Report continued from volume A.
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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
Continuation of debate on the motion for second reading 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.
Mrs Elizabeth Witmer (Waterloo North): I am pleased to participate today in the discussion on Bill 165. I think it's very important that we give this opportunity to provide some of the feedback that we have received as to the impact of this bill on people throughout the province.
We are responding today to a bill that was introduced on May 18, 1994, by the Labour minister. At that time he moved first reading of An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act.
In order to set it in context, I think we have to go back to one month earlier when the Premier on April 14 announced that the Minister of Labour would be introducing these reforms to the Workers' Compensation Act. The changes were supposed to be the result of the recommendations made by the Premier's Labour-Management Advisory Committee, the PLMAC. However, what we have seen in Bill 165 is that a number of very, very critical recommendations that were made by the management side of the PLMAC were totally omitted from the bill we have in front of us.
The Premier also announced at that time that a royal commission would be established to conduct a thorough review of options and alternatives to the current system.
I'd like to preface my remarks today concerning Bill 165 by stating that we have a Workers' Compensation Board that is a giant public institution that is totally out of control. It is piling up millions and billions of dollars' worth of commitments for which it presently has no current means of paying. It is jeopardizing the future economic security of thousands of injured workers and it puts at risk the financial viability of hundreds of companies.
Unfortunately, the bill we have before us does not address any of the serious issues that I have just mentioned, nor will it restore the Workers' Compensation Board to financial health, and it certainly is not going to address the very urgent problems plaguing this system.
This bill, which I believe to be fiscally irresponsible, only responds to the enormous pressure put on the government to fix the problem by their traditional supporters. This, I believe, they are doing just in time before they head to the polls. Unfortunately, the bill before us today places their own political agenda ahead of the interest of the total workers' compensation system.
It is unfortunate in that the government had the opportunity three and a half years ago when they were first elected in September 1990 to embark on complete and deliberate reform; however, they failed to do so. Now, because we have an election coming, we are seeing a lot of political manoeuvring and we have before us today a bill that is offering only one thing, that is, a quick fix to a very, very complex problem.
What we see in this bill are really the demands of organized labour: the demand for expanded coverage, expanded entitlement, beefed-up re-employment and an increase in benefits. We see absolutely no attempt to address the issue of the unfunded liability, which we all know stands at $11.5 billion. This plan, this bill does absolutely nothing to eliminate that unfunded liability, as was intended many years ago.
Now, the government has been able to get away with this political manoeuvring because, unfortunately, the public and the media do not understand the Workers' Compensation Board. They don't understand its problems. It is very complex. They don't seem to understand that the system is funded by employers, not the government. They don't seem to understand that the system was set up to remove the right of an employee to sue an employer in return for the employer's shouldering of liabilities for pension, rehabilitation etc.
This system, workers' compensation, was intended as a workplace accidents insurance plan. It was not intended, as this government seems to be intent on making it, as a universal system to compensate everyone for pretty well everything.
Let's take a look at some of the discussions and some of the debate that took place prior to the introduction of Bill 165, because I think that is extremely important. As I've mentioned, the government did have an opportunity to take some very, very concrete steps to embark on a complete and deliberate reform of the system almost three and a half years ago. Unfortunately, they waited until today, and so even before the end of their term, we're not going to see the issue of the unfunded liability addressed or any significant changes made to ensure that the system serves injured workers and employers better.
Let's take a look at the background. When did the Premier become interested in the issue of WCB reform? About a year ago he requested that his labour-management advisory committee, the PLMAC, individuals who were representatives of labour and management, look into the mess at the WCB. At that time there was tremendous hope throughout this province that, finally, there was going to be much-needed, meaningful reform take place.
The study that those individuals did confirmed that the system was bankrupt. It confirmed that the system was set to collapse. Last fall, after very extensive and very exhaustive research, the management representatives on the PLMAC advised, and I quote:
"Workers' compensation in Ontario is in crisis. The system is already technically bankrupt and owes workers $11 billion more than it has money to pay them. The debt is growing at the rate of $2 million a day and will triple in the next 20 years. Without fundamental reform, there will not be enough money to pay injured workers unless the taxpayer of Ontario assumes the payments."
If we take a look at the system with its unfunded liability today of $11.5 billion, we see that expenditures have been allowed to spiral continually and ever upwards to the point where the very sustainability of Ontario's workers' compensation is in grave peril.
In response to the need to deal with the system and ensure that there would be money available to injured workers in the future, the business caucus of the PLMAC in their November 1993 report said: "The unfunded liability must be reduced to zero. Without fundamental reform, the unfunded liability will climb to between $31 billion or as high as $52.5 billion." They went on to say that the WCB risks running completely out of assets by the year 2014. In other words, at that point there is a strong possibility that there will be no money to pay worker pensions.
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As I've indicated, we did have business and we did have management working together. There was some recognition that, indeed, the situation in this province was and is grave. However, just as an accord between the two sides was reached in early March 1994, within days that agreement fell apart. Within days of the accord it was discovered that there was in fact no commitment from labour and there was no commitment from this government to resolve the very serious problems facing the system, facing employers and facing injured workers.
In fact, within days the PLMAC business caucus wrote the Premier and said, "It became apparent that there is no basic agreement between business and labour that the system must be financially sound."
Indeed, there was also a letter from the ECWC, the Employers' Council on Workers' Compensation, which said, and I quote, "The demise of the PLMAC-WCB reform framework is hardly surprising given the apparent disagreement between business, organized labour and the government on the principles for reform."
The Canadian Federation of Independent Business wrote, and I quote, "The PLMAC-WCB reform framework cannot be viewed as a landmark deal between business and labour."
Finally, the Council of Ontario Construction Associations wrote, "Mr Premier, it is clear you do not have the authority to proceed with reform of the WCB on the basis of the failed agreement."
Yet this government has proceeded with the reform that we have before us today. They did it unilaterally, they have adopted the recommendations of the labour unions and they did not, and I guess they will not, return to the business community for much-needed advice.
What did the business leaders do? They issued a press release denouncing the plans and they indicated, on April 14, after the Premier spoke in the House, that what he was proposing was fiscally irresponsible and "it puts the future security of benefits for injured workers at grave risk." This came from David Kerr, the president and CEO of Noranda Inc.
George Peapples, president and general manager of GM Canada, wrote this:
"While the business community has worked very hard to develop proposals to ensure the sustainability of the system, the decision of the government to cherry-pick from the agreement has heightened the scepticism that a bipartite process can yield responsible solutions to public policy issues."
While this government has attempted to present the reforms before us today in Bill 165 as being based on the joint recommendations of labour and business, the reality is that the proposals before us today do not have support within the business community.
Unfortunately, the reality today is that the unfunded liability will continue to grow. This piece of legislation does not deal with the elimination of the unfunded liability. The reality is that there are no savings in the plan before us today. Any savings are based on future savings. There are absolutely no current savings at all. We also need to recognize that in 1993 the WCB had a negative cash flow of $74 million. So at a time when the board is broke, we have reforms before us today that are going to cost additional money.
The situation in this province is very serious, and to demonstrate just how serious the situation is, we need to take the time to compare this province to the rest of Canada. Our system in this province is in a state of crisis, unprecedented elsewhere in this nation. Other jurisdictions facing less critical pressures than Ontario have implemented tougher measures in order to confront the problems. Yet Ontario, with the second-highest average assessment rate, the highest assessment per worker at maximum earnings, the poorest funding record and by far the largest unfunded liability has chosen simply to delay and tinker, with the reforms we have before us today.
There was a report issued this year, on January 12, by the Financial Executives Institute of Canada. They did an exhaustive analysis of the performance of the WCBs throughout all of Canada and this is what they had to say about our province, Ontario. This was based on the 1992 performance.
They indicated that average premiums are the highest in this province. They were $3.16 per $100 of payroll. This compares to $2.24 in Quebec, $2.13 in New Brunswick, $2.15 in Manitoba and $1.84 in Alberta. They indicated that Ontario is responsible for 70.25% of the accumulated $15.8-billion debt, yet Ontario workers make up only 39% of the Canadian workforce.
They indicated that the volume of lost-time claims has steadily declined from a level of 208,500 in 1988 to 136,900 in 1992. Administrative expenses as a percentage of revenues continue to climb in this province, and at 14.8% it's the fourth-highest in the country.
The financial performance of the workers' compensation system in Ontario continued to deteriorate in 1992, and they went on to say that the unfunded liability continues to grow at an alarming rate.
In their report, they also stated that until recently there was no evidence that either the WCB or the Labour minister, to whom of course this board reports, acknowledged the severity of the fiscal problem. Benefit awards are significantly out of line with all other provinces and there is little evidence of any board initiatives to bring these costs down.
They also question the board's decision to build a new headquarters building in downtown Toronto at a time when approximately 20% of the office space in Metro Toronto was vacant. In fact, they indicated that this could be construed as evidence of a lack of fiscal responsibility. They talked about the increased assessment rates and the fact that there was considerable criticism from the employers in this province, some of whom were given increases of 33%.
They came to the conclusion that the employers in this province needed to continue to press for legislative changes that would work to eliminate the financial crisis at the Ontario Workers' Compensation Board as quickly as possible, and they recommended in their report that Ontario follow the lead of Manitoba, New Brunswick and Newfoundland and take, and I quote, "aggressive action to focus on reducing expenditures."
These provinces enacted legislation, as we know, that have quite significantly reduced the cost, but you know what? At the same time as reducing the cost, they have still maintained a very effective social safety net for the injured workers. However, they have taken action, and action is what is required here and action is what we're not seeing in Bill 165 to address the issue of the financial crisis.
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Let's take a look at Manitoba. They passed a bill on July 26, 1991, that reduced their unfunded liability significantly. They also introduced a new formula for calculating benefits due to injured workers. It was changed from 75% of gross to 90% of net. They reduced benefits to 80% of net from 90% after 24 consecutive months of receiving benefits. They terminated the indexing of pension payments to workers, in respect of pre-1992 accidents, at age 65. They limited stress claims to a reaction to an acute, traumatic event, and they required the workplace to be the dominant cause to qualify occupational diseases for compensation.
We have New Brunswick: They introduced a bill called Bill 55. It was effective January 1, 1993. Again, they were able to significantly reduce their unfunded liability. They reduced benefits from 90% to 80% of net for the first 39 weeks and 85% thereafter, with a freeze on indexation for injured workers receiving compensation until they reached the 80% level. They introduced a three-day waiting period for the commencement of benefits and they limited, as did Manitoba, stress claims to a reaction to an acute, traumatic event. They also went on to develop a strategic plan, with a mandate for a balanced system of workers' compensation that was going to encourage industrial competitiveness for the province and, at the same time, provide equitable programs for injured workers.
Let's take a look at Alberta because it is the most recent success story as far as reduction of the unfunded liability is concerned. I'd like to quote from the Calgary Sun, April 18 of this year, in an editorial entitled "A Way That Works." It says:
"The Alberta advantage the Tories seek is nowhere more evident than in the minor miracle of this province's Workers' Compensation Board. Nor is a more stark contrast needed than that available by looking eastward to Ontario, specifically to the chaotic, catastrophic condition of the province's WCB.
"Last week, Premier Bob Rae fired senior brass from the Ontario WCB and slashed inflation indexing of benefits in order to keep the board's debt below $12 billion. Without radical surgery, the shortfall between Ontario's WCB revenues and what it must pay in claims is forecast to be a staggering $31 billion by 2014. In the workers' paradise that was to be NDP Ontario, the Workers' Compensation Board is not only broke but publicly ridiculed as a laughingstock.
"Compare that to the Alberta experience where the WCB president, Dr John Cowell, and his executive board confidently predicted to the Sun editorial board last week that they are going to eliminate the unfunded liability by 1996, one year ahead of schedule. Most importantly, they'll do it without jacking premiums through the roof, slashing benefits to the bone, or subjecting injured workers to demeaning inquisitions just to get their payments. Indeed, Cowell said 64% of claims are now processed within two weeks, up from an abysmal 14% only two years ago."
At that time, Alberta's WCB was in a similar mess to Ontario's and faced an equally bleak future. Cowell and his team turned that around by insisting that the job of attending injured workers is a business like any other and must be run on prudent principles, prudent business principles. In that province, they have been successful because they have recognized that this must be worked on prudent business principles. Within Bill 165, we see no recognition of the fact that there needs to be turnaround management of the WCB.
Let's go back now to that unfunded liability, because if we don't deal with the unfunded liability, this province, as I've indicated before, is not going to have any money to give to injured workers in the long run.
What we have done in Bill 165 is we have gutted the experience rating, we have increased the interventionist powers of the board, we have provided the government with direct control over the WCB policy agenda, and we have ensured through way of the purpose clause that the board is compelled to increase worker entitlements.
We've done all this in a bill at a time when the system is technically bankrupt, when we have this huge unfunded liability, and even though the government suggests that money is going to be saved by these changes, as I indicated before, the reality is that there are no current savings in the plan whatsoever. The unfunded liability is still going to rise to $13 billion by the year 2014.
This is absolutely contrary to the long-term funding strategy that was developed by the business caucus. Even 10 years ago, if you remember, the employers in this province accepted high hiked rates in order to eliminate the unfunded liability by the year 2014. Unfortunately, this plan is not going to achieve that goal, and the government does not seem to be at all concerned that that's not going to happen or that the commitment to the employer community has been broken.
Many people asked us, what is the unfunded liability? I go back to what I said before. The media has difficulty with this issue because they don't understand it, nor do the public. In fact, oftentimes the media ask me, what's the unfunded liability?
The unfunded liability is the difference between the board's total assets, revenue plus investments, and the present value of the funds required to meet current and future costs of accidents which have already occurred today. For those who don't know and don't understand, that's the unfunded liability.
It's also important to reinforce the fact that this unfunded liability and the entire system are financed solely by employers in this province.
It's also important to remember that in the 1993 annual report, the Provincial Auditor in this province advised the board that it must develop plans to attack the unfunded liability as quickly and effectively as possible. However, it's obvious that the government in Bill 165 did not listen to the Provincial Auditor because we do not see any attempt to attack the unfunded liability as quickly and as effectively as possible.
This bill simply does not deal with the deep financial crisis that we're facing in the system. Unfortunately, by not tackling the problem of eliminating the unfunded liability, we are sending the wrong message to the investors throughout this world and also to the credit rating agencies of this province. They are looking to this government for signs that this government has its house in order. However, we know that the unfunded liability has caused the province's credit ratings to take a second look and they will continue to do so.
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Unfortunately, the other issue that the government didn't address within Bill 165 is the problem with the FEL, or future economic loss awards. That could potentially add $20 billion to the unfunded liability by the year 2014, and that issue was totally ignored in this solution we have before us today.
Let's take a look at what the government has introduced, what it is planning to do. Let's take a look first at the Friedland formula, which was part of the discussion that took place within the PLMAC discussions. However, the government has come out and said this: "There will be a new inflation protection formula known as the Friedland formula. That's 75% of CPI inflation less 1% with 4% cap. The new formula reflects inflation protection formulas that are used in the private sector and also in pension plans."
However, they said that an exception to the new inflation formula will apply. About 45,000 people will continue to receive full CPI indexation, and they indicated that these people would be those who qualify for the $200 pension increase, survivors and benefits, 100% post-Bill 162 wage-loss recipients, and 100% pre-Bill 162 pension recipients.
For 1995 the savings to the unfunded liability are projected to be $828 million. The new inflation protection formula, the Friedland formula that I've talked about, combined with improvements to early return to work and vocational rehabilitation will save the system a minimum of $18 billion over the next 20 years. These savings take into account the $200 increase to the pensions of the 40,000 older injured workers.
That is what the government said on the issue of the Friedland formula. What they unfortunately have done is they ignored the advice from the business caucus of the PLMAC and they have not accepted the fact that the system is not financially sustainable.
Because of a lack of action in this area, injured workers and businesses are going to suffer. When they had an opportunity to take courageous political action to save the future of workers' compensation, what they've done here is they've simply put off the real reform to another day and to another government. Probably we on this side of the House, our party, will have that opportunity to institute real reform at another day. We look forward to having the opportunity to ensure that injured workers will be entitled to benefits and that we don't put another business out of business because of increasing the assessment rates. Let's take a look at --
Mr Noel Duignan (Halton North): Your solution for injured workers is having a bag on the streets of Toronto; that's the Tory way.
The Acting Speaker (Mr Noble Villeneuve): Order.
Mrs Witmer: As I've indicated, there was support for the Friedland formula. However, what's happened here is that the key financial recommendations that were advanced were ignored, and they were so watered down that there are not going to be any savings to the system. Unfortunately, the solution put forward by the government has put the system very much at risk.
The business caucus had recommended that the Friedland formula apply to all claims, and now we hear that the government is going to exempt 45,000 people. One of the leading actuaries who assisted the management representatives of the PLMAC has estimated that the net financial effect of WCB reforms will be simply to cut the $11.5-billion unfunded liability by only $700 million. However, had benefits been de-indexed, had benefits not been enhanced, the savings would have been $3.3 billion.
Ten years ago, I told you, there was a long-term funding strategy developed by business in the WCB that was to retire the unfunded liability by the year 2014. Business accepted the long-term assessment rate hikes to meet this objective, and now they see that that objective is not going to be achieved.
Yet today the government, using a lot of voodoo economics, is telling us that the unfunded liability system, if you increase it to $13 billion, actually represents an $18-billion savings. It's amazing, isn't it, what the government can do? I repeat, they fail to recognize that the system is in crisis.
Let's take a look now at the new structure of the board. We're going to see introduced a bipartite structure. Unfortunately, bipartism is a social experiment that has been a proven failure, because what it does is ensure a strong element of partisan control over WCB policy development and WCB administration. Even the Liberals, who introduced bipartism to Ontario by way of the Workplace Health and Safety Agency, acknowledged in April of this year in their report on the WCB that it lends itself to political interference at all levels, and they acknowledged that bipartism doesn't work, is ineffective.
If this is so, and if the government had truly taken a look at the impact of bipartism, if it had taken a look at the Workplace Health and Safety Agency, why does it continue to proceed with this failed bipartism approach? By proceeding down this path, they are putting at risk the future integrity of the system. They are gambling with workers' benefits and employer assessment rates for purely partisan, political reasons.
