAC agreement of March 1994. It's seen so significantly differently by both sides: that it wasn't an agreement, that they want to go back, and business in many instances wants to go back to the November presentation. How do you see that PLMAC agreement, and what was it that was agreed to?

Mr Hynd: Rather than tell you what was agreed to, because what was agreed to was agreed to -- it's there; it's clear -- one of the difficulties of bipartism, quite frankly, is the business community very seldom is able to put anyone into any committee that has the full support of the business community. On the workers' health and safety committee, on the agency, as an example, most of the decisions that have been made by consensus the business community constantly wants to revisit. We do, and we end up with the same consensus, but it takes a long, long time.

I, quite frankly, see as a major problem of bipartism the business community's failure to be able to put people in place and give them support. The current practice has been to put people in place and undermine all the decisions they make. So that's one of the failures.

The PLMAC decision, I think, is clear. The record's there. I don't think it's worth commenting on. People made an agreement, and they've tried to back away from it since they've made it.

Mr Mahoney: I would share many of your sentiments about Lynn Williams, by the way. I think he's an outstanding individual who can indeed make an outstanding contribution to this province, and it would be great to have him back. The problem, I'm sure you can understand, is the perception that someone solely and firmly on the side of one of the proponents or one of the stakeholders would chair. I'd be interested to see labour's reaction if George Peapples were announced as the chair of the WCB reform. I think you might have a similar type of reaction to that.

On the PLMAC thing, though, I'd just like to ask if you're aware of this letter -- I've asked a number of the business interests if they're aware of it -- April 21, 1994, from Premier Bob Rae to Jim Yarrow, chairman of the Employers' Council on Workers' Compensation, in which he says, "Dear Jim," -- I'll read you one section -- "A `purpose clause' will be added to the Workers' Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility."

That was the agreement that was entered into in the PLMAC, and I have in fact got right here the comparison of the bill to the agreement. The Premier said there would be something in the purpose clause about financial responsibility; the PLMAC agreement said there would be something in the purpose clause. It's not here. Gord Wilson says this bill mirrors the PLMAC agreement. It clearly doesn't. I just wonder if you have anything to add to that.

Mr Hynd: I haven't seen a copy of the letter that you just read.

Mr Mahoney: You haven't seen it? I'm sorry, what did you say?

Mr Hynd: I haven't seen a copy of the letter that you read from Premier Rae. My colleagues point out to me that in subsection 58(1), "The board of directors shall act in a financially responsible and accountable manner in exercising its powers and performing its duties."

Mr Mahoney: It's not the purpose clause, though.

Mr Hynd: No, but it's in there.

Mr Mahoney: I acknowledge that, but it's not the purpose clause, which is where the Premier agreed it would go.

The Vice-Chair: On behalf of this committee, I'd like to thank the United Steelworkers of America, District 6, for bringing its presentation to the committee this afternoon.

I'd like to thank all the members for their patience. This committee stands recessed till 2 pm this afternoon.

The committee recessed from 1231 to 1403.

ONTARIO NATURAL GAS ASSOCIATION

The Vice-Chair: I'd like to call this meeting back to order and call forward our first presenters, from the Ontario Natural Gas Association. Good afternoon and welcome to the committee.

Mr Paul Pinnington: Thank you, Mr Chairman. Good afternoon to yourself and the members of this committee. My name is Paul Pinnington. I'm the president of the Ontario Natural Gas Association. Accompanying me, to my left, is Sandy Douglas, the director, employee relations, Consumers Gas Co Ltd. On my immediate right is Jim Chuby, manager of occupational health, Union Gas and chair of the association's WCB committee, and on my very far right is Mr John Neal, a consultant to the association and a principal of Nexus Actuarial Consultants Ltd.

We thank you for including the Ontario Natural Gas Association in these important proceedings. ONGA represents Ontario's $1-billion natural gas industry. On behalf of our members, we have prepared a discussion paper which addresses serious concerns that we have regarding Bill 165. The paper has been distributed to members of this committee.

Jim Chuby will make our presentation, and with your concurrence, Mr Chairman, I propose that my colleagues and I respond to any questions at the conclusion of Mr Chuby's presentation. The paper has been provided to the clerk and a representative of Hansard. Additional copies of the paper are available on the desk to my right here for interested parties.

The Vice-Chair: Please proceed.

Mr Jim Chuby: Today our presentation will include an introduction, followed by our specific concerns regarding Bill 165, and conclude with a set of recommendations.

Introduction: Although our time is short, we felt it important to briefly review the WCB's financial crisis and the process undertaken to arrive at Bill 165. This provides the background for our evaluation of Bill 165's ability to achieve the objectives of fair compensation and financial soundness. For your convenience, our written submission also contains a tabular comparison of the October 1993 recommendations of the PLMAC business caucus, the March 5, 1994, principles embedded in the accord between business and labour and the key elements of Bill 165.

In order to illustrate the WCB's financial crisis, it is noted that following the 1984 establishment of the WCB's strategy to achieve a zero unfunded liability by the year 2014, employers' assessments have doubled, the number of WCB employees has increased by 50% and the WCB's unfunded liability has grown from $2.7 billion to $11.5 billion, all of this in spite of a 30% reduction in lost-time injuries.

In addition to the above-noted problems, we understand that in 1993 the board had a negative cash flow, in spite of some $521 million of investment income. Without its investments, the WCB would have had to borrow from the province and/or increase its already unacceptably high assessment rates. Bill 165's proposal to add a $200-per-month pension will add another $100 million to this annual shortfall in cash flow.

As we understand the process undertaken to arrive at Bill 165, the Premier initiated the current reform in the spring of 1993 by inviting PLMAC to work together to produce a system that will pay injured workers fairly and meet the test of being financially sound.

The business caucus proceeded to prepare and present their October 1993 set of recommendations that would restore the financial viability of the system without reducing compensation below the fair compensation threshold.

In early March 1994, in response to prompting from the Premier, a short-lived accord was reached between business and labour. Although many of the business caucus recommendations were lost or watered down, we felt that as a take-it-as-it-is package, progress had been made.

By early April, there was no accord and the government had taken over the overall management of the WCB.

On May 18, the government tabled Bill 165. We did not expect the accord to be used selectively in the creation of Bill 165. We did not expect any of the accord's principles to be subjected to major modifications. We did not expect further government intervention in the workplace to be tacked on.

As a result of selectivity, major modifications and add-ons, Bill 165 fails to tackle the WCB's financial crisis and fails to live up to the intent of the March accord. We believe that the system is already too complex and requires too many resources within the WCB and in the workplace. Bill 165, if adopted, will add to these inefficiencies.

What we all need is a fair, competitive, efficient and effective system to meet the needs of our province's injured workers and employers. We believe that Bill 165 falls short of these requirements. It adds to the system's complexities and need for resources. It imposes undefined and untested requirements on an Ontario workplace that is working hard to remain competitive.

Bill 165's dilution of the Friedland indexing formula and the inclusion of a $200-per-month lifetime pension will result in a lost opportunity for major financial reform.

Coming to ONGA's specific concerns regarding Bill 165, the purpose clause: We believe that the original PLMAC business caucus purpose clause provided a balance between fair compensation and financial soundness. Without this balance, we believe that the system will continue to dysfunction. The Ontario system is already out of line with those of our trading partners. We support the solutions laid out in the original PLMAC business caucus purpose clause and urge you to consider them carefully. Thoughtful stewardship of our province requires an effective balance of the competing demands for scarce resources. At a time when essential services such as health care are under severe restraint, we question the appropriateness of a one-sided purpose clause for the WCB.

We believe that the removal of the balance between fair compensation and financial soundness from the PLMAC business caucus purpose clause is a major mistake. The result will be a less competitive environment for Ontario employers and a lost opportunity to restore the financial sustainability of injured workers' benefits.

1410

Return to work section: Bill 165 goes far beyond the March accord. In our opinion, it expands government intervention into the workplace, places further unrealistic demands upon the WCB and subjects employers to multiple penalties for a single infraction.

We do support the concept of prescribing the information required regarding the ability of a worker to return to work and the medical restrictions affecting the worker's ability to perform work.

We do not agree with the requirement for the consent of the worker before this information can be released to the employer, as the information does not relate to diagnosis or treatment.

While the worker's consent should not be required, it is critical that the worker, the worker's physician, the employer and the WCB be provided with this information from the appropriate clinicians in an ongoing and timely fashion.

We agree with the concept included in the PLMAC business caucus proposal that advocates obligations for all parties involved in an injured worker's rehabilitation and return to work.

Although there may be some value in the use of mediation within workers' compensation, it is important that these services do not increase the WCB's administrative costs. We are concerned that mediation may add to the time it takes to assist a worker to return to work. We are concerned about the proposal's silence on the question of confidentiality and the exclusion of the mediator from any adjudicative or case worker responsibilities. We also have concerns over the mandatory nature of subsection 72.1(1).

Experience rating: ONGA is a strong supporter of the current experience rating systems. These systems have made a significant contribution to the reduction of injuries in Ontario and effective return-to-work programs. They are objective and provide employers with a tool that is consistent with good management practices of any business. To modify these programs with inefficient and subjective WCB employee assessments of an employer's health and safety, voc rehab and return-to-work practices and programs is inappropriate.

For example, under the WCB's current Workwell program, which includes an audit of an employer's health and safety programs and practices, a staff of 11 is required to complete the assessment of less than 500 employers a year. The WCB's current experience rating program requires a staff of 15 to issue and service 120,000 annual adjustments. It is not surprising therefore that the WCB has stated it does not have the resources to administer the Bill 165 proposed changes to the current experience rating programs. Again, it is not clear why Bill 165 would purport expansion of WCB's administrative costs when the bill's objective was to provide financial soundness.

We urge you not to change a proven system.

Indexing: While we applaud the government's acceptance of a modification to the current indexing formula, we disagree with the need for exemptions. We are particularly concerned that the proposed exemptions include workers who are employed and workers who have retired.

The $200-per-month increase in pre-1990 pensions: Before proceeding with a further increase in the benefits to some 40,000 permanently disabled workers, we believe that a thorough analysis of the proposal is required. This analysis will provide an opportunity to explain if a further increase in benefits is required for the same group of injured workers who received a major increase under Bill 162. We do not agree with the extension of the increase beyond age 65, when most workers have retired and other government programs become available. We do not agree with the current proposal's failure to limit a worker's entitlement to the limits set out in section 147.

ONGA's recommendations: Our first-choice recommendation is for the withdrawal of Bill 165 and a return to the negotiation table. On the premise that our first choice will not be followed, our second-choice set of recommendations are as follows:

Purpose clause: Adopt the original PLMAC business caucus purpose clause. Failing adoption of the PLMAC business caucus purpose clause, we recommend the adoption of the accord's purpose clause.

Experience rating: Leave the current experience rating programs unchanged.

Exemptions from indexing: Remove the exemptions from the modified indexing formula. Failing withdrawal, remove employed, employable and retired workers from the exemptions.

The $200-per-month pensions: Remove the additional $200-per-month pensions. Failing withdrawal, exclude employed, employable and retired workers from the additional pensions and limit the amount of a worker's additional pension to the limits in section 147.

Penalty for employer failure to cooperate in section 53 vocational rehabilitation services or programs: Remove the penalty.

Mediation: Remove mediation. Failing withdrawal, change the mandatory requirement for mediation and improve the confidentiality and independence of the mediation process.

Medical reports: Remove the requirement for worker consent and prescribe the information from clinicians.

Again, on behalf of ONGA, we would like to thank the standing committee for this opportunity to provide our views on Bill 165. We welcome your questions.

Mr Hope: I guess my questions will be focused more towards Union Gas. It's the one I'm more familiar with.

Reading your presentation, I notice that you didn't put how much money you contribute to WCB, because my second question, if you had put that number there, would have been how much money you get back through the experience rating program.

I know Union Gas in the city of Chatham. I know what they do, and I'm just curious. You talk about the current experience rating program. Just out of curiosity, how much does Union Gas actually get back from the rebates?

Interjection.

Mr Hope: It's okay. Don't bother answering.

Mr Pinnington: Mr Chairman, I just had a question as to whether that was public information or not. I'm not aware that it is or is not.

Mr Chuby: I guess, Randy, just in response to your question, Union Gas and the gas industry, through a lot of work in accident prevention and rehabilitation, have, I believe, the eighth-lowest assessment rate in the province of Ontario. That's because we work hard at it.

Mr Hope: But that's why I wanted to ask the question, why one who is doing a lot of prevention in accidents asks for the removal of the penalties for failure to cooperate in section 53, vocational rehabilitation services and programs; why you're asking that to be withdrawn, when I know the services that you do provide in Union Gas.

Mr Chuby: I see. I feel that's a duplication of what's already in the system under experience rating.

Mr Hope: But wouldn't it get the system under control if we're starting to penalize those employers who are not participating, whether it's hiring disabled persons or whether it's bringing back the disabled persons from accidents that have occurred? I'm just having a hard time understanding your recommendation you have here, when I know the issue and where you guys are coming from with Union Gas.

Mr Chuby: Again, my response is that I see more benefit of a good experience rating program than a penalty system. In other words, a good experience rating program provides both incentives and disincentives to employer actions in a manner which is consistent with good business practice.

Mr Mahoney: I have a couple of comments. First of all, your opening remarks wherein you say you provide background for your evaluation of Bill 165's ability to achieve the objectives of fair compensation and financial soundness: Financial soundness is clearly not an objective of Bill 165.

The purpose clause lays that out very clearly, notwithstanding the letter that I continue to ask people if they've seen from Premier Bob Rae wherein he promises that a purpose clause will be added which will ensure financial responsibility. That's Bob Rae's letter right there to the chairman of the ECWC, the Employers' Council on Workers' Compensation.

So just by way of correction, I suppose, it's not an objective of Bill 165. It's not addressed in any way. It is an objective stated in the purpose clause to deal with fair compensation and that type of thing.

Also, I would add that your first recommendation of withdrawal and return to the negotiation table is one we've heard often. Your second recommendation is so broad-sweeping that it probably makes the first one more attractive if the government had to choose one. So I highly doubt that they're going to accept either.

1420

I guess by way of question, on the experience rating, would you rather have a system that eliminated rebates entirely but dealt with the experience rating in setting premiums in the first place, similar to the way auto insurance premiums are established based on a three-, four- or five-star system, so that you would be rated, notwithstanding the problems with new entrants into the system. There would obviously have to be some kind of a base, just like there is with new drivers, to allow for a certain period of time to gain experience. It seems to me odd that we have a system here where we have some $200 million being given back in rebates, and people crying about premiums being too high in the first place. Why not set the premiums fairly and eliminate this kind of rebate thing?

Mr Chuby: In response to that, our experience with experience rating has been that it's more responsive than the assessment rating system. In fact, we worked hard to become one of the groups that was allowed into experience rating in about 1986. We gained entrance in 1988 and we're one of the groups subjected to the sunset clause which, after evaluation, showed that experience rating did in fact work.

What you're referring to in your question is prospective rating versus retrospective rating, and that was a component of the experience rating system initially. On a long-term basis, it may be a more appropriate way to go, but it doesn't give you the flexibility to say, "Yes, this is your response," and it doesn't give you the accountability to manage well. The current NEER program gives you the ability to say cause and effect and a financial consequence.

Mr Arnott: On the purpose clause, one question: Of course, the purpose clause explains why we have a Workers' Compensation Act and what its fundamental guiding principles are going to be, and as such, it's a very important clause. Mr Mahoney has a letter the Premier wrote to an individual --

Mr Mahoney: Do you want a copy?

Mr Arnott: I haven't got a copy of it but I wouldn't mind -- apparently making the commitment that there would be within the purpose clause a requirement that the board would act responsibly in a financial sense.

The Premier made the announcement that he was going to make some changes to the Workers' Compensation Act. He told the Legislature on April 14 that some changes were coming. It was at that time that we were told that Mr Di Santo would be gone and Mr King would be gone, and a number of changes would be taking place.

I received in my office a news release. It comes from the Ministry of Labour but it talks about what the Premier said as well as the statement that the Premier made, and then a technical summary of workers' compensation reform. Again, this is dated April 1994 and it says:

"Program for Change: The government is adopting the following key elements of the PLMAC framework agreement: a new bipartite structure for governing the Workers' Compensation Board of directors; and two, a legislated purpose clause setting out the guiding principles of (a) fair compensation and benefits, (b) rehabilitation and early and safe return to work opportunities for workers, and (c) financial responsibility and accountability."

When I received this -- I assume it's coming from the Premier -- the Premier's telling me that there's going to be a requirement within the purpose clause for financial responsibility and accountability. Now that's not there, as we found. Why do you think the New Democrats have reneged on this promise?

Mr Chuby: I guess it seems kind of a political question. I'm not sure how to address that. All I can tell you is that in our table on page 6, we lay out the purpose clause that was originally put forward by the business caucus and then the business clause that was agreed to in the brief accord, and then showed, I guess, the similar or same sections in the proposed Bill 165.

As you can see, it's been a continual -- I refer to it as watering down to the point where I question that the intent of keeping a balance between fair compensation and financial soundness, which were the objectives, as I understand it, when the PLMAC first got together, still exists under Bill 165, and that's our concern.

The Vice-Chair: On behalf of this committee I'd like to thank the Ontario Natural Gas Association for its presentation to the committee this afternoon.

ONTARIO SOCIAL SAFETY NETWORK

The Vice-Chair: I'd like to call forward our next presenters from the Ontario Social Safety NetWork. Good afternoon and welcome to the committee.

Mr Randy Ellsworth: My name is Randy Ellsworth and I'm from the Ontario Social Safety NetWork.

Just a couple of preliminary comments before I start: One is, I'd like to voice my objection to the short period of time that people are allowed to present to this committee. I think the bill that you're considering and the act that you're considering is a fairly important one and the limit in time is not fair to the people who are interested in both the bill and the presentations.

By way of introduction, I'd like to say that the Ontario Social Safety NetWork is a provincial organization which was formed to fight attacks on social programs that make up our social safety net and to support progressive policy change. The network includes low-income individuals, anti-poverty groups, interfaith communities, people with disabilities, labour groups, legal clinics, social development agencies and others.

One further caveat to the submission before I start, as I've noted, the network has a diverse membership and some of its member organizations have made presentations to the standing committee in their individual capacity. Where this is the case, the standing committee should rely on those submissions as reflecting the viewpoint of the individual organization rather than our submission here.

The purpose of our submission today is twofold. The Social Safety NetWork recognizes that many of the social programs in this country, including this province, are under some form of review. Social assistance, or what's left of the social assistance reform process, is still going on. Unemployment insurance and the federal social security review is occurring along with the royal commission into workers' compensation.

We recognize that many of the issues that face recipients in all of these programs are similar and cross-programs, so what we're going to attempt to do in our submission today is both focus on the workers' compensation issue specifically, but also attempt, at least, to highlight some of the overlap and the interaction with different programs.

The first thing I'd like to touch on is the $200 increase, which is in section 32 of Bill 165. I'm sure you're familiar with all the sections and what they stand for, so I'll try to be brief in what they mean.

When the Premier introduced the legislation, he stated that the $200 increase was going to be to the lifetime pensions of injured workers and was going to not be subject to the social assistance clawback. Bill 165, as it reads right now, doesn't achieve any of those purposes. In so far as pensions are concerned, the $200 amount is contingent upon an injured worker being entitled to a supplement on his or her permanent disability pension. In effect, this is really a second supplement to the injured worker's pension.

Our recommendation is that the section should be amended to delete the subsection referring to entitlement to supplements, and that instead the $200 would be paid to workers receiving an amount awarded for permanent partial disability.

