CONTENTS
Tuesday 27 September 1994
Workers' Compensation and Occupational Health and Safety Amendment Act, 1994, Bill 165, Mr Mackenzie / Loi de 1994 modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail, projet de loi 165, M. Mackenzie
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 Jordan
Duignan, Noel (Halton North/-Nord ND) for Mr Huget
Hope, Randy R. (Chatham-Kent ND) for Mr Waters
Phillips, Gerry (Scarborough-Agincourt L) for Mr Conway
Witmer, Elizabeth (Waterloo North/-Nord PC) for Mr Turnbull
Also taking part / Autres participants et participantes:
Ministry of Labour:
Murdock, Sharon, parliamentary assistant to the minister
Toker, Mitchell, manager, workers' compensation board
Clerk / Greffière: Manikel, Tannis
Staff / Personnel: Spakowski, Mark, legislative counsel
The committee met at 1314 in committee room 1.
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.
The Vice-Chair (Mr Mike Cooper): We will be continuing our clause-by-clause on Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act.
For the information of the committee members, the clerk will be handing out two replacement motions. They'll be R and whatever the number is and the number will replace the number in your book or your package. So each of your pages are numbered so they'll replace the ones that are numbered that in your book.
Mrs Witmer, I believe you're first.
Mrs Elizabeth Witmer (Waterloo North): I would like to move, as we begin the proceedings to amend the Workers' Compensation Act and the Occupational Health and Safety Act, Bill 165, a resolution which I believe has been distributed. The resolution will be coming; it's on its way.
The resolution states, and I quote:
"Recognizing that many groups which appeared before the standing committee on resources development during the public hearings on Bill 165 indicated that Bill 165 is seriously flawed because it does not reflect the accord reached between the business and labour representatives of the Premier's Labour-Management Advisory Committee; and
"Recognizing that many of those appearing before this committee expressed concern that Bill 165 will compromise the work of the proposed royal commission on the WCB; and
"Since instead of addressing the WCB's unfunded liability crisis, Bill 165 will increase the unfunded liability to $15 billion by the year 2014; and
"Given that Bill 165 will impose significant new administrative burdens on employers which will diminish the competitive position of Ontario businesses;
"Therefore, the standing committee on resources development resolves that the Minister of Labour be requested to withdraw Bill 165."
I move that resolution.
As I have indicated, there were certainly numerous groups that did appear before the committee during the hearings indicating their dissatisfaction with Bill 165 and also the fact that it was seriously flawed. Probably the most serious flaw is the fact that it did not reflect the accord that had been reached between business and labour during the course of the discussions that took place.
I'd just like to go back to the beginning of those discussions. In the spring of 1993, the Premier did request that business and labour sit down together to review the problems of the workers' compensation system. He asked them to come up with some proposals for a reformed WCB system which would pay workers fairly and, at the same time, meet the test of being financially sound.
Although business and labour each had their own agenda -- for example, business was concerned about rationalizing and containing costs and labour wanted to increase and expand coverage and benefits without regard to cost -- in the end, as a result of the pressure that was exerted by the Premier, an accord was reached between the two sides on March 1994.
Although not everyone endorsed all the aspects of the accord, there was agreement on most of the fundamental elements and there certainly was an expectation that the government would honour the accord that had been reached between business and labour.
However, the government did not honour the accord and instead introduced Bill 165 which altered dramatically the agreement that had been reached in order to satisfy its own agenda. In other words, the government interpreted the agreement to satisfy its own agenda.
It was at this point in time that we need to recall that the business community decided to withdraw its support. Its support evaporated as the government produced these new reforms contained in Bill 165 which were obviously very slanted in favour of the labour position.
This bill and this change in direction destroyed the initial confidence that the business community had had that the government was going to be fair and also it destroyed any expectations that it had for a successful reform of the WCB system.
In fact, they said that in their presentation to us on August 23, and I quote, "Bill 165 is a clear breach of faith against the very group from which the Premier sought advice," and that of course is from the business committee of the PLMAC.
So unfortunately, we have before us today a bill which totally fails to address the very, very serious problems facing the WCB. It does not achieve the objectives that the Premier himself set to reform the system and that was that it respond to the needs of the injured workers, that they be paid fairly and that it would also meet the test of being financially sound.
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It doesn't have any reference at all to financial responsibility or accountability -- that's totally lacking -- and it's for that reason that I would be recommending today that this bill be totally rejected and a true process of reform be undertaken which will restore the confidence of all of the stakeholders in this province, a confidence which I have told you has been very badly shaken.
It is time for everyone in this province to work together cooperatively and in a spirit of true consultation and to articulate a very comprehensive set of principles. We need to go back to the original document, the reasons why we have the WCB and what it was supposed to accomplish. We also need to articulate a very clear vision and a long-term plan for the reform of the system, and that's why I've also said that this bill is going to impact on the work of the proposed royal commission on the WCB.
Really, we're putting the cart before the horse because the royal commission that the Premier is considering setting up is going to be reviewing a moving target and it's going to be changing daily as a result of the work of the transition team and, of course, that work is already ongoing and also because of the implementation, if this bill is indeed enacted. Therefore, this bill is totally going to complicate that entire process of the royal commission.
So I would suggest that if this bill, at this time, is dumped on the WCB, there are going to be more problems than we presently have. We know that this body has extreme difficulty administering the act the way it is, and here we're going to give that body, without looking at any long-term plan for total reform, a very new and ill-timed challenge to deal with.
It will be a challenge because this bill is going to introduce tremendous new costs into the system; it's going to require that the internal human resources be reallocated because of new obligations and newer responsibilities. As a result, there will be no benefit to the injured worker or the employer because what we're going to see is reduced ability to deliver the services effectively, services which at the present time are not being delivered in the efficient and timely manner in which they should be.
So it's for all of those reasons, but primarily because this does not reflect the accord, the agreement that was reached between business and labour, that I ask my colleagues to support the resolution to withdraw the bill and to come together in a spirit of cooperation, recognizing that the workplace has changed. We need to ensure that there is true consultation, dialogue between labour and management, and I ask you to support this resolution to withdraw the bill.
Ms Sharon Murdock (Sudbury): I'm glad to hear that Mrs Witmer says that we have to go back to why the WCB is in place because if we do that and we go back to 1914 -- the whole concept was that workers who are injured on the job would be able to be assured of some income replacement while they were off work getting rehabilitated, and that in exchange for that guarantee, they would then not sue their employer. The employer would then pay for that benefit package and workers would then know that, should they be injured on the job, they'd have some kind of protection. The act was put in place for the benefit of both parties, I would contend, but predominantly for the people who work in the province of Ontario.
Now, when we look at the bill that is before us arising from the PLMAC reform that was negotiated between labour and management, I would contend, contrary to Mrs Witmer, that if you look at the actual framework agreement that they came out with, and I've got the management submission that they put out, the bipartite board of directors was an agreed-upon structure, and Bill 165 covers that. There are no changes to how the PLMAC worked that out in the sections under Bill 165.
Part II was the advisory committee that would be established with membership from all organizations. That does not have to be done legislatively, and therefore, although it's not addressed in Bill 165, it is being addressed, as we speak, to a number of issues under the interim transition team.
Part III, financial responsibility framework: I think this is probably the key issue that has been presented to us time and again through the three weeks of presentations we had. The employers feel that the financial responsibility framework is the key to the whole of the Workers' Compensation Board, and I disagree. It is certainly a major part, but it is not the only thing that exists at the board, nor is it the only reason that the board is in place.
I'm going to read this because I think it's really important: "Business and labour have agreed that there be a financially responsible framework for decision-making and operation of the system. The underlying premise of the FRF" -- financial responsibility framework; I won't say it each time -- "and the governance process puts ultimate accountability for the system on the government.
"The act shall contain a purpose clause," and it proceeds to go through that.
Our amendment will cover that, as you will see in the amendments put forward, the one area that wasn't in the purpose clause and in exactly the language that is there.
The indexing is part IV and it was agreed that the Friedland formula of 75% of the consumer price index less 1% with a cap of 4% per annum would be applied to all past and future benefits. There was agreement that some recipients of WCB benefits need special consideration, and they were identified as survivor and dependent groups, 100% pensions and 100% FELs, and unemployed workers with disabilities injured prior to 1990 as defined by subsection 147(4) of the act.
And then the area that they didn't agree on. It says: "The nature of how this special consideration might be given was not agreed to. However, both parties did agree that the government must make a determination of how these people will be treated." That's exactly what the government did and it's reflected in Bill 165 with the $200.
Then part V, return to work: "There was agreement that the number of workers returning into the workplace must be improved." Both parties said that. "Using the analogy of a four-legged stool, where each leg represents an essential component, there was consensus as follows:
"The structure of the current act imposes an obligation on employers to re-employ workers. During discussions, a review of section 54 was conducted and the mandated obligation on employers to return employees to work was noted. The labour community is of the view that the WCB is unable to enforce section 54 of the act without an application from a worker requesting the WCB to do so. The business community's opinion is that the act allows the WCB to enforce employers' obligations to re-employ workers. If the WCB is not enforcing the act, it should do so."
Another area of disagreement is, "If the language of the act fails to provide the WCB with the authority to enforce employers' return-to-work obligations, then the act should be amended to give the WCB this authority," and Bill 165 does that.
Existing NEER should be augmented "by an additional incentive component to encourage greater re-employment. The parties agreed to the development of a template of best practices. This template of best practices would be used to adjust (up or down) the base refund or surcharge as calculated under the existing NEER program." In section 103.1 it is in Bill 165, and they took the language directly from the template of best practices in terms of our amendment that we're presenting before this committee.
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Then it goes on to part VI on coverage. No agreement was reached and the government was to make a decision. We made the decision and put it on to the royal commission.
Then on part VII, pre-1990 pensions: "It was agreed that unemployed workers with disabilities who were injured prior to 1990 and who are in receipt of a WCB pension may require some special treatment with respect to their pension," and the increase of $200 a month. There was disagreement there.
Then lastly, part VIII, the royal commission is going to be looking at it.
The contention by Mrs Witmer that this is putting extraordinary pressure on the royal commission, in my view, doesn't hold water, because the reality is, the royal commission has not started yet. By the time it does get started, my understanding is that it's going to take approximately 18 months for it to do its review. You figure that's a year and a half. By the time they sit down and make recommendations and present those recommendations to the government, I'm saying it'll probably be two years from now.
By the time the government takes action and institutes legislation -- as we can see just from this bill or from any other bills that we have put through, particularly from the Ministry of Labour; they seem to take extraordinarily long -- it's going to be at least three years before any kind of recommendations from the royal commission are implemented. The reality is that with the changing workplace, as Mrs Witmer has noted, return to work is key. Everyone agreed, even the employers. Everyone agreed that return to work is absolutely key and that if you can modify the workplace or if you can change the return-to-work attitudes, then that should be done, and this bill will do it.
So I definitely will not be agreeing with this resolution and I recommend that my colleagues vote against it.
Mr Paul Klopp (Huron): Steve agrees with you.
Mr Steven Offer (Mississauga North): I wasn't going to take part in this debate on this motion --
Mr Klopp: But that was then.
Mr Offer: But that was then. I think it's an important resolution. I think anything that deals with a withdrawal of a bill at any particular point in time is quite important. I know our party called for the withdrawal of the bill yesterday and it was done after some very serious consideration, because we recognize that a lot of people took a lot of their time to come before this committee and express their concerns on various aspects of the legislation.