Let's take a look now at the changes within the WCB policy area. We all know that one of the founding principles of the Ontario workers' compensation system is the deliberate, very deliberate, separation of the government from the administration of the Workers' Compensation Act. That was done to ensure politically free, arm's-length administration. The government was to design the legislative boundaries of the system, while an independent agency, the WCB, would oversee the implementation of the legislation.
This was done because even 80 years ago there was concern among the people who designed the system that an independent agency such as the WCB could be open to manipulation by partisan, political considerations. Since then, every attempt in the past 80 years has been made to ensure that the board is truly independent and that the government is unable to interfere in the day-to-day operation of the board.
However, in the government's amendments in Bill 165, for the first time we have unprecedented political control over the policy workings of the WCB being given to the government. For one year after proclamation, the Minister of Labour will assume complete control of policy. He or she, depending on whether the present minister is replaced or whether an election takes place, will have the power to issue binding policy directions to the board regarding its exercise of power and performance of duty.
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The politicization of the WCB board, of course, is also going to render powerless the new bipartite board of directors. It's simply going to make those individuals puppets. I believe the government should be speaking to the board through the laws it passes, not through the measures that are going to make a mockery of the very board the government is purporting to change.
Unfortunately, with the changes we see in the governance structure, with the changes we see in the unprecedented political control over the policy workings of the WCB by the government in the immediate future, the opportunity for consultation with the business community is certainly going to be decreased.
Let's take a look now at the purpose clause. This is an area where there had been consensus agreement reached in the PLMAC process. However, the government statement in Bill 165 is not similar in any way, shape or form to the consensus agreement that was reached. Remember that the purpose clause is, and will be, the basic principle which is going to guide the interpretation in each individual case.
Unfortunately, the purpose clause we have before us today is slanted in favour of labour. It will always, when in doubt, because of the way it is written, favour labour. The government says this about the purpose clause that's going to be enshrined in the Workers' Compensation Act:
"It will stipulate that the WCB is to provide injured workers with fair compensation, health care benefits, rehabilitation services and assistance in early return to work." The government has only extracted the features that were favourable to the one side, the labour side.
The government goes on to say, "The WCB will be required to ensure that developments in health sciences and related disciplines are reflected in benefits, services, programs and policies in a manner consistent with the purposes of the act."
The act is going to require the board of directors "to conduct itself in a financially responsible and accountable manner." Board members will have to keep the best interests of the corporation in mind when exercising their duties as board members.
WCAT, remember, isn't going to be bound by the financial responsibility and therefore it will still be able to go ahead and compensate for stress.
That's the purpose clause put forward by this government. The purpose clause had been advanced by the PLMAC business caucus originally. They very much believed in the need for a purpose clause to be enshrined in the act, because they wanted to ensure that a wise and needed balance existed between expenditures and revenues. They were concerned about the need to safeguard worker benefits and competitiveness of Ontario business.
However, that intent has been altered. The business proposal has been changed substantially, and unfortunately we have exactly the opposite effect. This purpose clause we have before us today does not ensure the competitiveness of Ontario business. The government's purpose clause today actually will force the WCB to increase entitlements even if job losses result. There is absolutely no recognition either, within the purpose clause, that the government is ultimately accountable for the system. Let's just take a look at this element of competitiveness and the fact that the government, within the purpose clause, has deliberately omitted the requirement for competitiveness, which I indicated was built into the New Brunswick strategy.
Mr Ted Arnott (Wellington): Mr Speaker, on a point of order: I think if you check, Mr Speaker, there is not a quorum present in the chamber.
The Acting Speaker: Could the clerk check if we have a quorum present.
Clerk Assistant and Clerk of Committees (Ms Deborah Deller): A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Clerk Assistant and Clerk of Committees: A quorum is now present, Speaker.
The Acting Speaker: The honourable member for Waterloo North may resume her participation.
Mrs Witmer: I'd like to return to the issue of the purpose clause. As I indicated, there was certainly a demand and a desire for the purpose clause within the act. This had been put forward by the business caucus. However, what I'm talking about now is that the government has deliberately omitted within that purpose clause the requirement for competitiveness and also the requirement for financial responsibility and accountability.
The recommendations by the business caucus would have ensured that the board would, first and foremost, assess the financial integrity of the system and that it would never expand entitlement to the competitive disadvantage of Ontario business. However, the government has chosen to omit this very important aspect of the recommendation. As I indicated before, the government's amendments are going to compel the WCB to expand entitlement. They are going to require the board to hike assessment rates to pay for the expanded entitlement even if job loss is the result. It's most unfortunate that it's going to have that very negative impact on the business community, because in the long term it could, as I've said before, jeopardize the payment of benefits to injured workers.
You ask, how can entitlement, if it's increased, result in job loss? When changes are recommended to WCB programs and services as a consequence of the advances in health sciences -- and this is put forward in subsection 65(3.1) -- cost issues are not going to be a consideration. This section is going to require the board of directors to evaluate the consequences of any proposed changes to ensure that the purposes of the act are achieved. And if you apply this to such issues as stress and chronic pain, it means the WCB will evaluate the changes consistent with the purposes of this act, which has no regard for the ability of the system to fund these improvements.
This has all happened despite the fact that business and labour had reached agreement on the inclusion of the financial responsibility of the purpose clause. Unfortunately, there is nowhere within this bill any recognition of the critical role that employers play in this system or their need for assistance of the WCB. In the purpose clause we see only the workers' perspective reflected.
Now let's take a look at re-employment. The government has indicated that the WCB will now have the power to review on its own initiative whether an employer has fulfilled its re-employment obligations and can levy a penalty under the existing provisions of the act. This is most unfortunate because the WCB has been given the power to expand upon the powers it already has, and we know that there are long-standing problems with the powers it already has. Instead of correcting those practices, the government is actually increasing the powers of the board.
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The re-employment provisions of the Ontario Workers' Compensation Act that were introduced in 1990 through Bill 162 are a crucial component of this province's workers' compensation system, and they confer important rights upon disabled workers along with significant obligations on their employment.
The policy objective of the legislation is clear. The employment prospects of a worker should not be disadvantaged because the worker sustained an injury while employed, and this is certainly a worthy objective.
Right now, should any worker be of the view that the employer has not complied with his obligation, the WCB has the power to conduct a thorough investigation; however, the change in the amendments now means that the board will have the power to mount an investigation even if there are no complaints made. In other words, even if there's no evidence of a problem, no evidence of non-compliance, the WCB, according to the change in the amendments, will be able to enter the workplace and it will be able to audit the employment practices of the employer: most unfortunate, the very intrusive powers that are being given to the board.
Let's take a look at the increase in worker benefits. The government has indicated that it will be increasing by $200 the pensions of injured workers, and this is going to apply to about 40,000 individuals. This is going to add $1.5 billion to the unfunded liability at a time when the WCB, as I've indicated before, is already experiencing a negative cash flow.
Let's take a look at experience rating. This was another area, by the way, where the PLMAC process had reached a consensus agreement as they had in the purpose clause. Unfortunately, the government in Bill 165 has ignored the consensus on these issues and it has forged ahead with its own agenda.
What they plan to do is that a new section of the act will require the board's existing experience rating program be modified to measure such matters as the employer's health and safety, vocational rehabilitation and re-employment practices and procedures.
What's going to happen here is that the experience rating scheme, which was the last opportunity for business to control the costs of the system through positive performance-based measures, is going to be stripped of the ability to do so. At the present time, the experience rating plan provides a thoughtful performance-based system to measure performance. It offers a balance between collective liability and employer accountability.
The PLMAC business caucus in its 1993 report of November provided resounding support for experience rating, and it said, "Experience rating has been an unqualified success and it has achieved its primary goals of reducing the frequency and severity of workplace injury and enhancing the level of individual liability," yet the government proposes to actually repeal the sections of the current act allowing experience rating. This will mean that refunds may be eliminated, that surcharges may be increased through purely subjective investigation by the WCB. The move in the amendments undermines the integrity of experience rating, and again it provides the board with unsurpassed interventionist powers.
This is not needed, it is not warranted, and I will tell you, it is totally counterproductive. It is counterproductive to establishing a good, cooperative relationship within the workplace, a relationship which should be established between the employer and the employee, because we now have the WCB given these unsurpassed interventionist powers.
Unfortunately, this type of government interference, this type of government intervention is going to damage our competitiveness because it is not going to make Ontario an attractive place to invest dollars. I would suggest to this government that you leave it alone. You should not be undermining the integrity of a proven, workable program: experience rating. You're making a terrible mistake by making these changes.
I've talked about the bill. I've talked about what's wrong with the bill. It's important that before I conclude my remarks, I spend a little time talking about what should be done.
Our party has been investigating. We recognize that the priority needs to be to eliminate the unfunded liability in this province. We recognize that if that's not done, there may not be future benefits for the injured worker in the system. We also recognize that the system's not working. It is not responding to the needs of injured workers. It is not responding to the needs of the employer community.
You only have to go into the constituency offices of the 130 MPPs across this province to know that the system's not working. Each day, our staff receive hundreds of phone calls from employees who are having great difficulty processing their claims through the system. The system unfortunately at the present time is mismanaged. It takes a long time to deal with claims and, unfortunately, there often is no response when the injured worker asks for information about the status of his claim.
Something needs to be done. We need to deal with the mismanagement; we need to deal with the unfunded liability. Unfortunately, the bill before us is probably not going to deal effectively with either those issues.
The Premier, I would suggest, should have continued to work with the PLMAC group. He should have taken a further look at the report that was tabled by the business caucus. There were excellent initiatives in there that had been supported and need to be looked at.
Number one, we must eliminate the unfunded liability. The government's revised target of $13 billion in the year 2014 is a betrayal to the business community in this province which has been subjected to increasing rates of assessment in spite of the fact, I might add, that we have seen declining accident rates.
We cannot continue with this high unfunded liability. We need to recognize that it is unfair to pass on to the next generation of workers and business the cost of today's accidents. We need to take a look at applying the Friedland formula to all claims. It would be consistent with other public and private sector pension schemes.
We should support the reduction of benefit replacement levels to 85%. We know that at the present time compensation at 90% of net earnings does lead to overcompensation. Manitoba has taken action. New Brunswick and Newfoundland have all taken action to reduce the benefit levels.
1940
We need to take a look at reducing the cost of the FEL awards, the future economic loss awards, by 15% to 40%.
We need to redefine "accident." This is absolutely essential. We need to ensure that in the definition of "accident" employment is the dominant factor, because the workers' compensation scheme is an accident insurance scheme. It was designed originally, 80 years ago, to compensate for injury caused by accident in the workplace, and yet we've moved away from that definition to the point where we now compensate almost everybody for almost everything. The system was never intended to do that. We need to redefine "accident" and make sure that employment is the dominant factor.
It's time for this government to show leadership. It's time for them to introduce reforms that are going to deal with the unfunded liability. There will have to be tough decisions made. They will need to be taken now. I would encourage the government to redraft the reform plans. I would encourage them to make the right choices in order to protect the system for injured workers in the future.
In conclusion, it is obvious that the reform plans of the government ignore the depths of the problem facing the Ontario Workers' Compensation Board. What this government is doing is simply putting off to another government, putting off to another day, the true task of reforming the system. At a time when this government had the support of both labour and management, at a time when, I can tell you, business was truly committed to working with the government, it ignored the need to make and take courageous political action. What the government has done -- and I said it when I began. I believe they're looking for a quick fix. I believe that what we see here today is a government putting its political agenda ahead of the interests of the total workers' compensation system.
Unfortunately, the government still doesn't recognize, and continues to deny, that the WCB system is in extreme financial peril. They have not done what the other provinces have done; that is, put the system on a sustainable financial footing for the future. I would urge them to do so.
Mr Kimble Sutherland (Oxford): Once again we have the member from the third party talking about the Workers' Compensation Board and about putting it on a stable financial footing, and once again I want to come back and look at the history of the Workers' Compensation Board.
What was the unfunded liability in 1980? It was only $400 million. What was it by 1985? It was $6 billion. What was it by 1990? It was $10 billion. They talk a good line about putting it on a solid financial footing. The history is that they could not manage the Workers' Compensation Board.
So how do they want to do it now? How do they want to deal with the problem? Put it all on the backs of the injured workers: "It's all the injured workers' fault. They're getting too much money."
They don't take into account the fact that if you're an injured worker and you are contributing to a pension plan you may lose all your pension benefits; that if you're an injured working contributing into CPP you're not able to contribute that. So what happens when you're retired and supposed to be supporting yourself? They don't take that into account, that people lose out on all those things. No, just penalize the injured worker. That's the very simple solution -- or even more, privatize it: "Yes, we'll get the private sector in and that's going to solve everything."
I will compliment the member for Mississauga West, because I think he dealt very effectively with the concept of privatizing the Workers' Compensation Board. Of course, whenever I hear about privatizing it, it would seem to me, "Fine, if you want to do that, then are you going to give workers the right to sue?" I mean, it was a Tory government in 1914 that brought in the Workers' Compensation Board and supported it. But you have no track record on managing it, and the increases in the unfunded liability from 1980 to 1985 prove that. It is this government and only this government that is taking the decisive leadership to solve the financial problems at the Workers' Compensation Board.
Mr Steven W. Mahoney (Mississauga West): While I didn't hear all of the speech, I have spent time with the critic for the Conservative Party on public platforms debating this and I know that there are differences between my party's position and the third party's position and clearly differences between our position and the government's position. But one thing I do know is that we all agree there is a serious problem.
When I heard the member for Oxford, it reminded me a little bit of the Speedy Muffler commercial about everyone pointing about whose fault it is and who's to blame for the taxes and it takes the guy from Speedy Muffler to come along and say, "No GST," or "No PST," or whatever, and settle it down. A little bit of a comical commercial and one used to promote the products of Speedy Muffler, but it raises a point.
The point is that if there has ever been an issue, and I say this as someone who generally is regarded as fairly partisan from time to time, it's that we've got to stop this kind of stuff, accept responsibility from all three parties in this place for varying degrees and various levels of allowing the WCB to grow to the point where the unfunded liability is $11.5 billion. Blaming the Tories or blaming Bill 162 under our administration does in no way release this government of the obligations to fix it today, because you have the limos, you have the control, you have the power. What we're saying, just one simple example if you want to talk about a simple opportunity that would send the message: the purpose clause, where you refuse to include a statement about running the board in a financially prudent manner. You claim it's somewhere else in the act. Why don't you put it in the purpose clause? You will simply answer and, in my view, quiet down those who criticize you for not doing that.
Mr Arnott: I'm pleased to rise very briefly and compliment the member for Waterloo North on her fine presentation this evening. I was here to listen to the whole speech and I thought she did an excellent job of summarizing the points that she has put forward on behalf of our caucus, as our Labour critic for the last number of years, constructive proposals. She's always been very constructive and very positive in her suggestions to the government over the last three and a half years that we've been here. She's never been critical of the government without offering a constructive alternative, and I want to commend her for that.
I agree with the member for Mississauga West when he said that it's time ultimately that we all assume some measure of responsibility, the three political parties, having governed this province in the last 15 years, some measure of responsibility and accountability for the workers' compensation system. Certainly the New Democrats have been in power for the last three and a half years and they have to assume their share of the responsibility for the problems that are there.
The member for Oxford in his hysterical way, frankly, tried to just blame everybody but the New Democrats for what's happening at the Workers' Compensation Board, as seems to be his normal bent.
Mr Sutherland: If you want to distort the facts, that's fine. But the record speaks for itself. You never dealt with it.
The Acting Speaker (Ms Margaret H. Harrington): Order.
Mr Arnott: No, the facts are the New Democrats have been in power for about four years and this bill, which makes some changes to the Workers' Compensation Board, does not address the fundamental problem that we see from our side. We want to see the benefits available for injured workers in the future. We want to see assurance of that and we're very concerned that if the unfunded liability problem is not addressed, then the future pensions of injured workers may very well be jeopardized. This bill does absolutely nothing to address the unfunded liability problem.
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In 1984, the Workers' Compensation Board did have a plan to address over time the unfunded liability problem, and the expectation was that it would be gradually reduced to zero over a period of 30 years. Since that time, there have been a number of changes in policy at the board which have meant that the unfunded liability is going to be extensive in 2014 if indeed some changes are not made.
I look forward to speaking further on this issue later on in the debate.
Ms Sharon Murdock (Sudbury): I listened to the member mostly on the television set while I ate my dinner and, as usual, she always works hard in doing her preparation for this, but I want to address one area that I think needs some clarification, both from what she said and from what I've been reading in my own remarks in Hansard.
It's in section 103.1, which is the section on the experience rating. Based on what the member was saying, the clarification needed is that the established experience rating programs that are already there will now encourage employers to reduce injuries, I think, and occupational diseases, promote vocational rehab and encourage return to work. It's added in Bill 165, and it lists the factors that the board must consider in determining whether a refund is available or whether there should be a surcharge.
Those factors are the employers' health and safety practices and programs, the employers' voc rehab practices and programs, the employers' return-to-work practices and programs, or such other matters that the board may determine appropriate.
Experience rating will still continue to measure the employers' accident costs, and I think that needs to be made absolutely crystal clear. The programs will be modified to include the health and safety programs. I think that's 103.1. Certainly, that's what we're hoping it says.
In regard to some of the others, there are savings immediately to the unfunded liability of $828 million as soon as the Friedland formula is established. We are concerned about the unfunded liability, and we agree with you; it cannot continue to go on the same way, and that's why we're bringing in these reforms.
The Acting Speaker: The member for Waterloo North has two minutes to respond.
Mrs Witmer: I thank the participants from Wellington, Mississauga West, Sudbury and Oxford. I think I would agree with a couple of the previous speakers. I don't think it helps to lay blame. We have an unfunded liability. The unfunded liability needs to be retired. My concern is that within Bill 165 there is no long-term plan to totally eliminate the unfunded liability, and I am certainly very concerned about that, as is the Provincial Auditor, that there is no-term plan, because again, I come back to the number one concern. If there is no money, if the system goes bankrupt, we cannot help the injured workers in the long run.