The second issue concerning the $200 is the social assistance clawback. Unfortunately, this has not been mentioned by anybody as far as I can tell, by either the deputy minister or the Minister of Labour in their opening remarks to the committee. It hasn't been mentioned since April 14 when the Premier made his speech.

As the bill is presently worded, any worker who receives the $200 and who is also receiving social assistance will have that amount deducted dollar for dollar from their social assistance payment. They will, in fact, be no better off now or after the bill is passed than they would be now.

The only way to ensure that this amount is not deducted from the social assistance payments is by amending Bill 165 to make a specific reference to these $200 payments not being included in income for the purposes of the Family Benefits Act and the General Welfare Assistance Act.

The second thing I'd like to talk about, just briefly, is the membership of the board of directors, which is section 11 of Bill 165. This bill creates a new composition for the board. Unfortunately, there are no spots reserved specifically for injured workers.

I find it difficult to believe that this government, or any government, would set up a commission on something like racism without ensuring that there were members of the visible minority communities as commissioners on that commission, or that it would set up a commission on sex discrimination without ensuring that there were women as commissioners on that commission, and yet that's precisely what it's done in so far as injured workers and the Workers' Compensation Act are concerned.

We believe that the injured worker should receive the same consideration. The exercise of the board of directors' power directly affects them and only them, or mostly them, and they should have specific spots reserved for them on the board. We don't believe it's sufficient to say that there are spots reserved for workers because, as I'm sure you are aware, the debate around Bill 165 has indicated that workers per se and injured workers do not necessarily have the same outlook on issues.

1430

The third thing I'm going to talk about is the obligation of the board of directors, which is contained in section 12 of Bill 165. That section says that the board is to "act in a financially responsible and accountable manner." However, there has been no explanation of what this "financially responsible and accountable manner" means. We believe that there's already sufficient guidance in the act for the purposes of carrying out the board's financial responsibilities and our concern is that this section is going to be used to reduce coverage or prevent coverage from being extended to workers who are injured at work. If this is the case, we believe that this would be a reneging on the historic agreement that was reached when the legislation was first passed. Workers gave up their right to sue in exchange for no-fault compensation for their workplace injuries.

The effect of this section, if it is as we've suggested, is that workers who are injured in the workplace would not receive any compensation because employers might complain that they can no longer afford to pay for injuries which they have caused. So our recommendation for this section is that it should be deleted.

The fourth thing I'm going to talk about is the purpose clause, section 1 of Bill 165, and that states that one of the purposes of the act is to provide "fair compensation" to workers who are injured in the workplace. As yet, I've seen no one who's defined what "fair compensation" means, and we're wondering whether it means anything less than full compensation. If it does mean less than full compensation, this would also appear to be reneging on that historic agreement. Workers gave up a common-law right to sue in return for compensation. There does not appear to be any corresponding encroachment on the employer's full immunity from legal action for workplace injuries. So our recommendation is that this section should be amended to refer to full compensation.

The fifth thing I'd like to touch on is what I've entitled Compensation from Another Jurisdiction. This is section 3 of Bill 165. In his opening remarks, the deputy minister stated that this section was meant to prevent double recovery of workers' compensation payments from two jurisdictions. Unfortunately, this section, as it's worded, is much broader than this. This section would arguably prohibit payment of workers' compensation benefits to persons who are receiving CPP disability benefits, where some portion, no matter how small, of that CPP payment takes into account the workplace injury.

As you'll see in our brief, there's a reference to a Supreme Court of Canada case which has in fact interpreted the words "in respect of" as the widest of any expression intended to convey some connection between two related subject matters. This argument on how that section could be used to prohibit payments to people who are receiving CPP disability benefits is somewhat more fully explained in the brief. So our recommendation is that section 3 should be amended to make reference to workers who receive compensation under the workers' compensation law of another jurisdiction for the same accident.

The last thing I'd like to touch on is what's been called the Friedland formula, which is in section 33 of Bill 165. The formula proposed in the bill means that workers' compensation benefits will not have full protection from inflation, and I'm sure you're all familiar with the formula. The indexing factor that's used to index benefits is three quarters of the change in the consumer price index minus 1%. The bill also says that the indexing factor will be no greater than 4%.

This is not what the Friedland task force proposed as its formula for indexing pensions. One of the things that the Friedland task force said was that the annual increase in the CPI -- the A in that formula -- the highest that this amount should be is 10%. With the cap that's proposed in Bill 165 to the indexing formula, the highest that this A can be is 6.7%, so that injured workers will receive no protection against inflation, which is higher than 6.7%.

The second thing that Friedland recommended and that isn't in the Bill 165 formula is that the inflation in excess of 10% should be carried forward to years in which inflation was less than 10%. This would ensure that inflationary gains were eventually recaptured by people who receive pensions.

Finally, the true Friedland formula was posited as a minimum for the indexation of pensions, not as a maximum, and it was recognized that it would not fully protect against the erosion of benefits associated with inflation.

The formula that's presently in Bill 165 creates the illusion of an increase in benefits because the face value of the benefit increases, but the purchasing power, or the real value of the benefit, decreases over time. What is being proposed is a legislated annual reduction in the real value of workers' compensation benefits which the government or the WCB does not have to account for publicly. Our position is that all benefits should be indexed fully to inflation.

I'd like to thank you for listening and I'm willing to entertain any questions that you might have.

Mr Mahoney: Actually, I think you've highlighted a major part of the debate around this that I saw when I went out on an outreach tour and I've seen in other -- how many times do we sit around here and deal with tinkering with WCB? Do you see the compensation system as a social service or an insurance plan?

Mr Ellsworth: I guess I'd have to ask you to define social service and insurance plan.

Mr Mahoney: Well, let me do that. When Meredith looked at it he said that one of the problems with other compensation systems that he looked at was that there was still the litigation. They were trying to pin blame, so there were systems where they were trying to blame the worker for causing the accident or they were trying to blame the employer for causing the accident, and the only solution to that was to litigate, was to actually go to court. It was his recommendation that the litigation aspects under this system be eliminated, for the benefit of both workers and employers.

In return for that, and in return for the workers giving up the inherent right to sue, and in return for eliminating all the costs and delays in litigation for a worker to get any kind of settlement to help the family etc etc, there was supposed to be insurance to replace the income and to provide health care benefits to rehabilitate the worker and help that worker return to work. So it was income replacement insurance, a form of health insurance separate from the broader health insurance that we enjoy with OHIP, and rehabilitation insurance.

Social services, in my experience, is something that is not related to an injury, is not related to an accident of some kind. It's simply related to the fact that you're out of work, you've run out of UI benefits, you can't get a job and you're on some form of family assistance. So I sort of see a difference.

I think the concern we've heard from a number of people, primarily in the business community, is the WCB system has become more of a social safety net than it has an insurance program to replace income, rehabilitate and get a worker back to work. I just wonder if you agree with that.

Mr Ellsworth: I guess what I would say is that the people who I work for and with really don't care whether something is an insurance system or a social services system or whatever. I don't agree with your premise that social services don't cover people who are injured at work because people who are refused coverage or aren't covered under workers' compensation, and yet are unable to work, are in many cases, forced to rely on social assistance.

I think, instead of trying to categorize something as an insurance system or a social service system, what we should be looking at is making sure that we compensate people for injuries that they've suffered.

Mr Arnott: Thank you for your presentation. I have a question about the bipartite nature of the board that this bill will create. It appears to me that if we go through this process and have a bipartite board where you make appointments, where individuals are supposedly in theory representing a specific interest, ie, either labour or business, that those board appointees are going to feel predisposed towards pushing a specific agenda once they get on the board. To me, you can almost draw a comparison, it's almost like bringing party politics into the Workers' Compensation Board, in my opinion.

Do you not think it would be better to appoint members of the board who are completely objective, completely fairminded, people without bias or preconceived bias?

Mr Ellsworth: I don't have any trouble with the concept. Our suggestion about ensuring that injured workers are represented on the board is that everybody also brings their personal life experience to their objectivity, and you and I might not have the same outlook on things as somebody who has suffered a workplace injury. And right now, as Bill 165 proposes that the board should be structured, there is no guarantee that this outlook will be heard at the board.

1440

Mr Arnott: I'm just saying a labour appointee is going to be given his marching orders, "You go in there and fight for labour," and a business appointee, so-called, is going to be given the marching orders, "You go in there and fight for business," and create a situation where on many occasions we're going to have the whole board at loggerheads, I think.

Mr Ellsworth: I'm not sure if there is a question there, though.

Mr Arnott: It's a comment.

Mr Ellsworth: Oh, okay.

Mr Arnott: You answered my question. Thank you.

Ms Murdock: Thank you for your presentation. Social assistance clawback: I have said, and you've referred to the fact, that it would be in a regulatory form under Comsoc regulations. From your second paragraph on that section, that's not good enough, according to you.

Mr Ellsworth: Yes. Do you want me to elaborate on this?

Ms Murdock: Yes. I do.

Mr Ellsworth: I have heard from people at Comsoc that they are insisting that they will ensure that this $200 is not flowed through to the government coffers. But the difficulty is, there are two things, and I don't want to get too legalistic, but in interpreting statutes there's one principle that says an act of the Legislature overrules a regulation in all cases, because acts are higher pieces of legislation. That's why we suggest the protection for that money be in this act and not in the regulations under the Family Benefits Act and General Welfare Assistance Act.

The second reason we don't want to see that is that I've had and people in our organization have had a long history of the amendments to regulations under the Family Benefits Act and the General Welfare Assistance Act not doing what they intend to do, for one thing, and subsequently being repealed or amended to do something else with no consideration for such things as this $200. A regulation can be changed overnight. The cabinet can get together and decide they're going to change the regulation. This act cannot be changed overnight. If the protection is in the act, the protection is in the act and it can only be removed by the Legislature.

Ms Murdock: There's a problem, I think, at this point under Bill 165, because if a section under a bill has not been opened, you cannot open it without unanimous consent of all three parties in order to change that. So any reference now to either general welfare assistance or the Family Benefits Act would require unanimous consent, and I don't know whether or not we'd get it.

Mr Ellsworth: To include the income protection in either one of those two acts?

Ms Murdock: Yes, because it isn't in Bill 165, as you've pointed out.

Mr Ellsworth: Well, the way the Family Benefits Act and the General Welfare Assistance Act are structured, there is no reference to income in either one of them. The reference to income is in the regulations.

Ms Murdock: Yes, it is regulatory, and we have got an agreement from Tony Silipo, the minister, that it will definitely not be clawed back.

Mr Ellsworth: I don't disagree with that. I'm just suggesting that Mr Silipo might not be the minister for the rest of his life.

Ms Murdock: I know what you're saying. That's true.

The Vice-Chair: On behalf of this committee, I'd like to thank the Ontario Social Safety Network for giving us their presentation this afternoon.

CANADIAN AUTO WORKERS

The Vice-Chair: I'd like to call forward our next presenters, from the Canadian Auto Workers, national office. Good afternoon and welcome to the committee.

Mr Jim O'Neil: First of all, I'd like to thank the committee for giving us an opportunity to make this presentation. My name is Jim O'Neil. I'm the national secretary-treasurer of the CAW. With me is Cathy Walker, who is the director of our health and safety, WCB and environment department, and Mickey Bertrand, who is one of our staff members, who works every day on WCB and with injured workers. Both Cathy and Mickey are totally familiar with WCB as it is and as it's being proposed.

Our union represents well over 130,000 men and women in the province of Ontario, and we think, as the bill that's coming forward here today has a lot of shortcomings, what we'd like to do is, one, we have a summary of our concerns, and those who have a copy of the presentation we're about to make will see in the middle it's detailed section by section. I would now ask Mickey Bertrand to go through our summary.

Mr Mickey Bertrand: As the largest private sector union in Canada, with a long and proud tradition of fighting for workers' rights in the workers' compensation area, we are pleased to address you this afternoon.

Within Bill 165, there are two new major areas with which we have fundamental disagreement: (1) the proposal to erode indexing of pensions and benefits and (2) the proposal to require the new board of directors to be fiscally responsible and accountable.

The proposal to erode the indexing of pensions and benefits will take money directly out of the pockets of injured workers. The new obligation on the leadership of the board will be used as an excuse to erode present entitlement and reduce opportunities to correct past policy errors, such as the undercompensation of occupational diseases.

These assaults on the workers' compensation system have been led by employers complaining vehemently about the unfunded liability, just as they use the federal deficit as an excuse to cut social programs. These arguments are wrong. The government should dismiss them. The Ontario Workers' Compensation Board is in better financial shape today than it was in 1983 even though significant improvements, including indexing, were made in 1985.

If the employers were genuine in their concerns about the integrity of the workers' compensation system, they would do two things. The first is that they would support increases in the assessment rate to recoup past losses which occurred during times when the assessment rate was far too low to meet future pension obligations. The second is that they would vigorously support enforcement of health and safety laws by the Ontario Ministry of Labour and the training obligations mandated by the Workplace Health and Safety Agency. The first would raise sufficient moneys to meet current obligations and slowly erode the unfunded liability. The second would reduce the occurrence of injuries and occupational disease.

Purposes: We support the proposed purposes to the act.

Subsection 1(1): We support the change of the term "industrial disease" to "occupational disease" both here and in later sections.

Subsection (7.1): We recommend that the proposal be deleted. We are concerned that this proposal might prohibit cost-sharing agreements among boards, thus forfeiting entitlement to workers, eg, workers with occupational diseases who might have had exposure in several provinces.

Section 43: We recommend that section 43 be amended to prohibit the practice of deeming. Phantom jobs should not be deducted from a worker's future earnings loss calculation.

Section 51: We recommend that this proposal be deleted. Workers should have the right to privacy. Employers should not have the right to demand and receive medical information about workers. For the board to pay for such medical information means there is no downside for the employer to make such a demand. At a minimum, we recommend the word "informed" be added before the word "consent."

Section 53: We recommend the proposals to add employers to the board's vocational rehabilitation processes be deleted. It is workers who require rehabilitation, not employers. Employers have obligations to provide voc rehab under section 54 to assist injured workers. The board's role is to insist they fulfil their obligations.

We recommend that the proposed change to subsection (12) be deleted. The board presently is required to assist the worker to search for employment for a period of up to six months after the worker is available for employment. We oppose the proposal to change "shall" to "may," making the board assistance optional.

Section 56: We support the change to the governance structure of the board. The board of directors' structure is copied from the BC act and was introduced during the last Social Credit government. It works well there.

Section 58: Given that the proposal for the new board of directors was a direct copy from the BC statute, we would have assumed that the obligations of the board of directors would have also been copied from the BC law. Unfortunately, the Ontario board of directors will be constrained by a new and insidious obligation.

We are completely opposed to the proposal in subsection (1) requiring the board of directors to act "in a financially responsible and accountable manner in exercising its powers and performing its duties." This new concept stands the statute on its head.

Workers' compensation is an insurance system. Employers are obligated to purchase this insurance to provide benefits to injured workers so that employers are immune from civil suit. The current section 4 of the statute is clear. The board has a statutory obligation to provide benefits to workers who are injured by accidents which arise out of and in the course of their employment. The benefits must be paid first, then the board must raise sufficient moneys to pay for them. This is what the law says at present. To change the law to require fiscal considerations first subverts section 4 and the proposed purpose clause.

1450

The undercompensation of occupational disease claims in the province of Ontario was noted by the policy adviser, Professor Paul Weiler, to the then Conservative government in 1983. He said that "the Ontario board compensates only a tiny fraction of them," work-related lung cancer deaths. This wrong will never be righted as long as the new board of directors looks at financial considerations first.

Subsection 63(2): We are opposed to the proposed subsection 63(2) for the same reasons we are opposed to the proposed subsection 51(2). If, however, subsection 51(2) becomes law, then we recommend that the form provide as little medical information as possible.

Clause 65(3)(h): We recommend that this proposed addition be deleted. There is far more undercompensation of injured workers than overcompensation. At a minimum, we recommend that clause 65(3)(h) be amended to add the phrase "and addressing any undercompensation of benefits provided under this act."

Subsection 65(3.1): We support this proposal.

Section 65.1: We are opposed to this proposal. Even at present, the workers' compensation system is supposed to be at arm's length from the government. The new board of directors re-emphasizes this point.

Section 65.2: We oppose this proposal for the same reasons as section 65.1.

Subsection 69(2): We support this proposal.

Subsection 72(1.1) and section 72.1: We are not opposed to the idea of mediation, but we are wary of it. Any mediation must not be used in a manner which erodes present rights of appeal.

Subsections 76(3) and (4): We support this proposal.

Section 88: We think this proposal is probably fine.

Subsection 95(1): We support the proposal for a change of name.

Subsection 95(6): We do not support the proposed change, which would bring the Occupational Disease Standards Panel under the direct control of the board. The offices of the worker adviser and employer adviser remain at arm's length from the board, with their funds received from the ministry, then reimbursed by the board; so should the ODSP.

Subsection 95(8): We recommend a new subsection be added which would read:

"(e) to make decisions about descriptions of disease and process in schedules 3 and 4 which shall become regulations by order of the Lieutenant Governor in Council within two months of the decision."

Duplication and waste should be eliminated. The ODSP should make decisions about the occupational disease schedules and the board should implement them.

Subsections 96(5) and 97(4): We support the proposed change.

Section 103: We wholeheartedly support this proposed change. Penalty assessments on employers enable the board to modify employer behaviour to ensure sound efforts are made in the area of voc rehabilitation.

Section 103.1: We support the proposed change to the experience rating system. The present employer hysteria over the workers' compensation system is led by a private army of employer consultants who feed off the adversarial system generated by the present experience rating system. The proposed change would require the board to consider employer efforts in the prevention and vocational rehabilitation areas first. Past claims cost experience would be an optional consideration.

We read in the media that the Minister of Labour has bowed to the employer opposition to changing the experience rating. We sincerely hope this is not the case. It is the most significant proposal which, if implemented correctly, may reduce the present conflicts in the system.

We further recommend that the board abolish experience rating and use a flat rate assessment system, which would dramatically reduce administrative costs.

Subsection 103(4), penalty assessments: We recommend that the current subsection 103(4) be used in the same manner as penalty assessments are imposed in the province of British Columbia. The prevention division of the BC WCB, the equivalent of the Ontario Ministry of Labour's occupational health and safety division, directs the WCB assessment department to impose a financial penalty on an employer who violates a health and safety regulation. This system has been used in BC to good effect to enforce health and safety laws for more than 20 years. The Ontario Ministry of Labour inspectors need the additional clout that a penalty assessment system would give them.

Subsection 117(3): We support the deletion of this section if it is considered redundant.

Subsection 137(4): We represent workers who are employed by both schedule 1 and schedule 2 employers. We support this proposal that these employers should follow the same rules.

Subsection 147(14): We wholeheartedly support the $200 increase for pre-Bill 162 pensioners. Many of these permanently injured workers are existing on extremely small board pensions. Their lives will improve as a result of this increase.

Since we are concerned that entitlement to a supplement is increasingly difficult to get, we recommend that a new clause be added:

"(c) If the worker makes application to the board and is determined to be receiving an inadequate permanent partial disability award."

Clause (b) would need to be amended to add the word "or."

Let me just divert from the presentation for a minute, if I may. As much as we support this section of the act and the people who are going to get the $200 increase to their PD awards, we do see a problem in this area. We see a lot of injured workers who are going to fall between the cracks and are not going to be in receipt of this $200 who desperately need it.

These are people who did not qualify for the subsection 147(4) supplement as a result, for example, of being cut off during the voc rehab process, being deemed to be uncooperative. We see a number of people who have insufficient pre-1990 pension awards who don't get the supplement under 147(4) and so, perspectively speaking, are already behind the other PD awards by approximately $390.