I thought that in a strange way, after just thinking about what happened over that three-week period, in many cases management and injured workers were quite unified in their opposition to the bill. Now, they might have had some differing reasons, but I think the position they came to this committee with was quite clear: They were very concerned with the bill itself; they were quite concerned with the implications of the bill. In a strange way this bill was quite a unifying experience for both management and the injured worker as they stood almost as one opposed to the legislation, but granted, for different reasons.
I am sure that members of the government side will take the opportunity as we debate this resolution to --
Interjection.
Mr Offer: -- share their thoughts on the united opposition that management and injured workers had as opposed to interjecting at a most inappropriate time.
However, the interesting point as to why I am in support of this resolution in the withdrawal of the bill is, firstly, as I have indicated, that my party and Mr Mahoney, the Labour critic, had called for the withdrawal yesterday, and it was done after, as I have indicated, some very long and hard deliberation.
The bill has 34 substantive sections. I think, at a very quick reading, 29 of those have been changed. I think that we're dealing with a very strange situation when the government has changed a particular piece of legislation in such a way that you have, in essence, not withdrawn a bill but you have rewritten a bill the impact of which is not known by anyone, and there has not been one iota of public hearing on the basis of the amendments that you have put forward. I think that will come up later on.
I listened to the parliamentary assistant as she spoke at some length about one of the items brought forward -- I think almost every day -- and that was the issue of the financial responsibility. I think the parliamentary assistant rightly points out that for many people it was a crucial item in the bill. It wasn't the bill in its totality, but for many people who recognized that, it was still an essential item in the legislation.
The parliamentary assistant will know that there was a PLMAC-WCB reform framework of March 5, 1994, and the parliamentary assistant and members of the government will know that part of that agreement indicated that business and labour have agreed that there be a financially responsible framework for decision-making and operation of the system. The underlying premise of the FRF and the governance process puts ultimate accountability for the system on government. I want to restate one part of that agreement. "Business and labour have agreed that there be a financially responsible framework for decision-making and operation of the system."
When we move from that agreement to a letter of April 21 from the Premier of Ontario to Mr Jim Yarrow, chairman, Employers' Council on Workers' Compensation, part of that letter reads, "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." I'm reading, of course, right from the letter.
We have a framework agreement which speaks to the financial responsibility for decision-making in the operation of the system; we have the letter from the Premier which talks about financial responsibility in the issue of services to the system; and the government -- and this will come up later, I am sure -- in its amendment speaks only to the operation of the board.
I believe that the amendment that has been put forward by the government in no way, shape or form addresses the substantive aspects of the agreement that was reached by the PLMAC of March 5, 1994, nor in any way, shape or form does it address the issue that the Premier of the province, Bob Rae, stated in his letter of April 21 to Mr Jim Yarrow. I have a suspicion that we might, if this resolution fails -- and I hope that it doesn't -- have occasion to further discuss that.
I am speaking in favour of the passage of the resolution. I am speaking in favour of its passage because of the amendments that the government seeks to introduce in this clause-by-clause stage, and comparing those amendments to in fact the amount of sections of a substantive nature that exist in the bill. The government has rewritten the legislation when in fact it should be withdrawing it and taking whatever step of a nature it feels is appropriate.
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I am also in favour of the resolution because so much of the debate focused on the health and the future of the Workers' Compensation Board and so much of that funnelled down to: Will decisions be made in a manner that is financially responsible so that the system can not only survive but indeed can evolve, so that the needs of the people who fund it are indeed met, and indeed that the needs of the people who happen to be injured workers are addressed? It was clear that unless you could embrace that principle of financial responsibility in the operation of the WCB in terms of the decisions that emanate from it, the result will without question be a weakening of the system which will result in the fact of increasing suspicion by those who fund it and increasing inefficiencies for those who need it.
So it would seem to me, on the basis of the needs of injured workers in this province and on the basis of the concerns of the funders of this province, that the most and only responsible course to take is to withdraw the bill, to relook that which has been said, to re-examine the issues that have been brought forward, and to take actions as a result of such an examination. To move forward with a bill that is nothing less than a quilt of different colours, of different messages, of different meanings, of incredible concerns, we end up with a blanket that shields and covers no one but rather hides some real problems, and we can't allow that to take place.
I would hope that members of the government would recognize that a resolution of this kind, and of the kind called for by my colleague Mr Mahoney yesterday, are ones which in essence will strengthen the board, will strengthen the system because it will deter changes to the system that will weaken it. I think for the injured workers of this province and the business groups in this province, we have no less responsibility than to act in a fashion that is directed in their best interests. Proceeding with this bill flies in the face of the message that we received through three weeks of public hearings.
Mr Ted Arnott (Wellington): I was just going to start by asking Mr Hope what the score of the hockey game was last night if he -- just kidding.
Mr Randy R. Hope (Chatham-Kent): If there was substance to be listened to, I would listen, but there's no substance to be listened to.
Mr Arnott: All right. I'd just like to start off by saying that I want to support my colleague's resolution. I think it's a sound resolution. I think it makes a lot of sense. I think it's accurate in its assessment of the events that have transpired leading us to this point, and I do agree that this bill ought to be withdrawn, for a number of specific reasons.
Last night I spoke to the Palmerston chamber of commerce in Wellington county and we talked about the Workers' Compensation Board.
Interjections.
Mr Arnott: Well, they're creating a lot of jobs in Palmerston. I have a great deal of respect for what they're doing. I think that they have a lot of good suggestions to do with workers' compensation. They were concerned about the unfunded liability issue. They were concerned about the administration practices at the board and I think there are no aspects of the bill that reflect those concerns that are evident in my riding in Wellington county.
I think it's a very practical resolution in that it suggests that the royal commission on workers' compensation ought to be free to look at the whole range of issues and that none of these issues should be pre-decided in advance of the royal commission. Certainly our caucus has, for years, been calling for a royal commission on workers' compensation. As late as the 1980s when we were in opposition and the Liberals were in power, we called for it. I'm not 100% certain of this, but I believe Bob Rae, when he was leader of the Opposition in those days, in the late 1980s, called for a royal commission as well, and it's too bad that we're four years in the mandate before the government finally concludes that it's necessary to have a royal commission.
So here we are. It's been I think since June it is, or May, that the Premier announced that we're going to have this royal commission, but the commissioner hasn't even been appointed and we're told that it's not going to happen in the short term.
I don't think we should prejudge the results of that royal commission. I think that if this bill goes through, it will do just that.
We've heard that no one supports this bill, or very few presentations that have come forward have been in support of this piece of legislation. I think some have given some modest support for specific aspects of it, some of the presentations, but as a whole we haven't really heard a great deal of unanimous support for the bill from either labour or business. When you're in a situation like the Workers' Compensation Board is presently, where both sides are so polarized and there's such a wide gulf between the two positions, when a government tries to take a sort of a middle-road approach it becomes very difficult and occasionally you don't get too much really positive support for something when you're just trying to find a way up the middle that will endeavour to find a public interest instead of just siding with one side or the other.
But it's interesting to note, and I think it's a strange irony, too, that the Premier constantly talks about bipartism and that this is the answer to encouraging cooperation in the workplace, by the bipartite process, and that is, you set up a structure where labour's got power on a committee and management has equal power and you put them in a room together, and if you leave them in there long enough they'll get to know each other, they'll get to understand each other's opinions and they'll come out with an agreement. That's the whole concept behind bipartism, and the Premier tells us it's a good idea.
Mr Len Wood (Cochrane North): What does Mike the knife say?
Mr Arnott: I have reservations about it, but the interesting thing --
Interjections.
Mr Offer: On a point of order, Mr Chair: I really want to try to listen to all of the comments that are being made, in this case by Mr Arnott, and I would hope that you might try to stop the cacophony across the way by the government members.
The Chair: Thank you, Mr Offer. I will. They are on the list and they will have their opportunities. Mr Arnott.
Mr Arnott: Just getting back to the concept of bipartism, it's interesting to note and I think it's ironic that in this case, the Premier's Labour-Management Advisory Committee on Workers' Compensation, in spite of a lot of belief that it wouldn't work, actually came up with an agreement. They sat down and they came up with a complete package that was interconnected, specific aspects of it, through the bargaining process where management said, "Well, we can accept this much if you give us this, labour," and then labour saying, "Well, we can give you that if you give us this," and there was a balanced agreement, not unlike a collective bargaining agreement where a union will sit down with management and come up with an agreement that has specific suggestions for change in the compensation or the benefits of employees and coming up with an agreement that people can sign on to and agree with.
And of course in this case, bipartism having worked in the first instance, the Premier didn't accept it. Because the labour unions started to unravel in terms of their acceptance, he decided to cherry-pick specific aspects of the agreement. The agreement that the committee came to is not entirely reflected in this bill, and for those reasons I think that this resolution ought to pass and I would encourage all members to support it.
Mr Will Ferguson (Kitchener): I certainly want to commend both the opposition parties for doing just an excellent job in fulfilling their duties and responsibilities and, more particularly, their role in opposing every single initiative, every suggestion, every idea that this government puts forth.
I would suspect that if this government had not proceeded with this bill and instead proceeded with the royal commission, we would be hearing today that the government ought to proceed with a bill because there'd be certain things that this government can do to resolve part of the difficulties that the board is facing immediately, rather than wait for the long-term effects of the royal commission.
They're in much the same position as editorial writers, who can have it both ways, and I think the government would be facing that criticism today. The critics would be saying: "Well, you know, there are certain things you can do. Geez, you don't have to wait for a royal commission. Why don't you do this, this, this, this right away?"
They've got to get 10 out of 10 for fulfilling their responsibilities, and I think all of us on this side wish them as much success as possible in the future in continuing to fulfil those duties.
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I think it's instructive when we look at who appeared before this committee and what they had to say, and I think it's instructive when we look at what the business community had to say, the organization. Let's face it; they have their own agenda here, and it's just not a financial agenda, I might add. They opposed it 100% down the line, everybody diabolically opposed. In fact, I am sure that if we asked every one of the business community presenters what they liked about the bill you would be hard pressed today to find one thing that they would want to give credit on.
I think it's interesting when we listen to the labour community, and they appeared before the committee and they said for the most part they didn't like some of the conditions of the bill but they could live with it. The labour community did not appear before this committee and say: "Oh, yeah, we support the bill 100% down the line. In fact, we think this bill is the greatest thing since popcorn." They didn't say that at all. And of course the labour community, let's admit, they've got an agenda here as well: to look after their members.
If you put those two communities aside and you look at the individuals who appeared before this committee, when you look at what the individuals had to say, their comments were the most important that any member of this committee really ought to take a hard look at, because individuals who appeared before this committee, either injured workers or people who live with or work on behalf of injured workers, don't have a hidden agenda.
They're not appearing before this committee with one eye on the next provincial election. The individuals who appeared before this committee for the most part were individuals who got caught up in the system and are still in the system for the most part, and they're the one who experience first hand on a daily basis the rigours of what it's like to go through the Workers' Compensation Board gauntlet. Those individuals could find some things they like about the bill and some things they don't particularly care for in the bill.
So when you take the vested groups and the organized groups and put them aside and you look at what the individuals have to say, I can't help but come to the conclusion that what we have here is a package that doesn't particularly suit any one group but serves every group, that ensures that no one is totally happy. I think particularly as elected people we have to recognize that we're not here to ensure that everybody is standing around in a circle holding hands, saying, "Oh yes, we all agree and we all think this bill is going to do everything that we ever dreamed of."