I would hope, in conclusion, that all three parties will continue to work together. I would hope that the Premier would go back to the business community. I hope that through cooperation, through taking another look at the reform package that we have in front of us, the government will realize it needs to balance what it's put in front of us here with the information that it has received from the business caucus, because to bring forward a bill such as it has without taking into consideration the need to address the fiscal crisis will not help injured workers in the long run. I hope the government will be willing to listen to all sides of the debate this summer as we head out and have our public discussions in the forum provided for us.
Mr Allan K. McLean (Simcoe East): On a point of privilege, Madam Speaker: I wonder if you could clarify the rules for me. I observed that there were four people who spoke. They had two minutes each. I understand that there are 10 minutes for questions and answers from members. That was not allowed, and I'm wondering if there simply are four people who are allowed to speak. If not, then I would appreciate your letting me know.
The Acting Speaker: I certainly will clarify. We have four participants in questions or comments and then the member who has debated has two minutes to reply. Further debate.
Mr Gilles Bisson (Cochrane South): It's with a certain amount of anxiety I can say that I've been waiting for an opportunity to comment on this debate in regard to Bill 165, an act that will seek to amend certain sections of the Workers' Compensation Act.
I want to say up front, because it seems to me it's been forgotten in this debate, what the Workers' Compensation Board is all about. I've listened to the critics of both opposition parties with interest in regard to their interjections and their thoughts about what they would do if they held the levers of power at the Workers' Compensation Board. Some of the comments they made and some of the ideas they raised, quite frankly, are sound ones, but I think we've forgotten a very important point as to what the Workers' Compensation Board is about, and that's injured workers.
I want to remind people, especially those employers watching, that the worker who goes out and gets injured at work does not do so because he or she chooses to do so that morning; it's because it's an injury of work.
Mr Anthony Perruzza (Downsview): Hear, hear, Gilles. You tell them. Okay, wake up.
Mr Bisson: I think we need to remember that.
I get a little bit nervous when I listen to some, especially the Conservative members, talk about a way of solving the problems at the Workers' Compensation Board, solving the unfunded liability by way of reducing benefits to workers. I think we all recognize that there's a severe problem at the Workers' Compensation Board; we can all agree. But I think we have to remain fast, and we need to remember what the Workers' Compensation Board is all about, and that's in regard to injured workers.
I know that all members in this House, all 130 of us including the Speaker, deal with the Workers' Compensation Board, if not from time to time, on a very frequent basis in our constituency offices. I find it highly interesting that some members can come into this House and speak about the Workers' Compensation Board and speak about the act the way they have, especially when they're out there representing injured workers in their own constituency offices. So I find that somewhat interesting.
I can say, coming from the riding of Cochrane South, from the community of Timmins more specifically and Iroquois Falls-Matheson, that the Workers' Compensation Board is probably the one issue that everybody can agree on that they don't like. If I speak to employers, if I speak to injured workers, everybody's mad at the Workers' Compensation Board for different reasons.
I can tell you, as a person who worked in industry, there are many workers out there who have been injured over the years who have had extreme difficulties in trying to get their claims adjudicated through the Workers' Compensation Board in a fair and efficient manner. That is added to a whole other issue, which is that when workers get injured and they find themselves unable to return to work because of the injury and at the same time are having difficulty with the Workers' Compensation Board in regard to their benefits, it brings on a whole bunch of other stresses within that household that sometimes we forget about. I think we should think about it, what it means to the family.
I deal with a number of people in my constituency office who are legitimately injured workers. There's an accident, it's been reported that there's an accident, the employer agrees there was an accident -- obviously the employee agrees; the employee's got the injury -- and the doctors agree that there's an accident. But for some reason within the Workers' Compensation Board there are either problems accessing voc rehab services -- for people who don't understand what that is, that's a portion of the act that attempts to rehabilitate the injured worker if he or she cannot return to their former job or there's a problem with their benefits.
I don't know about you, Madam Speaker, but I do know that what most injured workers I talk to, the vast majority of them, seek through the Workers' Compensation Board is simply this: a fair compensation for their injuries, should they become injured; that if they become injured, first of all, some rehabilitative services be done medically in order to be able to return them to work, and if they're unable to return to their former job, that some sort of voc rehab services be provided so that they can return to work, and 95% of injured workers want exactly that.
Yes, and I will say it, there are those people out there who would want to take advantage of the workers' compensation system, but they are not the majority. I know some people watching out there will say: "What do you mean, it's not the majority? Certainly all of the injured workers out there are out there because they want some kind of a pension." Not so; 90% of injured workers out there, I would say, are people who have been legitimately injured at work and who find themselves in a very difficult situation at times with the Workers' Compensation Board.
This brings us to this act. I think in fairness to the former Liberal government, it had tried to deal with the problems at the Workers' Compensation Board through another act that I'm not going to get into a lot of debate about, but what they sought to do is deal with the unfunded liability. What they basically did was find ways of massaging the benefits to injured workers through a deeming process and through a different system by which we would approach compensation if a person became injured after 1990. That's what we would refer to as the future economic loss system and the non-economic loss system.
What they were trying to do was actually not a bad idea. What they were trying to do is find a way that if an injured worker becomes injured, he or she is rehabilitated as quickly as possible and returned to work. That in itself, I think, we can all agree is what we want to do.
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The unfortunate part is that we ended up, through a deeming process, having a system that is a subjective way of assessing benefits to a worker or what a worker is or is not able to do. Consequently, we are seeing now the effects of that through our constituency offices and all other advocates out in the province, the unions out there that represent injured workers, the Ontario worker advisers. We have a number of workers out there who are not being fairly compensated for the injuries that they sustained at work.
What we're trying to do under Bill 165 is form some interim measures in order to deal with some very difficult problems at the board at the same time that we're able to refer to the royal commission on the Workers' Compensation Board some very difficult issues about how we approach the overall problem at the board. Because what has become apparent, I think to all of us in this House, is that the Workers' Compensation Board over the years has become an extremely politicized issue.
When members talk about the Workers' Compensation Board in this province, I think what we need to remember is that when you look at the same debate in other provinces, it doesn't have the same amount of political fervour within the debate that we have here in the province of Ontario. Because of that, it's been extremely difficult in this province, under the administration of the Davis government and Mr Grossman under the Conservatives, under the tenureship of Mr Peterson under the Liberals and now under the tenureship of Mr Rae, to try to bring together injured workers and employers together at the same table to try to address some issues that they both agree need to be fixed. So what we set out to do in 1990, and what leads to Bill 165, was to do exactly that.
We've always believed, in opposition, and we believe now, that what we need to do to be able to solve the problems of the Workers' Compensation Board is not to try to dictate to the board what needs to be done, through government, but to find a way to empower both the workers and the employers to be able to work together in order to solve some of the very difficult problems at the board.
So what we did is we reappointed the board in a way that it was an equal representation from both the injured workers' groups, through unions and other organizations, and the employers. Lo and behold, that group came together and started dealing on some very difficult issues, some of which are contained within Bill 165, and some other issues that I'll talk about later that were referred out to the royal commission.
The point that I'm making here is that even after three years of work on a fairly non-partisan -- there's a certain amount of partisanship on that board. Employers come to the board with a certain expectation in regard to dealing with some issues that are important to the people they represent, being the employer; the same as the issues that injured workers bring to the board through their organizations in regard to how they see the board should be run. But overall, both those groups try to struggle with some very difficult questions.
I think the biggest question we have to ask ourselves, other than the whole question of how we deal with injured workers in a fair manner, is the question of the unfunded liability. That debate has been going on in this province way before we came along in 1990. But since 1990, and under the direction of Odoardo Di Santo and Brian King, the board has tried to deal with the whole question of the unfunded liability in a fairly progressive way. What we have found is that after a lot of hard work on the part of the board and on the part of Mr King and Mr Di Santo, there has been quite a bit of movement on being able to deal with that whole issue.
I want to say before I go any further, before I forget, because I wanted to say this in the debate: I think that Mr Di Santo and Mr King have been done an extreme amount of disrespect on the part of a number of people within this province in trying to assess the problems of the board squarely on the back of Mr Di Santo and Mr King. In all credit, the work that Mr Di Santo did and Mr King did was to try to bring the parties together to deal with some of these very difficult issues, knowing full well that where they were going with the solution to this problem was to form the board in an entirely different way that it wouldn't be meddled by with politicians. In the end, they would lose their own jobs.
If they left the board, it is not because the Premier of the province gave them the big boot. It's because, under their direction, they recognized that we had to change the makeup of the board, and that the board chair had to be appointed by the board and not be a political appointment of the governing party. Mr Di Santo, with his leadership, managed to get the board to deal with that issue, and that is why Mr Di Santo is not there; not because he got the boot, but because he understood from the very beginning that we have to find a way to depoliticize the board. Yes, there will always be some politics, but we have to find a way to stop playing the politics around the Workers' Compensation Board and deal directly with the issues.
What we have in fact when they started dealing with the unfunded liability is that they've managed over their direction, what Mr Di Santo and Mr King did directly, outside of Bill 165 and outside of everything else that's been done, when we took power in 1990 as a New Democratic government, the unfunded liability at the Workers' Compensation Board was somewhere over $9 billion. I'm not going to get into talking about how much it was under the Liberals or under the Tories. I think we all accept that we've all had a hand in this thing. Governments have had difficulty in trying to deal with the Workers' Compensation Board for all kinds of reasons and I'll stay away from that part of the debate.
But to the credit of Mr King and Mr Di Santo, through internal measures that they'd done themselves within the Workers' Compensation Board, not by kicking the heck out of workers and telling them to take away benefits from injured workers but finding ways of rationalizing how we perform the work at the Workers' Compensation Board and how the board itself is organized, they managed to reduce the rate at which the unfunded liability was growing. And today we find ourselves, yes, with a higher unfunded liability, somewhere over $11 billion, but if they had not done what they had done at the beginning of 1990, the unfunded liability today would be anywhere from $2 billion to $4 billion higher than it is now, depending on whose numbers you want to believe.
So I think we need to be fair to Mr Di Santo; we need to be fair to Mr King. They did an extremely good job at the time they were at the board in trying to deal with that issue, recognizing that for quite different reasons both employers and employees wanted the whole question of the unfunded liability dealt with in a different way. Employers wanted it to come out of the benefits to workers; workers wanted it to come off other ways, including increases in assessments. What Mr Di Santo did was to balance the interests of both the workers and the managers in being able to find a way to deal with the unfunded liability.
The problem has not gone away. We know that if for some reason nothing were to happen from this point on, the unfunded liability at the board would increase over the next number of years. So that is why Bill 165 is being brought forward as one of the interim measures that this government wants to take in order to reduce the rate at which the unfunded liability is increasing. And what this bill will do, because of a number of things having to do with better and clearer direction about how the board is going to be run, the question about the Friedland formula in regard to the indexing or deindexing of benefits and a number of other measures found within Bill 165, is we're going to be in the position where the unfunded liability at the board will be reduced by $21.6 billion over the next about 20 years, in a ballpark number. That's pretty significant savings.
When I hear members in this House rise and talk about how this government is not taking any action in dealing with the Workers' Compensation Board, I would remind them of two things. First of all, it is a highly politicized issue. Employers and employees are trying to drive the board in different directions at times for quite different reasons, and what we need to be able to do is, like I say, as the second part, is to try to find a way to bring those two parties together because in the end you have the one group that pays the benefits and on the other side you have the group that receives the benefits, and somehow or other we've got to bring those two together so that they work a little bit closer together.
So I think what the bill does in regard to the unfunded liability is approach the question of the unfunded liability in a fair manner and not à la Ralph Klein in Alberta or what they've done in Nova Scotia and other provinces where they've attacked the unfunded liability issue by strictly going after the benefit of injured workers. What we're trying to say in the province of Ontario is that, yes, we need to find ways of dealing with benefits in a way that they're not abused, but certainly we cannot be in a position in this province where we start taking away benefits from injured workers who legitimately deserve those benefits, because if that's what the Conservative members and the Liberal members are talking about, I certainly want to be no part of that because I see first hand the people in my riding, the people of Cochrane South who have been injured over the years working in industry who have had a great deal of difficulty in dealing with the board.
Some people would believe that all kinds of people are receiving all kinds of money in regard to the Workers' Compensation Board. I need to bring you into my office on a Friday and Saturday morning when I do constituency appointments and you'll find that's not the case, that a lot of people are still trying to get what they justly deserve through the Workers' Compensation Board.
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What we've done in the act is simply this: We've approached the problem from a couple of points. The first thing we're doing in the act, is what should have been done back in 1914 when this act was put in place, and that's to put in a purpose clause. I can't believe that in 1914 the workers of this province got coverage under the Workers' Compensation Board in exchange for not suing their employers and when we put the act in place, we never put in a purpose clause. Unbelievable. How we ever got into that I don't know.
I'll read just quickly what the purpose clause says for those people who don't have the act and may be watching at home -- and I would note that I'm competing against Stanley Cup hockey tonight. It's the final game tonight.
Ms Murdock: That's why there's nobody in the opposition except one lonely soul.
Mr Bisson: Nobody's watching, in other words.
The purposes of the act are "to provide fair compensation to workers who sustain personal injury arising out of and in the course of their employment or who suffer from occupational diseases and to their survivors and dependants." I think that's fairly standard. We need to recognize that's what the act is all about, and why we want that in the purpose clause is, we want to make sure that we always remember that. We always remember at the end of the day that the Workers' Compensation Board is there for exactly that.
The other thing that we're putting in the purpose clause is, we're saying that it has "to provide health care benefits to those workers," should they need them, and "to provide for the rehabilitation services and programs to facilitate the workers' return to work."
Now, we already have rehab services within the present act, but we want to make sure in the purpose clause that we set that straight in the purpose clause. One of the main things that we wanted the Workers' Compensation Board to do is not to pay benefits and leave people at home, but we want the benefits going towards trying to rehabilitate the workers and getting them back to work. I'll get back to that in a few minutes.
So the purpose clause, simply put, is in order to set out clearly what the direction of the act is about and to protect injured workers in regard to having anybody interpret the entirety of the act in a different way than what it should be all about, which is providing benefits to workers in the event they become injured.
The other thing the act does is deal fairly directly with the question of voc rehab. Again, "voc rehab," I'm speaking as a WCB person here. Voc rehab is about providing training to an injured worker. One of the problems we have right now -- and a lot of people don't recognize this. I'll give you a fictitious example. I'll pull out of my memory a particular case that I've seen in my constituency office.
An injured worker gets injured. Working in a mine, he gets injured and finds himself under a doctor's care because of that particular injury. Often what happens with the injured worker is that for some reason or other, because the board is dealing with close to some 400,000 claims per year -- 373,000 claims last year -- the board forgets about the injured worker and the injured worker is left at home under doctor's care for six months, eight months, 12. I've seen it up to over two years on total temporary disability -- that means 90% of predisability income -- without ever the Workers' Compensation Board popping their head out of the woodwork and saying, "Oh, my God, we have an injured worker here and we've got to do something about it."
Is that entirely the fault of the Workers' Compensation Board? To be fair, I guess it is, in a sense. You don't have enough people to administer the act is basically what it comes down to, in regard to the number of people who are in need of benefits, who get injured every year. But one of the big problems we have is that there's no check and balance in the system in regard to the rehabilitation part of the act.
There is no onus upon the employer to make sure that voc rehab services are offered to the employee to get that employee back to work. The one thing we've learned, and I think we've all learned this as advocates of injured workers, is that if the worker becomes injured today and the injured worker goes off on doctor's care, the faster you can get that worker either back to school or, preferably, back to his original employer, the better it's going to be for everyone, including the injured worker.
The problem is, once you leave somebody out there and the Workers' Compensation Board forgets about that worker for a long period of time -- I'm going to say it -- it gets fairly easy to develop some bad habits. If I leave anybody at home with 90% of predisability income for long enough, it gets to be a pretty good thing. Now, don't misunderstand what I'm saying. It's not everybody out there in that situation, but it does happen.
Then, the Workers' Compensation Board, the employer and the advocate are stuck there trying to deal with an injured worker who has really deteriorated when it comes to attitude and returning back to work. Then it becomes a heck of a job to try to remotivate the worker to get back to work. By then, the employer doesn't want to take the worker back in the first place, because if they did want the worker back, they would have been trying to do something about it a heck of a lot sooner than two years after the occurrence of the accident. I'm not saying that happens in every case, but it happens in a number of them that I've seen.
What you've got is that under this act we're saying there's going to be not only onus but responsibility on the part of the employer to make sure that voc rehab services are provided to the employee, and if voc rehab services could be offered within the workplace that that be done, and that the Workers' Compensation Board support the application of the employer when it comes to being able to retrain the worker to do another job if he or she becomes injured.
I'll give you a good example. I don't want to use the name of the company because it would be unfair. It's a present case that I've got in my constituency office. The injured worker is a raiseman. A raiseman is a person who drills. In a mine, a raise is like a shaft going upward. The injured worker is a raiseman. He had injured his heel some years ago falling down a raise, unfortunately, while doing his work. He has been able to continue on his job as a raiseman for a long time with the injured right heel that he had because the partner that he had for those years was helping him along, wasn't making him climb up and down the manway two or three times a day with powder and drill bits and the rest of it.
What ends up happening is that the worker works with this particular partner for a number of years, and all of a sudden, the worker, being the industry that it is, finds another job that's better paid somewhere else and leaves, leaving the injured worker alone for another partner to be assigned later.
The new partner is assigned to this injured worker and says: "No, no, I'm not going to be climbing up and down the raise for you every day. What I'm going to do is I'm going to demand that you go up and down the raise the same amount that I do." Some people would say: "That's only fair. Why should the uninjured worker have to take up the slack of the other guy?"
The injured worker says, "I'm going to go see my mine captain and I'm going to complain that they try to find me another job that I'm able to do because I can't be climbing up and down this raise every day with this problem." It was not only the heel; it was the arch bone within the foot, and he was not able to climb up and down the ladders.
He went to see his mine captain and said, "Listen, if you can give me a job either on the scoop, you can give me a job on a jumbo or you can give me a job even diamond drilling or drilling in a drift, I'm able to do that. I might take a little bit less money in bonus, but at least I'll be working, and I won't have to feel the pain that I've been feeling over the past couple of weeks climbing up and down the raise every day the way that I have." The employer says, "No; categorically no."