The people who are getting the 147(4) are now going to get the $200 increase; a number of people who don't get the 147(4) are going to be left out in the cold. We see that as a problem.

Sections 101 and subsections 102(1) and 132(2): These sections deal with the obligation of the board to fund future obligations. The employers make much ado about the present unfunded liability of $11 billion. Is it a problem? Not when the board has capitalized reserves of $6 billion.

In 1980, the Ontario board was about half funded. Professor Weiler was not concerned about the unfunded liability. He had this to say in his first report to the then Conservative government:

"This does not pose a threat to the fiscal soundness of the program. It simply means that the board must use its power to levy assessments in later years to meet future liabilities on a pay-as-you-go basis. The main virtue of this policy is that the Workers' Compensation Board does not drain out of the private sector massive amounts of capital (amounting at this time to another $2 billion which would be needed for full funding of current liabilities.)"

Subsection 102(1) gives the board discretion not to fully fund future obligations. We see no reason to set aside more than a couple of years of current costs, as is the case with the Canada pension plan.

The issue of coverage, section 139, is an important one. Most Canadian boards, including the next-largest province, Quebec, cover everyone in the province. At the beginning of this year, BC was the latest province to extend coverage to all workers and employers in the province.

We recommend that the provisions of section 139 be deleted and replaced with a requirement that all employers and all workers in the province of Ontario be covered by workers' compensation.

Subsection 148(1): The statute presently requires that all dollar amounts in the act, average earnings and pensions be fully indexed to increases in the consumer price index. This COLA clause was hard won by struggles of the union movement, injured workers' groups and the support of the New Democratic Party. We made submissions, we lobbied politicians, we demonstrated at Queen's Park, we appeared on television and we were heard on radio and articles appeared in the newspapers and magazines. After decades of lobbying, we finally won full indexing in 1985.

The Friedland formula proposes to erode pension indexing drastically. What is the cost saving to the board of the Friedland formula? Well, we have heard figures from $13 billion to $27 billion over a specific period of time. Whatever the figure, it is a large amount of money. Whatever the figure, it'll come directly out of the pockets of injured workers.

There are some exceptions to the erosion of indexing which make the proposed change appear less draconian, but the reality is that only some pensioners will be protected by these exemptions. Most would not.

We recommend that the Friedland formula be scrapped and that the present full indexing formula of subsection 148(1) be retained.

Royal commission/universal disability: We are pleased to see that the appointment of a royal commission is imminent. Those affected by the workers' compensation system must have full opportunity to comment. The commission's recommendations must be given the serious consideration they deserve.

As well, we emphasize that the scope of the commission must be broad enough to ensure that a universal disability system is thoroughly examined. We strongly believe that a universal disability system would be a dramatic improvement over the present patchwork of disability compensation schemes, of which workers' compensation is only one.

Thank you for your consideration of this submission respectfully submitted by CAW Canada. Might I just add that on the following pages you'll see a more in-depth analysis of Bill 165. We condensed it for the purposes of our presentation.

1500

Mr Arnott: You say that you have a fundamental disagreement with two aspects of the bill. Are your fundamental disagreements such that you would recommend that the bill be withdrawn?

Mr Bertrand: No, that is not our position at all. We look at the bill in respect to the sections and subsections that it's laid out in. There are certain areas of the bill that we definitely agree with, but there are certain areas of the bill that we definitely disagree with. We take the liberty and we take the right that we have the ability to cherry-pick, as some people have put it, and determine which areas we support and which areas we don't.

Mr Len Wood (Cochrane North): I find it an interesting comment that you have here, saying that the employers in the United States pay a lot higher premiums under private insurance or whatever, and yet the workers get a lot less than in Ontario. I just want to know if you want to comment on that. It's part of your universal plan that you're talking about, disability.

Ms Cathy Walker: The reality in the United States is that because of private insurance systems, you have various competing insurance companies that are providing a much lower benefit level. They're required to provide a certain benefit level by statute, but in practice employers are paying far higher premiums throughout the United States and workers are receiving far lower benefits.

Mr Wood: So we're better off in Ontario?

Ms Walker: We're much better off in any province in Canada.

Mr Mahoney: In a very comprehensive brief you've recommended 16 fairly major changes to the bill. The bill has been referred to by me and others as the social contract for injured workers. Buzz Hargrove left the PLMAC process over the social contract. It reduces benefits to injured workers and yet you say you cherry-pick to support the bill. You've got to help me. I just don't see the logic of how you can support this bill after you have enunciated the concerns so well.

Mr Bertrand: Sorry, you must have misunderstood me. I didn't say that I support the bill. I said what we've done is we've supported certain elements of the bill. We've reserved the right to cherry-pick under certain elements of the bill that we do support and identify the areas that we are opposed to.

Mr Mahoney: You don't have what you want but you still support the bill.

The Vice-Chair: On behalf of this committee I'd like to thank the Canadian Auto Workers national office for its presentation to the committee this afternoon.

ONTARIO PUBLIC SERVICE EMPLOYEES UNION

The Vice-Chair: I'd like to call forward our next presenters from the Ontario Public Service Employees Union. Good afternoon and welcome to the committee.

Ms Heather Gavin: My name is Heather Gavin and I am the coordinator of the membership benefits department at OPSEU. I have here with me today two of the officers who work with me in the department, Marsha Gillespie and Diana Clarke.

I would like to thank the committee for hearing our submissions on this issue today. You have heard from us across the province on various issues as they relate to Bill 165. Today we're narrowing our scope again to specific areas of the bill and the workers' compensation system in Ontario. OPSEU has recently taken the opportunity to review the available WCB financial information. Our submissions today will attempt to address the real financial situation at the board and the solutions that we find are necessary.

In recent years we have heard a lot about the Workers' Compensation Board's growing unfunded liability, which is presently estimated at $11.5 billion. We have heard over and over again that employers claim that the solution is to cut the injured workers' benefits, while injured workers, many of whom live in poverty already, not surprisingly are opposed to this suggestion. At the same time, employers vocally resist any increase in their assessment rates and have been successful for over two decades in keeping their actual payroll assessment rates below the target assessment rates.

In order to go through this, we think it would be useful if we start off with a basic "What is an Assessment Rate?" course here, assessment rates 101 course, and explain the basic makeup of the WCB funding.

The target assessment rate is a rate which is set each year by the Workers' Compensation Board actuary. It takes three component pieces into account:

(1) The expected benefit costs for the new claims in the next year;

(2) The overhead, and this would include the components of the share of the WCB's administrative expenses, the accident prevention costs and other statutory obligations for the next year; and

(3) The unfunded liability. This component would have the share of the charge towards retiring the WCB's unfunded liability in keeping with the WCB's strategy that it be fully funded by the year 2014.

In other words, the target assessment rate is the rate necessary to pay the current costs, the overhead costs and eliminate the past debt. At the back of the proposal we have given to you what have been the proposed target assessment rates under table 1. It won't be the first table you run into; that's table 2. If you go to the one behind it, that will be table 1.

If I could just walk you briefly through what this table shows from 1984 to 1994, this would be what the board actuary has set; these should be the target assessment rates for those particular years. The black line shows that this would be the claims cost that they would have to fund for, the grey shadowed area is the overheads which had those component parts and the top part is the unfunded liability payments. This would not be in order to retire the full amount of the unfunded liability, but this would be a portion that would be required to pay for the unfunded liability.

One of the interesting things I'd like to point out to you on this chart is that from 1991 onward, the new claims costs are decreasing. It should be kept in mind that the past debt, or the unfunded liability, will only be eliminated by the year 2014 if the full amount of the unfunded liability assigned to each year is paid in full. It should also be noted that the board actuary, in setting the target rates, takes into consideration the past claims experience and the assessable payroll costs.

But what actually happens? The Workers' Compensation Board then considers a variety of other economic factors. As a result, the target rate set by the board actuary does not actually get used in determining the WCB premiums to be paid by the employers. Instead, the actual assessment rates are used to determine the WCB premiums paid by the employers. These actual assessment rates have always been set below the target assessment rates.

For that I'd like you to turn to table 2. Indeed, what we've done here is to take what would have been posed as the target assessment rates of the employers, in order to address the issue of all of the component pieces as to what the rates should be, and have actually imposed upon that the black line, which is the actual assessment rate. If you take a look at that, anything that would be above that black line would be the amount which was not funded in that year. I draw your attention to one of the aberrations, actually, where in 1986 you didn't even cover the cost of the overhead.

In the early years, the actual annual assessment rate was typically set at an amount that would cover only a part of the unfunded liability costs attributed to that year, but would fully cover the overhead and new claims costs. The result of this was that the unfunded liability grew from 1984 to 1992 by $2.5 billion from this cause alone. However, if this money had been received and invested, in today's dollars it would have grown to over $4 billion. That is based with just conservative assessments alone.

In recent years, the actual assessment rate has been kept so low that it is now no longer sufficient to cover fully the operating costs. As a result of the this, the board has had to remove the money from the board's investment fund to pay for the operating costs in the following amounts. These have been extrapolated from the board's financial statements from the years 1991 to 1994. You can see that there has been an aggregate amount of $1.4 billion removed from the accident fund in order to cover the costs of the board.

1510

Consequently, in addition to the unfunded liability problem, there is also a cash flow problem. This problem would be worse, except that the benefit costs, as I have pointed out earlier, have been declining faster than the assessment revenues.

Another component factor and another factor that has to be taken into consideration on the unfunded liability is, how do mortality figures or the tables that are used figure into the unfunded liability? Since 1986, the WCB has used mortality tables that have not reflected the actual experience for injured workers receiving pensions. In 1992, the board management moved to make appropriate provisions in its 1992 valuation. This has represented an increased cost -- or in valuation terms it would show us a loss -- of approximately $500 million to date.

The effect of not updating the mortality tables is that the cost estimates used in determining the target assessment rates are kept at an artificially lower level, translating into a lower actual assessment rate being set for employers.

Further, if we delve into what are the component pieces of unfunded liability, how does the experience rating figure into unfunded liability? Experience rating has been in place at the WCB since 1984 without any quantitative or qualitative study to suggest that it's an appropriate method of reducing accidents among the employer groups.

In addition, experience rating programs were designed to redistribute higher assessment costs to employers who have historically generated more claims and lower assessment costs to employers with fewer accident claims. By allowing for rebates and surcharges, assessment rates were to be revenue-neutral on an aggregate basis. This, however, has not been the case. Refunds and surcharges have not balanced themselves out and in fact the net cost has been close to $500 million to date. We have in the brief, if you'll note, $5 million. That's a typographical error. There should be two zeros on the end of that.

The basic premises of just those few component pieces are, what does it add up to and what does it show as the causes of the growth in the unfunded liability? If you put all of the component pieces that we were talking about earlier into place, you can see that the total of $6.4 billion of the unfunded liability can in fact be shown to have been produced just alone from those few areas which we have addressed. All of this is within a strategy in which full funding is supposed to be attainable by the year 2014.

In 1984, the unfunded liability was approximately $2 billion. It was the Wyatt Co report to the Ministry of Labour on the underlying financial situation of the WCB that led to the 1984 financial strategy that the WCB has included with some of the following elements:

(1) The amortization of the outstanding unfunded liability over a 30-year period;

(2) Full funding, ie, that the actual assessment rates would be adjusted to meet the target assessment rates.

While attention continues to be fixed on the year 2014, what gets overlooked is that the actual assessment rates have never reached the target assessment rates that we have shown you in table 2, and also that in the interests of the rate stabilization, an initial three-year phase-in period, with limits on maximum rate increases and decreases, was part of the 1984 financial strategy, thereby putting the payback plan behind from the beginning.

Disturbingly, this trend continues today, as can be seen when one considers the new employer classification structures introduced effective January 1, 1993. This has increased the assessments rates for some employers, but the WCB has put in transitionary rules to cushion the immediate effect of these changes. While it may provide temporary relief for some employers, it also contributes to the unfunded liability and the cash flow problems. Full funding by the year 2014 would have been attainable had the target assessment rates determined by the actuary been matched by the actual assessment rates for the full 30-year period, but they didn't.

The basic question that has to be asked is, what is the magic of 2014? While there are sound reasons for being securely funded, there is no legal requirement to be fully funded or to do so by the year 2014. In fact, what should be addressed is, what is a reasonable time period in which to build a reasonable reserve targeted to dealing with the unfunded liability and providing for stable funding in the future?

If in 1984 the year 2004 had been chosen instead of the year 2014, the target assessment rate would have had to be higher and, conversely, if the year 2024 had been chosen, then the target assessment rate could have been lower. The point is that as long as the unfunded liability is decreasing at a reasonable rate and the assessment rates are not increasing at an unreasonable rate, it doesn't matter how long it takes.

One solution that is commonly heard from employer groups is to address the unfunded liability by reducing benefit levels to injured workers. However, it's not the benefit costs that are out of control; it's the unfunded liability that is out of control. The number of lost-time injuries is decreasing, as is the net increase in the benefit liabilities in the post-Bill 162 years. Despite these reductions, the unfunded liability continues to grow for the reasons that we have stated herein.

It must be recognized that Bill 165 will have no impact on the unfunded liability as the target assessment rates that will be set in the next year will take into consideration the decreases in the benefit levels, and the rates will then, therefore, be set accordingly.

Our position is that an alternative solution is needed. It is obvious to us that the first area that needs to be addressed is how the actual assessment rates are set. There has to be a close relationship between the target assessment rates recommended by the board actuary and the actual rates set by the Workers' Compensation Board. The board must begin to look at setting reasonable actual assessment rates dedicated to reducing this unfunded liability while still covering new claims costs and overheads.

Such a strategy must be placed in the legislation in order to ensure that the Workers' Compensation Board will seriously begin to address the systemic underfunding of the workers' compensation system. Only by ensuring that the future funding of the system is adequate will the board be able to fend off future lobby groups wishing to decrease benefits to injured workers.

Another solution that should be considered is a review of the actuarial assumptions that are used in valuing the accident fund. At present, the assumption which they're using as a real rate of return on investments is set at a 3% level and the CPI rate is set at 5%. By increasing the assumed rate of return on the investments and lowering the assumed CPI, the fund would have a higher value and thereby a lower unfunded liability.

However, at this point, we have no way of ensuring that these changed assumptions would be adequate or even appropriate, but would strongly recommend that they be studied.

Our conclusion is that we believe there is a notion that the unfunded liability has been created by some form of overcompensation for injured workers. For too long, the setting of the actual assessment rates was determined by how well employers could lobby the next year's rate down instead of paying the real costs of the system. This cumulative effect has caused the unfunded liability to grow. The new 1993 classification scheme only caused some employer groups to be more vocal as their individual rates in their industry has gone up. Unfortunately, the unfunded collective liability has still not been addressed.

Employers' solutions are to cut workers' benefits or, better yet, de-index the workers' future benefits. Experience rating has not provided any real solutions either, as it remains just another way to get the employers out of their responsibility of paying their assessments. In fact, the unfunded liability has very little to do with the benefit levels that have been mandated by legislation and more to do with the failure to set the proper actual assessment rates.

What is needed is to develop a long-term strategy that will address the unfunded liability and maintain the current workers' payment levels without causing undue hardship. We believe that this is feasible and implementable.

We recommend that the legislation compel the Workers' Compensation Board to set the actual assessment rates that are in keeping with sound actuarial principles and assumptions. We'd like to thank you.

1520

Ms Murdock: This is refreshing because it's so different and explains it so simply to, hopefully, those people who are listening.

The effect of not updating the tables: Forgive me for asking a simple question, but those are the tables where the average age of males is 72, whatever. Do you know if there have been any studies done on whether injured workers live as long as the average person?

Ms Diana Clarke: As far as the board actuary told us, no, there haven't been. They just took it against the regular population, but they've never looked at the injured worker population specifically and their age.

Mr Mahoney: Just help me with your figures. On page 3 you say that the net cost for the experience rating has been $5 million to date.

Ms Gavin: It's $500 million.

Mr Mahoney: Oh, okay, $500 million.

Ms Gavin: Yes. We corrected that in our speech.

Mr Mahoney: Thanks. That clarifies that.

The analysis you've given us about the unfunded liability is interesting. I wonder if it would apply to the national and provincial debts, that the reason we have accumulated debts and ongoing deficits is because we haven't taxed high enough, and that our solution to rid ourselves of those burdens and our children of that burden would be to increase all taxes across the board. Same thing.

Ms Marcia Gillespie: One of the problems is that once you have an unfunded liability, it gets a life of its own. Right now, this unfunded liability is costing us over 8%. We have to earn on the investments over 8% just to keep afloat. The problem is, since you haven't put in that money that should be there, you're trying to earn that 8% plus a real rate of return on a very small pot of money. So it now has a life of its own.

Mr Mahoney: The stated goal of the board is to earn 3%. That may be a part of the problem.

Ms Gillespie: We would like that looked at.

Mrs Witmer: I would certainly dispute some of the facts that you've put forward. In fact, I would say to you, what is your response to the Provincial Auditor, who in his 1993 annual report indicated that the board must develop plans to attack the unfunded liability as quickly as possible?

Ms Gavin: I think you're right: They have to develop a plan to attack the unfunded liability as quickly as possible. What we're suggesting is that what you have to do is take a look at what is a reasonable time frame in which to do it and how in fact you are doing it. The whole premise of our presentation today is that if they are to attack the unfunded liability, then you can't set an actual rate which is far below the targeted rate which you should be setting in order to address the unfunded liability.

Mrs Witmer: Well, the target rate for the last --

The Vice-Chair: Thank you, Mrs Witmer. On behalf of this committee, I'd like to thank the Ontario Public Service Employees Union, Local 329, for bringing their presentation to this committee this afternoon.

HUMAN RESOURCES PROFESSIONALS ASSOCIATION OF ONTARIO

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

Mr Mike Failes: I'd like to thank the committee for the opportunity to speak to you this afternoon. My name is Mike Failes. I'm here on behalf of the government affairs committee of the Human Resources Professionals Association of Ontario, the HRPAO.

We like to think that we bring a somewhat unique perspective to the matters which you are considering here. The HRPAO is an association with over 8,000 members, and our members are human resources practitioners. Many of them are involved very directly on an ongoing basis every day with workers' compensation issues. It's a little different from the perspective of workers or employers per se.

What I'd like to do for you this afternoon is discuss really two themes in the bill which are of interest to our members and which we're pleased to see there, and try to develop, if I could, some of the ideas which we'd like to see implemented in the bill. There are two areas in particular I'd like to talk about. The first is the idea of fiscal responsibility, and the second theme is that of timely return to work.

If I could just take you first to the idea of fiscal responsibility, the obvious starting point is section 58 in the proposed legislation. We're pleased to see that the board is going to be charged with acting in a financially responsible and accountable manner. I thought it was somewhat unusual as I listened to some of the presentations today -- perhaps the last one might be an exception -- from workers' groups where there seems to be an assumption that this means cutting back on benefits. I would have thought all groups would welcome that concept being introduced, because it might mean a re-evaluation of assessments for employers; it might mean a re-evaluation of how the board can streamline its practices and save money. So I would hope that particular provision would be something which would be welcomed by all.

Along those lines, I'd suggest that what you probably should be thinking about doing is perhaps expanding it. We'd like to see some specific direction for the board on areas where they should be fiscally responsible, including the setting of rates and other administrative matters.

The other spinoff of that is the purpose clause. Sometimes purpose clauses get a little bit more play than they should. In this particular piece of legislation, the purpose clause actually has some significance, because the purpose clause is referred to in the legislation. If you look at what's proposed in Bill 165 in the new subsection 65(3.1), there's actually reference made to the purpose of the act. If you're going to be making those kinds of references, we'd suggest it's important that you have a balanced purpose clause which takes into account the matters which are set out right now in the purpose clause, which are good, as well as the idea that the board is going to conduct itself in a financially responsible and accountable manner. So we'd recommend that the purpose clause be amended to reflect that.