I still cannot get over the hurdle of why some people think if you have a $17-billion unfunded liability or a $20-billion or a $30-billion unfunded liability why you should have $30 billion in the bank to cover that, when the unfunded liability is over x amount of years. That to me makes no sense. I don't know anybody in my community who goes out and purchases a $200,000 home only when they have $200,000 in the bank. I don't know anybody who's done that in the past in my community. Yes, I'm sure the Liberals or the Tories would be able to drag up that one example of somebody who's been able to do that, but by and large that's not the way business is conducted.
I don't know of any business out there that doesn't have an unfunded liability when it comes to their pension plan. I've heard time and time again the business community hammer this government, saying, "Oh, the unfunded liability is too high." Well, you know, they're operating on a principle of an unfunded liability when it comes to their pension plans, and they're suggesting, "This is what we do, but my goodness, we don't want the government of Ontario to do this because financially it's not a sound practice."
I guess what I'm saying in conclusion is that the individual residents of this province who took time to appear before this committee, gave this government and this committee some sound advice, and I think it's that advice that we should be paying the most attention to as we proceed through these amendments.
Mr Hope: Just to echo some of the concerns because once again this resolution, all it does is prolong a problem that currently exists. What we've seen today, through the bill that was introduced by the minister, is a government that's willing to at least attempt to resolve some of the problems -- not all the problems; some of the problems -- that have been there for years that others have ignored.
Once again, this resolution tries to ignore a situation, throw it off to somebody else without taking political accountability for actions. They're so concerned about this bill that they're asking it to be put off to the side so they can use it as an issue, and Mr Ferguson clearly indicated one of the things that I firmly believe, that if there was a new piece of legislation brought forward today and we just announced a royal commission, they would be up on the left foot doing everything saying, "Take action now", but today they're up on the right foot because what they're saying is the legislation is flawed and we should just go to the royal commission.
It's amazing that I hear the opposition talk about flawed pieces of legislation. If I reflect on my past history before coming to this place, you want to talk about flawed pieces of legislation. Bill 162, what were the principles that were derived from that one? What was it supposed to accomplish? If we look today, most of the problems that exist in the people whom I represent are areas of problems that were created by Bill 162 brought forward by Mr Mahoney and Mr Offer's government, who would have no part in listening to what was being brought forward from people in general.
The Conservatives bring forward the unfunded liability. Who was it that did not raise employers' contributional fees to the Workers' Compensation to try to maintain competitiveness as they did, and then helped beef up the unfunded liability? It's nice to suck and blow at the same time but today we have a problem that we have to deal with, and that's one of the things that this legislation brings forward.
I heard business community after business community come before this committee and talk about unfunded liability. Unfunded liability is a common practice of business. When they were told by the Liberals to reduce their unfunded liability or to start making payments, reducing it from 10 years down to five years, the business community went absolutely bonkers saying, "No, no, we need that expanded unfunded liability over a longer period of time to deal with it." They're the same ones that are coming here and asking us to deal with this unfunded liability.
I just had the owners walk away from a plant for their own reasons, and they left a huge unfunded liability; an unfunded liability to this province, to the federal government, the municipal government and also the pension program, but they're part of the group that came before this committee and said, "You got to deal with the unfunded liability."
It's also important that when we talk about this piece of legislation, who is actually responsible for the funding of the Workers' Compensation system of this province? It's the employers' responsibility, and we keep losing sight. If they're saying, "Let's deal with the unfunded liability aspect," fine, then let's put the fees appropriate. Let's make up for the incompetency put forward by the Davis government at that time about not making sure fees were reflective of the cost.
The administration changes that are made within this bill, the amendments that are being brought forward, are not picture perfect, but to a lot of people they're a major improvement and a step in the right direction, which I'm sure the royal commission will deal with, and I'm sure that during that royal commission presentation we're going to be hearing from the same people who are talking about the unfunded liability. Don't bring in all those other employers out there, either. Leave the banks and leave everybody else who is currently not covered, leave them out there and say, "No, no. We're not going to cover them. We don't need the money," and I think the presentations we've seen before this committee clearly indicate there's a vast majority of workplaces out there that need to be brought under this system in order to address injured workers and their changing workplaces in our society.
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So Mr Ferguson was absolutely right. The opposition is doing a fantastic job at opposing everything. That's great. We've heard their ideas that what ought to be addressed in the workers' compensation system is to slash and burn the injured worker drastically by the Conservative government. Mr Mahoney, we're still waiting for him to pull that DeLorean out which is Back to the Future or whatever it is. I'm still waiting for Liberal policies. I thought maybe after their retreat we'd start to hear some policies or directions or ideas they may have. But the Liberals did have an opportunity during Bill 162 to correct problems but never did.
All I can say is that this resolution is exactly what it's intended to do: to prolong the system; to keep the victims out there, the people who are looking forward to the improved monthly pensions that they will get; the ability to improve the management ability.
One of the things that I sit here and look at this resolution is, I doubt if we'll ever get through clause-by-clause this week with this type of resolution. I can just imagine the debating that will go on, the hours of talk, the hours of rhetoric that we'll listen to, about the amendments that are being put forward.
But I believe that the competitiveness issue is one that was brought on by a Conservative government, called the dog-eat-dog society, called free trade and NAFTA. We have to compete in that marketplace, but if we're asking the workers -- and I know the workers in my community have been meeting that competitive edge by putting out extra product and making sure our employers are receiving a good profit. All they're asking for is when they've been asked to compete in this global marketplace and they're getting injured in their workplaces, they're asking for fair compensation for that injury that occurred in a workplace.
This resolution does nothing but just prolong a system and it does not allow us to get down to the work that government is supposed to be doing, and that is to deal with the amendments that are being put forward before this committee and to bring the legislation back into the House, pass the legislation, fix some of the problems that were out there and move forward to a royal commission to deal, hopefully, maybe even with a universal disability system for this province.
All I can say is I will not be supporting this resolution, and by the time we're done listening to the speeches, maybe we can get one of the amendments done out of this total package hopefully by the completion of the hour today.
Mr Offer: I just want to make three short points. Mr Ferguson spoke about in his opinion there were people who came before the committee who represented management and had their own agenda and there were people who came from labour and had their own agenda, and said there was another group of people that came, individuals, injured workers, who came telling us their position on the bill.
I think, without putting words in Mr Ferguson's mouth, he's saying that what we should be doing is really taking some real strong recognition of that group that came here. I must say I agree with that and I think that if we take a look at those who came before us, they were quite opposed to the bill; they were quite opposed to the piece of legislation.
I think that just on the basis of that, the government members should support the resolution, maybe for a different reason, but certainly I believe that the injured workers of this province who came before this committee, and I think were quite representative of injured workers throughout, were quite concerned on, if not outright opposed to, aspects of the legislation. It is our responsibility to deal with the point they brought forward to this committee, and that was oppose the bill. Here we have a wonderful opportunity to withdraw the bill. I believe injured workers in this province would in no small measure be in favour of withdrawing a piece of legislation they shared with us as being quite harmful to them.
The second point I want to make deals with the unfunded liability. This was an interesting area of discussion. Some said it was like a debt, sort of like a mortgage, sort of like a liability that we all know of. Others said it isn't like that, and we have to address the fact that maybe unfunded liability is not like a debt.
It's quite interesting now to hear members of the government refer to it as a debt in a more traditional sense, such as a mortgage and things of this nature. Examples have been brought forward: Does anybody buy a $200,000 home without incurring a debt known as a mortgage? I think there are a lot of people who would realize that those who are fortunate enough to purchase a home do incur a debt known as a mortgage for a particular percentage of the equity of the value of the home.
I think, if we're going to follow that argument, we'd better be pretty understanding about the message that's been brought forward, and that is that there is a real concern that when the home is $100,000 and the debt on the home is $100,000 or $150,000, you'd better be really concerned about that. If the government is going to start to deal with the unfunded liability in a traditional debt scenario, then, listen, I think that a lot of people will very much understand that. I think it underscores the need to withdraw the particular piece of legislation if that be the way in which they're going to deal with a significant issue around this bill.
The third thing is not really germane to the issue but must be stated. I don't know if many minutes passed before members of the government said: "Those dastardly Liberals. Bill 162, deeming. How could they do that?" The interesting point to be made is that you have now hung on to power for over four years and you've done nothing about the issue that you are so politically stated opposed to. If one can throw the criticism to one party, then one must be up front and be able to take the criticism that you just haven't done one thing on the issue that you are so upward-statedly opposed to, and you're just going to have to live with that.
I know that's not necessarily germane to the issue --
Mr Hope: You're right, I can; I can live with that.
The Acting Chair (Mr Paul Klopp): Order.
Mr Offer: I sort of feel like I'm prodding the beast.
The Acting Chair: Yes, quit teasing the bears.
Mr Offer: I knew, Mr Chair, that it wasn't necessarily germane to the issue, but one can't just sit back and listen to someone basically saying, as the government says, "How dare you -- we haven't taken action." And that's what you're saying.
Ms Murdock: I'll be fairly brief here. I can't help but comment on the crazy patch quilt that Mr Offer offered as an analogy.
Mr Offer: I didn't say "crazy."
Ms Murdock: You didn't say crazy patch quilt, but you said made up of different and divergent kinds of pieces and so on and it reminded me of a crazy patch quilt that my grandmother used to make, and you're saying using it as a blanket to hide under. I think that you should be reminded that those old crazy patch quilts, Mr Offer, were very beneficial, extremely warm and are still made to this day. Albeit this crazy patch quilt of Bill 165, as you're calling it, is, as Mr Arnott has said, not to the liking of everyone, it nevertheless is addressing some of the major problems such as return to work and others within the bill and I think those are very important. So, as I stated earlier, we will not be supporting Mrs Witmer's resolution.
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Mrs Witmer: I appreciate the discussion and debate that's gone on, particularly the references to the quilt that have been so effectively used by two of our speakers, but I wanted to respond to some of the concerns and arguments that had been made about the need to be unconcerned, I guess, about the high figure that has been reached as far as the unfunded liability is concerned as we know it's presently around $11.7 billion. I want to remind the government that one of the reasons that the Premier did introduce the reforms was because he also was concerned about the increase in the unfunded liability and he did see the need to make sure that it wasn't going to increase to $30 billion or beyond.
I also want to remind those who have spoken to the issue of the unfunded liability, who have indicated that the employer community did not assume the appropriate responsibility and pay adequate fees, that in 1984 there was a recognition that the annual assessments that were charged to the employers were inadequate to cover the future accident costs and as a result the board did adopt at that time a full-funding strategy to ensure at some future date that its assets would match its liabilities.
That funding strategy, that's in 1984, was to raise assessment rates to levels adequate to cover the current and future costs of each year's new accidents and it was also to generate a surplus above this amount that was going to be sufficient to retire the unfunded liability within 30 years, which of course is that magic 2014 number. That full-funding strategy has governed the setting of the rates every year since 1985 with the exception of the 1991 rate freeze.
I just want to remind you that employers did pay rate increases of 15% for three years, and that is quite significant. This was followed by increases of 10% for the next three years. So to say that employers have never paid the high premium rates that were necessary, I believe, is totally unfair. The reason the system got off track is because in 1990 the unfunded liability increased more than was anticipated under the original funding strategy for two reasons. Number one was Bill 162 which we've indicated was introduced by the Liberals in 1989, and that added nearly $1 billion to the board's unfunded liability, and at that time as well the recession reduced revenues.