The long and the short of the story is that after about three, four months of this and the injured worker going off a day here, two days here, a week there, because of the problem that he's having with his foot, eventually quits the employer because he's not able to do the work any more and the employer is not willing to retrain that particular injured worker.
You can imagine what happened. The Workers' Compensation Board says, "We have no liability to this injured worker because he quit his job." If the employer had at that time tried to rehabilitate the worker into another job, the guy could've kept on working.
The long and the short of the story is that the injured worker appealed the decision and won, because the board recognized at one point that the employer did have a responsibility, because it was the accident employer, to try to provide modified work for this particular employee, and what the employer had not done is provide that part. What this act will do is exactly that.
This particular case -- we talk about saving money, and it would've cost the employer absolutely nothing in this case because this guy's able to do work; the difference is he can't climb ladders but he can do all other jobs in the mine pretty well -- is that if the employer had done what he should've done at the very beginning, the amount of money that we've paid to the Workers' Compensation Board through the appeals process, the amount of money that we spent through the whole voc rehab because we had to send the guy off to college for two years, and the amount of money that we spent in job searches wouldn't have been spent by the Workers' Compensation Board. That's what the voc rehab services that we're looking at within this act are designed to do. They are designed to say that the employer has a responsibility.
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Yes, the employer may not like that. I know most employers in my community, if I go talk to Mr Miraka or Mr Perry or Mr Holmes or other captains of industry -- and I say that with respect to the people in my riding -- they would disagree. They would say, "Why do we have to become the rehabilitation people?"
The fact is, and they may not like this, that if somebody's working with your employee and gets injured you have a responsibility. The employee is not allowed to sue because of the act and the employer does have a responsibility. I would say that it'll be cheaper in the long run. We need only to look at Kidd Creek and Falconbridge mines in my community, which have had a fairly good record of rehabilitating workers over the last 20 years in my community. They've managed to keep their assessment at the board down by doing exactly that; by doing what this act is calling for. They're doing it in different ways and I have some problems about how they've approached it at times, but that's for another day. But what they've basically recognized at that particular employer is that it's far better to try to rehabilitate the worker directly back into the workforce without having to put the worker on benefits if at all possible. That's what we attempt to do under the act, and that is going to save a lot of money for the workers' compensation system over a number of years.
I've only got about five minutes so I'm not going to be able to go through all of this, but one of the other very important components of what this act does is it deals with the whole question of structure and how the board is going to be governed. In the past, this is how it worked: If you were elected as a government in 1990 as New Democrats or as Liberals in 1985, 1987, and as Tories before, you appointed the chair of the board, and the chair of the board basically carried out the dictates of what the government decided to do at that time when it came to the Workers' Compensation Board.
Quite frankly, that is one of the reasons that we find ourselves in the mess that we're in now. I remember an election campaign fought in 1981 or somewhere in the early 1980s with the Tories where they increased assessments to injured workers, the amount of money received, in an attempt to be able to appease workers before going into an election, and they did that because they had the control of the board. Clearly, you don't do it for those reasons. If injured workers are entitled to money, you give it, but you don't do it for political reasons. I don't think that's the way that should be dealt with.
Anyway, what we're doing is, we're saying, "No, we have to change the system and we have to get away from the politicizing of the board as we have it now." What's going to happen under the act is that Bill 165, when it comes into law, over a period of time, about six months, you're going to have four directors who are going to be appointed from workers through their unions; you're going to have four directors who are going to be appointed by -- I've got to say, not appointed by the government -- four worker representatives and four employer representatives as directors appointed by their own peers. What that means to say is that it's not going to be the governing party that influences who's going to get on; it'll be those people responsible for making those appointments. There are going to be two directors who will be appointed by the Lieutenant Governor in Council from the general public and there are going to be two vice-chairs appointed, one by the worker group and the other one by the employer group.
What you've got right now is a bipartite board structure. What that board's going to do in the end is go out and hire the person to run the Workers' Compensation Board, not the government. What that's going to allow us to do for one of the first times is to clearly give a mandate to the person responsible to the Workers' Compensation Board to carry out the gist of what we have not only within this legislation but what the board is all about: maintaining an equitable system when it comes to dealing with injured workers and their injuries in regard to compensation and at the same time dealing with the financial issues of the board.
The other part of the act and what it's going to do is that it's going to for the first time include a memorandum of understanding within the act that says basically this: Every five years the board has to enter into a memorandum of understanding with the Ministry of Labour in order to set the policy that the board has to go on in dealing with certain issues. One of the things that's never happened in the past is there has never been that kind of undertaking. I think the last time there was an agreement signed was back in 1982 under the former Tory government, and we want to put that within the legislation in order to make sure that the board doesn't become a totally independent structure that just goes off and does what it wants. It has to have some direction from the people of Ontario through this Legislature, and that's why it's being included.
Unfortunately there's not enough time to go through the Workers' Compensation Board; God, you can go on a good two hours speaking on the issue. But I just want to sum up by saying this: Let's not forget what the board is all about. The board is about protecting injured workers in the event that they become injured in regard to trying to maintain their income level. If the injured worker is able to return to work, the Workers' Compensation Board under the system has an obligation along with the employer to return that injured worker to work. That's what we need to be able to do. But in the event that that doesn't happen, we've got to remember that there's a responsibility. I think we need to be careful when we start talking about trying to balance unfunded liabilities by way of ratcheting and taking away benefits from injured workers, because they're not the ones who created this problem; they are just injured workers, simply that. They are people who happened to get up one morning, went to work and got injured or were killed, and for that they should not be punished.
Mr Bruce Crozier (Essex South): It may be because of the lateness of the day or it may be because we get more mellow as we go on, but I do agree with a number of things that the member for Cochrane South has said this evening. I think he's spoken well on behalf of the government to this bill, albeit we may disagree on some things, but I appreciate the attitude which he has given. There's only one thing that shocked me, and that was that he said he remembered an election in 1981. Frankly, I didn't think he would be old enough to remember that.
In any event, I look forward to the rest of the debate. You'll notice why I'm looking forward to it, no doubt. I just thought, while I was sitting here looking across, if 12 or 13 of you would leave, I would have the province in the palm of my hand.
Mr Perruzza: I want to commend the member for Cochrane South for his very enlightened comments with respect to the bill and the issue that's before the House. However, I want to pick up on a point that he made about what the function of the Workers' Compensation Board is in his view. Reflecting on that, I just simply want to pick up on a comment that was made earlier by the Liberal member for Mississauga West, Mr Mahoney, and expounded on and broadened by the Conservative member and Conservative critic Mrs Witmer.
The Liberal's comments were this: that in his view the primary function of the board is a function that is employer-oriented, employer-geared and simply to serve the interests of the employers. I just want to remind both him and the Conservatives that the Workers' Compensation Board was built and created to serve not the functions of the employers but the functions of the workers, the people who were in the mines, who were involved in logging, who were involved in railway construction, who were involved in the heavier industries, who were getting hurt on the job, who were suffering injuries and not being compensated. That's why the Workers' Compensation Board was created, essentially to serve that interest. I'm saddened that hasn't made it into their comments and their participation in the debate.
Mr Larry O'Connor (Durham-York): I want to comment just briefly on the member for Cochrane South. When we get into this Legislature it's far too easy to get wrapped up in the rhetoric of, "Well, the government doesn't do this good enough; the government doesn't do that good enough." The member presented, I thought, a very focused participation in his time on the debate. He talked about the bipartite sense of the reforms, that it's going to allow the WCB to remain at arm's length from the government, with a stronger sense of the rehabilitation element. That was lacking. He talked about what was lacking in the purpose clause. The sense that the WCB should focus on getting injured workers back to work, that's a very important sense.
He probably could have spent a little bit more time on the fact of the $200 a month that was increased to our most vulnerable injured workers, the ones who had been injured years ago. He could have spent a lot more time dealing with that, because I know that the opposition isn't going to talk about the needs of those older injured workers that this government recognized.
We hear about the unfunded liability that started -- we first saw it when the Tories were there, and it grew. For half a decade it just grew, and then the Liberals. We're actually trying to do something with that. I think that he could have gone on at length about that, but he didn't because he wanted to focus on what the Workers' Compensation Board was about. It's dysfunctional; it's not working. So we've got a royal commission studying that.
I would be misleading the Legislature if I was to say that the injured workers in my riding are completely happy with the reforms that have been proposed. But they're pleased at the fact that a government recognized that reform is necessary, and that's what the member for Cochrane South focused on.
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The Acting Speaker: We have room for one further participant in questions or comments. If not, the member for Cochrane South has two minutes.
Mr Bisson: Good. I have two minutes plus two minutes; it gives me four.
I want to, first of all, thank the member for Essex South for his contribution. You asked if I was around in 1981. Yes. If I'm looking younger, it's because of Oil of Olay. Keep them guessing. Remember that commercial? That dates prior to 1981. It gives you an idea that I'm a little bit older.
I'd like to thank both my colleagues on the government side of the House for their comments. Yes, I chose not to speak about other parts of the act, and I could have gone on at length in regard to section 147 in regard to the older injured workers' section of the act. I chose not to do that because I wanted to talk about what the act is fundamentally about.
I know that there are a number of injured workers in my community, I'm sure the same as others, who will benefit. Yes, they are the most vulnerable of the injured workers: the older workers over age 55 who find themselves with inadequate pensions from the Workers' Compensation Board and with inadequate pensions from CPP. There are people out there trying to survive -- and let's not forget this; these are real stories -- on less than $1,000 a month, older workers who are out there, injured and unable to return to work. There are people I worked with when I worked at the McIntyre Porcupine Mines and for the Pamour and Royal Oak group who became injured and could not return to work and are living on less than $1,000 a month. That is really unfair. One of the things that we tried to do is ameliorate that to a certain extent.
I say again, let's not forget the purpose of the act: The act is there in order to provide for compensation in the event that a worker becomes injured. How the Workers' Compensation Board deals with that clearly has to be a system where we try to rehabilitate the worker almost immediately. The quicker we can rehabilitate the worker back to his or her former employ, the better off we're all going to be. It's going to be better for the injured worker, better for the employer and better for all of us.
Mr Crozier: I rise this evening to speak on Bill 165, the act to amend the Workers' Compensation Act. I fully realize that this evening may be one when many of our constituents, although they may be interested in the debate that we have this evening, may have reason to flip away from our debate on occasion, so I assure you that this side of the House will not call for a quorum should we slip below that.
Mr Len Wood (Cochrane North): They're all watching the hockey game.
Mr Crozier: That's exactly right. Or, if they are wrapped up in the stimulating debate that we have going on, I'm afraid during the call for the quorum they might switch and then we'd lose them.
In any event, I don't think that in any way diminishes what it is that each of has to say. I think that, if not for my own benefit, it may be for the benefit of some of those who are with us that we do take a little look at where we have been. It's been mentioned on occasion through the debate today, but I think it deserves repeating, mainly because when I prepare my notes I have no idea what someone else is going to say and therefore I don't know whether I'm going to repeat it.
It has been said and, as I said, it deserves repeating, that workers' compensation as we know it had its beginnings in 1910. Sir William Meredith has been mentioned on occasion. He was appointed by the provincial government of the day to inquire into the laws relating to the liability of employers to make compensation to their employees for injuries. At that time, he studied, of course, other systems that were in existence and found that compensation systems had one major flaw in that they tried to place the responsibility for the accident and the cost involved on either the worker or his employer and this led to litigation. That then was one of the reasons that he tried to define and form a workers' compensation act that would address that problem.
It's been said a number of times today that we shouldn't put this liability on the worker, nor perhaps should we put it on the employer, but what we're all trying to do, I think, is to come to a reasonable solution to what has grown to be a rather difficult problem.
In any event, it was Sir William Meredith who founded the Workers' Compensation Act on four or five basic principles:
The no-fault principle, that being that the first principle completely disregarded the question of negligence, except for cases where a no-fault injury or a serious disablement was solely attributed to the serious and wilful misconduct of the worker.
The next was statutory benefits. The second principle emphasized that following an accident, the need of an injured worker was the most important consideration. I hope that we have unanimous support for that finding. The test for this need was based on the worker's ability to earn full wages for more than seven days after the accident.
The third principle was collective liability. It indicated that compensation costs rest solely on employers, who are collectively liable, except, in those days, for railways, publicly owned companies and municipal corporations, which were all individually liable.
The fourth principle designated that a three-member commission be appointed by the Legislature to administer the act's provisions. Workers' compensation in Canada is based on a historic compromise whereby workers give up the right to sue at common law in return for a comprehensive, no-fault, public compensation system. The principle of collective liability must be adhered to whereby in return for freedom from lawsuits brought by workers injured on the job, employers --
Mr Duignan: Employers don't starve.
Mr Crozier: -- bear the burden of occupational injuries and disease collectively by paying assessments into a central fund.
Please don't distract me because this will take longer and then we'll all miss what we're trying to get at.
Mr Duignan: You're not making any sense.
Mr Crozier: I'm sorry if I woke you.
Mr Duignan: You haven't made sense since you started. Is this another Liberal flip-flop that's going on?
The Acting Speaker: Order.
Mr Crozier: I can wait as long as you can. I'll let the clock tick on.
I said earlier I didn't come here in a confrontational manner. We all have the opportunity to speak to these issues. If mine appear to be a little bit boring to someone, perhaps I'm the only one who's learning from it.
Having said that, I'll attempt to point out a few areas of this bill where we may not agree on the specifics, but I think, as I said before, we all should be working towards the same end.
The changes, I think, are the government's attempt to deal with financial and administrative problems at the Workers' Compensation Board, and we all agree that there are problems. There is an unfunded liability that's projected to exceed $30 billion by the year 2014. We all want to address that unfunded liability, and I think it's been said, at least by the government side and by our side, that we all share, all three parties, in that liability.
Raising premiums to the private sector during a time of increased foreign competition will not benefit us. Business unrest at the present time concerning possible increases in the types of injuries to be compensable, one of them being stress, for example, and the regulations governing workers' compensation -- these are all, I think, common problems that we share, problems that may not be much different, no matter what government may have been governing the province over the last few years.
To address some of these concerns, the government has announced a number of changes to the existing Workers' Compensation Board, including reducing inflation protection for awards to the injured workers except in special circumstances; changing of the chair position at the Workers' Compensation Board to that of president; establishing a royal commission to examine the Workers' Compensation Board's long-term future; formalizing the board's bipartite management structure, and awarding $200 per month to older workers receiving Workers' Compensation Board awards.
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Bill 165, as we have mentioned, is the legislation that implements a number of these changes. Under the provisions in this act, older workers who had been receiving permanent partial disability pensions will receive an additional $200 per month, as I said.
Now, instead of remaining fully protected against inflation, workers' pensions will be indexed to 75% of the CPI minus one percentage point. The indexing factor cannot be greater than 4% or less than zero. I have to think back to this afternoon when it was suggested that a computer might be needed for some of this, and yet my colleague from Mississauga West went on to explain it all and I thought he was doing probably as well as most computers could do. In any event, an example is that if the price index increases by 4%, the amount of the pensions is increased by 2%. Removing full inflation protection will reduce the unfunded liability by more than $10 billion, it's estimated.
Other provisions of Bill 165 include:
-- The formal establishment of the Workers' Compensation Board's bipartite board of directors. Even though the board's management structure of labour and management representatives already exists, Bill 165 codifies this situation.
-- Provisions that strengthen the Workers' Compensation Board's mandate concerning vocational rehabilitation. Interestingly, one provision in the bill allows for the board to investigate and levy fines on employers who fail to cooperate in the vocational rehab programs.
-- The mandating of a memorandum of understanding at least once every five years between the Workers' Compensation Board and the Minister of Labour covering the reporting requirements of the board to the minister and government policy affecting the operations of the Workers' Compensation Board. This provision, we would point out, is similar to the section of the Power Corporation Act in order to achieve some legislative oversight of Ontario Hydro.
I suppose I would be expected to make some criticism of Bill 165. After all, that's why we're here and that's why we're sitting so late this evening, in order that, I guess, you might give me an opportunity to do that. So I hope some of the things that I mention, as I said earlier, in the same vein as our colleague from Cochrane South, are in the best interests of employers and employees and the Workers' Compensation Board in general.
I would like to say that during the past three years, our leader Lyn McLeod, former Labour critic Steve Offer and the current Labour critic Steve Mahoney have tried to point out examples of bad management at the Workers' Compensation Board, which included the board's rising unfunded liability, premium increases faced by employers and the apparent inability of the Workers' Compensation Board management to get agreements between employers and workers on change. I think we would all agree that that's a difficult thing to do.
When I say the "inability" to do that, I suppose at any time it takes a conciliator with great ability to get workers and employers together on an issue such as the import of workers' compensation.
There's one thing, though -- and this was before I joined the opposition -- that I wish could be reversed, because it is misunderstood if there is a good reason for it in the general public, was the construction of the $200-million headquarters of the board in a time of economic downturn. As I say, I wasn't here at the time. I don't know how it got started. Goodness knows, if I bring it up, it may have been started some way that I wouldn't like to hear. But in any event, it's unfortunate that we weren't able to change the construction plans of those headquarters, because it's very difficult for the public to understand in a time of restraint.
The government has suggested that a royal commission be put in place that will allow study of the problems of the WCB. It was suggested earlier today that what might happen is that the conclusion or decision or recommendation of the royal commission may not be brought back to this place before there is another election and a possible change in government.
It's our suggestion -- and I suppose only because we have alternate suggestions -- that the proposed changes in Bill 165 won't be sufficient to solve the problems at the Workers' Compensation Board. Instead of making substantial changes to the board, we feel that the government is continuing the same structures and operations at the board which are responsible for some of the financial and operational problems of the board today.
For example, it's proposed to maintain the existing bipartite managerial setup at the WCB. Yet the recent failure to reach a deal between employers and workers concerning major funding and operational issues makes it clear that this structure needs revamping.
In the paper called Back to the Future, our Labour critic has proposed broadening the board of directors of the Workers' Compensation Board to include other groups that affect the workers' compensation system such as the medical community. One of the observations is "Comprehensive Medical Observations." The consultations that were carried on were "very effective in assembling the views of the many stakeholders who are involved in the delivery of workers' compensation. To this end, the input received from the medical and chiropractic communities has been invaluable. Further to this, the outreach tour that developed this paper recognizes that if the system is to work, the medical and chiropractic communities need to have greater input. The first person that an injured worker must consult with is the medical practitioner in the determination of the degree of injury. Early intervention is the key to a patient's rehabilitation and re-employment."