Another comment with respect to the fiscal responsibility of the board: We have a concern that Bill 165 as currently drafted tends to introduce too much political interference, or potential political interference, with the work of the board. The first order of business and one which the legislation addresses is restructuring the board, getting the board on track in terms of its responsibilities.

At that point we see the government's ultimate role with the board as one of appointing the members of the board, a change in the legislation if necessary, not one of being involved in the setting of day-to-day administrative policies of the board as is currently considered and contained within the two sections allowing for government intervention, the first being the time-limited initial government intervention and the second being the provision for an ongoing contract, if you will, between the board and the government. We'd suggest those kinds of provisions aren't appropriate here and should be deleted.

The last area I'd like to talk about in terms of fiscal responsibility is the general question of what you should be doing in terms of introducing elements which are going to significantly increase the cost structure of the current legislation. That's not to say that some reforms aren't necessary or needed. We've heard today, and I'm sure you've heard on many previous days, concerns raised by injured workers or specific groups of injured workers that the benefits are insufficient or inappropriate. What concerns us, though, is that we are apparently embarking here upon kind of a Band-Aid approach. We're going to put the $200 Band-Aid on here and then we'll go on and the royal commission will consider the longer-term way in which we can address some of these issues. What we'd suggest is that rather than doing a Band-Aid approach now, we have the royal commission look at a comprehensive review of how benefits should be paid to workers.

One of the first orders of business, I note, from the government's material on the royal commission is that the royal commission is going to consider the impact of other income replacement schemes on benefits and how that should be accounted. There seems to be a general presumption here, for example, that older workers are in need of immediate relief. Well, some groups may be; some may not be. It might depend upon the extent of other forms of income protection. Rather than trying to do this without a comprehensive plan, we'd suggest you have a comprehensive plan which also takes into account how these costs are going to be funded.

The second area that I'd like to touch upon today concerns the provisions of the legislation which really relate to timely return to work. By timely return to work, I'm referring to the desirability of getting workers back to the workplace as soon as is possible within the limitations of their injuries and the availability of work there.

1530

I haven't been here, obviously, for all the days of the hearing, but I'm sure you've heard before that this is now recognized as one of the most important aspects of rehabilitation. If you get people back early, get them back to their jobs or back to meaningful work, that assists in their rehabilitation and obviously also helps the employer keep costs under control. The longer a worker is out of work and not back in the workplace, the less likely that the worker is going to be able to get back to work, both because of psychological and physical problems which develop. In general, the HRPAO supports any measures that you're introducing here, even ones which as the gas association pointed out are going to cost money, such as mediation, which are going to enhance the ability to get people back to work quickly.

One of the first that I'd like to discuss is the requirement to provide information. In the proposal for subsection 51(2) there's a requirement or an obligation for physicians to provide reports which will be paid for by the Workers' Compensation Board. We'd like to see that expanded, for a couple of reasons.

First of all, one of the experiences that a lot of our members have had in administering WCB claims is that the doctor is often not the most important person in getting people back to work. The government affairs committee recently met with members of the OMA who are looking at return to work and the physician's role. One of the problems you have is that many injured workers go and see a family physician who is not a specialist in this area: not a specialist in rehabilitative medicine, not a specialist in occupational medicine. They are going to see this worker for a short period of time, perhaps once a week, and they are not inclined to take a very proactive role in terms of getting the worker back to work.

What we found is that people involved in physiotherapy and other forms of rehabilitative medicine are much more likely to be the key people in this process. So when you're talking about information flow, we'd like to see that provision expanded to allow for information from those people, from people in the various health services areas which may be treating the worker. That's the kind of information that's necessary in order to get people back to work quickly.

You really want to reduce, we'd suggest, any impediments to that information flow. One of the things in the legislation is that it's with the consent of the worker. This isn't specifically covered in our proposals, but I'd ask you to consider that if you had an insurance claim and you tried to go and claim that from the insurer and you refused to allow them to have the details of the claim -- I'm not talking about other irrelevant information, but the details of that claim -- the insurer is not likely to honour your claim. It seems to us that if you're going to put roadblocks in the way of getting information, that's not desirable. Obviously, the employer shouldn't have access to medical or other information which is unrelated to the injury, but if you're seeing, for example, a physiotherapist and that person is prescribing a course of treatment and has done perhaps some studies and exams which show range of motion and what a worker can do, you really want to get that information as quickly as you can without having to go through a lengthy bureaucratic process.

The second area I'd like to talk about is mediation. We're in favour of mediation, although I've got to tell you that in our experience the quality of mediation is going to determine the quality of the result. If you've got people who aren't good at providing mediation, you're not going to really get anywhere. You're just going to have an extra cost associated with the system.

With that in mind, we'd like to see something in the mediation process that allows for binding settlements on everybody. There's not much point in going into mediation, for example on a return-to-work issue, getting a deal with somebody and then you walk away and that person, whether it's the employer or the employee, says: "Gee, you know, that's not binding. Section 16 of the legislation says that I can't contract out of the act. Sorry, Mr Employer. This is really contracting out of the act, because I'm entitled to come back to work under these circumstances." And away they go with their complaint. We think there should be a provision in there for binding settlement. The settlement should be binding on all parties and it should specifically exempt the impact of section 16.

As our final point, and we think it's an important point, we'd also like to see the provisions in the legislation which purport to do away with experience rating as we now know it and replace it with something which is more subjective and to impose other subjective penalties for return-to-work programs -- we'd like to see those deleted.

The reason is simple. Since the introduction of experience rating, there has been dramatic improvement in this province. I'm not saying it's directly related necessarily, but there has been dramatic improvement in this province with respect to lost-time injuries. One of the things our members like is that it's a direct cause and effect, so, for example, you don't have a situation where simply because you don't have the resources -- you can't put in a fancy return-to-work program with lots of chrome -- you're going to be penalized or not rewarded. If you get the results because you go the extra mile in getting the worker back to work, you go the extra mile in arranging for physiotherapy and modifying work, you are rewarded.

When you introduce a subjective element -- you know, is the program very good? -- some person down at the WCB head office in Toronto is going to tell you that, and with a staff of 50 and the costs that are associated with that, we don't find that to be very effective. People are going to be rewarded or punished based upon performance. We think that's the way it should be, and that's a system which we think is working well at the present time.

Subject to your questions, those are our comments. If I can help you in any way, I'd be pleased to.

Mr Mahoney: On that last point, I maintain that it's the small business person that's going to really get killed. The larger companies -- Algoma, Stelco, Inco, General Motors -- all have the ability to put in place whatever training program you want. In fact, a vice-president of Inco said to me that he has to send his people down to the workers' centre in Hamilton to get what he calls a grade 7 level of health and safety training when they're doing PhD training in Inco right in their own shop. He couldn't understand why he had to have those costs laid on him.

But what happens to the small business person who is unable, through time, lack of funds, pressures, everything else -- he's got the bank yapping at him, he or she. They've got all these problems. They can't put it in place. And yet they may have a very good record with regard to health and safety and a very good record with regard to low accidents or lost-time injuries. I think they're going to get killed.

Mr Failes: I would agree with you. In fact, many of our members who work for large employers are the ones who are most sensitive to that because they see all the chrome that can go with those programs. It's the small employer who doesn't have that ability. That's not to say the small employer shouldn't be just as responsible for getting people back to work in a timely way, but they invariably do not have the money and resources and manpower to devote to all of the paraphernalia that go with a very expansive program. So I'd agree with you.

Mr Mahoney: You say you support mediation. This bill gives really quite an unbelievable amount of power directly to the board to determine whether an employer has fulfilled their obligations, to go in -- the concept of the WCB police etc. I think if this bill goes through the way it is, there will be nothing left to mediate. What do you think?

Mr Failes: The real objection we have, you see, is not with the mediation. It's with, I guess, as you phrased it, the WCB police. I hadn't quite thought of it in quite that way, but --

Mr Mahoney: Think about it that way. I'm not with the government.

Mr Failes: What we're concerned about is the potential for double and triple penalties for the same problem and the ability to deal with it.

Interjections.

The Vice-Chair: Order. Are you finished?

Mr Failes: Yes.

Mrs Witmer: Thank you very much for your presentation. I would agree with you that there is a need to get people back to work quickly and also to deal with the fiscal responsibility.

You talk here about the medical reports and the fact that there needs to be an amendment made that a positive obligation be included within the act on workers to cooperate. How would you suggest that happen? Because at the present time, of course, the act does not obligate the employee in any way to cooperate.

Mr Failes: I have to be careful on this one because, just for those of you who have maybe not had the firsthand experience, the board does in a way require the worker to cooperate, but it's a cumbersome method; it involves warnings and they start cutting back on benefits. By the time they deliver that kind of message, it's way too late. We like to think that in the first 30 days you want to get the person back to work or you've really missed the boat. By the time the current board practice has had any sort of effect, we've already missed the boat.

What we're suggesting is that there should be something explicit in the act, and this might be something which a mediator might be using to try to encourage a worker to get back to work. Don't forget that a worker may very well want to get back to work, but he's hardly a specialist in rehabilitative medicine. This may be the first time he's ever hurt himself, or he may have hurt himself many times, but all he understands is that he's got pain, and his doctor, who's probably not a specialist, has said, "Listen, how long before you want to go back to work?" and the guy says, "I don't know. It hurts. A month."

That may not be in his best interest. He should probably be getting physio, he should probably be in a return-to-work program, to avoid all the things that come later.

What we'd like to see is something in the act that mediators and the board can use to encourage workers in positions to be more supportive of people coming back to work.

1540

Mr Wood: Thank you very much for your presentation. To follow up on the 30-day period that you're saying is very crucial to getting people back, in the pulp and paper industry throughout Canada, especially Ontario that I know of, they put clauses in the collective agreements back in 1970, and I think they had them all in by 1973, that if there's a disputed workers' compensation claim out there, the company would automatically make sure that sick leave, either from their own resources or through an insurance company, kicked in and made sure they were getting a paycheque in that 30-day period.

The feeling at that time, by the employers and the employees, was that this helped in speeding up the recovery and getting the people back into the workforce. The royal commission is going to be looking at some kind of universal disability plan, but I just wondered if you had comments on that. I'm talking about 20-some years ago that they had this plan.

Mr Failes: In fact, you see it with a lot of employers. Of course you see it in the pulp and paper industry, because they have pattern bargaining there and what's good for one is good for all. But just as an aside on that, one of the problems I see with our clients, and I'm a management-side labour lawyer, is that sometimes the WCB isn't very good at ensuring that those sick leave payments come off the WCB premiums, with the result that sometimes there's a double payment, in which case the employers --

Mr Wood: No. He's got to sign a waiver.

Mr Failes: The trouble is that the waiver, depending upon how it's signed, can sometimes be ineffective, because you then are in a situation where the person has been overpaid and you're trying to recover the money from the person. I'm only indicating that there are some problems with that system.

But I'd agree with you that you'd want to have some continuity of earnings there. Frankly, that kind of issue is probably better dealt with in the context of the entire cost structure for the Workers' Compensation Board rather than hiving off one issue, but I haven't really given any particular thought as to how it might be best dealt with.

The Vice-Chair: On behalf of the committee, I'd like to thank the Human Resources Professionals Association of Ontario for bringing us their presentation.

ASBESTOS VICTIMS OF ONTARIO

The Vice-Chair: I call forward our next presenters, from Asbestos Victims of Ontario. Good afternoon, and welcome to the committee.

Mr Edward Cauchi: Thank you, Mr Chairman and members of the committee. My name is Eddie Cauchi. I'm from the Asbestos Victims of Ontario. Our group is made up of mostly widows who are still waiting for compensation. We lost about 800 of our group in the last 20 years. The royal commission, as with all royal commissions, didn't do much for us, even though it cost $1.8 million -- nothing to help us.

I would like to start by asking why injured workers were not included in the bipartite committee of labour and management to advise the minister on this bill. I'm not going to bore you with what's wrong with the WCB. I'm here to try to convince you to go back to the Legislature and to try to convince the Minister of Labour to scrap this bill, as suggested by the trucking industry, the independent business and many other people.

This bill is so regressive towards injured workers that I consider it an insult to all injured workers. Being around for as long as I have been, I see too many bad apples in this basket. Never in my dreams of some 30 years -- I've been coming here since 1963 fighting for injured workers. I have seen many people in the Legislature. They all come and go. I've appeared in front of this committee about 20 times. I never see the same member every time I come here. I think the only one who was here the last time is Mr Phillips.

After 30 years of helping workers at Queen's Park, at WCB, Tory and Liberal governments in power with the full support of the NDP, we finally got an indexed pension on December 17, 1985, and now an NDP government wants to take it back 20 years. I just talked to Mike Harris this morning. He must have written this bill because he suggested this indexing cutback about a year and a half ago.

Rehabilitation of injured workers is a big joke and is very expensive. I was on rehabilitation for 10 years. The reason I came out of rehabilitation was because I turned 65.

What injured workers need and want is a true rehabilitation program where injured workers look forward to employment and after his or her rehab program is complete, he or she gets meaningful employment. When I say "meaningful employment," I don't say that you rehabilitate somebody to do a carpenter's job and you send him to wash dishes. This is what's happening today.

I've been dealing with rehab people for the last 25 years. Today you have rehab counsellors, tomorrow you have somebody else. Today this guy tells you to go and look for work; the other guy says, "Just phone and don't bother to go." There is no direction. We had two task force recommendations about the same problem.

This bill is not going to improve health and safety in the workplace. You know why? I've been going to IAPA meetings for 20 years, once a year. The IAPA is funded by the WCB. All we have in there is a bash to talk about industrial health and safety -- 20 years. Where were these people when they built the mines in Elliot Lake and the Johns-Manville Corp? They're not going to improve health and safety in the workplace.

The only way to improve health and safety in the workplace is by taking them to court and fining them, and fining them very heavily. Then they'll learn. We fine people who are on welfare and steal an apple and put them in jail, yet when a company kills 800 people like Johns-Manville did, we let them get away with it. They're not even paying their fair share. Look at the mining industry up north. I don't have a copy machine big enough. You read this paper in here, it'll tell you. This is today, 1994, we have a workers' health and safety organization in Ontario funded by the compensation board. Let them read this article. They're not paying one cent. Denison Mines, they pulled out stakes and left the Elliot Lake people in disarray. Let me talk to these people.

I have dealt with 17 ministers of Labour and five chairmen of the board, and you know where they are today? They're all doing something else, because the people in the community figure they're doing not a good job so they turfed them out. The five chairmen, some of them were good people, I tell you that. I dealt with Dr Elgie and he was a wonderful gentlemen; Michael Starr and Odoardo Di Santo. I can tell you, ladies and gentlemen, it's not the chairman's fault. When Di Santo got the job I said, "Odoardo, I feel sorry for you." It's not the chairman's job. It's the way you people put into the legislation.

That place in there is like a zoo. It's like Bosnia. One adjudicator don't know what the other adjudicator's doing. If this bill is passed, as a certain, the WCB is going to be like Bosnia, I'm not kidding you. It's not straightforward. It's too ambiguous to implement. It will be a nightmare for the adjudicators.

You know what's going to happen? They're going to have to hire another 200 people to deal with the appeals. Ask the worker adviser who is coming in tomorrow. Today you've got to wait two and a half years to have an appeal hearing represented by the worker adviser. If this bill goes through, they're going to have to wait five years for an appeal hearing. In the meantime, these people who are appealing have go on welfare and be a burden on the community. Is that what you want? No.

Paul Weiler, who did an extensive study of the Ontario system in the early 1980s, prompted the concept of experience rating. He did wonder in passing whether such a system might cause some employees to hide claims and increase condition. He pointed out that really there had been no studies which show the efficiency of the experience rating.

By the way -- correct me if I'm wrong, some of you here -- but this hearing must be a joke. The reason why? I read someplace that the compensation board already has a committee ready to implement this bill. Why would the WCB and the government have somebody to implement this bill when this bill is being debated? That's my question.

1550

I apologize for not giving you a typewritten, fancy brief. You see, I come in here by myself, I spend my own money, I help the widows with my own money, I get paid by nobody. I'm just an injured worker. I live on a measly pension from the corporation I worked for for 24 years: $111 a month pension. If I spent seven years at Queen's Park I might get a better pension, like Peterson and the rest of them get.

The royal commission chairman I heard this morning. Somebody's not happy with the chairman they selected, like Lynn Williams. You know something? There were 10 royal commissions done in the last 10 years. There's none of them from labour. But I tell you, we put up with it. One of them was Mike Starr, who is a good friend of mine. I didn't complain. He came from the Ministry of Labour in Ottawa under the Tory government. They make him to investigate the WCB. He did such a good job they made him the chairman of the WCB. We did not complain, and he did a good job while he was in there. But like I said before, it's not the chairman of the board; it's the act, the way it's written.

They talk about safety in Ontario? All they have to do is read the paper today. You know what it says? Canada and Ontario is C in poor workplace motivation; safety in the workplace is poor; poor relationship between employers and workers; poor relations for corporate credibility; corporations don't have credibility. This is on the front page.

Then you know something, Mr Chairman? You turn the second page, and what does it tell you on the second page? "Bosses getting generous raises, survey reveals. Average pay up three times the inflation rate." Yet this bill is going to cut down on us, the people who are making $111 a month. Give us a break. We need the break, you know.

As you said this morning, there are so many thousands of injured workers who cannot afford to help their children, can't afford -- on welfare. It's been too long since these people at Queen's Park and there have done something for us. If you don't do something for us today, I'll tell you, you're going to suffer for it.

I say to the members of the government, if you don't do something today -- I have a copy here of when Bill Wrye got up in the Legislature in 1985 and said: "This is an historic day. We're going to give you indexed pension after 20 years of fighting."

Then Mr Gillies got up -- he used to be a good friend of mine, the member. He said: "You know something? I applaud your decision, Bill Wrye. It was a very good suggestion, and speaking for the Tory party, I applaud you for that."

Then in turn Bob Rae got up and said: "This is an historic day for workers." I got a picture with him in here at Queen's Park on June 1, among 5,000 people, saying to us: "Elect me and I'll fix you up. I'll get you an indexed pension."

But you know what happened? Now the God-damned -- pardon my language; I'm sorry. But when I talk about injured workers, I suffer, because I am getting old now. I am getting sick and tired of coming here. Thirty-three years is too long to come here and lobby for these injured workers -- on my own. I never worked for a union, I never worked for a company. I do it from my own heart. I have these people phoning me for help every day, as you can see by some of these people. I drive them down here, I buy them lunch, not because I can afford it, but because I get a little bit more than they do. What can you say?

Mrs Witmer: That's right. What can you say? I appreciate the history you've given, the frustration you feel, but I'm not sure that Bill 165 is going to address your problems.

Mr Cauchi: In Bill 165, like I said, there's too many bad apples. I would rather go back and get another bushel of apples. I think I wrote it down here someplace. I'd rather have another bushel of apples, and in that bushel of apples -- I've been on bargaining committees for a long, long time; I was locked up in many rooms and they never opened the door until we came to an agreement, because where lives are involved and the livelihood is involved, they never let you go.

It should have been three members from management, three members from labour and three injured workers, because we're talking about injured workers anyway. So how come injured workers are excluded from the bipartite committee? Let's put these nine people in one room and I wouldn't open the door until they come up with a solution. Then there'd be no need for you to have confrontations with injured workers, with management, with nobody.