So I want to make it absolutely clear that the employer community has attempted to pay their fair share and I will also just let you know what the result of high premium hikes are. I have dated here September 27, 1994, an article entitled "Premium Hikes Hurt Business," Toronto Sun. Here we have a Mississauga-based mom-and-pop operation on the verge of bankruptcy. Why? Because the Workers' Compensation Board hiked their premiums by more than 400% in two years. In 1993 these people were paying $1,076 in premiums for two employees. By November 1993 they were paying $4,120, an increase of 383%. In 1994 their premiums hit $5,385. As the husband says, "They are killing me." He says, "The worst part about it is I've never been able to get a live person to talk with at the WCB...all I get is voice mail and nobody returns my calls."
While this man waits, the premium hikes are retroactive, the WCB is looking for interest, and they've been asked to pay $2,000 in interest. That is the impact, folks, of high premium rates on the employer community. You force the individuals out of business; you destroy jobs that are available for people in this province. So for you to suggest that 15% and 10% rate increases aren't high enough, I think, is most unfair. The employer community has certainly attempted to pay its fair share of the assessment rates.
I also want to just go back again to the unfunded liability. Regardless of what you and I know about economics, and I suspect some of us know less than others, there is reason for concern. It's not a fictitious figure, the $11.7 billion. I want to tell you that some day we do have to pay this out. The system was never designed to defer the mortgage funding of the system on to future generations of employers and people at large.
If you're not concerned about the adverse effect of the unfunded liability, I can assure you it is having a negative impact on Ontario's credit rating. It does act as a growing disincentive to the new firms and businesses that may be considering locating in this province. The Dominion Bond Rating Service has spoken to this issue. We've also had the Canadian Tax Foundation speak to this issue. Certainly there is concern, and because of the concern, it could impact very negatively on future job creation in this province.
I think it's important to note, and I'll just conclude by saying, the government did not adopt the consensus approach and adopt the solution that had been proposed. As a result, I am opposed to the bill that we have before us, because it doesn't address any of the critical problems that are facing us today. We don't have an adequate purpose clause. We don't have within this bill an effective governance structure. We have no financial responsibility framework. That is what was necessary. We needed to fully fund the cost of new claims, we needed to balance the outputs with the inputs, we needed to liquidate the unfunded liability and we needed to maintain a system that is competitive.
That is not part of Bill 165, so this bill is no solution to the many problems that are facing us. I would urge you very strongly to support the resolution and not pass a bill which is only going to exacerbate the problems at the WCB.
The Vice-Chair: Further discussion? Seeing no further discussion, on Mrs Witmer's --
Mr Hope: Mr Chair, may we have 20 minutes to call our members in before we have a vote?
The Vice-Chair: Okay. The committee stands recessed for 20 minutes.
The committee recessed from 1418 to 1438.
The Vice-Chair: On the resolution by Mrs Witmer, all those in favour? Opposed? Defeated.
Before we start into section 1, I believe legislative counsel has a response to Mr Offer's request on undertaking number 8 yesterday.
Mr Mark Spakowski: I propose just going through the general drafting concerns relating to purpose clauses. I understand this is in relation to a proposal to add to the Workers' Compensation Act that a purpose of the act be to require the board of directors to act in a financially responsible and accountable manner. But my remarks will be primarily general, relating to what a purpose clause does and what it doesn't do.
I'm going to speak briefly about what the effect of a purpose clause is and then I'll touch on two lesser matters that relate to how a purpose clause is actually constructed from a drafting point of view.
The effect of a purpose clause is limited. A purpose clause is not directly enforced. The way a purpose clause is used is in interpreting other provisions of a statute or of regulations under a statute. Courts interpret provisions in their context. "Context" includes other provisions or other statutes or even conditions existing at the time an act was passed. Part of the context that a court considers is the purpose of the act. That purpose can be deduced from the act itself or it can be found in a purpose clause if an act contains such a purpose clause.
It's difficult, however, to ascertain exactly what effect a court would give to a purpose clause. That's because the purpose clause isn't given direct effect itself. It's only used in interpreting other substantive provisions in the act. As a simplification, it's probably reasonably accurate to say that the effect of a purpose clause is limited to interpreting provisions in the act that are either vague or ambiguous. Except for that, it won't have any significant effect on interpreting the act at all.
Because a purpose clause is of limited effect and what effect it does have is somewhat uncertain, from a drafting point of view, drafters prefer to use substantive provisions to effect whatever the desired change in the law is. So that's my explanation of what the effect of a purpose clause is and why drafters prefer to put things in substantive provisions rather than purpose clauses.
As far as how specific purpose clauses are constructed, a purpose clause should reflect what's actually in the bill. A purpose clause should not set out what one wishes the purpose of the act were; it should actually reflect what is in the act. A purpose clause should also -- it's safer from a drafting point of view if a purpose clause is confined to the main purposes of an act.
When purposes other than the main purposes, subsidiary purposes, are put into a purpose clause, there's a danger that other equal purposes or purposes of greater importance will be skipped over. A court will probably look at the purposes that are set out explicitly in a purpose clause as establishing a kind of hierarchy that they will give precedence over the purposes that are set out in the purpose clause over purposes that may be important but which are omitted from the purpose clause.
To the extent that a lot of purposes are collected in a purpose clause, there's a danger from a drafting point of view of missing things or leaving out purposes which are also important in an act. That's as much as I wanted to say right now. If there are other questions, I'd be happy to try to answer them.
Mr Offer: Thank you for that explanation. My first question is that this was pursuant to an undertaking that was provided that dealt with why the financial accountability aspect of the legislation can't be in the purpose clause. I guess the first questions is: Can the financial accountability be inserted in the purpose clause?
Mr Spakowski: The remarks I addressed -- and from the drafter's point of view there are disadvantages and advantages of both approaches. It can be done. The difficulty is that the legal effect of it may be somewhat uncertain because it's not given direct effect. So the one limitation is that it won't have any direct effect; then its actual effect becomes uncertain because it's only used in interpreting other provisions. It can be done.
Mr Offer: I guess my next question is: That rationale can be used on all of the subsections in the purpose clause. Is the position that you've made plain today something equally referable to any section or in fact to any purpose clause in any piece of legislation?
Mr Spakowski: The remarks I've made are certainly relevant in being cautious in using a purpose clause. As you recall, I said that a court considers the context. The purpose of the act is considered part of the context whether it's in a purpose clause or not. So as long as the purpose clause sets out what one would normally assume to be the purpose of the act anyway, there's much less danger, because a court would deduce that as the purpose of the act in any event, whether it's explicitly set out in a purpose clause or not. The danger arises when more and more is put into a purpose clause that may not be obvious.
Mr Offer: One of the issues under the bill, as you well know, dealt with the financial accountability of the board, and that manifests itself in a whole variety of ways. But the bill itself, section 12 of the bill, refers to a new section 58. It repeals 58 and 59 and inserts a new 58 which speaks to the board of directors acting in a financially responsible and accountable manner. So I think in that respect, inserting a financial accountability phrase in the purpose clause is probably not something that's not seen anywhere else in the legislation because of the fact that the government has introduced the new section 58.
I understand the issue around interpretation and being used by the courts as an interpretative guide and the fact of its not being terribly certain. I certainly understand that and appreciate your thoughts on that but I guess the feeling I have is that if financial accountability were placed in the purpose clause it would not be coming out of the blue, because of the fact that we have a new section 58.
The question that we have and have always brought forward is, how far does section 58 extend? Does it extend to all aspects of the operation of the WCB, such as WCAT, or not? I think the government has now made it plain that section 58 does not apply to decisions of WCAT, of an appeal nature. But if financial accountability were placed in the purpose clause, then would it not be the case that WCAT would also fall under that purpose as being a creature of the act itself?
Mr Spakowski: It's probably the case that putting something in the purpose clause will give it wider scope, although more uncertain scope. It would depend on exactly how the provision were worded. A provision of the purpose clause that relates to the board of directors of the Workers' Compensation Board may not be sufficient to affect the operation of other bodies.
Mr Offer: So I guess just for my purpose, for my understanding, the financial accountability could be inserted in the purpose clause, recognizing that it's still used as an interpretative guide by courts and that in itself results in an uncertainty, but if it were placed in the purpose clause, it would have a wider application than that which now applies in the legislation under the new section 58.
Mr Spakowski: If I understand the question to be putting it in the purpose clause instead of a substantive provision, it's conceivable that it would have wider application if it were put in a purpose clause, but it may have a weaker application in the sense that it wouldn't be directly enforceable as a duty against the board. That should be done in a substantive provision. I hope that's clear enough.
Mr Offer: Crystal clear. Thank you.
On a point of order, Mr Chair: I'm wondering if the government can indicate to me whether there are any undertakings that you have taken responsibility for that you have not yet responded to. Are there any outstanding questions?
Ms Murdock: No, it is complete. All of the undertakings that were taken during the period of presentations have been done and submitted in the materials by the clerk.
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Mr Offer: Thank you for that. Just as a follow-up question, there is one answer that I would just like a quick clarification on, and that's the $200, by a memo under the date of September 21, on page 3 -- I'm referring to a memo from -- have you got that? It's your answer. Are you there now? Tell me when you're there.
Ms Murdock: Page 3?
Mr Offer: Yes, undertaking number 14. You've provided the financial impact of the extension and I would just like to know: The last three lines of undertaking 14, and in fact the last line, talk about a one-half-billion-dollar impact. Is it one-half billion in total or is it one-half plus one-half?
Interjection.
Ms Murdock: I'm being advised it's one-half plus one-half, but I'd rather have them explain it than me.
Mr Mitchell Toker: The costing in the last two paragraphs of undertaking number 14 -- the second-last paragraph in the three bullets directly under that describe the financial impact of providing the $200 to that group of workers.
Mr Offer: Right, I understand.
Mr Toker: The last three lines describe the impact on the indexing of adding that group to the exemptions from the Friedland formula, and they are as shown there: $16 million in 1995; $125 million to the unfunded liability in 1995; and $500,000 to the unfunded liability in 2014.
Mr Offer: I'm sorry, it must be myself. That $500,000 to the unfunded liability in 2014, is that the same $500,000 as applies in the --
Mr Toker: No.
Mr Offer: So it's basically $1 billion?
Mr Toker: That's right.
Mr Offer: Okay. Thank you. I just wanted to get a clarification. I appreciate it.
Ms Murdock: Just for the record, I have Mitchell Toker from the Ministry of Labour with me, and Sherry Cohen, also from the Ministry of Labour.
The Vice-Chair: In section 1 there's a PC motion.
Mrs Witmer: I move that section 0.1 of the Workers' Compensation Act, as set out in section 1 of the bill, be struck out and the following substituted:
"Purposes
"0.1 The purposes of this act are,
"(a) to provide fair compensation, health care benefits, rehabilitation services and return to work opportunities for workers who sustain personal injury arising out of and in the course of their employment or who suffer from occupational disease;
"(b) to require the board of directors of the Workers' Compensation Board to exercise the highest level of financial responsibility and accountability in administering the workers' compensation system in Ontario;
"(c) to ensure that any proposed change to benefits, services, programs or policies under this act is thoroughly analysed in order to evaluate the overall consequences of the proposed changes on workers and employers and report on them to the provincial government; and
"(d) to ensure that the developments in the understanding of the relationships between work, injury and the workers' compensation system are monitored so that,
"(i) generally accepted advances in health sciences and other related disciplines are reflected in benefits, services, programs and policies consistent with the above principles, and
"(ii) a continuing effort is made to improve the efficiency and the effectiveness of the workers' compensation system."
What I have done here, on behalf of the PC Party, is to put forward an amendment which would replace the purpose clause in Bill 165 with the PLMAC framework document wording. As I indicated at the outset, it was the Premier himself who called upon the PLMAC to achieve consensus in reforming the Workers' Compensation Act, and one of the central features of that consensus was the recommendation that there be a purpose clause included in the statute.