This afternoon our Labour critic went on to outline a number of non-partisan appointees to a board that would be balanced and broad in its approach. I needn't repeat all of them but certainly the Ontario Medical Association and the Ontario Chiropractic Association were two.
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We feel as well that Bill 165 doesn't address the question of rising premiums to employers. We do feel that the legislation reduces the potential increase in the Workers' Compensation Board's unfunded liability, but it does nothing to lower the existing employer premiums. As a result, we feel that companies which already pay Workers' Compensation Board rates far higher than their competitors in other jurisdictions are not going to be more competitive as a result of Bill 165.
We also feel that the suggestions must make better use of the oversight provisions of the government to maintain a tight rein on the Workers' Compensation Board. In other words, management at the board in the past was able to gain approval to build its new headquarters without a full vetting of cabinet.
The provisions on Bill 165 for a memorandum of understanding between the board and the minister offer a new chance, though, for the government to exercise some authority over the decisions of the board. This provision is similar to one that already exists in the act governing Ontario Hydro. Especially with the recent episode of the possible purchase of the Costa Rican rain forest by Ontario Hydro, we would hope that similar situations would not arise with other bodies, such as the WCB.
I received a letter from an employer close to my constituency, not exactly within the boundary but close by. It's from Hike Metal in Wheatley. They were in receipt of the communication from the Employers' Advocacy Council regarding the reform of workers' compensation in Bill 165. This employer concurred with the understanding that "industry was to be consulted on any reform." However, this employer goes on to say -- and there are other examples of it, but I use this as one -- "I have concerns in regard to the highlights I have read and would like a full comparison and explanation of any changes before this bill is passed." The employer asks that we voice their concern, we voice employers' concerns, and that this be explained to them before any legislation is passed. So I think there's not only concern out there by workers about the changes that this bill would make but also by employers.
But despite assurances that business would be consulted before the legislation was introduced, it passed first reading without any consultation, and it's suggested that the bill imposes further costs and penalties on employers and won't solve the fundamental problems in the system. But I would hope and I expect -- and perhaps it's because I'm not totally familiar with the system -- that if and when this bill passes second reading, then some of the employers will be given the opportunity, as well as employees, as well as other interested groups, to comment on the bill. I just want to add that in the introduction to the document that we've put out, Back to the Future, there were a couple of statements that I think go again to what our Labour critic said this afternoon, that anything contained in this document doesn't criticize the current government but tries to point out some of the areas in which he feels the government might take advice and move. I'll quote from the foreword, in fact, and it was signed by Steve Mahoney, our Labour critic.
"This paper is an attempt by Liberal leader Lyn McLeod, the Labour critic and the Ontario Liberal caucus to stimulate debate, analyse the problems" -- notwithstanding the fact that I may not be stimulating this evening -- "and propose possible solutions in an attempt to save the troubled Ontario workers' compensation system. It does not represent party policy but rather is a series of recommendations for discussion as we build towards our final positions on WCB reform."
I will be concluding my remarks shortly. I just want to say that in my former world, prior to entering the provincial realm of politics, for 22 years I was in a small retail business. I think over those years, yes, there were problems with the WCB and with some of the results, decisions that have come from it, but if I rely on my own experience I think for the most part the employees at the WCB took their responsibilities seriously. They worked under some very difficult conditions at times, but I think, if I could speak on behalf of some small businesses, there was always an attempt to arrive at the best solution for the worker and for the employer as well.
I have found, though, that since I've become a member of provincial Parliament the number of calls that we get has surprised me -- and I'm certainly not telling anybody in this place anything new -- regarding difficulties with workers' compensation. What I find to be the most difficult is that initially the normal response is that we want to help the worker, but there are those occasions where there's nothing that can be done for the worker. The WCB has done its job; it has made its decision. It's gone on to the workers' adviser. Perhaps the employer adviser has been involved. The most difficult thing is to tell an injured worker nothing more can be done.
There is a suggestion, I believe, or if it is not in this document it's been made, that we should work towards a system where the decisions will be made in a fair and equitable way but that perhaps our role as MPPs should not be brought into it. Not to say that none of us want to help out constituents when it comes to this, but I think that our constituents in many cases think there's something magic that we can do, there's something their member can do that the Workers' Compensation Board has not been able to do for them.
So if there's anything that we can do in all of this or if there's anything that can be added to all of this discussion and in the final analysis, the decisions that are made on changes, I would hope that it would take the adversarial position out of this and that decisions can be made, workers can be compensated when they need it and employers will also be happy with those decisions.
I see my time is drawing to a close. I think it's time that I moved on.
Mr Bisson: More, more.
Mr Crozier: See, they're falling over. Some of them are even falling over, they thought so much of it. So everybody come to attention; I'm concluding.
Mr Bisson: It was the most eloquent speech that I've heard in this House. My God, I see members rolling down the aisles, physically rolling down the aisles, after that speech. I must say, I've never seen this in all my time in the House, and I would like to commend the member for such a delivery.
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The Acting Speaker: Any further questions or comments? Seeing none, the member for Essex South may respond if he wishes.
Mr Crozier: No, I need not respond to that.
The Acting Speaker: Further debate. The member for Wellington.
Mr Arnott: I'm pleased to rise tonight to participate in this important debate on Bill 165, An Act to amend the Workers' Compensation Act, and I hope that everyone's able to remain in their seats, or standing, while I make my presentation.
Mr Bisson: Explain it for the people at home.
Mr Arnott: We've got the hockey game on tonight, so I doubt very much if there are too many people watching our presentation. But we do have an important responsibility here tonight and we have important issues to discuss around this workers' compensation system. We all accept, I think, and agree that the system is in a mess and that steps have to be taken to address the problems at the Workers' Compensation Board.
Hon Floyd Laughren (Deputy Premier and Minister of Finance): Be a red Tory tonight. Be the only red Tory in that caucus.
Mr Arnott: I'm not a red Tory, Floyd. You've got me wrong.
I think this bill, brought forward by the government for first reading on May 18 and now we're experiencing second reading, in some way is an effort on the part of the government to address some of the problems at the Workers' Compensation Board.
There's a lot of history to the Workers' Compensation Board. Some of the members, during the course of this debate, have talked about the extensive history, going back to 1914. I won't go back that far, but over the last three and a half years, since the New Democrats took power, there have been a number of issues that have arisen during the course of debate in this House.
We've talked about the unfunded liability from the perspective of our caucus, because we're very, very concerned about the long-term financial viability of the board so that, over time, injured workers are going to be able to continue to receive the benefits that they need, especially the ones who are on pensions who can't go back to work because of injury.
When we go into the more recent background of the developments leading up to this bill, we recall that on April 14 the Premier announced that the Minister of Labour would be introducing reforms to the Workers' Compensation Act. I recall very well that announcement was made in the House at approximately that time. I believe it was when Odoardo Di Santo, a former NDP member of the Legislature and more recently the chairman of the Workers' Compensation Board, as well as Brian King, the vice-chair, were asked to take on other responsibilities, I guess, within the government. I'm not sure what's become of them, but they're no longer in those positions.
A number of senior management changes were made, including the appointment of William Blundell as the transition team chief, and I applaud the government for that particular appointment because I think that was a positive step. Then there were a number of other changes too. Mr Copeland came in in a senior position of responsibility.
These changes announced at that time and the plan that the government put forward were supposed to be the result of the recommendations made by the Premier's Labour-Management Advisory Committee, which was set up some time ago as a consultation mechanism on the part of the government to try and determine a broad consensus of opinion as to what changes should be made. Unfortunately, a number of critical suggestions made by that committee were actually omitted from the plan that the Premier announced on that day.
The Premier also announced that a royal commission would be appointed to establish a thorough review of the options and alternatives to the current system. Of course, that review is ongoing, but it's very likely that the royal commission will not have a chance to report back to the government in time for the government to respond to any of the changes. We'll likely be into an election campaign, I would think, before then.
The Minister of Labour, who is responsible for the Workers' Compensation Act, moved first reading of this bill on May 18. He has indicated that the primary goals of the government are ensuring the future financial viability of the system, early return to work for injured workers and the protection of the most vulnerable workers.
I think the bill's key issues include a purpose clause, which wasn't in the previous act; provisions for a bipartite board of directors; provisions for getting rehabilitated workers back to work more quickly; a new formula for the indexation of benefits; and a new $200-a-month increase for pensions of certain injured workers, some of the most seriously disabled, I understand. But I think the bill fails in one of its central features.
One of the central provisions that the government talked about was the need for the preservation of the financial viability of injured workers' claims over time. Of course, that again is the key feature of what we have been saying in our party, the key aspect that we think ought to be addressed, and we're very concerned about the unfunded liability problem. It's projected that the unfunded liability problem right now is about $11.5 billion, which is far in excess of what it was in 1980, as we've heard during the course of this debate.
There's a lot of misunderstanding, I think, and really lack of understanding about what the unfunded liability is. Of course, the unfunded liability, quite simply, is the difference between the board's total assets and the present value of the funds required to meet current and future costs of the accidents which have already occurred. So it's an actuarial figure. It's a projection into the future, really, of what the board's obligations are going to be in the form of payouts to injured workers versus what the board anticipates bringing in in the form of revenues.
We know the workers' compensation system is financed exclusively by premiums, or assessment rates, which are paid by employers. That's the system we set up many, many years ago and still maintain.
We know also that in 1984 the Workers' Compensation Board accepted the fact that it had a severe potential problem in the form of its unfunded liability and it decided that in the future it would try to have its future obligations meet its future revenues. So at that time, in 1984, the board adopted a full-funding strategy to ensure that at some future date its assets would meet its liabilities. The funding strategy was designed to raise assessment rates to levels adequate to cover the current and future costs of each year's new accidents and to generate a surplus above this amount sufficient to retire the unfunded liability within 30 years, which of course was 2014. We're now 10 years into that plan, and we're farther away from the initial goal of 10 years ago.
The full-funding strategy really has governed the workers' compensation assessment rates every year since 1985, with the exception of the 1991 rate freeze. Assessment rate increases of 15% for three years were followed by increases of 10% for the next three years.
Between 1984 and 1989, the board's strategy to eliminate the unfunded liability was on track. However, the unfunded liability in 1990 increased more than was anticipated under the original funding strategy, and we recall two reasons why that occurred. Bill 162, which was the Liberal government's changes to the workers' compensation system that it brought in during its mandate, created new benefit entitlements for injured workers that previously they had not been entitled to and in fact raised the costs to the board, adding nearly $1 billion to the board's unfunded liability. As well, of course, in 1990 the recession started to deepen, and that reduced the revenues to the board.
In February 1992, though, after the New Democrats had been in power for approximately two years, the board issued a funding strategy discussion paper. The paper was really criticized by the employer community, because it only provided options for either increasing assessments or extending the period to retire the debt from 2014 to 2024, adding another 10 years to the previous time span, the 30 years of the original plan to reduce the unfunded liability to zero, and noticeably absent were any proposals which would reduce the real costs of the system.
At that time too, a report by a consultant named William Mercer concluded that the critical problem facing the Workers' Compensation Board had less to do with the economic downturn and much more to do with the ability of the board to responsibly and effectively manage its operations.
Bill 162 expenditures, as we had seen, had really far exceeded even the highest projections that were done at the time by the Liberal government, and therefore business had asked the Provincial Auditor to launch an in-depth review of the implementation and the future economic loss and rehabilitation provisions of Bill 162 to determine the reason for those cost overruns.
Of course, in the Provincial Auditor's report in 1993, the auditor advised the board that the board really had to develop plans to attack the unfunded liability as quickly and as effectively as possible. The auditor really was concerned, and I think shared the concern that our caucus has articulated, that without a plan to address the unfunded liability problem, the future benefits to workers might possibly be in jeopardy.
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The WCB at the time said in response to the auditor's report, "The board of directors hopes to develop and adopt a plan by early 1993 or 1994. One of the elements of the plan is the funding of the program." The government members might argue that this Bill 165 constitutes such a plan; I would argue that's not the case.
In my opinion, the consequences of not dealing with the unfunded liability could have a much wider impact on the province by reducing its ability to access the debt markets -- our access to borrowing. My colleague the member for Waterloo North today asked a question of the Treasurer, and I thought it was a good question, trying to get at the root of how the unfunded liability may affect our overall debt picture in the province and to what extent our debt rating perhaps would be reduced unless the unfunded liability problem were addressed.
A Globe and Mail editorial back in November 1993 -- I'd like to read that -- said, "Ultimately, if we're convinced that they're not going to be able to fund it or we'll have to fund it with tax dollars, that thing's got to go on the debt level of the province." This was a statement made by Walter Schroeder, president of the Dominion Bond Rating Service. "It would probably raise the [province's] debt level rating by 15% to 20%."
There's real concern within the bond rating community that unless the unfunded liability of the Workers' Compensation Board is addressed, the overall financial picture in the province is in jeopardy, and I think again we must say that this bill does not address in any way the unfunded liability problem.
Business leaders have escalated this issue to the Premier's attention recently, and in June of 1992 the Premier announced the appointment of the Premier's Labour-Management Advisory Committee, which has been discussed in the course of this debate, and meetings have been held to discuss the future. Recommendations of course were made which were not fully followed up upon by the government.
The people in Wellington county, whom I'm privileged to represent, find that the WCB does not meet the needs of the injured workers who go to the board for assistance when they're hurt. It does not meet the needs of the employers who require service when they have a problem with their assessments, for example.
I have a letter here that I'd like to read from an employer who lives in Guelph actually, just outside my riding, but I think it's fairly indicative of the concerns of the employer community with respect to workers' compensation. It's a letter that was addressed to the Minister of Labour, the Honourable Bob Mackenzie, back in February of this year. It reads as follows:
"Dear Sir:
"I must protest at this time workers' compensation policies regarding NEER costs to my firm. Our costs have gone up dramatically over the years."
In 1989, they paid about $13,000; in 1990, just over $13,000, but in 1991, $40,000, and in 1992, $20,000. No, I'm sorry. The claims they paid out were actually decreasing over time but essentially their assessments were going up.
He says:
"I just wish my grocery business would give me such a return on my investment. Last year, on $5,327,299, the total income after all taxes was $20,473, and I own the building, not charging any rent to the business.
"In 1992, we had a staff member off for some time with a motion injury. We did our best to have her return to a lighter job as soon as she was able, training her for this but paying her the same rate she was getting in her former position, a rate higher, I might add, than the experienced girls in this job were getting, so she would not be drawing from WCB any longer. We did our best to do everything suggested to reduce their payout. The total payout from WCB in 1992 was $10,400, and for the year we paid WCB $20,374, so they only made $9,973 on our account.
"They projected future costs for 1993, because of 1992 claims, at $16,435, but only paid out $1,098. Based on all this, the WCB computer says that we owe a further $4,647. This makes my 1994 costs $20,650," plus additional costs of $4,647 for a total of $25,297.
He talks about the efforts that he made to get a response from the Workers' Compensation Board. He had a meeting with the Workers' Compensation Board and he had great difficulty in terms of getting any response.
He goes into some of the other issues that affect his business that are government-controlled. He says that last year his company paid out to various levels of government $115,953 in taxes for the employer health tax, municipal taxes, Canada pension, unemployment insurance, workers' compensation and company income taxes. "In 1994, we are facing costs of $5,000 to $6,000 for three weeks' WHMIS training for two people. In addition to this, there is talk of a new training tax. The government says it is concerned about unemployment but it most certainly will get worse unless small business is given some relief from some of these regressive taxes.
"Is it any wonder that companies are leaving Ontario in droves? We pay too many taxes in this country.
"As a result of too many taxes and predatory pricing of the chain stores, we could only add to the unemployment ranks 44 full- and part-time people. Taxes most certainly have a real bearing on the outcome.
"More regressive taxes most certainly will help dictate who the government in the future will be. Taxpayers will revolt unless relief is given.
"I know of many small business owners who would love to sell but they cannot, simply because there are no buyers. Who would be crazy enough to go into business in Ontario? Our company is in a loss situation so far this company year even though we have been in business since 1965, own the real estate and watch costs very closely.
"The government must reduce their costs to reduce taxes. Think seriously about this."
Again, this is a very thoughtful letter, but it really says that this single individual, who owns a retail grocery store in Guelph, has virtually no confidence in the government. He has virtually no confidence that the government is going to do anything but hurt his business. Any step that they take, he feels, obviously, implicitly in what he's saying, will hurt his business.
I ask the government: Will this individual invest one additional dollar in terms of creating jobs if he believes the government is against him, if he believes that the workers' compensation system is stacked against him? I will answer it as well: He will not. This is one of the problems that we have been facing over the last three years because of the fact that business people have very little, if any, confidence in the New Democrats as a government. They're not investing and they're not creating the jobs that we need.
I think we have to look at what the role of government ought to be with respect to workers' compensation. In my opinion, I don't think it's up to the government to run the WCB, and of course, part of this bill will enhance the political control of the WCB by the government. I think it's the role of government to set up a structure to ensure that people who are injured on the job and because of their injury are unable to work receive fair compensation, but that's setting up the structure and allowing the structure to do the job.
I think it's important, too, that government policy, to the extent that it can, attempt to encourage a reduction in the number of accidents in the workplace. I think that's a very important responsibility of government. I'm not sure that the New Democrats, in spite of their rhetoric, have taken the policies that have actually impacted directly on the numbers of accidents we're experiencing.
The Workplace Health and Safety Agency which has been set up to, we're told, train workers has proven to be a disaster, in my opinion. I don't think it's training the workers that the government claimed would be trained. I recall the initial projections of how many workers would be trained for safety reasons, and those objectives, I know, have not been met.
That agency was set up as a result of the Liberal Bill 208, which sought to address and encourage a reduction in the number of accidents in the workplace, but again it has not been successful in meeting the objectives that the government set for the agency or that the agency set for itself.