I don't want a royal commission, my friend, I tell you. I don't want a royal commission. You go to the seventh floor -- sometimes if I have my lunch in here I go upstairs and I look at the royal commission by Dupré: $1.8 million. They spent about six months in hearings, they brought people from all over the world to tell them about asbestos. What did they do to us? I didn't get one cent. Widows never got one cent. The government spent $1.8 million. All they did is create the royal commission, the Tories at the time, just to pass the buck and delay things for our people. But they had a royal commission -- big deal -- $1.8 million. There are three volumes which I have at home.

Mrs Witmer: So do you think this royal commission is an attempt to pass the buck too?

Mr Cauchi: Exactly. Why would you have a royal commission? I got nine royal commissions here. You see them? The last nine years, nine royal commissions. I don't have to tell you. I guess everybody knows about royal commissions and what their purpose is. I wasn't born yesterday. I only went to sixth grade education, but I have 33 years' experience in the Legislature, I tell you that.

Ms Murdock: Thank you for coming and taking the time to explain. When I saw the title, Asbestos Victims of Ontario, I thought actually that you were going to be talking more --

Mr Cauchi: We met before.

Ms Murdock: -- about the history of how long it took for asbestos to be recognized. It is now, as you know, in schedule 4, where it was finally admitted to be a disease that the worker did not have to prove he got in the workplace.

Mr Cauchi: Let me give you an answer on that. I'm glad you mentioned that. I got a friend of mine. He was getting 20% compensation for his asbestosis, 20%. I went to the board. I said, "This guy is sick." There is schedule 4, there is this and there is that, like you're saying. They wouldn't give him more than 20%. He phoned me from St Michael's. They took his lungs out. In the afternoon they gave him 100%. Was that a joke or not? They had to take his lungs out to get 100%. The guy is dying. They give him six months to live. This month in August, I lost three of my people. Like I said, there are only a few widows of us left.

I'm lucky, or maybe God gives me the strength to come and bother you in here, because I'll tell you, as long as I live I'm going to keep coming here and I'm going to keep raising hell with you guys, whether you're here or not. I'm not going to give up, no two ways about it. I just keep my fingers crossed and stay healthy. I had a bypass operation that the compensation gave me. I never had high blood pressure in all my life, but they gave me a heart attack trying to get compensation. They gave me rehabilitation for 15 years. You know what rehabilitation they gave me? They drove me crazy staying home waiting for somebody to call me to work. Nobody ever called at my place. That's rehabilitation in Ontario.

And I'm not talking about this government or another government. The three governments, the three political parties were in power. When I went on rehab the Tories were in power, and then the Liberals took over and I thought they were going to change it. Then the NDP took over and nothing has changed. So it's not the board. It's you people. It's how you write the act. Write it down so them guys in there can have a policy for one worker and not another policy for another worker. Make it crystal clear to them. These guys don't know whether they're coming or going up there. I know. I've been there twice a day sometimes.

Mr Hope: I've worked in asbestos. I come from a factory with asbestos, and I remember very clearly that we used to get black and come out and they'd say, "Nothing wrong with it." Now they've removed asbestos and put fibreglass in place. All it does is knock the asbestos off your lungs and leave the fibreglass there.

I see some of the changes in this act which are going to prevent, as we move into isocyanides and every other chemical that's out there reducing lung capacity -- I see improvements. I understand your frustration, what you're saying, that there are reductions in the pension benefits. But don't you see, a person who has fought for the right for asbestos to be recognized as a disease caused by a workplace, don't you see some improvements in this bill that lead at least in a progressive way? I understand your frustrations about benefit reduction, but in some of the other areas, aren't there improvements you see?

Mr Cauchi: There is nothing in there for us, nothing in there for us that you could say that. We're not going to qualify for the $200.

Mr Hope: But what about the future aspects? Are you cutting me off?

The Vice-Chair: Yes. That's it.

Mr Cauchi: We're not going to qualify for the $200.

1600

Mrs Joan M. Fawcett (Northumberland): Thank you very much for coming forward and making a presentation yet again. I can understand and certainly feel your frustration. I too believe, and my party believes, that injured workers should be represented on the board. I understand why you feel that way, and I would certainly hope that the government is listening.

There was an injured worker who came into my office in Cobourg. He was actually from Sault Ste Marie, but he was visiting his granddaughter. So he came in -- and he's been watching the committee -- and he said that the committee just doesn't get the point. He said none of us get the point. He said it's safety in the workplace that is the most important thing, that somehow we have to improve the safety in the workplace.

I just wonder, do you have any comments on the Workplace Health and Safety Agency? We've heard certainly some people who say that it is just not working, it needs to be revamped, and certainly our party believes and we have a suggestion as to how it can be revamped.

Mr Cauchi: Well, I'm glad you asked that question, because I'll tell you, in my plant we had a health and safety committee for 30 years. In 1965, when our first colleague died, I quit the bargaining committee. I said: "The heck with bargaining. I don't want no more to do with the bargaining committee and grievances. I'm going on health and safety." I travelled all over the world to find out what's wrong with asbestos, what's caused by working in asbestos and inhaling asbestos. We never had any masks, we never had any earplugs, we never had any safety precautions.

I came back and we created a joint management and union safety committee, and once a week we toured the plant. I'll tell you, I have the minutes at home of every meeting we had with management. "You fix that in there. You fix that in there. We'll mark them down." We'd go the next Monday, and it's the same thing, year after year after year, until the Minister of Labour, who was Bette Stephenson I believe, and I toured the plant. Then they changed it. But with me, being a member of the safety committee, nothing was done. I had to take the Labour minister -- there were three ministers at the time.

You might know that at the time safety and labour were under three ministers: the Minister of Environment, the Minister of Labour and the Minister of Health. I had the three ministers at once. I've got a picture of them, the three of them walking into the plant to find out the true meaning of danger: working in that plant; the true meaning of disease that's going on in that plant. The three ministers had to come in. Today we're lucky; we only have to go under one Minister of Labour to say, "Hey, listen, you guys, you'd better clean your act up, and if you don't clean your act up, you're going to pay for it."

That's why I don't go along with experience rating. I don't believe that you should charge everybody the same rate. The same rate doesn't apply to me, because the more you charge the little guys -- I agree with the independent business group. I told this to a Tory friend of mine up north one time in Thunder Bay. We had hearings here about 20 years ago about Bill 101. His people up north in the lumber industry were complaining because they were being hit hard by the compensation. Well, no wonder they were being hit hard by the compensation. The companies that moved out of Elliot Lake and Johns-Manville and Bendix in Windsor, they killed so many people they pulled out. So the little guy had to pay for it. I don't think that's fair.

The Vice-Chair: Thank you very much.

Mr Cauchi: Do I have 20 minutes?

The Vice-Chair: No, you've had your 20 minutes.

Mr Cauchi: That's what I mean. Well, I'll tell you, I'd like to thank you, and I'm sorry if I lost my temper, you know, because I get a little bit upset when it comes to injured workers, my friends, I tell you.

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

HAMILTON MOUNTAIN LEGAL AND COMMUNITY SERVICES

The Vice-Chair: I'd like to call forward our next presenters, Hamilton Mountain Legal and Community Services. Good afternoon and welcome to the committee.

Mr Hugh Tye: Good afternoon, Mr Chairman and members of the committee. I'd like to thank you for this opportunity. My name is Hugh Tye, and I'm a staff member of Hamilton Mountain Legal and Community Services. I regret that I'm not able to deliver a submission today with the same passion that we've just witnessed, but I hope that on behalf of the hundreds of individual claimants whom we have represented over the years I can act as a conduit to express some of the frustration and anger that they've experienced in their complicated journey through the web of workers' compensation.

With that in mind, I'd like to briefly tell you a little bit about Bob. I believe that his dealings with the board are representative of a very disturbing pattern that we see in our office. He first came to us in 1991 after an injury in February. He was 32 at the time, a member of a union, was unskilled, did heavy labour in a factory setting and had an injury to his shoulder and back as the result of a trauma.

There was no problem with the initial entitlement for which he received six months' total temporary benefits. The problems arose with his return to work and allegedly appropriately modified employment. He was not able to continue with his initial attempt because the work in fact was too fast. He was twice disciplined by the employer for not keeping up with the pace. When he had to stop, he did not receive benefits at that point. On his own initiative, he made a second return to work, experienced the same problems with speed and had to lay off.

At that point, a work site analyst from the board did attend the work site, but neither Bob was present nor was a union representative, and unfortunately he wasn't provided with a copy of the assessment report. Later he accessed it during the appeal process.

Again he returned to modified employment for approximately one month, when again he laid off due to speed, which he wasn't able to keep up with, and the repetitive motion.

The appeal process then began. He went through what is referred to as the expedited process, which meant he went straight to a re-employment hearing. He was unsuccessful. He then went to the WCAT, and a hearing was held in January 1994. An order at that time was made granting him retroactive benefits with interest to 1991. He was also granted a future economic loss assessment and a non-economic loss assessment and was provided with retraining.

So, for Bob it took three years to establish that the work was not suitable, at huge cost to the board, I might add. But of most concern to us is the cost to Bob himself. During that three-year period, he was forced to go on welfare, he became extremely depressed, his marriage fell apart and his wife retained custody of the two children. He's currently living in the basement of a relative's home.

At Hamilton Mountain Legal and Community Services where I'm employed, we're a general service clinic, and we deliver services in the area known as poverty law. So it's appropriate that workers' comp constitutes approximately 60% of what we do. There's always an overlap when we act on behalf of an injured worker with other areas of the law, specifically welfare, family benefits disability, Canada pension disability and even landlord and tenant, as clients become unable to pay their bills.

Accidents and protracted delays impose huge costs on society generally, but the human cost is what is most tragic, and there are many victims. Like Bob, we see increased stress. We see a great deal of anger, which is sometimes vented in violence; a great deal of depression, which is common in many of the clients we serve; generally a loss of dignity, self-esteem and hope. Some individuals unfortunately turn to drinking and drugs. There's a great deal of family breakdown. Children's lives are shattered as parents split up. Part of our work is to make quite a large number of referrals to family lawyers as well as to counsellors of various sorts, whether it's financial counselling, marital counselling or psychological counselling.

Bill 165 specifically attempts to address, albeit we believe unfairly, financial cost, but it does not address the human costs. The bottom line is that accidents and industrial disease must be decreased in Ontario. What we require is a proactive approach to reducing accidents. We believe this must form the framework for all changes. Such a guiding vision was lacking in the formulation of Bill 165, and it is for this reason that we oppose the bill in its entirety. It is our hope that a royal commission can provide some sort of a guiding vision that would focus on the decrease in accidents.

In the written submissions, we address specific concerns that we have with the bill, as well as areas that it does not address. I would like to just touch on those briefly at this time.

1610

To begin with, de-indexing: As has been discussed this afternoon and many times, compensation is an insurance scheme whereby premiums are paid by employers in exchange for an exemption from lawsuits from injured workers. If accidents aren't reduced and costs are increased, our position is that premiums should be increased.

Premier Bob Rae, in announcing the proposed legislation to Queen's Park, talked about making a sacrifice and asking people to give. We believe that the wrong people are asked to give and make that sacrifice by this bill. We believe what it represents is an unjust transfer of increased financial responsibility on to the poorest victims of the system, namely, injured workers.

De-indexing guts benefits over time. We are totally opposed to the Friedland formula, particularly the very shortsighted 4% cap that has been imposed. This is based on a recessionary economy and one which we hope is going to improve.

In the submissions, we also address re-employment and the experience rating system. It is our experience in representing individual claimants that there's a great deal of abuse by employers and undue pressure by the board as a result of the existing re-employment obligation and the experience rating system, and we believe that this is exacerbated by the legislation, because there aren't any built-in safeguards. I believe that Bob's example that I gave off the top is illustrative of that fact.

What we are finding, unfortunately, in many cases is that an improper job description is being provided by employers without worker input. Work site analysts seldom attend, and when they do, the workers themselves or their representatives are not in attendance, and when a report is made, they do not receive it. Workers are often forced to return to work before they are ready and frequently to unsuitable employment. In many cases, the modified work that is promised by the accident employer is not provided when the worker actually does return.

Our feeling is that because of the experience rating system the way it exists, it encourages not reporting. In some cases, employers are pressuring workers not to report. In other cases, workers are kept on the payroll rather than making a claim, or they are put on private insurance plans in order to reduce the number of claims and benefit from the existing experience rating system.

We believe that the board, if it is going to be effective, must have knowledge of the actual conditions of the workplace. This doesn't exist now. There must be more worker input, the use of analysts or their equivalent, and follow-up is key. Rewards should only be provided when there is long-term successful integration of workers into the workplace. We believe that has to be the cornerstone of any incentive program, as well as the re-employment obligation.

In addition, the bill doesn't address a number of issues related to the re-employment obligation that we feel it should. Specifically, it doesn't cover workers with less than one year experience nor places of work with fewer than 21 employees. We have problems with the limitation period lasting for two years, for example. Because of the protracted appeal process, we're often past the two-year obligation by the time the individual is in a position to establish that they have a right to return. We believe that the board should be authorized to order reinstatement of injured workers and that just cause should also be a part of the legislation with respect to termination.

Other issues that we address include deeming. This is not found in Bill 165. As with other worker groups, we have strong objection to what has become the practice related to deeming. The board presumes that suitable, well-paying jobs are available, yet there is no legal obligation on the board to look into it. I believe WCB figures state that 80% of those deemed to have found suitable work were in fact never offered a job.

With respect to the $200 monthly increase, we believe it is too restricted. It leaves too many injured workers with no increase and with limited inflation protection. We also have some concerns about the clawback, which has been referred to this afternoon.

In conclusion, we would like to emphasize that if there are to be changes to the compensation system in this province, there must be a change with respect to the mindset of employers and the board, and namely, we must emphasize a reduction of accidents. We need to promote the study of ergonomic factors.

The tables found at the back of our submissions show that the largest proportion of claims being made are as a result of repetitive strain or what is known as musculoskeletal injuries. These are things like tendinitis and carpal tunnel syndrome, epicondylitis, trigger finger. Things that can be modified in the workplace would severely reduce if not eliminate many of these injuries.

We also believe that health and safety must be made a priority and that the Ministry of Labour must increase its enforcement activity. We feel that Bill 165 fails in this fundamental regard at immense financial cost to injured workers, and it's therefore our recommendation that Bill 165 be withdrawn.

Mr Wood: I notice on page 5 and again on page 6 you're saying that with the surcharges and refunds for individual employers the system leaves a lot of room for serious abuse the way it is right now on experience rating. Under deeming, the impression I'm getting from the last paragraph is that you're saying that the then minister, Mr Sorbara, said repeatedly that deeming wouldn't be a problem and said that they would make regulations, which they never ever did. You're saying that you felt the minister at that time was held responsible for causing some of the problem on that.

In your conclusion section, regarding accidents and disease, the impression I'm getting is that the only way we're going to have a better Ontario is if we can find a way of eliminating accidents and disease in the workplace. I just want to know if you want to further elaborate on that, how that should be done. I know that under the Highway Traffic Act if you're speeding or if you were to cause an accident, there's careless driving, there's impaired driving charges, there are all different kinds of things. Should this be the case for the employers? If somebody's hurt, should they be hauled off to court and fined and repeatedly fined until such time as there are zero accidents or zero diseases in the workplace?

Mr Tye: I don't believe that anyone doesn't want accidents reduced. I believe that the existing system and the proposed legislation is more of a reactive approach to an existing problem, as opposed to a proactive approach: Let's do something regarding the root cause. That is our fundamental concern with the existing legislation and the bill as well, because we believe it preserves the status quo in that regard but also makes some very detrimental changes with respect to injured workers.

Mrs Fawcett: Thank you for your presentation. You've certainly outlined many omissions in the bill, and I really think some of your suggestions are certainly well taken. Now, whether or not Bill 165 will be amended to address some of these -- but certainly your suggestion that if not then it be withdrawn is well taken.

I was interested in the example of Bob, and certainly it must have been so horrible for him. When he first started the whole process and the first person he would've gone to would be the adjudicator, did things break down from there? I guess why I'm asking this is that it has been suggested -- and I don't mean this to be in any way derogatory against the adjudicators; they're only doing their job; they're doing what they've been told -- that at that level there is not enough training, that these people are very, very important and should have better training. Is that something you might advocate, from your experience?

1620

Mr Tye: I think I would. I believe that the case load of adjudicators is probably --

Mrs Fawcett: Horrendous. I do not where they begin.

Mr Tye: -- horrendous. I appreciate the stress that they're under in delivering services. However, that doesn't adequately deal with my clients' concerns.

I think there needs to be more emphasis by the board generally at the outset, which is a point being made by I think both sides, that the appeal process is extremely protracted. Field investigations, for example, aren't done right off the top. They're perhaps ordered three steps up the appeal ladder by decision review. If they're done up front, and there's greater analysis and an understanding of the workplace itself for the individual claimant, then I think we're going to see a return to work much sooner.

Mr Arnott: Thank you very much for your presentation. I agree with you that the bill should be withdrawn, though for different reasons.

You talk about the experience rating changes that are in this bill. Where some of us would like to look at it in terms of a system which encourages workplace safety, you've said that the current rating system encourages employers to hide claims. I just wonder what evidence you have to offer in support of that statement. What's the extent of the problem in that respect?

Mr Tye: I can only speak from our experience, and I know that it's not unusual for us to take a matter all the way to WCAT on an entitlement issue because there wasn't a report made initially, and that's a decision made by somebody with the employer. Clearly, it's not in the worker's interests not to report, and in cases when they do, it's not being properly reported.

The suggestion we're making, and it's the only conclusion we can draw, is that the employer is reluctant in some cases because of the penalties under the existing system. We prefer to see an incentive program that reduces accidents, not just claims, because if the emphasis is on claims being reduced, then there's the potential, and the reality, for abuse.

Mr Arnott: What do you think the scope of the problem is, though? Is it a huge problem?

Mr Tye: In speaking with other worker advocates, it's much larger than any of us would want it to be, not that there should be any problem, but I believe it's fairly generalized.

The Vice-Chair: On behalf of this committee, I'd like to thank Hamilton Mountain Legal and Community Services for its presentation to the committee this afternoon.

LATIN AMERICAN NETWORK GROUP

The Vice-Chair: I'd like to call forward our next presenters, from the Latin American Network Group. Good afternoon and welcome to the committee.

Ms Constanza Duran: Good afternoon, members of the committee. My partner, Alberto Lalli, and I, Constanza Duran, represent the Latin American people or the Spanish-speaking people of the city. We would like to express the problems that we see as a community with the new bill.

I would like to start by saying that the Latin American Network Group, LANG, was formed in 1990 in response to the needs of the Spanish-speaking injured worker community. Immigrants, generally, have problems that go beyond the obstacles inherent in the adjudication process. They are strangers in a strange land and must cope with a set of cultural norms that are outside their experience and understanding.

The Spanish-speaking community is, in addition, young and facing more problems than the already established ethnic injured workers' communities in Canada, the major problem being the language barrier. LANG was born to respond to those problems and to provide this group with a vehicle capable of expressing its concerns and its discomfort. Today we are trying to do exactly that.

In summary, we agree with and support the submissions presented by the Ontario Network of Injured Workers Groups, the Union of Injured Workers this morning and Injured Workers' Consultants, also this morning, which is a member of the Toronto Injured Workers' Advocacy Group.

In addition, and at the risk of being repetitive, we would like to remark on the following areas of Bill 165 which affect our community in a singular manner: (1) de-indexation, (2) the increase of $200 under the subsection 147(4) supplement, (3) employers' access to medical records, (4) vocational rehabilitation, (5) mediation. Also, we want to add to these the problems that we find with the present deeming system.

Now I'm going to let Alberto continue with our presentation.