The purpose clause that was endorsed by members of the PLMAC -- it's the one that I have here before me -- was designed specifically to balance the interests of business, workers and the public at large.
As a result, we have reintroduced the purpose clause that was agreed to by labour and by business as part of the accord. We were very disappointed, of course, to see the very narrow scope of the purpose clause that had been set out in Bill 165 and the absolute disregard for financial responsibility and accountability. We certainly believe that this purpose clause which we have reintroduced is far superior to the clause proposed in the bill, because it does now again clearly articulate the issues of financial responsibility and integrity as well as stakeholder accountability and employer, WCB and governmental responsibilities.
That's, I guess, what is so absolutely essential: the fact that there be contained in the purpose clause, which of course is going to govern the interpretation of the bill, the reference to financial responsibility. We need to make reference to the costs and we need to take a look that any changes that are going to occur, any service changes, programs, policies, are going to be thoroughly analysed in order to evaluate the consequences of the proposed changes on the workers and employers and report the same to the provincial government. As it is currently drafted, the purpose clause of this bill doesn't take into account when new provisions or policies are considered by the government or the WCB.
So I would certainly recommend that the people present today support the amendment we have put forward. As you know, there was very, very widespread support from many of the presenters that appeared before the standing committee on resources development to entrench the concept of financial responsibility in the purpose clause. In fact, the Premier himself recognized the need to be aware of that, and so I would suggest to you that you would give very serious consideration to agreeing with and supporting our amendment.
Ms Murdock: Again, I have a feeling that we'll be saying much of the same thing over and over again. But I know that when the people were sitting down to discuss at the PLMAC they were looking at how the board could be improved and they were trying to find something that both sides could agree on, and that they came to this language saying that that's what they would like it to do.
However, the reality is that it's unenforceable in the purpose clause, and I think, actually, leg counsel made that pretty clear, although not specifically, on each of these points but basically said that it is not achieving -- if you put in the purpose everything that's in the PLMAC agreement, and I will address myself to that in a moment, as is in this PC motion, it is not achieving the desired intent of either labour or management. And on the latter comments of Mrs Witmer, I would say, nor should the purpose clause be a deciding factor in whether or what benefits in the future should be applied. That's first and foremost.
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Addressing the specifics, when we went through this afterwards in terms of drafting and in terms of having it have some impact and import and legislative teeth -- it's pointless to put something in a bill that you can't do anything about it afterwards -- we did take the first provision under Mrs Witmer's motion sub (a), and it is in sub (1), Bill 165, and the only difference is that we've added survivors and dependants to the last part of that.
Sub (b), which is in Mrs Witmer's motion, is requiring the board of directors to exercise the highest level of financial responsibility and accountability. In the amended section 58, which is section 12 of the bill, and as you can see -- we'll be coming to that shortly -- we have taken that and are amending it to include it in the purpose clause. Sub (c), to ensure that any proposed changed benefits etc, is in subsection 15(3) and is enforceable there and would not be enforceable under the purpose clause. Sub (d), to ensure that developments and the understanding of the relationships etc, is also in subsection 15(3), again for the same reason.
So I would say that we have taken what a group of people in negotiations have done in terms of what their intent was and we have included it in the bill. All parts of that are in this bill, albeit not in the purpose clause because, as I stated, it would have little or no effect there, so that the obligation is on the board of directors in terms of how they govern the board.
Mr Offer: I'd like to ask the parliamentary assistant some questions on this. I'm a little confused about the issue about the purpose clause and certain aspects of it and your position that in a purpose clause it really doesn't have any effect; it's really got to be in the legislation. Doesn't that, if we follow your argument to its logical conclusion, indicate that there should not be any purpose clause because there is no effect?
Ms Murdock: No, I don't. I think that it was a good idea to have it stated, in a 1990s context especially, what the purpose of the act is. But we heard from predominantly employer groups about having financial accountability and responsibility in the purpose clause. We heard that time and time again throughout the three weeks of public hearings, that it should be in the purpose clause, and I stated then that I did not believe it should be in the purpose clause if you wanted to have any legal effect. But we are listening to what the presenters said to us, and they asked specifically that it be in the purpose clause and said that bipartism was going to be a problem if we did not put it in the purpose clause.
So we have listened to the employer groups on that subject and have included it in the purpose clause -- well, we will have once we have that motion before us. But in terms of this motion before us -- you're a lawyer, Mr Offer. You know as well as I that the purpose clause is there to give you a taste of what the bill is but the actual meal is in the other parts of the bill.
Mr Offer: I think that you and I disagree on the purpose clause. I'm not talking about the substance of the purpose clause right now because I think purpose clauses are important, and I think that if things are found in a piece of legislation, I don't care whether they're in a preamble or a purpose clause or a section; they're there for some purpose and there is the opportunity of people to interpret why we did it. The fact that you say, "Well, it's okay that it's here because it really doesn't have any effect," I think just for me principally that's not the route that I'd like to take. I think it is important. I think it sends out a message as to how people who designed a particular piece of law felt about it, what was important to them, and if there was ever any discussion, any disagreement over any of the sections of the legislation today or tomorrow or 20 years down the line, they were going to be able to take a look at the purpose clause to help, as a tool, in interpreting what it is that you meant in 1994.
So, for me, the words in the purpose clause are pretty important, and that's why I have some significant concerns with your response to the amendment that was put forward, because I haven't dealt with the substance of it all, but rather the response saying: "Well, you don't have to worry about all of these terms. They were part of the PLMAC agreement and they're found somewhere else," or, "It doesn't really matter." I happen to feel that it does matter and, because I feel it matters and because I feel we have to be very careful as to the wording and what it means, that we have to take a look at the wording itself.
I have no difficulty with the amendment as put forward, and we will be shortly dealing with an amendment put forward by my party and the Labour critic, Mr Mahoney, that basically does much of the same, but I think we have to recognize that the wording is wording that was arrived at due to an agreement. That took time and took some great thought. The time and thought, in terms of the wording, is one area, but also where it's positioned in the legislation was another issue. It was clear that they felt that it was to be used almost as a guiding principle in any interpretation of any following section of the legislation.
So I think it sends out a very clear message as to some of the areas that the workers' compensation system should be involved in, in principle and in purpose, areas such as health care benefits, rehab services, return to work and requiring the board of directors to exercise the highest level of financial responsibility and accountability in administering the system in Ontario. I believe that that will encompass and embrace decisions in and around the appeals tribunal.
We know that there are matters that are now before WCAT that have the potential of a major financial implication, and I don't have to speak as to whether one supports or does not support the particular areas of compensability. The question we have to answer in this legislation is whether the board of directors should be primarily responsible. I think that the purpose clause that has been arrived at by PLMAC and is part of this amendment clearly indicates that the responsibility is with the board of directors, and that responsibility extends to decisions that are made through WCAT in a variety of other ways. Their responsibility is to injured workers in this province and their responsibility is to the funders of the system. The stronger the system that is created, the better the interests of all are protected.
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So I have a real concern as to a certain passing interest in the words of a purpose clause in that they really don't mean too much, because I think that they do mean something and that it sends out a very clear message as to what the workers' compensation system is all about: fair compensation, health care benefits, rehab service, return-to-work opportunities and financial responsibility. Who can disagree with those purposes in the system in this province? I guess my question is: Why does the government disagree that that is not a legitimate purpose in the operation of the workers' compensation system?
Ms Murdock: There's a whole bunch of things there. But first of all, I need to say on the first part of your comments that I am not a proponent of having both a preamble and a purpose clause. I never have been. I think that you should have one or the other and that whichever one you choose to use -- in this case, it's a purpose clause -- sets the tone and the interpretation for the whole act.
There's no other word to say except that, whenever there is any ambiguity or vagueness in a particular portion of the legislation, it is used for interpretation purposes.
It is the government's view that the section that you're referring to requiring the board of directors to exercise the highest level of financial responsibility and accountability in administering the workers' compensation system in Ontario, on the grand scale of things the tone would be there but it doesn't put the obligation there.
I tried to explain that during the public hearings to the employer groups that came forward and I really, truly never got them to understand, as I am not getting seemingly for you to understand, that if it came to a court case -- and that's what I'm saying -- for whatever reason, and it was in the purpose clause, our view is that it would not have the impact or the requirement to force the board to do that, but it would have a board obligation in a section regarding obligation and duties of the board.
The other thing is, it was never our intent ever -- because I know you've asked the question a number of times, Mr Offer, throughout the public hearings on the impact of WCAT decisions -- as the government to include WCAT in this. I should also say that I will never, personally and I think I speak for the Minister of Labour on this as well, agree that in terms of an injured worker, anyone who's injured on the job or suffers an occupational disease on the job -- and I only got to ask the question to one employer group -- that the determination should be, "You've got the disease, but can we financially afford it?" and that the answer is, "No, we can't financially afford it; therefore you don't get it."
I will never agree to that. So if you understand that premise, that's the way we're coming at this bill. If you agree with me on that, then we might meet eye-to-eye on some things, but if you don't agree with me on that, then we will never see eye-to-eye because that is the premise from which we are coming and that is what, as far as we're concerned, we'll be voting upon.
Mr Offer: Then I guess my question is based on your last response, that on the basis of expense and affordability, if WCAT, on appeal, overturns or embraces a new type of benefit for a new area, under the current legislation, when it was referred back to the board, they would have to comply with the decision of WCAT.
Ms Murdock: They can delay for a while, but yes, in the end, if WCAT, when it was asked by the board to review, maintained its decision, yes, the board would be required to follow it.
Mr Offer: And if we follow that through, then the board would not have the power, apart from delay for a short period of time --
Ms Murdock: Well, they can delay quite a while, as you know.
Mr Offer: They would not be able to say on the basis of the financial accountability portion of the purpose clause, "We do not have that at our disposal," in terms of dealing with the decision of the appeals tribunal. If that were the case, then you will, I would expect, agree that the government's figures as to what the unfunded liability will be in 2014 are more of a wish than of anything substantive.
Ms Murdock: Well --
Mr Offer: One decision explodes those figures into oblivion.
Ms Murdock: If I might, Mr Offer, since WCAT has been in place since 1985, that has been the case all along. I know that the whole issue of WCAT right now has been on the issue of stress. Everybody's talking around it, but that's what everybody is talking about. If you look at the decisions of WCAT thus far, they have been quite -- and I use the term "conservative," small "c" -- in terms of deciding who would receive stress benefits, other than traumatic stress, which is a policy of the board and has been agreed to by the board where for obvious reasons if you see your partner killed or whatever, there is automatic traumatic stress. So that's been accepted. It's the issue of doing the job caused the heart attack and that kind of thing that has been at issue at WCAT.
So they have been aware, I think, of the concerns of the board, but I don't think that you can say that if WCAT were to decide that whatever it was that was before them would put a financial onus on the board, that should be the deciding factor. I don't think we would want a society that would do that.
Having said that, I think that with the governance provisions -- you can't look at everything in isolation here -- whereby you're going to have a CEO and a president who is chosen by the board of directors, and it's going to be operated more on a corporate level than it has been in the past, you would have to find those finances or the monies for that in other ways. That's what businesses do all the time whenever different things affect their markets. The board is going to have to be very fiscally responsible and I thought we had done it, but we had the business groups coming in here themselves saying they wanted it in the purpose clause. So be it. We're putting in a recommendation to do that, even though I don't particularly agree with them.