We've had a number of complaints from small businesses over the last number of months with respect to the Workplace Health and Safety Agency. They're concerned about the costs of the safety training. I believe the cost is excessive. They're concerned about the fact that in many cases the extent of the training, the numbers of weeks that the government through the agency is expecting businesses to send some of their key people, the duration of the training for some of the jobs, is unreasonable and it's too long. And especially in this time of economic difficulty, there are a great many small business that literally can't afford to comply with the requirements of the Workplace Health and Safety Agency and will not be able to participate. So in that sense, I think that indicates in some way where many of the failures of that agency have come from. If the Workplace Health and Safety Agency is failing, if workers aren't being trained with respect to safety, then we're not likely to encourage a reduction in the number of workplace accidents.
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Overall, the Workers' Compensation Board has had, I believe, two major failures.
It has failed the test of good fiscal management. We see that again in the fact that this bill does not have an explanation of how the board will deal with the unfunded liability problem and the future projection of the unfunded liability at $11.5 billion. We have seen that with respect to the WCB going out and building a new administrative building for itself. I believe the cost is something in the range of $150 million. We have seen that over the course of the last number of years. Good fiscal management has not been a feature of the WCB over the last number of years.
It has also failed with respect to the test of providing good administrative management. Service delivery at the board continues to be a major problem. I don't know how many members of the Legislature make the calls themselves to the WCB. I know many of us have staff who do that for us, who assist us in that respect. But if you call the board, you have great difficulty getting through to a living, breathing person. That is a major problem for the injured workers as well because they feel they're really not being given the time of day or any adequate service. Sometimes you leave messages on these voice mail machines and you don't get a call back for days. Sometimes you write letters to the WCB and you don't get a response for weeks, even months. That is absolutely unacceptable from a public agency. That issue must be addressed too.
The adjudicators at the Workers' Compensation Board have a morale problem. They feel, I think, that they're overworked and they're always being yelled at. But I think in many cases they're not able to make the decision and, as a result, they feel they are powerless in a sense. I think that issue must be addressed as well.
The administration at the board is chaotic. Files are being lost which can't be retrieved. Adjudicators receive files they know nothing about. They seem to be shuffling files around from one adjudicator to another to another, which further frustrates the injured workers.
The incidence of fraud is also a major problem. I think that falls under the lack of good administrative management. The estimates of fraud at the board are anywhere between $150 million and $500 million, which are absolutely phenomenal numbers. We see the premiums paid by employers going into someone else's pockets in a fraudulent way. That simply must be addressed as well.
That's a 20-minute summary of what's wrong at the WCB. What should be done at the WCB is what I'd like to conclude with.
Our caucus has released the Common Sense Revolution. We have some specific suggestions as to what should be done in a number of different areas of governance. We address the workers' compensation issue, and Mike Harris has committed, should he form a government, to cutting workers' compensation premiums by about 5%. We've said this will save employers an estimated $98.5 million.
Further, we'll implement the five-point plan that we've talked about for a number of months. The first point within that five-point plan is that we feel the Workers' Compensation Board should adopt a moratorium on all new entitlements until there's a plan in place to deal with the unfunded liability. We feel that expanding coverage or benefits in the face of looming bankruptcy is irresponsible, and we would impose a moratorium on the expansion of entitlements either by legislation or by regulation or by interpretation. Of course, this bill doesn't do that.
Secondly, we feel we should improve the management of the workers' compensation system by giving more control to the stakeholders. We would, for example, eliminate the politically appointed chairman and fill that position with a top-notch insurance executive. Given that Ontario's workers' compensation system is equivalent to the eighth-largest insurance company in Canada, we feel it would make sense to ensure that an insurance executive would fill the chairman's office.
Third, we all know that the net benefits for many workers' compensation recipients are actually higher than what they received while working. This does not make sense and is not sustainable over time. It should be reviewed and addressed.
Fourth, we've said that to help achieve the new WCB management objectives costs should be controlled and we should better serve injured workers. To do that, we need value-for-money audits and other spending controls. In our opinion it's absolutely ridiculous what's been going on at the WCB in terms of its spending. Particularly, the new office building is an example that we would cite.
We've talked about the merits of examining privatization, and that is something our caucus still feels ought to be examined. We feel that contracting out some of the administration and the provision of workers' comp services, enlisting private sector expertise to develop and implement less expensive and more effective ways to retrain, rehabilitate and respond to the needs of injured workers so that they can re-enter the workforce, would be desirable. We also feel that we need to investigate the possibility of private sector training as an alternative to the current approach, which is serving neither employers nor employees.
Finally, and this is our sixth point, we believe that we have to look at the question of who pays for workers' compensation. Right now, as we know, it's 100% employer-funded. Many people have argued -- and we're interested in looking at this -- that there should be more accountability to the system and it should be less open to abuse. The way we could do that is by incorporating some form of worker copayment to give workers a stake in ensuring that the system is well run.
That's where we're at with this bill. It doesn't pass the tests of what we in opposition have said ought to be done with respect to workers' compensation reform. A great many of the issues I see are still outstanding, and the government probably will refer those to the royal commission. But I must say that this bill should not pass in its present form. I hope that the government will consent to send it to a standing committee of the Legislature for further review and for public hearings over the summer months, because really this bill is not what we need today from the government with respect to workers' compensation reform.
I would just make one closing comment, to urge the government to at least give some consideration to the points that are coming from the opposition with respect to this bill. It's been a good debate, I think, and we've had a lot of constructive proposals put forward by the opposition parties with respect to this issue.
Mr Sutherland: I appreciate the member for Wellington participating in the debate and expressing concerns on behalf of his constituents, as the member does on several occasions. I did find interesting, though, a few points that he raised, because he didn't mention or talk about efforts regarding rehabilitation of injured workers. He didn't mention about how we got to the large unfunded liability. I know the third party is very sensitive about being associated with blame for that, but I think it has to take some responsibility. They said earlier in the debate: "It's not what happened in the past. We've got to look to the future."
The reason we've got to take dramatic action today to preserve the future of the WCB is because of past mismanagement. We do need to make some reference to the fact that the unfunded liability was only $400 million in 1980 and it was up to $6 billion by 1985, and up to a further $10 billion by 1990.
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I think his points about rehabilitation, raised that way, are important. It also brings into account the importance of prevention, because if we really are going to get a handle on future costs and keep them under control, then we need significant prevention efforts. I do find it interesting, though, that while many business people have been complaining about premium increases, I did receive some information from, I believe, the injured workers' network that indicated serious injuries in the workplace have increased by about 28% over the last three to four years. That information clearly tells me that businesses and workers, everyone has a lot more work to do in terms of ensuring that workplaces are safer, that there are fewer accidents so that therefore there are fewer payments out to injured workers, fewer expenses. That helps to deal with some of the financial difficulties at the Workers' Compensation Board, and I hope the member for Wellington would keep that in mind.
Mrs Witmer: I'd like to take this opportunity to congratulate my colleague from Wellington for a very thoughtful and succinct presentation. What he has attempted to do is summarize the views of the various stakeholders involved with the workers' compensation system. He's tried to represent the views of the small business person, since he is the critic for that portfolio. He's spoken about the impact of WCB on the injured worker. He's talked about the employee at the WCB and some of the difficulties that they experience in trying to deal with the claims and trying to deal with the system. He has represented those points of view extremely well.
We all know that there are difficulties, there is mismanagement. As I said before, we have the issue of the unfunded liability that stands at $11.5 billion. He has indicated that we cannot continue to allow continued mismanagement. We cannot allow the fraud to continue, which he estimated to be between $150 million and $500 million. We need to deal with the unfunded liability. He has shared with us as well the PC response, the six-point plan for action as to what we would do in order to ensure that the system does respond to the needs of both the injured worker and the employer community and also to ensure that the unfunded liability can be eliminated by the year 2014.
I would say in response to the member for Oxford that he has talked repeatedly this evening about the debt at the WCB being incurred by the PC Party. I would say to him, it was our party, in 1984, that did put in place a funding strategy that would have eliminated totally the unfunded liability by the year 2014.
The Deputy Speaker (Mr Gilles E. Morin): Your time has expired.
Mrs Witmer: Unfortunately, it's others who have gotten off track.
Mr O'Connor: I appreciate the opportunity to comment for just a few moments on my colleague the member for Wellington. He didn't go to any length in his description about the tough cost-saving measures. He criticized the unfunded liability, said that the government didn't do anything about it. The fact is that they've dealt with it in a very direct fashion. He didn't talk, as far as I'm concerned, with enough emphasis on the fact that there are a lot of vulnerable older injured workers out there. The $200 a month is going to needy injured workers. The need is there, the people are there.
Mr Gregory S. Sorbara (York Centre): Give me a break. It doesn't pay the taxes on the house.
Mr O'Connor: The former Minister of Labour is heckling because he realizes that he mismanaged it. That's the case, but that's not what I'm commenting on. I'm commenting on the member for Wellington, who has said about the injured workers, "We're worried about them." They had the opportunity to worry about them. They didn't correct the problems that were there when they were there in government for so many years. In fact, during the early 1980s we saw the unfunded liability grow at an enormous rate. I'm disappointed in that.
When the bill was introduced, the Minister of Labour pointed out five key elements to the legislation, and I'm disappointed the member didn't focus on some of them. He focused on some of the parts and blamed mismanagement: "Everything is too late and it's too far and you didn't do it quickly enough." I think the important focus needs to be rehabilitating injured workers, getting them back to work. He's tried to focus somewhat on that and I would hope that he would focus perhaps a little bit more on that and the need of the older injured workers who are going to get that $200. Economically, they are the most vulnerable. They do need that type of support. I hope that maybe he'll address that in his two minutes.
The Deputy Speaker: Further questions or comments? If not, the member for Wellington, you have two minutes.
Mr Arnott: I want to thank the members who have responded to my speech: the member for Waterloo North for her kind comments, the member for Durham-York for his observations and the member for Oxford for his questions.
The member for Durham-York talked about the enhanced benefits for the older injured workers. It's $200 a month for some of them; I think that's the figure. I think also we still have to keep in mind, though, the overall capacity of the system over the long run to sustain itself, to ensure that workers who are likely to be injured in the future will be able to receive any pensions at all through the system, because we're getting to the point where employers cannot stand any further increases in their assessments. Again, that's motivated our party to suggest that assessments ought to be reduced by 5%.
We want to help injured workers. We want to make sure that injured workers are able to receive the payments they need to sustain their own households. We want to be able to do that over time. We have to be able to keep the system going financially and that is what's motivating our suggestions with respect to reducing the unfunded liability.
The member for Oxford still wants to talk about whose fault it is. The Conservatives, of course, were in power since the time of the Second World War up until 1985, the New Democrats and the Liberals were in charge from 1985 to 1987 when they had the accord years, the Liberals were in charge for three years after that, from 1987 to 1990, and now the New Democrats have been in power and have been responsible for administering the provincial government since 1990. We're now in 1994. Yes, all three parties who are presently represented in this Legislature have been in power in the last 10 years, so all of us, I think, have some measure of culpability with respect to how the WCB is administered, but today we've got to talk about solutions, not who's at fault.
Mrs Irene Mathyssen (Middlesex): I'm pleased to have this opportunity to join the debate on Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act.
The information derived from tonight's discussion is important for Ontarians because for far too many years the Workers' Compensation Board has inflamed rather than resolved the difficulties faced by workers and employers in this province. There's a real need to overhaul the act and make it function as it was intended to function. We need to ensure protection for workers and their families, we need to get the injured the medical intervention they require to get people back to work, and, let's not forget, we need to spare employers litigation that could potentially put them out of business, because there is a significant benefit to employers from the WCB arrangement. The original intent seems somehow to have been lost, I think, in all of the discussion here, and that brings me to the purpose of the amendments we're discussing tonight.
If we look at the purpose clause in the bill before us, we see that the amendments brought forward by the Minister of Labour will indeed fulfil the original intent of the act. The purpose, as already indicated by the honourable parliamentary assistant, the member for Sudbury, is to establish fair compensation, health care benefits and rehabilitation services for workers who sustain personal injury by accidents arising out of and in the course of employment, or who suffer from occupational disease, and for their spouses and dependents, and to facilitate a return to work for these workers.
Like all the members here, I think the very first thing that happened in my office after the election of 1990 was a deluge of calls and visits from people for whom the current system simply was not working -- hundreds and hundreds of them. In some cases, the complaint went back several years. In others, the worker suffered not just from the long-term effects of an injury but from the stress of trying to cope with financial hardship, pain and the adversarial atmosphere that has evolved between the WCB and many injured workers as a result of the financial problems the board has endured over the past 10 years.
In most of the cases, there was very little that we could do to help. Certainly my staff made the calls, and we'll continue to make calls on behalf of injured workers to WCB and to make those inquiries that are so necessary. But the situation is such that it's extremely difficult and frustrating for those seeking compensation, and, I believe, frustrating for those trying to provide it, because I'm convinced that many of the front-line workers at WCB truly would like to be able to provide the service that will help those folks who they know are dependent on WCB compensation.
At any rate, we've heard a great deal here tonight in the discussion about the unfunded liability, and certainly it's a debt that's grown from $400 million in 1980 to $10 billion by 1990, and has been projected to be as high as $31 billion by the year 2014 if we don't do something now. It's a source of profound concern for all of us, because it does indeed jeopardize the provision of fair compensation to injured workers and causes profound concern for employers, who are paying the premiums. We have to find a way to provide that fair compensation, and that is, of course, the purpose of the cost-saving measures that are part of the reform that this bill puts in place.
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I must say that despite some of the rhetoric opposite, cost-saving measures are the key to the future stability of the Workers' Compensation Board. I find it quite remarkable that the opposition would howl to the rafters about the unfunded liability and the rising debt at WCB and then reject the formula that will save $21.6 billion from the unfunded liability by the year 2014.
We're providing an amendment in this bill that will result in the adoption of the Friedland indexing formula. We've heard a little bit about that tonight, but I think it's important to remember that these provisions will ensure that the most vulnerable workers will continue to receive benefits fully indexed to the consumer price index and that the Friedland formula indexes pensions to 75% of the consumer price index, less 1%, with a cap of 4% a year.
Certain groups will continue to receive fully indexed benefits, and they are those people who are receiving survivor and dependant benefits, those receiving 100% pensions for injuries that occurred before 1990, those receiving 100% wage-loss awards for injuries that occurred after 1989, and those receiving the $200 increase I've mentioned before.
About 45,000 workers or survivors and dependants will quality for the exemption to the Friedland formula, and we're proposing amendments to the Workers' Compensation Act that would provide a $200 increase to the permanent partial disability awards of workers injured prior to Bill 162 who are or become entitled to receive, or have been entitled to receive, subsection 147(4) supplements. That's about 40,000 workers who will qualify for the $200 pension increase.
We're also bringing forward amendments that will require the board of directors to act in a financially responsible manner, with a view to the best interests of the Workers' Compensation Board.
The second part of the purpose clause is the vocational rehabilitation and return-to-work objective. So we have a directive very clearly to put the financial house in order, and secondly, the purpose of initiating rehabilitation.
Bill 165 amends the vocational rehabilitation section of the act to require the WCB to provide vocational rehabilitation services to employers where, in the board's opinion, such services would assist in early and safe return to work. Amendments to this section will require an employer to cooperate in the worker's vocational rehabilitation where the board considers it advisable to do so.
To achieve this goal, section 51 is amended to require a worker's physician to provide information relevant to the worker's medical restrictions and ability to return to work directly to the worker's employer upon the request of the employer, but with the worker's consent, or upon the request of that worker. The information transmitted by the doctor will be limited to the information prescribed by the WCB form, because this kind of information is sensitive and it should be used appropriately.
If the board determines that the employer has not cooperated with vocational rehabilitation services or programs provided, the board is able to penalize the employer. The act already provides that a worker can be penalized financially for non-cooperation in vocational rehabilitation, so it only makes sense to level the playing field and firmly establish the employer's responsibility.
Amendments to section 54 of the act will allow the WCB to initiate a penalty for non-compliance with respect to the re-employment obligations established in this section, and a new section in the act will provide that the board's experience rating programs will be modified to measure such matters as the employer's health and safety vocational rehabilitation and re-employment practices and procedures.
Finally, in the event that a worker or an employer objects to a board decision which turns on cooperation, availability or participation in a vocational rehabilitation or medical program or which involves a dispute with respect to return to work obligations, a new provision requires the board to provide mediation. The mediation process must cease within 30 days of a party's objection or application. Where mediation is unsuccessful, a final decision of the board will have to be rendered within 30 days.
All of these changes are to get people back to work because we know that one of the worst fears of injured workers, apart from the medical fears, the pain, the financial uncertainty, is the fear of loss of employment, the fear of a loss of your place in the workforce, because that place provides dignity and satisfaction.
So the purpose of this package of amendments is to get the Workers' Compensation Board back on track, its house in order. For this to be achieved, there has to be a new governance structure. The new bipartite board will have equal representation -- five from business and five from labour -- and will include two public representatives chosen jointly by business and labour. This new model will ensure effective, equal representation for all interested parties. A chair will be selected on the joint recommendation of the business and labour board members, with two vice-chairs, one from business and one from labour, and the chair of the Workers' Compensation Appeals Tribunal will sit as a non-voting member.
Under this new model, the board itself, not the government, will appoint the president and CEO who will be responsible for managing the operations of the Workers' Compensation Board and will be accountable to the board of directors. The mandate of this new board will be to provide strategic policy and business direction to the corporation, and of course, as we did with Ontario Hydro, this government has made the WCB accountable to government, this time through a memorandum of understanding between the board and the Minister of Labour.
In closing, I'd like to spend a moment in regard to the royal commission that's been appointed to examine the current system and study the relationship between workers' compensation and other income replacement and support systems. The commissioners will hear from the public and examine WCB systems in other jurisdictions. They will study alternative systems of compensation, the financial viability of the current system, the current benefits structure, entitlement issues, as well as look at groups that are currently excluded from coverage. Questions regarding expanding coverage to industries like financial institutions or workers like artists, who are not currently covered, will also be addressed by the royal commission. Finally, commissioners will examine the relationship between workers' compensation and occupational health and safety. They will report in about 18 months, by the end of 1995, and will provide government with recommendations in regard to their mandate.
It's very clear, I think, that the appointment of the royal commission and the specific amendments contained in this act will significantly move the WCB out of its current dilemma to more solid ground. And that is, of course, precisely what should happen. This is no small problem. It has festered for more than 10 years and it must be resolved.