Mr Alberto Lalli: I will try to refer to the topics that Constanza mentioned. I apologize if I am repetitive, considering how many people already have talked to you and will talk to you. However, they are issues that are very important to us.

The cap on de-indexation, or the Friedland formula as it's been known, is one of the most worrisome problems that we see and that we are completely against and reject, for the simple reason that it is the only demand that has been granted to the injured workers groups in their fight, as was mentioned this morning by the Union of Injured Workers. It was after many years of struggle, sometimes pretty violent if we remember history correctly. It was considered, in 1985, not as an increase of any sort of benefits but as an adjustment, and it was based on a solid rationale. It's just to protect benefits from the normal, logical erosion of our type of western economy.

The elimination of the protection, even in a partial way, is outrageous for us. We can see in the Hansard of 1985 all the members of the three parties expressing the fairness of and agreement with this application of the full CPI in workers' compensation benefits. Today, we don't see any rationale except to appease the business community at the expense of the disabled workers.

For the reason that most of our clients, most of the members of our community, were injured after 1990, under Bill 162 legislation they won't benefit at all from any of the changes that this Bill 165 will bring. On the contrary, they will be directly affected by the application of the Friedland formula in their current benefits.

Another point that comes across is the increase of $200 under the subsection 147(4) supplement. As I said, the big majority of our members will not be affected by this increase, and the idea or the implication that they won't receive this increase because they have been adequately compensated is preposterous. We don't believe this is the case. Actually, we have seen people in these days of hearings who agree with that, even members of the business community. So we are strongly opposed to this just because the only thing that will be like a good sales pitch doesn't apply to our members.

One other issue that is very important for the immigrant injured worker community is the employers' access to medical records that will be granted with introduction of this bill. We believe this is unnecessary. There already have been two big task forces: one in 1986, the Majesky and Minna, and one in 1991 by the former chair of the WCB, Mr Di Santo. Neither of them saw any need for more employers' access to medical records. Actually, already there is enough in the legislation so that whether the worker appeals the decision or whether the employer does, they have access under a section of the current legislation. So we don't see why this could bring any other solution.

1630

In an ideal society we believe that a working relationship between the injured worker's family doctor, the injured worker and the employer could work, but the reality that we have shows the situation to be totally different. In my particular experience I've seen family doctors preparing notes to employers regarding physical limitations or requesting some sort of light duties for injured workers which employers totally ignore. What I see is this injured worker walking this note from the employer's company to the WCB without any result from anyone, and those notes end up on my desk. So it's hard for me to believe that now things are going to change and the employers are going to be paying attention to something that they haven't done in the past.

This brings a new right to employers, and I call it a right because history shows that the workers don't have any say in the matter. Many times they just have to sign or agree, put their signature on a paper for anything, and if they don't do it, they run the risk of jeopardizing their benefits. That we have seen more than often.

The other issue we want to deal with is vocational rehabilitation. We see that when an injury strikes a new immigrant, the effect that produces is different from that on the one who has already been established here for years. He has the proper skill usually and a unionized type of work and a whole surrounding of social net to protect him.

The Spanish injured workers in your community, the Latin American people, do not have that, so the impact is greater, and now we will have to explain that the WCB is ready to offer vocational rehabilitation services also to their employer. So what I can see now is that they will feel that maybe the employers also fell and hurt their backs the same way or at the same time that they did, and maybe they need some sort of assistance to, what, look for work?

It's going to be hard for me. I can see myself in my office trying to explain that this is not the case. However, they're going to receive vocational rehabilitation services, and I have to explain now that the Workers' Compensation Board is also the Workers' Compensation and Business Board maybe, because we will have to deal with that fact.

For us, workers' compensation is compensation for workers, for people who have had injuries as a result of an accident in the workplace. Employers have nothing to do with that. Like John McKinnon said this morning, maybe the only thing they need to be assisted in rehabilitating is how to participate actively in the reinstatement of workers in the workplace.

Again, in an ideal society it's probably possible to see a working relationship between the employers and workers and the board, trying together to achieve a goal of return to work in the workplace, but the reality is not that. For instance, one of the reasons why Bill 162 was presented to us was that, for the first time, it was bringing reinstatement rights to injured workers up to two years after the time of the accident. But the reality shows that's not happening. We know that the figures for unemployed injured workers have increased, up to 78% according to the last figures released by the board.

In many meetings that we had with the workers' representatives and the board of directors we were always told that it was very hard to get the employers to actively participate in the voc rehab and the reinstatements. In our case, the people that we see, the non-unionized and unskilled, don't get any type of cooperation from the employers in the country. They just don't want to hear about them, and many times we've had to end up in the re-employment hearings branch.

It seems like we are now led to believe that with this bill employers are going to be willing to reinstate the injured workers and they only need a little bit of assistance from the board to get that. We have seen that it didn't happen with Bill 162 and has never happened before, so we don't believe it's going to happen; on the contrary. The tradeoff with Bill 162 in the name of reinstatement rights was the elimination of the permanent disability awards. Now again, Bill 165, in the name of more reinstatement rights, implies the elimination of the indexation of benefits. The result is always employers getting the good deal, the lion's share, power, or whatever it's called in English, and the workers getting nothing. On the contrary, they lose.

The issue of mediation also comes into question. How difficult it is for an immigrant worker, who most of the time doesn't even speak the language, to enter into a sort of favourable bargaining situation with the company lawyers and Workers' Compensation Board representatives who know the game, who most of the time know each other because they have been dealing with the same company and the same mediation officer and creating a sort of familiar relationship in which the worker feels uncomfortable and left out. We many times, as representatives, have felt also the same.

The whole thing, besides implying the existence of an adversarial relationship right there, creating the whole idea or myth that the system shouldn't be adversarial, also brings the fact that it can't possibly be on an equal footing for injured workers. From the beginning of the mediation, the injured worker will be in an unfavourable position or situation, so we also disagree with this and don't think it's necessary.

The last issue that we want to talk about, even though it's not in the bill itself, but it has been at the core of the struggle and fight against Bill 162, is the deeming procedure. We disagreed then and we were hoping that any serious reform on workers' compensation would consider the elimination of the deeming provision because of the devastating effects on injured workers, particularly injured workers who are immigrants, unskilled in this country, including unskilled in the English language, which necessitated that they look for work in low-paying jobs and had accidents in those jobs.

The board always assumes that there is no potential there, there are no dreams, there is no expectation of anything else, and assumes that the only thing that worker required was to work as a parking lot attendant or a gas bar attendant and that's his goal in life. Therefore, any attempt to show the contrary is impossible. The deeming provision follows suit very swiftly and the person ends up with a FEL that's extremely low, or maybe no FEL at all, without a possibility of getting a job, unable to return to their original work and being abandoned by the system. That situation has been repeated over and over again.

Like I say, we hoped that deeming would have been considered in this bill, but it hasn't been touched, despite the promises, despite the opportunity and everything else.

Our conclusion is that we're strongly opposed to the bill and reject it in its entirety because, again, it doesn't do anything for our community except reduce their benefits by application of the Friedland formula.

1640

Mr Mahoney: Thanks for your presentation. I think you very clearly outlined your concerns, and what I am pleased to see is that you've objected to a number of the sections in the bill and then categorically said you reject the bill, which is a little different from some of the other presentations.

This morning I asked the question to injured workers, since they objected to many of the same sections you're objecting to, particularly the de-indexing of the pensions, would they like the bill tabled so that we could, as you put it, I guess, get back to the drawing board? The answer was no.

The reason is, even though they objected to all of the different parts of the bill that you and they have outlined, they don't want to lose what they see as the one thing they've gained, which is the $200, and fear that it would be getting muddled back with the review, rewriting of the bill or perhaps even worse, with the long-term prospects of going through the royal commission, that they could be a year, two, three years, whatever, away from seeing that $200. So I guess my question is, is this almost a cynical way of trying to buy support for the bill on the part of the government by putting in the $200 even though it's funded by de-indexing all the other workers' pensions?

Mr Lalli: What I believe is that the reason we are here is because there is a need to reform compensation and there is an understanding, an agreement, that the injured workers are not receiving what they deserve. We don't want to wait for the royal commission; we want changes now. My proposal is to get back and do those changes now. Don't wait for the royal commission. How we get to those changes? My question will be, do you think the injured workers deserve the $200? Do you think that their pensions are not representative of the real disability?

The Acting Chair: Thank you very much. That was a good question; you'll think about that, I'm sure.

Mr Mahoney: Is this an independent Chair that's been thrown the microphone over there?

The Acting Chair: Very independent.

Mr Arnott: I don't have any questions to ask you but I appreciate your coming in to make your presentation and your statement that the bill ought to be withdrawn.

Mr Lalli: Thank you.

Ms Murdock: Thank you very much too. I just wanted to ask you a question: "Bill 162 was the termination of permanent disability awards in exchange for reinstatement rights" and this bill "is the elimination of indexation...for even more reinstatement rights." Given the sections in Bill 165 that make return to work and vocational rehabilitation -- it isn't mandatory, but there will be surcharges applied if employers are not doing it, whereas Bill 162 was voluntary and it didn't work. Really, Bill 162 did provide reinstatement rights, but it was on a voluntary basis and we all see that it has not really worked. Would that not affect some of your deeming concern?

Mr Lalli: I don't know, actually. The experience that we have is that the board with Bill 162 was granted great discretionary powers and they have used it with deeming provisions in an incredible devastating way.

On the other hand, employers have fought every step of the way for the reinstatement. That tradeoff didn't work and the feeling I have now is that this bill is -- or the reinstatement rights or the saving of money that certain people mentioned because of those workers coming back to work, are based on how successful those reinstatement rights before would apply and I don't see that.

The board has been always very cautious in fining workers. For example, the previous speaker mentioned the problems of initial entitlement when the employers do not send the proper forms. I had also that experience. Our community is full of those examples. Even though there is a section in the legislation that empowers the board to fine the company, it never happens. We have our injured workers waiting for weeks and months without any result.

My concern is that the board needs a whole change of attitude. It's becoming more a corporate organization in their scheme and honestly I don't trust that the board will do that. My eight years of experience show me that. I had to see that.

The Acting Chair: On behalf of the committee, we'd like to thank the Latin American Network Group for taking the time to appear. I'm sure you'll be watching the process as it unfolds.

RETAIL COUNCIL OF CANADA

The Acting Chair: I would now like the Retail Council of Canada to come forward. Sit yourself down. Welcome to the committee.

Mr Peter Woolford: My name is Peter Woolford. I'm with the Retail Council of Canada. With me is Mr Keith Lamson, manager of health and safety with A&P stores. Also, staying with the company, Ms Martha Brunning is a claims management supervisor with A&P stores, and Ms Arlene Lannon, who is a director for Ontario for our sister association, Canadian Council of Grocery Distributors.

We do appreciate the opportunity to appear before the committee this afternoon on this issue. A quick commercial, if you will, in respect of retail council. Our members come from every sector of retailing and among themselves account for something over 65% of all of Ontario store volume by sales. Our sister association, as you can see by its presence here this afternoon, fully supports the views that we put in our submission and what we have to say.

Retail council was a member of the business steering committee, which provided advice to the business members of the Premier's Labour-Management Advisory Committee, and we're also a member of the Employers' Council on Workers' Compensation. We fully support the submissions they've made to this committee and the business proposal submitted to Mr Rae back in November of last year.

To reiterate what many other business groups have told you, and I guess what many other employee groups are telling you, injured worker groups, Bill 165 is unacceptable and it should be withdrawn in its entirety. From our perspective, it perpetuates and extends the workers' compensation system, which is notorious across Canada for wasteful operation and excessive compensation. In fact, the minister himself acknowledged this when he appeared before this committee when he said that his reforms would result in the unfunded liability in fact going up to $13 billion.

I'd like to come to a couple of detailed items that we wanted to focus on particularly, simply because of the constraints of time. The first, of course, is experience rating, about which you've heard a considerable amount.

The proposal to augment the current experience rating system with a board evaluation of a firm's practices is of the greatest concern to the retail trade. We believe it will substantially undermine the purpose and effect of experience rating by overriding the focus on results with a test on process. In particular I would like to note that this is a really serious concern for the thousands of independent members that we have who don't have the kind of processes the board will be testing for, and these very good performers will find themselves automatically at a disadvantage.

I think there's another factor the committee should consider here and that is, simply, NEER works. I think the clearest example of this was a study that the board itself did in 1991 in response to labour union charges that NEER was causing employers to underreport or hide accidents. The board went out with a mandate to look for evidence that NEER was not working and it simply couldn't find it. The conclusion of that very thorough study was that NEER is operating as it should.

At this point in the presentation I would like to turn to Ms Brunning, who's going to talk particularly about how NEER has worked for A&P stores, the impact it's had on their experience and the way it has operated to change their behaviour with respect to accidents and health and safety.

1650

Ms Martha Brunning: A&P is a retail grocery company which operates in Ontario under the banners of A&P, Dominion, Miracle Food Mart, Miracle Ultra-Mart, SuperFresh and Sav-A-Centre. When we entered the NEER program in 1991, we believed that we had made progress towards our goal of reducing worker accidents. Our initial assessment under the NEER program, I am sorry to say, resulted in a large surcharge being levied against the company.

The NEER program, therefore, had provided us with the clear and direct feedback on our performance that we had been lacking. Through education and discussion about the negative and the positive results which are possible under the NEER program, the company renewed and increased its commitment to workplace health and safety.

Over the course of the next few years, A&P revamped its accident prevention programs in the stores by increasing training and by working with the joint health and safety committees to make them more effective. We have implemented a back belt program and accident-free challenge in all the stores. Awareness of health and safety issues and concerns has increased throughout all levels of the company and all field personnel are more aware of the issues at hand.

Administratively, we have increased our vocational rehabilitation staff and hope to increase our claims management staff as well. We have introduced a health and safety supervisor for our warehouse locations and have also established a modified work centre for our injured warehouse employees, that has proved very successful.

Our company has seen the results that are possible under the NEER program. Since entering the program, our accident frequency has been reduced by 31% and our sheer accident numbers have been reduced by 25%. Our performance index under the NEER program has improved with every quarterly report, and we will have finally achieved an initial rebate on our 1993 accident year.

In terms of sheer dollars, the 1993 rebate represents less than 10% of the initial assessment we paid for that year. However, in real terms, the rebate represents a decrease in the injuries suffered by our employees as well as an improved ability to provide meaningful, modified work in a timely and effective manner. In short, it represents the creation of a healthier, safer and more productive workplace, something that we're all striving for, labour and management alike.

A&P is so strongly convinced of the value of NEER's basic principle of judging actual performance that we are currently examining the possibility of implementing an internal mini-NEER program in all of our locations.

All health and safety professionals know that a safe workplace can only be created with a top-down commitment from management and a feeling of empowerment among staff. The NEER program has provided us with the essential tool to create both of these conditions.

A&P is committed to continually improving its health and safety performance, but it is the NEER program that has facilitated our progress to date and will ensure our progress in the future.

Mr Woolford: I'd like to finish with a couple of quick remarks on a couple of other parts of the bill. The changes in the bill with respect to vocational rehabilitation and return to work are of concern to us. Frankly, we can see no justification for the extension of the powers of the Workers' Control Board -- Workers' Compensation Board in this area; pardon me, a little Freudian slip there.

The board, in our view, already has two very powerful instruments to promote those objectives: experience rating, as you've already heard; and the existing, fairly stringent re-employment requirements. My understanding is that re-employment in fact is required under the current legislation, it's not voluntary. We can only conclude that the proposals really are intended to give the board greater power to intervene in the operation of companies and to extract money from them.

The third, particular area we'd like to address, just very briefly, is the question of policy direction. We strongly oppose the section giving power to the government to impose policy directives on the board. In our view, this undermines the status of the Workers' Compensation Board as an independent agency and raises very substantive questions about the minister's statement to this committee that responsibility for the unfunded liability rests with the Workers' Compensation Board, not the government. If it rests with the board, then it should have the authority to make the decisions. If the government's going to make the policy decisions and the operating decisions then it should carry the responsibility. You can't have it both ways.

In conclusion, I think we might look to New Brunswick. In 1991 New Brunswick was substantially headed where Ontario is at today. Workers' compensation costs were outstripping revenues by 15% and the government recognized it had a serious problem on its hands. As a result, they reformed the legislation.

What did they do? Benefits were cut. A three-day waiting period was put in place. Compensation is not paid to employees who are getting income from other insurance or from their employer or from top-ups; they're taxed back. Stress claims were limited.

And what are the results? In 1993, the board plans to cut its premiums by 18% to an average of $1.70. The unfunded liability dropped by $18 million in 1993. They expect a $20-million drop in 1994. They expect it to be gone by 1997. And as the chair, Mr Roushorne, says, "The bottom line is, it works." Bill 165 will not deliver these results and it's not meaningful reform. In our view, it should be scrapped.

We'd be pleased to answer questions from the members of the committee now.

Mrs Witmer: Thank you very much for your presentation. You have pointed out here a fact we've heard from all of the employers that experience rating works. In fact, you've attempted to put to rest here a fallacy that has been put forward by the unions that employers are trying to hide the reporting of accidents and you've pointed out here that there was a study done and there was conclusive evidence that it indeed was not happening and those fears and those allegations were unfounded. Do you have any proof that this has ever happened to any one of you in the areas where you work? I've heard this again and again.

Mr Woolford: I certainly have not heard anything from my members. We have a large number of workers' comp professionals on our employee relations committee. Certainly there has been no discussion there about clever ways of hiding accidents or avoiding the responsibility. I should say that those are large firms and they behave responsibly. Whether it is taking place in independent merchants or not -- I would be surprised if it is. You've got a family environment, you know your employees personally. In many cases you've been to their homes, they've been to yours. You're not going to hide accidents in that circumstance either. I would doubt it and I have had absolutely no sign that it's taking place.

I don't know if any of my colleagues here have anything to add to that.

Mr Keith Lamson: We don't understand how that could be true, because as soon as an employee goes and tells a doctor where they were injured the doctor submits it to the board as well. In some cases, where the employee doesn't tell the store manager of the incident and goes to the doctor, we get a notification from the board saying we've been notified by somebody other than the employer that an accident has occurred, please give us details. Then we have to track back to the employees and say, "What happened?" We don't understand how anybody can hide a claim. The doctor's going to report it.

Mrs Witmer: I guess it's so unfortunate that these allegations continue to be put forward because, as you've indicated, the doctor's involved and the report indicated it wasn't happening. I was pleased to hear about the A&P experience where, when there was some positive reward, a process was put in place and that it's been so very, very successful.

Mr Wood: Thank you for your presentation. Just to follow up on what Ms Witmer was questioning on, we've had the legal profession representing injured workers and they've stated that there are all kinds of cases where the forms have not been filled out and they have to take it through the appeal and then the employer comes forward and says, "Yes, okay, he did actually get hurt or she did get hurt on the job," and it's resolved that way.

I find it kind of interesting and curious that you're saying on page 6, "Vocational Rehabilitation and Return to Work" -- my understanding is that back in 1914 and 1915, an agreement was reached that the employee would not be able to sue the employer for injury on the job and the compensation act was set up as an insurance company to deal with that. You're saying -- there are a couple of different spots -- where the WCB would have "more opportunities to interfere with the operation of a firm," and on the bottom of the page you're saying, "One can only conclude that the proposals are really intended to give the board...greater power to intervene in the operation...and to extract money from them."

I was under the impression that this was the agreement that was reached back in 1914, 1915, that the employee would give up his right to sue and compensation was set up to take care of that. Now you're saying you don't want the insurance company or the WCB to interfere in your operation and make sure it's safe and healthy so that there are no injuries and the cost is down. I'm just curious on the statements you've made in your presentation.