Mr Offer: I guess I just don't get this, because the Premier of the province said, "A `purpose clause' will be added to the Workers' Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility." There was no limitation in that area. I just don't get it when the Premier of the province says that the WCB is going to be financially responsible and the bill of that same government limits what the Premier of the province said. I don't get it how you can do it both ways.
Ms Murdock: Excuse me here, but I've been listening to Mr Mahoney for three weeks talking -- whenever he was talking to employer groups saying one thing about financial responsibility, and then talking to the injured workers' groups and saying, "And this is being done on the backs of the injured workers." Both sides of the mouth here. The PLMAC agreement never included WCAT. If you look anywhere in the PLMAC agreement that was struck, they never included WCAT.
We have asked, and it is going to be part of the mandate of the royal commission, that they look at that relationship. Bill 165 never addressed WCAT and the ramifications of WCAT decisions. It will be discussed under the royal commission. It is beyond the scope of this bill and it will be addressed in the royal commission. That's all I can say. I've already stated my own philosophical view on injuries and workers and cost.
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Mr Arnott: I'd just like to indicate that I would like to support this amendment, probably not a surprise to the government members, but I'm having a bit of difficulty following some of the logic of what I've heard in this discussion from the parliamentary assistant. Again, that might not surprise the members opposite.
If we're going to have a purpose clause in the bill, the purpose clause ought to be meaningful. It shouldn't be just a political statement, and if it is, I don't think we need a purpose clause. I think it should be the point at which the rest of the bill is interpreted.
I heard the parliamentary assistant say that the purpose clause would set the tone for the bill and I heard her say it would be used for interpretation when there's a misunderstanding or when there's a dispute as to what the legislation actually means. Yet I also believe I heard you say that it really doesn't mean all that much and that's why you reject this amendment.
I have all that discussion here and then I also have a press release that was sent out by the Ministry of Labour yesterday, "Key Amendments to WCB Reform Bill Announced." This is the Ministry of Labour's press release and it says:
"Following almost unanimous advice from the business community, the government proposes to amend the purpose clause of the bill to include a requirement that the WCB board of directors must govern in a financially responsible and accountable manner."
I would like to see an amendment to require the whole system to be managed in a financially responsible manner. I think that's something that's desirable. That should have been implicit since 1914. There should have been financially responsible administration of the whole system. If there wasn't financially responsible administration, the board should have been dismissed and the administrators should have been dismissed.
Ms Murdock: It's 80 years in the making we've come to this day. You guys were there for 43 of those years.
Mrs Witmer: Good years, Sharon.
Ms Murdock: Yeah, right.
Mrs Witmer: That's when we had consensus.
The Vice-Chair: Order, please.
Ms Murdock: If you're talking about management, if they weren't doing their job, then they should have been removed -- we have not been the government except for four of those years. I think we have tackled an unbelievable problem that no one disputes is a problem. So that's number one.
I'm not saying it doesn't matter what's in the purpose clause. I don't want to have you misunderstand. I think it's important. As I said, it's the flavour of the bill. I don't know how to describe it any other way. It is used, as I said, for interpretive purposes.
In terms of legal effect, because both Mr Offer's and your questions are tied together, if I as an injured worker was diagnosed with a disease or an injury and WCAT decided I should be reimbursed or compensated for that injury or disease, it goes under section 93, back to the board, and they say: "We really can't afford to cover that, because if we cover you, we now open the door for a myriad of cases. We can't afford to do that, so we're not going to pay you" -- basically, that's what would happen under your scenario -- then I as the worker can go to court under a writ of mandamus and I can get the courts to decide.
I am saying that that section in there and the purpose clause, the court would not look upon it as a legal duty for the board and the board would not have a legal duty to say, "No, we cannot afford to pay you." They would be required to pay. It might take a little longer to get there, but the board in the end would have to pay. They would have a responsibility, because that is the duty of the board. I don't know how to say it any other way.
We have listened. We didn't put it in originally in the purpose clause, for the reasons already stated. Then after listening to three weeks of public hearings and having the employer community almost unanimously, as was stated in the press release, say that it wanted it there -- and basically, we had two or three particular groups of employers who said very definitively at the end of their presentations that if it wasn't in the purpose clause, they would have great difficulty working in a bipartite mode, which basically says, "We won't participate in the bipartite process if you don't do this."
It's a shame that one has to put it in a purpose clause on that basis, but if that's what they want, then so be it. In actual fact, I believe that what we were doing in the original bill was probably more to what the employers' intent was than this is, but so be it; we listened to what they had to say and we are abiding by their request. Our amendment will include the owners.
Now, there is one other point that has to be stated too, because you said it and Mr Offer said it: that you wanted this to permeate through the entire system, the financial responsibility.
Mr Arnott: He said that.
Ms Murdock: Certainly Mr Offer did --
Mr Arnott: Yes, he said it was implicit.
Ms Murdock: -- but I thought you had as well. The obligation is on the board of directors to operate in a fiscally responsible manner. You can't have the claims adjudicator -- and I did say this during the public hearings. I don't know if you were here for it, but I did say quite emphatically that the claims adjudicator should be asking the question: "Did the accident happen? Is it work-related?" That's the question that the claims adjudicator asks, not, "Can we afford it?" because the claims adjudicator, in all likelihood, probably doesn't know whether they can anyway. That's what your board of directors is there for. So I will not agree to any proposal that's put forward that requires that kind of requirement on all levels and all employees of the board.
Mr Hope: Now we're back dealing with the amendment that's being put forward by the Conservative Party. As we have an opportunity to listen to the debate that goes on, we also have an opportunity to flick through the amendments that are being presented and I notice the Conservatives were not very comfortable with the first amendment, so they also put a second amendment. Just in case option (a) doesn't work, we've got fallback plan option (b) to deal with, an amendment to that clause. It would have been nice if they were certain about themselves and put one amendment forward, versus two amendments about that particular clause.
But I want to specifically focus my comments on the amendment and why I will not be supporting the amendment put forward. We must reflect what the purpose of the act is for: to provide fair compensation for workers who have sustained personal injuries arising out of and in the course of their employment. I think that is very important.
If I read the amendment that is being put forward -- and I heard Mr Arnott say that if this was a political statement, that's wrong. I read it as a political statement because it's taken word-for-word from the 1993 document, November 17, 1993, from the business caucus reform proposals. Other than adding a few ands, ifs, buts or "the," it's very reflective. They're doing it for a political statement because they even have another amendment which is dealing with the same section and is amending it and taking away some of the important values behind it because the business community kept coming before this committee and saying, "In the purpose clause, there must be financial accountability."
In the further amendments, you will see that the government will be introducing an amendment to this section to require the boards of directors of the Workers' Compensation Board to act in a financially responsible and accountable manner in governing the board. I believe that's what the business community was putting forward, but the amendments that are being put forward by the Conservatives right now put a higher priority on finances than it does to the worker who has been injured in the course of employment. I believe that the amendment where we're appropriately putting it has to be in sight of -- and the parliamentary assistant clearly indicated that if you get into circumstances where you're saying "Yes, you're injured and yes, it is the cause of the employer, but we can't afford it, so tough luck," that is the wrong approach we're trying to do to make sure that people are compensated for an injury that occurred in a workplace through the course of employment.
So when I'm looking at this amendment -- you talk about political statements; you've actually done it because you were so insecure of the amendment you had to put an alternative amendment with it. You've put the priority of the issue about financial accountability and reporting to the government before you actually even deal with the true context of what needs to be done to the injured worker. Let's face it: Workers' compensation problems occur when injuries occur in workplaces through unsafe working conditions and when you do not have a return-to-work program that is suitably meeting the needs of the injured worker to return him to full employment.
I believe the purpose clause, when this whole reform was intended and when the two groups came together to ultimately come up with a package, the two main purposes are to provide benefits to injured workers and help rehabilitate a return to work and, within that, to make sure that the boards of directors are financially responsible.
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So with the amendments that I see -- and it is one of the fortunate benefits of the committee that we have an opportunity to examine all the amendments that are being put forward, and I find it very ironic that the Liberals asked a lot of questions yet have just one simple amendment, which doesn't seem to be too bad, but really asked a lot of questions about nothing. It's amazing that we have to answer the questions for the amendment being put forward when it's a Conservative amendment. I guess I just don't understand that process of it.
To look at the amendment, to look at the legislation, to understand the intent -- and Mr Offer says it's got to be in the language and don't leave it for interpretation. How much clearer can you be with the writing of the bill which is in section 1, which highlights the four areas dealing with fair compensation, to provide health care benefits and rehabilitation and to provide rehabilitation programs to survivors and then putting in place also another paragraph that just strictly talks about financial responsibility?
I look at the wording that is being put forward by the Conservatives, which would leave -- how would you call it? -- a lawyers' field day for interpretation, to find out what comes first: the injured worker, the financial accountability, the financial accountability to the worker -- it leaves too much discretion for interpretation of the legal act when why we are here in this Legislature is to put legislation in place so that general people, people who are out in the public, can read the act, who are going to maybe become victims through an injury that they sustained during working.
When I look at amendments, I look at all amendments that are being placed forward. I will not be supporting either one of the Conservative amendments -- I will be supporting the government amendment, which does comply with the business community -- nor will I be supporting the Liberal amendment that's being put forward. I believe that if we can move on with the amendments, the employer community should be satisfied by all their presentations that they made, because I've had an opportunity to look over a number of them, which I've carried with me, and I believe they've asked for, in direct wording, that there be financial accountability, and I believe the amendment that the government is putting forward will address the major concern that they talked about.
Mrs Witmer: Do you know what? I think I need to help Mr Hope. I think I need to make him aware of the fact that in putting forward two alternative suggestions for the purpose clause, there was a reason. First of all, the amendment we're dealing with presently was the proposed purpose clause that was accepted through consensus by both the business and the labour communities as part of the accord. So I thought in all fairness, since it had been a purpose clause that had been reached through consensus, that we should put it back on the table.
Mr Hope: I just wanted the identification that it's a political statement.
Mrs Witmer: Part of the process that we're going through, Mr Hope -- and maybe you don't want to take the time -- is to listen to all of the players, all of the interested stakeholders in this province. We are just not beholden to one faction or the other and this does reflect a consensus reached by two major stakeholders in this.
The second proposal that we have put forward as far as a purpose clause is concerned addresses the issue of incorporating within the purpose clause the financial responsibility framework, which we know was to be the cornerstone of the reform package. It was your own Premier who, when he set up the group, indicated that we needed to reform the system in order to pay workers fairly and meet the test of being financially sound.
So what we are endeavouring to do -- in fact, I thought that was the reason for clause-by-clause -- is ensure that the viewpoint of all of the participants at the hearings would be brought forward to this committee. If Mr Hope and the NDP are not interested in discussing all of the options, then perhaps we should adjourn at this point in time.
I would also say, in response to what's being said, that if you think your amendment to the purpose clause addresses the concerns of the business community, you are wrong, wrong, wrong. If you wonder why business is now so wary of the NDP, even when you are trying to mollify the business community and management, as you have attempted to do by making your motion, I can tell you, it doesn't respond to the concerns that were given. We have learned that since your amendment has been made public.
Because, I ask you, what business person in their right mind would agree to sit on the board of the WCB when the new purpose clause that you are proposing says that only board members must be financially responsible; not the administration, not the WCAT, not the WHSA? At the same time, we have a bill which orders the expenditure of hundreds of millions of extra dollars in increased pensions, and we have a government that is going to continue to direct the operation of the board for at least a year. Folks, it doesn't add up.