A new board, with balanced membership, the new funding formula, which will reduce the debt, fiscal accountability provisions, the rehabilitation provisions, improved pensions, the return-to-work initiatives and the royal commission re-evaluation will help make that desired resolution a reality. It's what has been desperately needed for over a decade and it's what this Minister of Labour and this government are determined to do through this particular piece of legislation, and I'd say that it's certainly worthy of our support.
I look forward to the advice and the guidance that the public will provide to the standing committee that will sit this summer to review Bill 165. I believe that the result will benefit all Ontario employers and workers and it will make the WCB truly function as it should.
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Mr Sutherland: I want to compliment the member for Middlesex for her comments and her participation in the debate. I think she outlined some of the key points of the types of changes we're bringing about in the WCB.
I've been criticized several times today for only talking about the past, because I keep wanting to talk about how the unfunded liability was only $400 million in 1980 and by 1985 it was up to $6 billion, and then by 1990 it was up to $10 billion. I think we need to talk about that, because to understand where we are and what the solutions are that we are proposing -- and that's the key point: We are proposing solutions, whereas the previous governments didn't deal with the issue or came up with schemes that very clearly have not worked, or else the unfunded liability never would have got to $10 billion.
But as I was saying, the member for Middlesex, I think in a very effective way, outlined the types of solutions we're proposing to put the Workers' Compensation Board on a solid footing so that it works for business people, but also not to say that the whole blame should go on injured workers and to say that they should carry the entire burden of the unfunded liability. Because as we all know, injured workers in the province of Ontario have already made sacrifices. They've already made sacrifices with their bodies and the other injuries that they have suffered, and we should never forget that.
So I think what has been proposed, and the member for Middlesex highlighted that, is a forward-looking solution. We're not just putting up our hands and saying, "Gee, the Tories and Liberals created this whole problem; we're not going to do anything."
I think as the member for Middlesex has highlighted, this government is showing leadership on this issue. We're not going to avoid the problems. We're not going to avoid the problems like they did with Ontario Hydro, like the Tories did with the unfunded liabilities in the pension plans. I give the Liberals credit for dealing with some of them, but we're dealing with the Workers' Compensation Board, whereas no other government has.
Mr Drummond White (Durham Centre): I wish to commend my colleague the member on her excellent remarks. The member for Middlesex has already, in this House, established a reputation in terms of her standing on behalf of people who have been injured, people who have been disadvantaged, her fight for social justice.
I know in my riding, in my area, there is no area where our government should stand more firmly than in support of injured workers, people who have been disserviced and abused in the past, people whose issues and concerns have been neglected, people for whom the issues of responsibility are clear. They know clearly who was responsible and what system was responsible for creating their injuries. They also know that a responsible system that addresses those injuries also has to look at the liability, has to look at those expense issues, but does so in a way which addresses, first and foremost, the issues of social justice.
These are people who have put their lives and their backs on the line for the wellbeing of our province, and they deserve an adequate recompense. These are people like the asbestos workers, like Eddie Cauchi in my riding, like Barry Huard and Vicky Standingready in my riding, people whom this member has fought long and hard for in her area, people whom this member is a credit to.
I want to again commend my friend and hope that she continues in this spirit to fight on behalf of injured workers throughout our province.
The Deputy Speaker: Further questions or comments? If not, the member for Middlesex, you have two minutes to reply.
Mrs Mathyssen: I thank my two colleagues for responding. For a moment there I didn't know whether I'd mesmerized them or simply put them soundly to sleep, but I appreciate their comments.
Certainly I would like to say to the member for Oxford that clearly a solution was needed and, fortunately, I believe a solution has been found. Very clearly, this is a government that has not run away from the tough problems, has faced them directly and worked very diligently to try to resolve those problems, even problems as far back, in terms of this province, as the WCB problem.
I'd also like to thank my colleague the member for Durham Centre and say that his reputation has certainly been one as an advocate for people in his community and as a long-time advocate for injured workers. I know that he has done a great deal of work, and when injured workers come to Queen's Park he makes absolutely sure that they have access to those who need to hear from them and makes sure that their concerns are met every day in his own community.
So, thank you to both of my colleagues. I will listen with great interest to the rest of the debate.
The Deputy Speaker: Any further debate? The member for North Centre.
Mr Sorbara: York Centre.
The Deputy Speaker: York Centre.
Mr Sorbara: The hour is late, Mr Speaker. You are to be forgiven for that.
I'm going to vote against this bill. I want to simply take an opportunity to put a few remarks on the record to explain my opposition to the bill, where I think we should be going and principally what part of this initiative so angers and outrages me as a former Minister of Labour and a minister who was, for a period of some two years, responsible for the workers' compensation system in Ontario and, in that regard, a bill, Bill 162, which represented significant reforms to the system during the period of 1987 to 1990 during the 34th Parliament.
What dismays me most of all as I look around the House is that there are but four or five members who are in the House at this time who were in the House during the debate over Bill 162.
Mr Mahoney: Shelley Martel was here.
Mr Sorbara: My friend the member for Mississauga West, who did such an excellent job of critiquing this bill, points out that the member for Sudbury East is indeed here, paying virtually no attention to the debate. But this is now and that was then. Back then, five years ago almost to the month, almost to the day, the member for Sudbury East launched the most, in some respects, effective and at the same time malicious campaigns against workers' compensation this province had ever seen.
Mr Mahoney: Misinformed.
Mr Sorbara: My friend the member for Mississauga West says "misinformed," and perhaps that would be the best way to describe it, and at the same time say "parliamentary."
When I heard a few months ago the Premier announcing the reforms that would be brought forward, and then some time later the minister introducing the bill, it just absolutely broke my heart to see that the New Democratic Party, which had so clearly put its position on workers' compensation and workers' compensation reform on the record during the 13-month debate over Bill 162, completely reverse itself, completely change its position and introduce a bill which reflected not at all what the member for Sudbury East had preached during that debate; what the member for York South, the now Premier, had preached; what the member for Hamilton East, now the Labour minister, had demanded during the course of that debate.
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This bill is so diametrically opposed to what the New Democratic Party was campaigning for during the 13-month debate over Bill 162 that one can hardly believe it's the same political party. One can hardly believe that the same people would have the gall and the audacity to introduce this bill, having just five years ago staked their entire political reputation on a campaign to stop the passage of Bill 162. It is so hypocritical. It destroys people's belief in political principle and the fact that a political party can say the same thing when in government as they said in opposition.
My friend the government House leader was here. He will remember the near riot in front of the doors of this assembly by injured workers who were brought down here by the member for Sudbury East to protest this bill, and the kerfuffle that resulted. He will remember day after day of holding up parliamentary work, reading petitions for hours and hours to try to express political opposition to Bill 162.
Now the government has completely abandoned, absolutely 100% abandoned, the principles that drove that opposition, which I said in my speeches was effective opposition, even if misinformed. My friend the government House leader is invited to re-read those speeches, his own speeches, his own position and his own petitions introduced during that time.
It just breaks your heart that a government that stood so clearly for something else, which I disagreed with -- I disagreed with the position they were taking at that time and I would still disagree with it. But to bring in a bill that is so inconsistent with what you preached and the hope that you handed out to injured workers during that time in 1988 and 1989, to bring in a bill that so violates the commitments made at that time, is enough to have people throw up their hands in disgust and say, "Where can we find a party with political principles that last for more than one election?"
I just want to point out one aspect of that inconsistency. The major part of this bill is a section that will de-index the pensions of injured workers. Now, I know about that. I was Labour minister for two years. I know the implications and the huge monetary saving that can be garnered by de-indexation of pensions.
In fact in 1988, when we were trying to shape the models in Bill 162 that would both be responsive to the real needs of injured workers and understand that the Workers' Compensation Board has to be fiscally manageable, one of the things we considered was the partial de-indexation of pensions. We considered that. We examined what impact that would have on injured workers.
We decided, as a party and as a ministry and as a government, that that option would be unfair to the workers who were receiving those pensions, that it would be unacceptable public policy, that you simply cannot violate the bargain and the contract you've already made with people who are the beneficiaries of pensions.
We looked at it, we saw the great savings that could come to the system doing it and we said, "No, that would be wrong." To cut the pensions of the workers who have been granted those pensions in good faith represents to me a violation of a sacred contract. I rejected it then and I reject it now.
You see, right now it's easy for the government to do this because we're living in a world where there's basically zero inflation. So for the time being, when you say you're going to de-index the pensions, people look ahead and see that the cost of living went up a fraction of 1% over the past year and they realize that the impact today is not going to be very great. Back then in 1989, we had significant inflation and people could immediately see that would have a very serious effect on injured workers.
But the low rates of inflation that we have today, as we all know, are only temporary. That bunch of rogues who have formed this government during 1990-94, and till the date of the next election, know full well that they'll be out of power and long gone and no one will remember that it was the New Democrats who de-indexed pensions and violated the contract that had been made with the workers who are the beneficiaries of those pensions.
When inflation reaches 7% and 8%, which you can rely on, you can take it to the bank -- this will happen over the course of the next five or 10 years. We will see that period of inflation, and when the values of those pensions start to drop, some two-bit NDP politician sitting in opposition will stand up in this Legislature and demand full indexation of those pensions because of the hardship of de-indexation brought on by this bill.
It's so disheartening to see that those people over there who day after day in 1988 and 1989 tried to disrupt Parliament and organize protests -- in the last few weeks of the carriage of that bill I had to have 24-hour police protection because of the threats on my life as a result of the opposition organized by the NDP and their friends during the course of that debate.
I want to tell you that, as a result of that bill, there was no de-indexation, most pensioners with serious injuries received larger pensions, and only those workers who were able to return to work and earn more than they did before their accident were denied a pension. That made sense then and it makes sense now.
The proof is in the pudding, because when they got to power, notwithstanding all the nonsense we heard during the debate on Bill 162, there was no effort to repeal. Notwithstanding the commitment that the NDP would never do anything like that, there was no suggestion, even from day one, that they were going to change that bill, because they knew the reforms of Bill 162 prevented a financial disaster within the WCB.
What did Bill 162 do? It was pretty simple. It said that instead of giving people lifetime pensions, notwithstanding that they might go back to work and regain their full earning power, instead of giving everyone a lifetime pension when they had a permanent partial disability, what you would do is examine periodically what the financial impact of the injury was. The WCB was charged through Bill 162 to make up the difference. That made great sense then, and it makes great sense now.
What doesn't make great sense is the fact that in opposition the NDP said that this was intolerable, this was the end of the world, this was an insult to injured workers, and they would never countenance anything of that kind, and what do they do when they get in power? They bring in a bill to make some rather unadvised changes to the board of governors of the Workers' Compensation Board, and to those pensioners who have received a pension in good faith they say, "We're going to de-index your pensions."
I remember what the seniors said to the Prime Minister of Canada, the Right Honourable Brian Mulroney, when he suggested de-indexation of pensions. There was a near riot. Grey power came about in Canada. The seniors said, "We earned those pensions in good faith and you will not cut them." But now in this period of low inflation, when everyone is talking about the financial crisis that every organization of a public nature in Ontario is facing, this government is going to be able to slip this under the rug, and the real impact of that is not going to be felt until we get into a period once again of inflation.
I simply say to my friend the government House leader and everyone, at least everyone in the government caucus who was a part of that Parliament and a part of that opposition, that to breach faith with what you said to your constituents and your friends in the trade union movement and in the injured worker community during the debate over Bill 162, to breach faith to that extent, is a message that is going to be heard right across Ontario when we finally get to an opportunity where the people will vote, and will vote to eliminate and rid ourselves of this government.
You can't keep misrepresenting what you believe in for ever to the people of Ontario. This theme of misrepresentation, whether it be on Sunday shopping or public auto insurance or workers' compensation or the sacredness of public sector or private sector collective agreements, this saying one thing then and doing another thing now, has so damaged the credibility of the political process that we will take years, I believe, to heal after you guys are long gone from the government benches and the councils of this province.
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But I'll tell you, Mr Speaker, the people of Ontario cannot wait. They cannot wait to get an opportunity to express their displeasure with the way in which this government has mismanaged and misrepresented the issues to the people of the province of Ontario.
The people of Ontario are not partisan. They don't care particularly whether it's Liberals in power or Conservatives in power or New Democrats in power. What the people of Ontario historically have wanted through the 100 years and more of our history is good, quality government; governments that can and do manage difficult issues well; governments that are characterized by the principles of integrity and a commitment to doing what you say you are going to do. The people of Ontario have, over the course of the past four years, had such an unpleasant experience with the unpredictability, the unreliability, the incompetence, the change of course, the feigned idealism of the New Democrats.
For me personally, as a former Minister of Labour who bore the brunt of the most vicious political assault during the whole period of 1985 to 1990, I simply say to my New Democratic Party friends that you may be able to pass this bill. You have a majority and it will pass and it will change the realities of life for many injured workers in the province not for the better.
But when it comes time to evaluate your performance as a government, because of this change of heart and all the other changes of heart, the social contract, the misrepresentation of the financial condition of the province -- my friend from Scarborough-Agincourt, who has perhaps provided the people of Ontario with a better assessment of the real budgetary realities and fiscal realities of Ontario than the Treasurer, the Minister of Finance, the Premier or anyone in the government caucus, I think has made the point several times in here that what the people complain about is that this government has never come clean with the people of Ontario. They have never really brought to them the issues in a way that characterize what they said as a political party and what the people expect in terms of managing the difficult issues, and this will come back to haunt you.
I know how you have bought off labour opposition to this bill, almost all of them. Yet Buzz Hargrove, the head of the Canadian Auto Workers, will not quietly let you live with this. You know that. You know that sooner or later the real impact of this bill on the lives of injured workers is going to be talked about quietly, and although we will not have the demonstrations of the kind that the member for Sudbury East organized, the proof will be not in the pudding so much as in the ballot box, when the people of Ontario will say: "What we have had from the New Democrats has been intolerable. It has been inconsistent, it has been unprofessional, it has lacked integrity and it ought to be rejected and rejected massively."
Yet there is, from my perspective, one kernel of light here in this whole process, and here I will simply commend the Premier in that he has taken the steps to set up a royal commission to re-examine workers' compensation in Ontario and other income support systems.
As a former Minister of Labour, as a member of the Ontario Parliament and as a student of public policy issues, I believe that in Ontario and in Canada it is high time that we started to look at models very different from the classic model of workers' compensation and other income support systems. I believe that if this nation could get its act together and provinces could come together with the national government, we could transform the various income support systems that we have throughout Canada into a comprehensive national income support system for all Canadians.
The realities of individuals in Canada, right across this country, is that this plethora, this hodgepodge of income support systems -- whether it be municipal welfare or provincial family benefits, unemployment insurance, the Canada pension plan and all the other systems that we have to support income -- have, I think, in their day served us well. But I believe it's high time that we, as Canadians, started to look at income support in a very, very different way.
We ought to start thinking about the fact that one level of government, the national level of government, ought to develop a comprehensive system for income support which will get us beyond the artificial realities of someone's failure to be able to earn income because of an accident in the workplace or an accident at home. We need to look at systems that thoroughly change the way in which we provide income support right across Canada.
All of us as parliamentarians have had to deal with injured workers who have suffered the dilemma of trying to figure out the workers' compensation system and how to receive its support as a result of injuries arising, at least in part, from the workplace. But you know, for so many of them, for so many injured workers, the system is mysterious, ineffective, inefficient and unable to respond to the realities of that individual's life.
I think, for me, the quintessential problem is the problem of the Italian Canadian or the Portuguese Canadian bricklayer who has perhaps spent 30 years of his life -- let's take from age 20 to age 50 -- doing hard, heavy construction work, laying bricks eight, 10 hours a day, hauling bricks, laying mortar, row after row.
Sometimes, after 25 or 30 years, that body is done. There's been no accident, there's nothing that one can particularly point to, there's no trauma that brought about the inability of that worker to one day get up and go to work, but he's worn out.
Those are the kinds of problems that the WCB, no matter how you fiddle with it, is not going to be able to respond to. There's no accident that happened on the job, there's no injury that happened on the job, there's just a body that is exhausted and can no longer climb the scaffold, can no longer lay the blocks, can no longer spread the mortar, can no longer face the tremendous amount of energy and output that is required for that kind of work. We've never had a good system for dealing with that. We've never had an income support system that acknowledges that that is the reality of so many workers.
Or I think of the worker who is in the eyes of some the victim of industrial disease. It's very difficult to identify how that disease arose and whether it was a peculiarity of the individual's biology or some infectious exposure that happened in the home or some infectious exposure that happened in the workplace, but these things do happen and we've created in the workers' compensation system all of these artificial models to partially deal with these realities.
I'm saying it's high time, whether through the Premier's royal commission or otherwise, perhaps through the federal Minister of Human Resources Development Lloyd Axworthy's initiative, to look at our social safety net. Somehow, we've got to get from where we are today to where we really could be in this nation, with a system that effectively realizes and delivers the kind of income support that we really all have come to believe in as Canadians.
I am absolutely sure that if we can ever achieve that system, it would have a high degree of acceptability right across the nation generally among Canadians from coast to coast and a high degree of acceptance by the businesses which must generate the wealth to supply the tax dollars to provide that, and I believe it could be a system that could be administratively efficient, using the very best technologies of data collection and recordkeeping that are available to us.
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You just have to apply for a moment your imagination to how we could transform the reality of the welfare recipient or the reality of the family on family benefits or the reality of the injured worker or the reality of the worker on unemployment insurance, reduce dramatically the millions that we spend on administration and increase significantly the kind of service and support that we could deliver to Canadians at this time.
But instead of that, what this government has given us, after coming to power in part as a result of its promise to crusade for injured workers, is a bill that in my view must, at least for those members who have a little bit of integrity on the government side, be a thorough embarrassment. It so violates what you said, it is so repulsive to what you campaigned on, it is so inconsistent with what you've demanded as to leave me, at least, as a former minister, almost breathless with outrage.
If you had done nothing, that would have been okay, or if you had said, in making the presentation of this bill, "We regret in part the kind of expectations that we gave to injured workers back in 1989. We apologize for our enthusiasm just to provide more benefits for everyone. We apologize to the constituency to whom we said, 'We can get you more.' We have had to bring in a bill which basically represents a cutback" -- if there had been a word of contrition, I could have accepted it.