1700

Mr Woolford: That's not the case. What we are concerned about is that some of the additional requirements that the board is going to be putting in in this area talk more to process within a firm rather than the results and that an evaluation of that process will then limit a firm's access or the amount of rebate it might get or increase a penalty it might receive under the NEER program. We feel the NEER program solves a lot of those problems. It solves them, as you've heard, in a very effective and direct way, and we're concerned that it will muddy the water.

I think we're concerned as well that firms are not able to carry out voc rehab and return-to-work which makes sense in the context of that firm and which makes sense to them and their employees together. If you get a series of bureaucrats laying down a series of standard procedures, what you end up with is a coat that doesn't fit everybody in the province, and we are concerned that then will become a template that will be applied willy-nilly to a lot of very, very different operations around the province.

A good example is the independent business area, where we have many independent retail merchants who don't have the kind of overburden of staffs and headquarters operations that something like this would naturally envisage. Yet they are among the very best performers with respect to workers' compensation. They could end up paying surcharges because they do not meet the template of best practices and they could end up paying a surcharge because they do not have return-to-work policies.

I can think of an independent member of mine who has five stores, about 40 employees, in operation for 20 years, one accident. A return-to-work policy makes no sense in that kind of circumstance. She has had one claim for $80 in 20 years of operation in five stores. To tell a firm like that that they've got to keep a return-to-work policy fresh and meaningful is just not realistic, and yet they could well be judged on that basis.

Mr Mahoney: It's interesting to me that government members wouldn't understand why you're concerned when I read subsection 103.1(2), "In determining whether a refund is available or the amount of a surcharge under a program, the board shall consider" four things: health and safety practices, voc rehab practices, practices, programs regarding return to work and "(d) such other matters as the board considers appropriate." Does that frighten you at all?

Mr Woolford: Given the experience with the WCB, it causes you to pause for a minute. Yes, it's hard to know exactly what's intended in the fourth area, but even in the other three areas our concern is that we will end up with a series of requirements which are driven more by the need to fill in a form, by the need to meet certain standards determined by the board, rather than by what actually works in the context of the firm. There's a great passion for committees in some firms. In other firms, they do not believe in committees. They believe it's a waste of time.

Mr Mahoney: But there's no reference to results, either.

Mr Woolford: Exactly. In fact, this is a layer on top of a program which measures results. As we heard from A&P, that focus on results leads to getting the attention of managers in the firm and, frankly, of the employees, and that's what works.

Mr Mahoney: It's interesting to have A&P here, because I guess you folks have had a lot experience dealing with the labour laws that have been imposed by this government.

You talked about the agreement that was supposedly entered into. We've heard from the OFL and others that this legislation mirrors that PLMAC agreement. I want to share with you -- I know the government members will be delighted at hearing this again -- a letter from the Premier on his letterhead to Jim Yarrow at the ECWC wherein he says, and I quote -- this is Bob Rae, not me:

"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."

The Premier made that commitment in April 1994. I guess I've asked a lot of other people: Either the Premier has been overruled, he was mistaken or he lied. I don't know which of those. What do you think?

Mr Wood: Why don't you talk of Greg Sorbara when he was Labour minister?

Mr Mahoney: Do you want a copy of this?

Mr Woolford: I have a copy already, thank you. Our view certainly is that this is not a financially responsible package. It does not put in place the changes needed to guarantee in fact the welfare of employees in the future who are injured. We are very concerned about an insurance company that is bankrupt and is intended by these reforms to become even more so.

The Vice-Chair: On behalf of the committee I'd like to thank the Retail Council of Canada for bringing their presentation to the committee this afternoon.

BARRIE INJURED WORKERS SUPPORT GROUP

The Vice-Chair: I'd like to call forward our next presenters, from the Barrie Injured Workers Support Group. Good afternoon and welcome to the committee.

Mrs Joan Thorn: My name is Joan Thorn. I'm president of the Barrie Injured Workers Support Group. We're affiliated with the Ontario Network of Injured Workers Groups, and we fully support the network's position on Bill 165.

Mr Paul Fudge: My name is Paul Fudge. I'm vice-president of the Barrie Injured Workers Support Group.

Mrs Thorn: We will not support this bill in its present form, as it is a bill that supports big business and corporations and has no concern for disabled workers whatsoever. The hands of the disabled and killed workers helped build this country, and now they're to be punished by de-indexing their meagre benefits. Some of them are already living in poverty. With the de-indexing of their benefits, they will have to go on social assistance, and that just puts a bigger burden on the taxpayers.

A monthly increase of $200 has been promised older workers who received small, inadequate permanent pensions. Some receive a supplement and some don't. This increase must be awarded on the pension and not on the supplement. Those who were injured after Bill 162 and are on a permanent pension, whether able to return to the workforce or not, must also receive this increase. But it seems like they're going to be left out.

Anyone who was injured after Bill 162 has the right to rehabilitation. The employer is obligated to reinstate an injured worker who was injured.

The problem here is, a case worker will intimidate the employer by threatening a heavy fine if he doesn't reinstate the worker, whether the worker's able to go back to work or not. The worker is threatened to be cut off his benefits if he does not return to work. A family physician and/or specialist is the one who decides when an injured worker is fit to return to work. An adjudicator or case worker should not have the authority to override the medical decisions of doctors who are looking after an injured worker and forcing them back to work before they are ready to be reinstated in the workforce.

When an employer requests a worker's medical file, that employer should only be given medical evidence relating to the injury or disease. Employers will always find a reason to claim second injury and enhancement funding because of an old injury or disease that they say contributed to the worker's disablement.

When an injury occurs and disables a worker, he/she can no longer work at an occupation that would pay the wage earned before injury. The difference in wages paid that injured worker must be realistic, not an adjudicator saying you could go out there and earn x number of dollars doing a job that does not exist. Deeming must be stopped. A FEL award must be based on realistic future earnings, not phantom jobs.

Paul Fudge is an injured worker who will explain his FEL award.

Mr Fudge: Yes. I'm an injured worker, and I know all too well how the WCB works. I was injured on May 31, 1993, when I fell 15 feet on to a cement floor, injuring my back. I have just received a cheque, and I have the stub here to show, for my FEL award for a two-year period from September 1, 1994, to September 1, 1996, for $2. I have been told by the WCB that I will not lose any wages when I go back to a job search and hopefully gain suitable employment. I was earning $650 a week, or $16.25 an hour, as a store manager.

1710

In the voc rehab program of workers' compensation, I have turned around and had to do what they call a job search to determine that a job was there in order for me to go back to school for upgrading. I have gone around to employers in the area, and they told me: "Yes, there is a job when you are done. You have to start at the bottom." You do not start at the top. You have to work through either as a sales clerk to work up to be a sales manager or you start as a department manager and work through to be a store manager.

The rate of pay would be anywhere from $7 to $8 an hour, but I have here a letter from WCB voc rehab stating that: "Through the vocational testing and research done by yourself, you have decided on a new job target of retail trade management/general business manager. These jobs pay between $643.26 or $709.61 gross per week." I've gone out and found that it pays only $320 per week.

Also, the course at Georgian College which I'm taking in Barrie: They say that I chose it myself. I was told by WCB to take it. I had no say in the matter whatsoever.

Mrs Thorn: This is why we feel that the FEL award is very unjust and unfair. When you start a job, no matter how many diplomas you have, if you go to a new position, you start at the bottom. You do not start at the top, and this is what they're basing their FEL awards on. And your rehab, what you had to go through for your rehab?

Mr Fudge: On the voc rehab, for my vocational rehabilitation part, I had to turn around and clip newspaper ads and everything to justify my sponsorship in a program at the college. This is what they ask of every person who qualifies for voc rehab training. You have to do all the legwork and you have to prove to them to be justified in taking that course, but you have no say in it. They tell you what you're going to do. You have to research it. It's an experience I will not forget, believe me.

Mr Hope: My question would focus on the issue -- and Paul, maybe I missed it. Your previous employer: What role did he play in this whole part of rehabilitating you and putting you back to work?

Mr Fudge: My previous employer would not accept me. I was working in an independent store and he would not accept me back to my pre-injury job because I would end up doing less work than him and he owned the company.

Mr Hope: He'd probably be one of the schedule 1s who didn't really care about taking back an injured worker, doesn't want the responsibility of vocational rehabilitation and feeling about the work ethics.

Mr Fudge: Yes.

Mr Hope: Don't you believe it's his responsibility to make sure that the re-employment -- I mean, the injury occurred in the workplace there, and why isn't that person responsible I guess would be the question I would be asking.

Mr Fudge: With the limitations that have been placed on me medical-wise, the way the economy is today, I would have to be able to do some of the work in the store. What I could technically do right now would be just administrative duties. With the amount of lifting in the store, there's no cases under 22 pounds that I could lift on a regular daily basis, and on Fridays I would also help with the handling of the front-end service work, and I would also do customer carryouts. There's no way I would be able to take the bags out for the customers when we're busy. So what this man was looking at was 22 hours a week out of my 40-hour work week would be just spent on administrative duties and the rest I'd be just sitting around collecting a paycheque.

Mr Hope: Joan, my next question would be to you. Being as you deal with the Barrie area and dealing with injured workers, and we've heard employers come before this group saying, "Our concern" -- I mean, I just heard Paul's incident that the employer wanted no responsibility for vocational rehabilitation. In your area that you deal with with injured workers under employers trying to stop claims from being paid, calling them frivolous, some of the allegations are that there's fraud in the system, that people are faking their hurt and, you know, they're being paid. In your expertise and your experience in the Barrie area, have you seen employers who use the coercive process of making sure that claims don't get processed?

Mrs Thorn: Yes, and the Royal Victoria Hospital is one. They have a huge sign right by the elevator stating, "We're accident-free for the month of July." You go up to the seventh floor and there's two nurses up there who are living on painkillers. They're afraid to put in a claim because they'll lose their job, and being elderly ladies they say, "Where are we going to get a job now?"

Mr Hope: So they're finding this is the way to improve their experience rating program by making sure the claims are not a part of the process.

Mrs Thorn: That sign is right there, and I was almost tempted to tear it down. There are two pregnant women in there, and both their doctors have stated that they should not be working, but if they leave now, they will not be eligible for their sick benefits.

Mr Hope: You've expressed your opposition to the bill and your views of the bill, and I know there are problems with the doctor obtaining information. I mean, why would your employer want your information when he had no intent of bringing you back? But under the re-employment aspect and making sure there are certified programs in place to make sure that workers return, wouldn't that part of the bill solve some problems? I mean, the biggest problem of workers' comp is that people get injured and they're on workers' comp. If we can fix that problem and create healthier and safer workplaces, we eliminate some of the problems that people face with workers' compensation. So I'm just wondering, with that section of the bill, do you find it a means of improvement?

Mrs Thorn: Health and safety would be a great means to improvement. Like with Paul's case, he had told that man I don't know how many times that the rung on that ladder was broken. It never got fixed. But Paul's back did.

Mr Mahoney: Interesting statement: The biggest problem with workers' comp is there are people on workers' comp. That's what I just heard. I wonder what it's there for.

Paul, I heard your complaint against the workers' compensation system much more clearly than your complaint against your former employer. I don't know who your former employer was, and it doesn't matter, but it seems to me what you said is, you got a ridiculous cheque for two bucks. You weren't allowed the freedom to make certain choices regarding your retraining and things of that nature. Service delivery within the workers' compensation insurance program, which is there, where your employer paid premiums on your behalf and on behalf of all his employees to protect them and to get them rehabilitated and protect their income and do all of that kind of thing, sounds to me like it just fell apart.

Mr Fudge: Yes, that's what it seems like.

Mr Mahoney: Do you have any suggestions as to how we can improve service delivery at the board? Instead of the continual attempts to suggest that all the employers in Ontario are just terrible, rotten people who don't care about their workers -- and I reject that out of hand -- I would rather see us try to focus on how we could improve service delivery at the Workers' Compensation Board to help somebody like you when you get hurt.

Mr Fudge: There's too much running around at the WCB. I've been cut off six times in the last year and I had to fight to get reinstated. I came close to losing my home, causing problems in my family. I've been placed under mental anguish and stress by this, and I don't feel an injured worker, with his injury, needs to go through this type of nonsense, so-called, with it.

Also, while you're healing, they turn around and send you to physiotherapy. You're in physio, you're coming out of it, and then they tell you: "Okay, go into the voc rehab. Now what we're going to do is get you back into training and school." Meanwhile, you're still being treated medically.

I was injured on May 31, 1993. It was January 3, 1994, when I was diagnosed as having a bone injury, and as of that date and time, I was finally given the just treatment that I was supposed to deserve. But even now I have letters in my briefcase dating from May 6 that I was terminated from WCB and I was capable of going back to doing my pre-injury job. As I stated to them, I said: "That's fine, I can go back to doing my pre-injury job, but there's one thing I would like to show you. How can I go like this?" And this is what I told them: "I'm wearing a back brace now. I have limitations that will not let me go to work, and you're telling me, `Get back to work.'"

As a result, I had to appeal that decision, and I won the appeal on May 10. After taking medical forms from their own doctor, who was a Dr Ford that they sent me to see, highlighting it and sending it back in, they accepted my appeal, and I won the appeal. Then after that, they finally got everything rolling for me to start back to school.

1720

Mr Arnott: Thank you very much for bringing us your opinions and coming down from Barrie for your presentation; we appreciate it.

Mr Fudge: Thank you.

Mr Arnott: Do you think it makes sense, though, for the government to give employers some positive incentive to make their workplaces more safe?

Mr Fudge: Yes, I do. I feel it does, but with the economy the way that it is right now -- it's starting to pick up, but when it was slow, most employees will turn a blind eye and do what they're told in order to keep their jobs. Actually, that fear of keeping their job is still there. If we were to have the occupational health and safety stepped up a bit more, I'm sure that you would go and you would find roughly 90% of the workplaces are in violation of the act. I think we need to really get on the program and do more. Right now, the sheep are meeker, they will not speak because everybody wants that paycheque. As small as it may be right now and what you have to do to keep your job, they will do to hold on to their job.

Mr Arnott: It seems to me the best way to encourage employers to make the workplaces safer is a bottom-line assessment of how safe they've been in the past, and that's what the experience rating system is all about, and I would hope we could enhance it as opposed to change it in a way that makes it more bureaucratic, I think. That would be my suggestion.

Mrs Thorn: Why do you have to notify these employers when the health and safety is coming, because when they get there -- they'll call and say we'll be there on such and such a day at such and such a time. Everything's just so-so. If they were to go back three days later, they would find out what it's really like.

Mrs Witmer: I would agree with what you've said. There's certainly a need for greater awareness of workplace health and safety training. I guess the problem at the present time, though, that we have is that most of the training that's taking place is very global, it's not very sector-specific. As a result, the workplaces are all receiving the same type of training, and yet, if you work in one environment or in another, there's quite a difference. I don't know if you're aware of that, that right now it's not having the same type of positive impact because it's very global.

Mr Fudge: I agree. They're striving to try to get the occupational health and safety going in all the businesses that we pretty well have, but even with what's been done, there are still a lot of small businesses that do not adhere to it. The ones that are under 20 employees are the ones that really should be looked into. The large companies and organizations, they might have a small amount but it's not as great as the small employers that have 20 or less working for them.

Mrs Witmer: Were you in a small workplace?

Mr Fudge: Yes, I was.

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

CANADIAN UNION OF POSTAL WORKERS, LOCAL 560
INJURED WORKERS ASSOCIATION, GUELPH-WELLINGTON

The Vice-Chair: I'd like call forward our next presenters from the Canadian Union of Postal Workers, Kitchener local. Good afternoon and welcome to the committee.

Mr Moe Dhooma: My name is Moe Dhooma, from the Canadian Union of Postal Workers, Kitchener Local 560. To my left is Mr Robert London, injured workers' president, Guelph-Wellington.

Thank you for giving me this opportunity to come before the committee this afternoon in order to express our concerns regarding the implementation of Bill 165.

Sections 51 and 63 of the act, Bill 165, respectively, we feel that these amendments in which they are presently being laid out will indefinitely be of grave consequence to the injured worker.

Pertaining to section 51, in regard to an approved return-to-work program: The reasons behind the worker providing medical information to the employer would not necessitate an employer to stay within the guidelines set forth by the WCB in providing a suitable program to which an injured worker could be returned.

Diagnostic information, the way it stands, provided by the worker, should only be directed to the board, and non-diagnostic medical information regarding such employee would then be provided to the employer in order to set up a return-to-work program approved by the board.

The question to be asked at this time is whether or not the board would deem the worker uncooperative, which, in turn, would thus affect the worker's vocational rehabilitation. As far as diagnostic information provided to the employer, the fact remains in which way and to what the employer may use such information, and, in turn, may lead to potential abuse as the employer is not of medical background and his understanding of the information may lead to abuse towards the employee.

The Vice-Chair: If I may interrupt, could we keep the discussions in the audience down a little please, so that the members of the committee can hear. Thank you.

Mr Dhooma: At present time, under section 71 of the Workers' Compensation Act, it states that the employer can access medical information from the file which is in the hands of the Workers' Compensation Board. Again, we question what the reasons are in having the employee provide to the employer diagnostic medical information.

Our recommendations would be to have the employee inform his or her employer of medical limitations. The fact that medical documentation be provided in full is of little or no use to the employer in providing suitable accommodations in the workplace.

The wording "consenting to" should be amended to read, "the employee may inform," thus eliminating further abuse on the part of the employer. Surely, the rights of a worker would be freely affected by the employer by having this implemented into the bill the way it stands, and we feel that these rights should be protected.

Confidentiality between the injured worker and his or her attending physician is no longer valid under these conditions, and again, the rights of an individual are severely violated by the employer. Although the purpose of the act is to help an injured worker, the reading of the act must have these changes made in order to clarify the act when read.

In regard to vocational rehabilitation, the rights of an injured worker to be accommodated by the employer under section 54 also cannot be overlooked. The Workers' Compensation Board is set up in order to assist an injured worker to be accommodated in his or her place of employment. Such obligations by the employer should be made mandatory and be enforced by the WCB. This section of the act is to assist the injured worker, not to assist the employer in streamlining its workplace at the expense of an injured worker.

If it is found that the worker cannot be accommodated due to an injury, then his or her right to retraining shall be provided by the WCB with no input from the employer. The manner in which the section of this bill reads clearly gives the employer more leverage in which to discriminate against an employee, leading up to termination. The obligation by the employer to either accommodate the injured worker or become more responsible for some type of retraining program should be fulfilled and not placed on the back of the WCB, releasing an employer's obligations to the employee who has become injured in the workplace. Is it not the role set forth by WCB to assist the employee once again and not at the discretion of his or her employer? The way in which this section reads is that once again, it seems to us, we have the tail wagging the horse.

In conclusion, I'm sure that we're well aware of the way the economy stands, mainly with free trade resulting in plant closures and layoffs, especially here in Ontario. We must now focus our attention on what is left for the injured workers of this province. But more misery and grief to not only the injured workers but also to the families of such injured workers would be detrimental to all workers.

It is once again important that all rights of the injured workers be protected as they are clearly at a disadvantage when it comes to injuries at the workplace. Thank you for your time and consideration. I would like Mr Robert London to present his story.

1730

Mr Robert London: I'd like to thank the committee for allowing us to present a short brief to them. I was going to go over my brief but seeing that it's been well documented with everybody who was here, maybe I'll just express a little bit of what actually happened to me with the board.

First, I will say, though, that the Injured Workers Association of Guelph backs the network 100% with regard to Bill 165.