You have failed totally to recognize what it is that the management community was looking for. Your motion does not address the concerns of putting in place a financial responsibility framework that was to be the cornerstone of any reform of Bill 165.
Ms Murdock: It suddenly struck me, as I was reflecting on the comments made by the opposition members, that the PLMAC agreement, which seems to be the holiest of grails -- or, at least, is being represented as such -- was set up. No government, I don't care whether it would be a Liberal government, a Conservative government, an NDP government, any-party government, would take an agreement that was negotiated between two parties and stamp "Bill 165" on the top of it and present it exactly as such. Otherwise, there would be an entire group of legislative counsel and policy people that we wouldn't need. There would be a whole bunch of people out of work. Because when you do legislative drafting of a bill, any bill, I don't care what it was, and all of us have been in government now so we recognize -- well, excuse me, but your party has been. We all realize that you have to have it set up in appropriate language. The process is quite lengthy.
Once the government has indicated its direction to its staff, sets up how it wants to go, its legislative counsel within the ministry drafts it, sends it over to the AG's office for approval for the language that's used so it's Ontario language that's used in legislation, and then sent back to the ministry to make sure the intent has not been changed somewhere along with the change of language, and then it is sent back until you finally get it all approved and you can do first reading.
To think that we would take the PLMAC agreement, as it is written, and we all know what it looks like -- it's got different sections and so on -- and just take it holus-bolus and say that that's the way it has to appear in the legislation is unrealistic. As I stated earlier, when you look at all of the purposes, as stated in the PLMAC agreement, they all appear within the bill in what we felt was an enforceable manner and a legislatively correct manner.
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The last thing I want to say is that what I'm hearing from Mrs Witmer is that because we aren't making the financial accountability and responsibility a systemic board responsibility, we aren't agreeing to what was in the PLMAC agreement, which is not true, because this motion before us is the exact wording of that, as you stated. It says, "To require the board of directors," and I put emphasis on "the board of directors" of the Workers' Compensation Board, "to exercise...." That's what was in the PLMAC agreement. That was not systemic board financial accountability.
Mrs Witmer: That's why we have motion 2.
Ms Murdock: Yes. I'll speak to motion 2. I'm already ready for that one. In any case, I'm just saying it's important to note that it is the board of directors' responsibility.
Mr Ferguson: Very briefly, I view this much the same as a mission statement for a corporation. I don't think any corporation would be held liable by its employees as a result of the mission statement outlining the goals and objectives of the corporation. Some people hold up the business community as some kind of icon out there, that everything the business community says is correct and everything the business community suggests ought to be enacted.
The obvious question is, if the business community and people in the business community are so right and so correct all the time, (a) how did we get into this situation and (b), more importantly, why is it that only one out of every three businesses that start up makes it a year and one out of every five lasts five years? Why isn't the success rate higher? I'm sure that the response to that would be, "If the government would get out of the way; it's the government's fault that the businesses don't succeed more than they do."
I think those are some thoughts to ponder.
The Vice-Chair: Further discussion on Mrs Witmer's motion? Seeing no further discussion, all those in favour? Opposed? Defeated.
Second motion by the PCs.
Mr Klopp: I think we've heard about this one.
Mrs Witmer: You're right. I tried to get it all in.
I'd like to move at this time that section 0.1 of the Workers' Compensation Act, as set out in section 1 of the bill, be struck out and the following substituted:
"Purposes
"0.1 The purposes of this act are to provide, in a financially responsible and accountable manner,
"(a) fair compensation to workers who sustain personal injury arising out of and in the course of their employment or who suffer from occupational disease and to their survivors and dependants;
"(b) health care benefits to those workers;
"(c) rehabilitation services and programs to facilitate the workers' return to work; and
"(d) rehabilitation programs for their survivors."
We have, in passing, discussed this amendment and I believe personally that this is the amendment that would most correctly address the cornerstone of what was intended, and that was to incorporate a financially responsible framework and to ensure that there was balance injected into the system, and that we did ensure that there would be future benefits for injured workers as well as having a system that was financially responsible and accountable at all levels that would ensure that any changes in services, benefits, programs or policies under the act would be thoroughly analysed in order to evaluate the overall consequences of the proposed changes on workers and employers, and also within the context of financial accountability.
So we know and we must always remember that one of the reasons that the Premier had for putting in place a review of the system, the reason that he asked business and labour to come to the table, was he himself indicated concern for the WCB's financial situation, which, as I have told you this afternoon, does stand with an unfunded liability of $11.7 billion. He was also concerned about its accountability to the stakeholders.
Therefore, we have put in place this purpose clause because we do not believe that the government's purpose clause or the amendment to the purpose clause does anything to restore the financial stability and the accountability that is required within the workers' compensation system, and I would hope that all members here today will remember what was said throughout the course of the discussions. They will remember that there was a consensus process used, and what we're trying to do is ensure that the purpose clause that would be in place in Bill 165 would reflect the concerns and the interests of all the parties in the discussions.
We believe this would accurately address all of the concerns that have been made and will ensure that we have a system that can sustain itself and will also have sufficient funds to meet the needs of the injured workers in the future. Ultimately, that has to be our concern: Do we have a system that is financially sustainable? Is there any possibility that the system could go bankrupt in the future? If that concern is there at all, we need to look very seriously at ensuring that we add the clause that we've added here, and that is, prefacing the four points by saying that the purposes of the act must be to act in a financially responsible and accountable framework.
Ms Murdock: This is insidious. It is mind-boggling to me. In fact, it's even worse than the first motion, for the very fact that it is in a financially responsible and accountable manner covering fair compensation to workers who sustain personal injury, health care benefits, rehabilitation services and programs and rehab programs for the survivors.
It's quite mind-boggling that any government that believes in fair compensation for injuries sustained on the job would even want to look at that in terms of basing it on a financial perspective. It definitely links the adjudication and revenue jobs that the board does. It still, however, does not make it a legal duty unless it's ambiguous or vague within the legislation, so we still sit there with the whole idea that unless a provision within the legislation was vague or ambiguous, you would not even go to the purpose clause to look to see what your legal duty was.
I'm not going to talk lengthily on this because in the first discussion we went through my basic philosophy and the ministry and the government's intent here in terms of coverage of benefits, but I think we all need to be reminded that if the Workers' Compensation Act was not in place at all and workers were still able to sue their employers, when the court awards benefits, the court does not sit and ask whether or not the defendant, being the employer, can pay for it. The benefit is made. The court awards it, or doesn't award it, as the case may be, which is exactly what is being done in the present system; it's either awarded or not awarded, and then you have appeal mechanisms to go through. But there is no enforceability of judgement. This would not do that.
So if the intent, as what is being stated, is that they want the board, the board instead of the board of directors, to have that responsibility, then putting it here and in this manner is not going to achieve that purpose. So I'm not supporting this one either.
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Mr Gerry Phillips (Scarborough-Agincourt): This is a very interesting discussion because to me it's in everyone's best interests that the workers' compensation act in a financially responsible and accountable manner. Everybody's best interests. If this is a program that jeopardizes its financial health, lack of health jeopardizes the future benefits of everyone. It almost seems self-evident that the board should be acting in this manner. Perhaps had this been part of the purpose clause before, we may not have had all the challenges.
So putting it in, to me, makes sense. Not having it in -- I'm not sure; does that then say they don't have to act in a financially responsible and accountable manner? If you say they don't have to act in a financially responsible and accountable manner, then you don't put it in. If you say they have to act in a financially responsible and accountable manner, you put it in.
If all of us are agreed they have to act in a financially responsible and accountable manner, and all of us agree that's in the best interests of the workers of this province, why in the world would we not put it in? What possible reason would there be to not have it there? By not having it there, I repeat, is the board allowed, therefore, to operate in a financially irresponsible and non-accountable manner? For the life of me, I'm having difficulty with the logic of the argument that's being advanced here, because it just seems so self-evident to me.
Ms Murdock: I think we are all in agreement that the board has to act in a financially responsible manner. The board of directors especially has that obligation and duty.
We have to remember that this is a corporation, and as employees of the corporation they must abide by whatever guidelines, policies and so on that their board of directors put through to them. For the first-level claims adjudicators -- I'll use them specifically -- to know all of the details and ramifications of the financial picture of their corporation would be like asking the technical supervisor -- not even supervisor, one of the technical operators at Xerox to know what was happening in the boardroom upstairs when they were making decisions about where they were going to place their new outlets or have their sales management or whatever.
If you look at it that way, then you realize that you can't have a systemic financial accountability requirement and that the board of directors should be the ones who are required to operate, which they should anyway just based under corporate law, in a financially responsible and accountable manner. But it has to be said even more clearly for some reason in this, and so we will be bringing forth an amendment that does say it at the request of the business community.
But I don't think that it would serve any purpose and it is certainly not enforceable to have "financially responsible and accountable manner" as listed in this PC motion covering all of that, and as I've already stated, it is not a legal duty as it appears here.
Mr Phillips: Maybe we have a fundamental disagreement then. I think what should permeate all organizations, including workers' compensation, is that we have to operate in a financially responsible manner. That's everybody, not just the board of directors; it's the whole organization. That's not right-wing, left-wing; it's not hardhearted conservatism; it's just reality.
You see what's happened to insurance companies. Two years ago no one would have ever even dreamed that some insurance companies would be in difficulty and now they're in difficulty. So it seems to me that maybe we just have a fundamental disagreement, and of course in fundamental disagreements you have the votes and the opposition doesn't.
I see absolutely nothing wrong with every individual in workers' comp feeling that part of our responsibility is to manage our expenditures well. I firmly believe it's in the long-term best interests of every injured worker in this province because all of us look down the road at the resources available and they're limited. Because we have that fundamental disagreement, we're going to have difficulty persuading you that what workers' compensation should do is guide its activities on fair compensation and all those things, but in a manner that's always financially responsible and accountable.
Ms Murdock: I don't think we have a fundamental difference in everyone operating in a financially responsible manner. I don't think we do. I think we are not using the words "financial" and "responsibility" and "accountability" in the same way. If the board of directors has the responsibility to be financially accountable and responsible, as they do under the Corporations Act -- they have already got that responsibility -- we would be stating it very clearly otherwise in the next amendment. But they've already got that and the board of directors is required to do that. Their policies and directions to their employees are such that they're already based on financially accountable and responsible reasons for making that policy, or changing a policy or whatever. Their employees then are obliged to follow the direction of the policies that their board of directors has set.
That's how I think it permeates down through the system to have your front-line workers following the directions of the board, because that's what they're doing now. When they make a decision on a claim as to whether or not it is work-related and whether or not the worker has the injury, they're doing that on the basis of policy that has been set forth by their board of directors already.
What you're asking and what Mrs Witmer's asking in this is that all of their questions should be prefaced with, not, "Is it work-related?" not, "Does the worker have this?" but, "I'm not going to make a decision unless we can afford to pay for it." And I don't think that's the question of the front-line worker. I actually asked an employer group, during the public hearings, that very question: "Are you saying that a claims adjudicator should ask, `Can we afford to pay for that,' instead of, `Is this work-related'?" The employer said yes, which is just mind-boggling to me. Never in a million years will I accept that.
I think that the financial responsibility is at the head. Unfortunately, it's still a hierarchical system and so it's the board of directors that sets the policy and guidelines, based on financially, fiscally responsible decisions, and those policy guidelines and directions are sent down to the different levels through the appeal system at the board. So I don't think we're disagreeing on the fundamental financial responsibility. I think what we're seeing is: Who has that in terms of the actual dollars and cents?