In 1979, I was injured. I worked from 1979 to 1984. I was in transport. Taking a lot of drugs and driving a rig on a highway isn't a very bright idea for anybody to do, but I had just bought a house in 1975 and I didn't want to lose everything. I'm here to tell you that in 1984 I lost it anyway. The house, I sold for $32,000. I lost $40,000. I had bought a new car in 1982. They came and towed it out of the driveway while my wife was going to work, purse and everything.

I was operated on in 1985. In 1986, the doctor at the time here in Toronto drafted a letter to the board suggesting that I would never work under any capacity again, and I should be compensated accordingly. The board, probably a week later, gave me a phone call and said that the UMA had gone over my file and that I was capable of returning to some sort of employment and as of that day, my benefits would be cut to 50%, temporary partial.

I was reading the same letter that the doctor had given me, and my family physician, the surgeon and I asked the adjudicator at that end, "Well, are you reading the same things I'm reading?" He said, "Probably I am, but this is how it works." The problem that I had with that was that I was injured on a job, lost everything that I had worked for, and I did work from 1953 until 1985. Everybody that I approached just were amazed, "No, it don't happen."

I decided I would look into this. It happens, every day, to a person who is injured on the job, whether he's in construction, a labourer, whether he's -- I'll use a politician. We could use that too. Every one of us is forced, if we're not a schedule 2 employer, to take compensation.

The compensation board, I guess, was set up by Mr Justice Meredith to protect my rights as an injured worker and to give me benefits until I was capable of going back to pre-existing earnings, not to cut me off, which they did.

I co-founded this organization in Guelph, and one of the main reasons I did was because of being on the other end of the stick in a system that just does not work. It doesn't work for injured workers. I don't know who it's working for but it sure isn't working for me, which I will tell you.

At the time of my cutoff to 50%, my medication and my wife's medication was $800 a month. I couldn't afford to buy the medication: my wife's heart pills, I take a couple of puffers. I developed a lung disorder after surgery. I just couldn't believe they would do this to me, but they did and caused great stress.

The part of losing everything really bothered me, it even bothers me today, because I do have sons, grandchildren that I leave nothing to. When I die, compensation dies with me. My wife has nothing that she can fall back on but social assistance, if there's any that's going to be paid for her.

I could probably keep going on and on and on. I do help injured workers and my story is not unique in any way, shape or form. Everyone that I know can tell the same story, realizing that this bill is going to do absolutely nothing. If you think $50 a week is going to give somebody something, well, think again. The economy out there keeps going up and up and up; $50 is nothing. Just to pass me my medication, a puffer, it costs me $10.95. My Ventolin went from $5.65 to $23 right now. My Pulmicort went from $89 to $135. I don't have a drug plan, and I know injured workers don't have drug plans. The company they work for, it stops. Everything stops, and you're left paying everything out of your pocket. If you have a pre-existing condition, you still have to take the medication and you still have to pay for it out of your own pocket, so $50 is absolutely nothing. Thank you.

Mr Mahoney: Thanks very much. I have, Mr London, your document here. You've included your concerns. I think you just made it clear. I was going to ask you, but you just made it clear that you are opposed to this bill.

Mr London: Yes, I am.

Mr Mahoney: Okay. I see the CAW, Local 1917 in Guelph has issued a letter. They refer to the PLMAC agreement on workers' compensation. They refer to the de-indexation and to the financial responsibility section. I'm assuming they're opposed to the bill, because you've included this letter here, and yet we've heard from Local 444 in London, we heard from the national office today of the CAW, which have suggested that --

An emergency alarm sounded.

Mr Mahoney: We're now hearing from someone else.

Interjection.

Mr Mahoney: Yes, that's right. Actually, it should have been the real thing when I was speaking. It should have been the real thing.

The Vice-Chair: We will try to proceed.

Mr Mahoney: They'll repeat that about six times and drive us all crazy.

I'm trying to get some clear indication from organized labour and from injured workers as to whether or not they support this bill. They've confused the issue, many of them. The CAW local in London submitted 17 changes -- 17 out of 25 sections of the bill that they totally disagreed with -- and then went on to say they supported the bill. It's causing some concern, because there are definitely problems for injured workers in this bill, there are problems for organized labour, there are problems for management, and yet we continue to see people saying they want the bill passed whether it's amended or not. Do you have any comments or thoughts on that?

Mr London: I can't speak for Local 1917, but I will say that Mr Fairfull did give me the letter and I did put it in with my brief. Again, probably some of the CAWs are not voting with the main part of their union; I don't know. Again, this is just my own opinion.

Mr Mahoney: I guess maybe that's the problem -- there are splits all over the place on this thing. Thanks for that.

Mr Dhooma, your comments about the right to retraining provided by WCB with no input from the employer: I'm assuming that this employer, at this stage, when you're going for retraining -- you're an injured worker -- still there's a possibility that you would go back to work with that same employer. Is that the case, in your understanding?

Mr Dhooma: What I was trying to say is that at times when a worker is in a training process, the worker would interfere with that training process.

Mr Mahoney: The employer would interfere.

Mr Dhooma: That's what I mean, yes.

Mr Mahoney: But what I'm wondering is -- you say that there should be no input by the employer -- if there's a retraining program -- you work for ABC company and you're injured. You go to the board and you can't do the job you had before that you were injured at but the company's willing to take in some form of modified work and you have to go to a retraining program. Would it not make sense that this employer should have something to say or some involvement or some contribution to the retraining program since they're going to rehire you in some capacity?

Mr Dhooma: The board does have work site analysts and they have personnel who can help in any retraining. They could oversee it. The board is there to be the go-between each party, so it would have all this information on retraining, as far as I'm concerned.

Mr Arnott: Thank you very much for coming in today. I'm looking at Mr Fairfull's letter as well from the CAW. He indicates that he appears to be against the insertion of the words "financial responsibility" and "accountability" in the purpose clause. Would you share that view as well, that those words should not be in the purpose clause?

Mr Dhooma: I agree with that, yes, I do, because I think that you can't put a price on injuries that might come up in the future. Are you going to say, no, you shouldn't have any more benefits going out, yet these injuries are occurring? That's the reason why I would agree with that.

Mr Arnott: It's very difficult to put a price on an individual --

Mr Dhooma: That's right. You can't put a price on an injury.

Mr Arnott: -- or a life or an injury. But do you realize that there's a financial problem at the Workers' Compensation Board right now?

1740

Mr Dhooma: That's what you hear all the time, about the financial costs and everything, but what about the financial costs the injured workers have had to bear all these years? How come no one's talking about that? I'm getting sick and tired of hearing about all these financial costs going on, but what about all these workers? Look at Mr London. He lost his house and he lost his car. Who's going to give all that back to him? That's what I have to say on that.

Mrs Witmer: In the presentation that you made, Mr Dhooma, you expressed your concern regarding the impact of changing the legislation. You recommend here, "The wording of `consenting to' should be amended to read, `The employee may inform,'" and that of course is concerning the medical documentation. What if the employee chooses not to make the employer aware of his ability to return to work and the type of work that he or she is able to do?

Mr Dhooma: Isn't the WCB there to provide that help to the injured worker, to get that injured worker back to work? This is an approved claim I'm talking about, per se. It's an approved claim. There's vocational rehabilitation involved. Wouldn't they do this kind of work?

Mrs Witmer: Why do you object to the employer having access to the medical information?

Mr Dhooma: Because with the employer I am with, we've had serious problems all the way up to the privacy commission federally. To have this in the act now is going to give them more leverage and we'll have to go to WCAT and do sections 71 and 23. To me, as far as I'm concerned, they don't need any more leverage. There's enough leverage. Injured workers don't have the kind of leverage employers have, as far as I'm concerned.

Mr Hope: A few questions: Would you be in favour of the Friedland formula with no $200-a-month increase to the pensioners? Would you be in favour of that type of a proposal?

Mr Dhooma: No, I would not be in favour of that.

Mr Hope: Okay. That's the Liberal position. Would you be in favour of a reduction to 85% or 80% in benefit levels to workers' compensation claims?

Mr Dhooma: No, I would not.

Mr Hope: That's the Conservative approach.

Mr Mahoney: Of course not.

Mr Hope: Would you be in favour of taking $294 million from the experience rating program and diverting that to improvements and getting rid of the Friedland formula?

Mr Dhooma: No, I'm not in favour of the experience rating because it's a kickback. I think if all that money were put back into the board, it would bring some of that deficit down that the employers are talking about. All they are doing is getting money back and that money should be going back to injured workers. The employers have a right to have a safe workplace and they should keep that safe. They shouldn't be paid for it.

Mr Hope: So what you're saying is, for the years that the business community, through the Conservative government, never got its rightful increases in workers' compensation, which created an unfunded liability by the Conservatives, by the changes the Liberals did and with Bill 162 and --

Mr Mahoney: You're here to save us.

Mr Hope: -- its revenue-neutral approach, you believe that the $294 million that is paid back to corporations for actually upholding the law of this province --

Mr Dhooma: That's correct, yes.

Mr Hope: -- by creating safe workplaces should be removed in order to make sure that the Friedland formula is removed from injured workers and to make sure that we can deal with the unfunded liability through their money? Is that what you're saying?

Mr Mahoney: Close enough.

Mr Dhooma: Yes, I'd have to agree with you.

Mr Hope: Okay. Thank you.

Mr Dhooma: And again, if --

Interjections.

Mr Hope: Don't let me put words in your mouth.

Mr Dhooma: No, no.

Interjections.

Mr Dhooma: I'd like to say --

Mr Hope: I've listened to Mr Mahoney talk about getting into his DeLorean and driving away, and we know how many DeLoreans are on the street today, as he goes back to the future.

Mr Mahoney: I don't have a DeLorean. What the hell are you talking about?

Mr Hope: The thing is, what I'm trying to do is express a viewpoint. I mean, the business community --

Mr Mahoney: Get on your horse and ride home.

Mr Hope: -- is coming in here and saying, "Attack the injured workers."

Mr Dhooma: No, that's wrong. In fact, the business community should police its own community. We have a lot of companies that have gone bankrupt or left the country and left them holding the bag and that's not right. They should police themselves. They keep on pointing their finger at injured workers, which is wrong, absolutely wrong.

The Vice-Chair: On behalf of the committee, I'd like to thank the Canadian Union of Postal Workers, Local 560, for its presentation.

Interjection: Are you in favour of Bill 162? No?

Interjection: When are you going to tear down that one?

The Vice-Chair: Order, order.

Mr Mahoney: No, he's not in favour of Bill 165. That's what he said. We are here on 165, aren't we, Mr Chairman?

The Vice-Chair: We are indeed. We're on the public hearings.

Mr Mahoney: Just checking. I know that a lot of the government members are living in the past. I was just checking.

The Vice-Chair: If we could keep some control for another 20 minutes.

EMMA OSSO

The Vice-Chair: I'd like to call forward our last presenter of the afternoon, Emma Osso. Good afternoon and welcome to the committee. Just a reminder, you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd leave a little time for questions and comments. Could you please identify yourself for the record and proceed.

Mrs Emma Osso: My name is Emma Osso, and with me is Orlando Buonastella, who is going to help me if I have trouble with my English. I live in Whitby.

Mrs Osso: I will begin speaking to you about my experience as an injured worker. I have a claim for traumatic hearing loss.

In 1976, I started working for a furniture manufacturer and I was exposed to a very noisy environment. In the early 1980s, I started experiencing problems with my hearing. Then, in 1985, I had the misfortune of hitting my ear against the sharp edge of my sewing machine while lifting some material at work. The combination of extensive exposure to noise and the traumatic ear accident have caused a lot of problems for me.

Last year, for example, I was off work for six months because I had lost my sense of balance. The doctor took me off because I was at risk of further injuring myself and my fellow workers. He also ordered me not to drive and to avoid being by myself. I had a tendency to fall very easily, and indeed I fell on the floor on several occasions. I collected UI benefits instead of WC because I could not handle the additional stress of having to deal with the Workers' Compensation Board.

In the early 1980s, when I started experiencing hearing loss, my family doctor sent me to a specialist. When this specialist learned that my hearing loss was work-related, he kept putting me off about the seriousness of my problem. This continued for over 10 years. My hearing continued to worsen over this time. I was constantly asking people to repeat themselves. Co-workers and friends teased me about being deaf, but no one realized the seriousness or depth of the problem. I was constantly embarrassed about not being able to hear. If people were laughing or clapping, I would follow along even though I had not heard the joke or remark. When my children were in school, I would proudly go to their plays and concerts, but I could not hear what they were saying. I tried reading lips, but unfortunately that did not work.

In 1992, I could not take it any more. My family doctor finally referred me to another specialist. Once again, this specialist could not help me, so I was referred to another one. I sit before you today with a hearing loss in my right ear of 35% and in my left ear of 30%. I have had two operations on my ears and now I wear hearing aids, but nothing can help the ringing and buzzing in my ears, or the dizziness. A lot of nights, I only get a couple of hours of sleep because the ringing and the pain keep me awake.

I'm angry. If my first specialist back in the early 1980s hadn't been intimidated by the WCB, maybe my hearing loss could have been stopped at that point. Maybe I would not have lost all those years with my family. Maybe I would not have suffered all the humiliation and the pain.

Employers seem to think that injured workers make a lot of money. I would never wish for anyone to be injured and go on WCB. For all my loss of hearing, loss of balance and loss of enjoyment of life, I only received a 9% pain and suffering award. It took the WCB over two years to decide on this award. The grand total of this cash settlement was $3,700. To make matters even worse, WCB ignored all my years of suffering. They started my claim in 1992, even though my exposure to noise began in 1976 and my hearing loss began in the early 1980s.

1750

I know of injured workers who are very proud and will not go to the WCB for help, even though their problems are work-related. I knew an injured worker who committed suicide after he had an accident on the job. He was a very close friend of ours. His employer did not help him. WCB would not help him. He felt he had no alternative.

Injured workers are not treated fairly. Work-related injuries cause workers to lose their families, their homes and their dignity. Many have to turn to welfare so their families will have food on the table and a roof over their heads.

I wish that employers who come before you to ask you to cut our compensation benefits would stop to think what they are doing. They are hurting real people. They are hurting people who worked honestly, proudly and worked hard so that their companies and their country would develop. Injured workers do not need cutbacks. We need security and fair compensation.

Now I want to tell you what I feel about Bill 165. Bill 165 wants to cut the cost-of-living increases to injured workers. This is wrong. Why should our compensation be cut by inflation year after year? You would not like to see your pension reduced by the cost of living each year. We survive on very small pensions and these are not retirement pensions. They are pensions that we rely on for many years before our retirement age.

Bill 165 will give a $200 increase to a group of older injured workers under the old pension system. This increase should not depend on the older workers' supplement. Many injured workers who deserve this supplement never applied for it, for ignorance or language problems. Also, this increase must be on the pension, not on the supplement. If it is dependent on receiving the supplement, the $200 will be lost if the supplement is cut off when it's reviewed.

I'm speaking to you on behalf of all injured workers. Please do not leave us stranded. Please let us keep our homes, our families and our pride. Don't make us go on welfare. All we want is fair compensation for our work-related injuries. We injured workers do not want to get rich. What we want is simple. We want to live in dignity and to be able to provide a good home for our families, our children, who are the future of this country.

To this government I'd like say that injured workers need your support as much as you need ours. Please don't let us down.

Mrs Witmer: Thank you very much for your presentation, Emma. I think you've outlined what we've heard so many times. There's been injustice in the past, and I guess the question that I continue to struggle with is, how do you address the injustice of the past? I think unfortunately many of the people who were injured are immigrants like yourself or people who don't have the language skills. I say that because my parents are also immigrants and they didn't have the language skills, so I know what I'm talking about, and there was a hesitation to approach any authority, whether it be WCB, and to ask and to get the help that's necessary. As a result, many people are suffering in the same way that you are.

I don't know what the answer is. Do you know what the answer is? How do you solve the injustice of the past?

Mrs Osso: Personally, I think the WCB is a bunch of incompetent people. Last year, in one day I got four phone calls from four different departments. One was sending me to therapy, one was sending me to the specialist, things which are not related with my hearing.

Mrs Witmer: Yes. So there's a total lack of coordination as far as dealing with your case?

Mrs Osso: Yes. They don't know what they're doing. You know, they find this name, they phone and they don't know what they are talking about. To me, that's what happened because four people phoned me the same day and they didn't know they were talking about my hearing. What was the purpose? I don't know. Just one told me, "You have your hearing aid." The other three, one was sending me to the therapy --

Mrs Witmer: For what? Well, those are the types of problems that we, as MPPs, hear about on a regular basis. I know my staff works very diligently to try to get through to somebody at the WCB who will listen to the injured workers. It's a very frustrating process and unfortunately this bill isn't going to address the mismanagement at the board and make it more efficient and more responsive to people as yourself. I guess, personally, that concerns me. I appreciate your coming forward today.

Ms Murdock: I know Mr Wood wants to ask something too so I'm just going to -- I just did a quick survey down here and three of us are injured workers who have put in -- I haven't put in my claims to the board, but the other two have. One was an employer, one was in the British system and the other one was a self-employed farmer, so I think we have an understanding.

I know when I worked with Elie Martel and Shelley, before getting elected myself -- the invisible injuries such as yours are the ones we have the hardest time with in terms of getting benefits recognized. Mrs Witmer is absolutely right. Bill 165 doesn't address that at all. I don't think it was the intent of Bill 165 to address that, so it's a whole different issue. Also, the invisible injuries, because you don't see a hand missing or because you don't see somebody on crutches or whatever, then the awards are also very low. I know it's a whole area that has to be looked at.

Mrs Osso: Can I interrupt you?

Ms Murdock: Certainly.

Mrs Osso: I understand there are all kinds of injuries, but I'll tell you one thing. Being the way I am now and what I was before, it seems to me I'm mutilated. My arms, everything is gone, because when you talk -- even now when you were talking I had to read your lips, with my hearing aids, and that is something. You know how many times when people are talking, you go, "Pardon me?" the first time, "Pardon me?" the second time and "Pardon me?" the third time. That's the worst pain that could happen, and I do have pain, even in my ears.

Ms Murdock: I understand that, and you're right. It is something that has to change.

Mr Wood: Thank you very much, Emma, for sharing your experience on the hearing loss that you've had on the job. We've heard presentations from injured workers and the Latin American association talking about being offered jobs and only phantom jobs are there, and the other worker presenting before was saying that he lost his home and he lost everything because of a phantom job he was offered and there was nothing there for him. Were you offered another job where there would be less noise that you'd be able to do in the workplace?

Mrs Osso: Right now, even though they give me another job, it would do no good.

Mr Wood: Okay.

Mrs Osso: I have lost 30% and 35% of my hearing, so even if the roof is coming down I wouldn't know. I know something's happening, but no noise to me.

Mr Mahoney: Thank you as well on behalf of our caucus. Do you see anything in Bill 165 that will help your situation or will help people like you in the future?

Mrs Osso: I don't think I got you. Can you just --

Mr Mahoney: Let me ask it another way, I guess.

Mrs Osso: Yes, please. Keep in mind I'm a factory worker. I'm not a politician.

Mr Mahoney: No, no. You don't have to be smart to do this job. Trust me.

Interjection: Very well said.

Mr Mahoney: I've not been injured on the job yet, but if I have many more days like today it might happen, I think.

Mrs Osso: You are very lucky.

Mr Mahoney: Yes, that's right.

Ms Murdock: MPPs aren't covered.

Mr Mahoney: I know we're not. That's right.

Do you support Bill 165 in its present form? Do you want it passed the way it is now?

Mrs Osso: No.

Mr Mahoney: Thank you very much.

The Vice-Chair: I'd like to thank you also, Emma, for your contribution to the committee today. I thank the indulgence of all the committee members today, getting us through a long schedule. This committee stands adjourned until 10 am tomorrow.

The committee adjourned at 1801.