Mr Arnott: Given the fact that the government members defeated our first amendment with respect to the purpose clause, which of course was the amendment that came out of the PLMAC process -- I don't think the PLMAC agreement was the holy grail. But I do think that the Premier, if we listen to him he tells us that the concept of bipartism is the holy grail and that's the method that should be used. That PLMAC agreement was the result of that process. I still find it very difficult to understand how the Premier could have walked away from that agreement.
But, having said that, --
Ms Murdock: He didn't.
Mr Arnott: -- that amendment was defeated. Now this is the next amendment that we put forward on the purpose clause. As Mr Phillips has pointed out very eloquently --
Mr Hope: This is not a political statement.
Mr Arnott: No, what I said, Randy, earlier was I thought that the purpose clause ought to be meaningful and if it wasn't meaningful, why have a purpose clause? If it was just a political statement, it was unnecessary to include it. I didn't say a purpose clause was wrong.
But I think that this is a good motion in the sense that it puts financial responsibility throughout the system, and we talked about that earlier in terms of the need for that to be implicit in all the operations of the board and something that I'd like to see.
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You mentioned that the adjudicators would have difficulty with that concept. I don't think really that's valid. I think most adjudicators could look at the financial outlook of the board. The unfunded liability is fairly straightforward financial information. Every day we're going $1 million higher on the unfunded liability. That's what's happening: $1 million a day higher. That's pretty straightforward. I would think that every adjudicator could conduct their decisions based on that.
Ms Murdock: I'm going to respond to that. I wasn't going to; I was going to actually stop and let us vote on this, but I have to respond to that, because I don't agree with you that the unfunded liability is that straightforward. I wish it were, but it isn't. In fact, people still think of it as debt. When you talk to the general public out there, they think of it as debt, as moneys owed, and they don't look at it as sort of like CPP, that it is assets and it takes into consideration those assets.
I think it is important and, for what we're doing in this bill, as a New Democrat, is very difficult.
Mr Arnott: I realize that.
Ms Murdock: The Friedland formula to me is anathema and I make no bones about that. I don't like it. I advocated on behalf of injured workers for the four years before I got elected. It is definitely having injured workers picking up billions and billions of dollars of cost on a system they didn't create. It was not they who caused the unfunded liability.
The $1 million a day is why we're doing this bill, because if we don't do this bill and we wait for the royal commission, then you're right, the $1 million will continue, until we get some kind of handle on what's happening within the board. Right now we're working on an interim basis. We have to get the governance section straightened out so that the board can start operating as a business and start looking at its requirements and duties for fiscal responsibility. It has to look at the unfunded liability.
I think the point was made earlier about no requirement to go to zero by the year 2014. There was an employer actuary here during the public hearings who, when asked by Mr Mahoney why they felt it really necessary that you be at zero, said that in a pension plan such as this, which is an insurance plan based on pensions over time and in the future, you really didn't need to have it actually zero, but that you should have at least 60%, 65% coverage, or 60% I think was what he said would be adequate. You've even got employer actuaries saying that. So to go to 2014 with the unfunded liability and have it at $13 billion -- I disagree with your $15 billion. I actually think truthfully that the return-to-work sections -- because again I'm stating that you can't look at all of these things in isolation, you can't cost them out but they're going to save millions of dollars.
I know in Ottawa when we went to the presenters, I went out in the hall and talked to the transportation group that appeared before us. One of the vice-presidents from Canadian National, I think it was -- yes, because Canadian Pacific came here to Toronto -- stated that there are unbelievable savings on modified work programs and early-return-to-work programs. Of course there's no cost to workers' compensation, you see, because if the worker goes back to work, then there are no benefits being paid out by the Workers' Compensation Board. There is no lost-time accident which then affects their premium for the next year. So the savings are there in millions and millions of dollars. I think we are going to see that, once return-to-work is in place and people are actually utilizing it. But you can't cost it out. When they ask us to cost that, we can't do it, because each company is going to be different. NEER explains a lot of that.
In any case, what I'm saying is that the unfunded liability is not a straightforward issue, nor should we be asking our claims adjudicators or those people on the front line to be looking at a $1-billion question when they're looking at Joe or Sally Smith who has been injured on the job and their wages are $400 or $500 a week and they're going to get 90% of net. I think that's what the claims adjudicator is deciding: Is this work-related? Is the worker injured? That's the issue, that the claims adjudicator has to do it, following the guidelines that the board sets forth.
Mrs Joan M. Fawcett (Northumberland): Just briefly, I'm really interested in the arguments that the parliamentary assistant is using around this whole financially responsible and accountable manner that, depending on where it's situated in the whole clause, seems to give her a problem. I noticed that in one statement she said, "Do you think we would take the PLMAC and just stamp approval on that?"
All right, but it was a group brought together by the Premier for the purposes of advising. I have a question as to why then, when your original purpose clause came forward, it was really slanted on just the one side. I also would say to Mr Hope, who keeps accusing the Conservatives of these political statements, to me your original purpose clause smacks slightly of a political statement slanted to one side.
If I go back to this letter of the Premier's -- you keep holding out your new amendment that you're going to put forward that "financially responsible and accountable manner in governing the board," but the Premier in his letter said, "A `purpose clause' will be added to the Workers' Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility." Why didn't you put that in your amended purpose clause then? Why didn't you spell that out the way he did? This is your Premier.
Ms Murdock: You can't do it both ways here. The PLMAC agreement is "to require the board of directors to exercise the highest level of financial responsibility and accountability in administering the workers' compensation system in Ontario." You get into drafting problems with "highest level" and what is the highest level and how does one determine that and so on. You have to be careful in terms of the wording that is used legislatively.
Having said that, I've already stated fairly clearly, I think, and I'm not going to get into it again, the reasons why I don't even think it should be in a purpose clause. But in any case --
Mrs Fawcett: But then nothing else should be in the purpose clause either.
Ms Murdock: No, and I'm going to speak to that. The people who were sitting at the PLMAC --
Mrs Fawcett: That's your line of thought.
Ms Murdock: -- the employers and organized labour who are sitting at the table, are not legislative drafters.
Mrs Fawcett: Oh, of course they're not. I understand that.
Ms Murdock: Nor could you expect the Premier -- or the Minister of Labour, or whatever, wherever it's being done, where anything is being negotiated on a bipartite basis could you take -- to take that and just holus-bolus stamp it as the legislation. It can't be done.
Mrs Fawcett: Well, I guess I wonder why you could holus-bolus just leave out the financial responsibility.
Ms Murdock: But we didn't leave it out. You see --
Mrs Fawcett: You did.
Ms Murdock: No. I disagree with you entirely, because -- and I've explained this, but I'll explain it again -- we never left it out of the act. The people at the PLMAC were all sitting around discussing what is the Workers' Compensation Act there for and discussing all of what they saw as the purposes of the act, given that the purposes I think are fairly important in terms of setting the tone and what is it there for: It is there to protect workers. That's our basic premise: It is there to protect the workers who get injured on the job.
Mrs Fawcett: Of course.
Ms Murdock: Okay. That's the what the purpose clause in our initial Bill 165 stated: to provide fair compensation to workers who sustain personal injury, health care benefits to those workers, rehab services and programs to facilitate those workers' return to work, rehab programs for their survivors --
Mrs Fawcett: But it's doing all of that, according -- when my colleague was saying --
Ms Murdock: I'm not finished.
Mrs Fawcett: -- everything is to be done in a financially responsible manner.
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Ms Murdock: Responsible manner. The thing is, what I explained earlier -- and I know Mr Offer was here when I gave this explanation, and the legislative counsel also gave an explanation of the legal import of having it in the purpose clause as compared to having it in a separate legislative obligation of the board of directors. It's very important. All of the members of this committee were given this chart, and it's dated August 26. When you look at the purposes of this act under the PLMAC framework and you look under the Bill 165, all sections of that are in the bill.
I know that much has been made of the fact that it wasn't all put in the purpose clause, but again I come to the point where, if you want it to have any kind of enforceability, all of those parts cannot appear in the purpose clause. Well, you can put them all in there, but then you weaken the importance of the things that you want to be important, and it is only referred to whenever you have a problem in interpretation. Then you go to the purpose clause.
I don't think that was the intent of the PLMAC. The PLMAC's intent was to have a bill written up that would cover all of those things. They in their minds put it as purposes, but in reality if they wanted it to work, it had to appear in different places. I don't know how to say it any other way.
The Vice-Chair: Further discussion on Mrs Witmer's motion? Mr Hope.
Mr Hope: I wasn't going to say anything till Mr Arnott --
Mr Arnott: Don't.
Mr Hope: But I wanted to make a comment, and when you read this amendment that's being put forward, it says, "The purposes of this act are to provide, in a financially responsible and accountable manner," so when a person, whom we always bestow this responsibility on, reads it and says, "fair compensation to workers who sustain personal injury arising out of and in the course of their employment or who suffer from occupational disease and to their survivors and dependants," -- which means that the person would say "financial compensation." Then they'd raise the question "financially responsible and accountable manner," and they're going to start to pre-determine that X person will receive x amount of dollars and Y person will receive y amount of money. It leaves too much interpretation.
"Health care benefits to those workers": The question would be asked, "Is it financially responsible to provide health care benefits to the person?" It doesn't put any obligation in this amendment that's being put forward to provide those services. It says to do an analysis whether they're eligible and then to balance it off with financial accountability.
This amendment, again, and I guess I would ask Mr Arnott, is this one the political statement or is the first amendment the political statement? But all I see in this whole analysis is it leaves too much interpretation to actually deal with what workers' compensation was intended to do, and it's to provide services to people who are injured in a workplace, and I think it's important that the act clearly reflect that.
The business community, I repeat once again, came front and centre to this committee a number of times and would not accept it in section 58 of the bill. They wanted it in the purpose clause. We've now bestowed -- the amendment which we'll hopefully deal with next is ours -- their request there and to make sure that the requirements of the board financially are there.
This amendment, all I see it does is leave too much discretion to question, first, the eligibility and then, after eligibility, can we financially afford it. It just places too much of an onus on those who are affected by being injured in a workplace, whether they will be fairly compensated, whether they will receive adequate health care, whether they will receive rehabilitation services, and will they receive rehabilitation programs for their survivors.
We all listened to the history, in every presentation that pretty well came forward, of why this act was established and the purpose of the act, and we all said it was great in 1914 why they did what they did and why it was put into place. But I believe that if we were to support this amendment, we'd be taking totally away from the intent which was first brought forward, why we established this act and the workers gave up their right to sue and we went to a compensation system that would adequately deal with those injured workers.
Mr Ferguson: Mr Chair, just before you call for the vote, I'm wondering, given that the clock is ticking, if it would not be an appropriate time to adjourn, given some of the events that are taking place in the building this evening.
Mr Klopp: Well, let's call a vote on it.
Mr Ferguson: No, we're meeting --
The Vice-Chair: I believe we're close enough to the vote and I have no more speakers on the list on this motion.
Mr Arnott: I just want to answer briefly Mr Hope's question. I understood he asked which of the two amendments we put forward on the purpose clause is a political statement. Well, I would answer that both of them would be, in my opinion, meaningful purpose clauses which would impact on the whole bill and that's why I think they're good. The first one, I think, would be my preference if I had to choose between the two because it came out of the PLMAC process, but it having been defeated, we would submit this amendment for the committee's consideration and would hope that we do get the support of the government members.
The Vice-Chair: Seeing no further speakers on this motion, all those in favour of the motion by Mrs Witmer? Opposed? Defeated.
Seeing the hour, this committee stands adjourned until 10 am tomorrow morning.
The committee adjourned at 1616.