If there had been some acknowledgement that in the near past you said something completely different, I could have been satisfied. If you had built some bridge of consistency between what you said then and what you say now, I could explain this bill to the hundreds of thousands of people who are wondering how you could have proposed what you proposed in 1989 in opposition and what you deliver now in 1994 in government. If you don't at least stand in your places and build that bridge, you violate fundamentally the trust that you were given in 1990 and the trust that makes our political system work.
I can understand the change on Sunday shopping; we all knew that had to come. And there are aspects of the social contract, some, perhaps, that have some fine thread of consistency with NDP policy -- not very much. But maybe that's just my perception because I remember so vividly, through these long evening debates, in 1989, in June and July -- you'll recall, Mr Speaker, that this Parliament had to extend its sitting for over 25 days in July to get that bill passed because the NDP would have nothing of it. I can imagine at least a statement of remorse, a statement that: "We were not able to deliver what we said we were going to deliver to you when we were in opposition, when we were asking for your support, when we were suggesting to you that the minister, Sorbara, will be out in Brantford and it'd be a good time to create yet another demonstration. Let's get all the folks out there to show our anger at Bill 162."
If somehow you could relate your position then to your position now, I would be somewhat consoled. But the anger that I feel and the betrayal that I think you brought to your own supporters on this issue simply leave me feeling a thorough disgust with this bill. It will pass and it will change the lives, as I said, of many, many injured workers, most not for the better. It will not improve the system at all.
My only hope is that some day we as politicians, nationally and provincially, can really come to grips with the issues of income support that really do confront us as a nation.
Ms Murdock: I am very interested in responding to the remarks made by the member for York Centre, because he was the Minister of Labour at the time that Bill 162 was brought in. I think he should have a conversation with the present Liberal critic of Labour, because I was interested to hear the comments about how there's a sacred trust in not cutting pensions. I agree, because we did not cut the pensions in this. We have not cut the pensions on any of our people in --
Mr Sorbara: Oh, come on, Sharon. What do you call de-indexation?
Ms Murdock: The Friedland formula is certainly a reduced indexation of the pension, but the pension itself is not reduced, and the most vulnerable workers -- your Bill 162 workers -- both pre- and post- in terms of total, 100% wage loss, and those people who are unemployed and never have any hopes of working are exempted from the Friedland formula, as you well know. Those people are not affected by the Friedland formula and they are the ones who are most severely affected by Bill 162, or what was Bill 162.
Mr Sorbara: You never asked for de-indexation of pensions in 1989.
Ms Murdock: I just think the Liberals have to get their act together.
In terms of the income support systems, I must agree with the member opposite. I think it is a situation that has to be looked at, and I'm happy to say that the royal commission is going to be doing that.
Regarding the comments that were made, that I thought were made rather bitterly, about the member for Sudbury East, I think there was a lot of chagrin and anger evidenced at the doors of this House when Bill 162 was introduced. I know that I certainly was out there arguing against it, and I'm happy to say that the return-to-work provisions, in my view, that are in these amendments today will change much of the damage done by the deeming provisions.
Mrs Yvonne O'Neill (Ottawa-Rideau): I certainly want to congratulate the member for York Centre. I do remember very well the debates on which he speaks on Bill 162 in those latter years of the 1980s. What was very different then from now is, the speeches went into four- and five-hour speeches. There was much more of an opportunity for members to say what they really felt. Now the rules have changed drastically, and even a former Labour minister only has 30 minutes to express his distaste for a piece of legislation that he doesn't feel very good about.
Bill 162 had much to its merit and was a balanced bill. I really do feel now that we are getting into a situation of more study, more study, more study -- another commission. Whether it's in education or whether it's WCB, that's the answer to things. Put them off on to the next mandate. We may or may not get around to implementing the bills that we're putting forward.
I think the NDP government can't fool all the people all of the time. The people who will have to implement this bill, and certainly those who are trying to be served by it, will soon discover that it's not what it seems to be. I've discovered that with many, many pieces of legislation this government has brought forward. It's not what it seems to be, and distrust is the name of the game out there with the Ontario people and this government at this time.
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Mr White: When I came to this assembly several years ago, I had a great deal of respect for some of my colleagues opposite. Certainly my colleague who just spoke, the member for York Centre, who was the Minister of Labour in the last government, had a great deal of experience in this area.
When I listen to him speak, he's using the language of activists, of people who have supported labour, who have supported injured workers. Yet when he says we should come clean, when he talks about indignities, when he talks about outrage, when he talks about the dashed hopes of older workers, I can't think of any time when those hopes were dashed, when "coming clean" would be a more appropriate phrase, than when he was the Minister of Labour bringing in Bill 162.
I'm sure that it must be difficult for him to see reform of that system. Yet that system and a reform of that system is one we are now attempting, not whole-hearted, not complete, as some of us might wish, but certainly when he speaks about the NDP and their friends, he's neglecting to mention that their friends are the older workers, the older act workers, the injured workers in this province. He neglects to mention them, and that's the purpose of this bill. He's neglecting to mention that they felt neglected and abused by that bill.
I would hope that in his closing comments the former Minister of Labour would come clean to this assembly and acknowledge the important reforms that are encompassed here and that workers have called for for many years from him.
The Speaker (Hon David Warner): The honourable member for York Centre has up to two minutes for his reply.
Mr Sorbara: With due respect, my friend from Durham Centre doesn't know what he's talking about.
My speech is a very simple one indeed. These volumes of Hansard contain an accurate record of what the New Democratic Party said were its policies in respect of the workers' compensation system. These volumes set out clearly, over and over again, what the promises were that were made to injured workers and the constituencies that are concerned about the workers' compensation system. It's all here. It's written down, the words that were said from the opposition benches during 13 months of debate. It's here. This is what a political party said it believed in as far as worker compensation reform.
My quarrel with this bill is not particular sections or particular lines. My quarrel is the breach of trust, which is accurately contained in these volumes representing your party's views on what we should be doing for injured workers, and what is contained in this bill. What is contained in this bill is totally and thoroughly inconsistent with what is contained in these debates, and if you continue to do that as a political party when you're in government, you will weaken the very system of government and a parliamentary democracy that has served us for so long. This bill will pass and pensions will be de-indexed and all the other little trivia you have in here will become the law. The real damage will be to the integrity of your party and the democratic system in general.
Mr David Tilson (Dufferin-Peel): Many of us in this place were elected for the first time in 1990, and as we came to this place and in our constituency offices, it didn't take long for us to find out that the Workers' Compensation Board Act and all the surrounding legislation was an absolute mess.
We've listened just now to a former Liberal minister. I think we can all say that it's very easy for all of us to stand up and criticize each other, because certainly all parties in this place, whether it be the Conservatives, the Liberals or the New Democratic Party, have to accept some of the blame for this mess that the WCB is in. For the five years of Conservative rule from 1980 to 1985, the unfunded --
Mr Perruzza: Don't get into that at all, David.
Mr Tilson: I'm going to get into it because I want to show you the climbing debt that you have allowed to continue, and yes, that the Liberals have allowed to continue, and yes, that the Conservatives have allowed to continue. This bill will not solve that problem of unfunded liability.
If it's been said before, I'm going to say it again: Yes, when the Conservatives were in power the unfunded liability fund went from $800 million to $5.5 billion, a substantial amount, and during the next five years, with the Liberal government in office, that rose to $9.1 billion. So, so much for the previous speech that we just heard as to what that government did to solve this mess.
Mr O'Connor: He was the former Minister of Labour.
Mr Tilson: Yes, he was the former Minister of Labour.
Mr Perruzza: Don't get into that. What did Elgie do? I'll tell you what he did; he golfed.
The Speaker: Order, the member for Downsview.
Mr Perruzza: He golfed all over Ontario. He was a good golfer.
Mr Tilson: Since the New Democratic Party government took power, that unfunded liability has increased to somewhere between $11 billion and $12 billion. At last count the figure seems to be $11 billion, but we know it's somewhere between $11 billion and $12 billion.
I don't think, from all of the information that's been given to us to date, that the topic of unfunded liability is going to decrease. In the short run it may decrease. Some of the statistics I've seen that have come up are that the unfunded liability in the long run will increase in a very short period of time to $13 billion.
Many of you have been in this place longer than I have; many have been here for their first time, as I have, in 1990. But certainly it didn't take us long to realize that serious issue of the unfunded liability and the effect that has on investment in this province, the effect on whether people are going to invest in this province, the effect of when it's going to get paid off. Is it going to keep on increasing? If it continues to increase, how are we going to stop it? How are we indeed going to pay it off? That's the first issue.
The second issue we discovered very shortly which goes on in our offices is that most of the complaints that occur in our constituency offices are those from workers who simply don't understand the workings of the WCB and feel that they are being continually robbed and abused and unsatisfactorily treated.
I think the third issue ties into the liability issue, and that is certainly the fear of the bond raters, the fear of the investors as to where this province is going, the debt that continues to rise. Certainly, this debt that exists in the Workers' Compensation Board is something that can't be ignored any longer and can't be allowed to increase as this government appears to be allowing it to do.
I will tell you that one of the issues that the Progressive Conservative Party has looked at is the issue of privatization. I know that's an adverse policy or a policy that the current government simply would dismiss. It's against their whole standard of operations. But we must take immediate steps and at the same time protect the workers, as opposed to building up on the debt and allowing the debt to continue, because eventually it has to be paid off.
Yes, there's one solution. This bill is allegedly one solution. I don't think it is a solution. The appointment of a royal commission to study the issue is another solution. Of course, if you don't know the answer to the problem, you appoint a committee or you appoint a task force or you appoint a royal commission. That appears to be what is going on throughout all this confusion of where the WCB is going and the debates are going.
We look at the construction of a building in the shadow of the SkyDome which is going to cost the taxpayer of this province at least, at last count, $200 million, at a time when there are all kinds of facilities in this city for the number of people who work in the WCB. The empty offices that are available are astounding, yet for some unexplainable reason this government has been talked into allowing the WCB to put up at least a $200-million building in the shadow of SkyDome.
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There are other issues that have been mentioned, strange things that could be little anecdotes. I notice there's one minister in the House who could tell us some stories about pensions, that pensions are being received by workers even though they have other jobs. That may not be their fault, but it exists. There are at least two ministers I know of where that situation applies. It may not be their fault; all I know is that this problem exists, and it's a common problem. The pensions are being provided. Workers, who you're trying to rehabilitate with their injuries, perhaps retrain them in other jobs, continue to get pensions even though they're being paid through new jobs; a very strange procedure.
At the bottom of all this is one fact that we don't forget: who's paying for it. Who is paying for it of course is the employers. The employers are paying for it. At this particular time, they keep watching the unfunded liability go up and they keep watching the amounts of money they have to pay go up. Yes, there are all kinds of solutions that I'm sure will be looked at by the royal commission, such as rehabilitation.
People are asking questions. We ourselves are asking questions. The Canadian Federation of Independent Business put out a survey which I think most of us have completed, at least most of us in our party have completed. I don't know when their results are going out, but there are interesting questions that they ask. They talk about financial responsibility, benefits, coverage, governance, entitlement, a number of topics that perhaps we could spend some time on. I submit that many of these issues should be in the bill and they're not.
The bill incidentally was introduced about a month ago. I think it was May 18. It's very difficult to consult with my constituents in such a short period of time. We're essentially being allowed to debate this bill. I know there is no time allocation motion, but essentially this bill is being debated tonight at, of all times, 20 to 11, in the midst of hockey games and baseball games.
I would like to hear the input from injured workers and I would like to hear the input from the employers in this province, as to what they think of this legislation. They really haven't had an adequate time to deal with this legislation or to provide their comments on this legislation. That's a sad part of it, for something as major as this to be crammed into the final two weeks of debate in this place before we recess for the summer.
Yes, it will be going out to public hearings and we'll hear some comments from the different groups that are affected by this legislation, but I must say it's regrettable that the government has chosen this particular time and not allowed time for the bill to be digested by the different groups around this province and enabled us as members of this place to listen to their concerns.
Some of the questions that are being asked with respect to the Canadian Federation of Independent Business, and it will be interesting to hear the results: They talk about financial responsibility. It says: "Since the funding strategy was adopted in 1984, rates have risen enormously from 2.17% of payroll on average to 3.01%. Currently a 3.66% average rate would be required to defray the unfunded liability by 2014." Such a hike would devastate job creation. That's one thing we can't forget as to the effect of the funding on job creation. That is the primary issue of this province. If we don't have jobs, we're in dire straits. I question whether this legislation has taken into consideration the effect on job creation in this province.
I'm continuing on with the statements that are made by the Canadian Federation of Independent Business: "While such a hike would devastate job creation, benefits changes similar to those recently implemented in some other provinces would leave Ontario workers with a fair system that is financially sustainable. The current accountability arrangements allow each of the WCB and the government to point at the other for failings in the system, resulting in the current financial crisis where the system is only 37% funded."
This was drafted before this legislation was introduced in this House, but many of the questions that are asked remain unanswered as far as this bill is concerned. It's a question that I'd like to hear other members speak on.
"Do you favour eliminating the $11-billion unfunded liability by the year 2014, primarily through spending reductions as opposed to assessment increases? Do you favour amending the Workers' Compensation Act to establish the principle that any change to the WCB system must not impact negatively on business competitiveness?" Very important questions. "Do you favour legislative changes to make the government more accountable for workers' compensation, including the scope and design of the system, appointments and economic liabilities?" Finally, "Do you favour the Provincial Auditor regularly conducting and making public value-for-money audits of the WCB?"
That's something I think this government should look at: allowing the Provincial Auditor to go in and look, in a value-for-money audit, at the whole system. You don't need a royal commission to come to some sort of conclusion as to how to fix the system. There is that one office, the Provincial Auditor's office. In my time sitting as a representative from my riding in this place on the public accounts committee I have watched two public Provincial Auditors and the work they do. I think that would be a perfectly logical thing to do, to allow the Provincial Auditor to go into the Workers' Compensation Board and all of its workings.
I can remember that when I first came to this place people would have lost files. They still lose files. They have computers, yes, but files would be lost, they'd be gone. You'd call up and ask for assistance for one of your constituents who had a claim and they wouldn't have the foggiest idea what you were talking about, and perhaps if they did it might take three or four weeks to get a response. To some extent, notwithstanding the introduction of a number of computers, that problem still exists. The system is absolute chaos.
For a party that has always supported the injured worker, and I can't believe that my office is any different than yours, when you look at the number of injured workers who come to see you, you simply can't believe the workings of the Workers' Compensation Board and the various appeals. How they get their problems not resolved is simply astounding. You don't need a royal commission to deal with many of those issues.
The proposed poll continues with the topic of benefits: "The WCB insurance design is financially unsustainable. While waiting periods were widely eliminated in the 1970s, New Brunswick has recently instituted their three-day waiting period as a cost-control measure." That's something I'd encourage all of you to look at. I've referred to an article in Canadian Business of February 1992 which is quite an extensive article on the whole topic of workers' compensation boards across this country. I will say that many of the concepts in this substantial article -- a nice little topic here of Mr Di Santo and his workings in this place, and of course he's gone.
It would pay many of you to read this article. I'm not going to refer to it substantially, other than the fact that it was this article that refers to what has been going on in the province of New Brunswick and the province of Manitoba. Following the lead of Manitoba and New Brunswick, you may recall that I introduced a private member's bill in this place which didn't really vary from those two provinces, a bill which I hope I will be able to debate in due course, notwithstanding where this legislation is going, because this legislation doesn't go far enough.
Following that lead of those two provinces, my bill that I have introduced, which is Bill 106, will limit the stress claims to only those that result as a reaction to a traumatic event; reduce maximum compensation from 90% to 80% of net earnings of the worker before the injury; address overcompensation by including top-up provisions in collective agreements and other income sources such as CPP benefits in the WCB benefits calculation; introduce a three-day waiting period before compensation is payable; index awards on the anniversary date of the award rather than on January 1 of each year; and, as has been suggested by many journalists and many people in the media and many people in the business community and many other provinces, allow the Provincial Auditor to conduct value-for-money audits of the board.
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Why shouldn't we? Why shouldn't we allow that to happen? The confidence in this board has reached an unbelievably low ebb. It would be very easy for me to sit down as a former speaker did, the former Labour minister, and attack you, and I could attack him, but that's not the real solution.
I don't think this bill adequately goes through the many problems that have been raised over the last period of time, the last number of years. Ten years ago, business accepted long-term rate hikes to pay off the unfunded liability by 2014. This was a long-term funding strategy developed by business and the WCB, and the purpose was to retire the unfunded liability by the year 2014. Business accepted long-term rate hikes to pay it off. This isn't a new problem; this existed 10 years ago.
The target of zero unfunded liability was reinforced by the then Premier's own business advisers from his Premier's Labour-Management Advisory Committee. In a report issued in November 1993, the business caucus of the Premier's Labour-Management Advisory Committee repeated the demands long held by the Employers' Council on Workers' Compensation to eliminate the unfunded liability by the year 2014. Business called for the elimination of the government's unfunded plans.
Yet with this bill it's estimated that the liability will increase, not decrease. The government is suggesting that an increase of the unfunded fund to $13 billion actually represents an $18-billion savings. I have no idea where that math comes from. The supposition advanced by the government is that in the absence of any changes, the unfunded fund would increase to over $31 billion by 2014, and yet all of the savings being suggested by the government are future savings. Quite frankly, I don't really understand all that rhetoric. All I know is that the unfunded liability fund is going to increase, it's not going to decrease, and that is something that cries out, for all of the reasons that I have given, for a solution in this Legislature.
The business recommendations of this committee ensured competitiveness, and that's one issue we in opposition keep trying to remind the government of, that we must be able to compete with other jurisdictions, that we must be able to compete with other provinces and with the United States. Yet with these amendments, there are going to be even more benefits that we simply cannot afford.
The business recommendation, in short, that the board would, "first and foremost, assess the financial integrity of the system and would never expand entitlement to the competitive disadvantage of Ontario business." That was the prime interest of business, because if you don't do that, you won't have jobs; you won't have the very thing that you're trying to boast about, that you're trying to create in this province, and that is jobs.
The government, contrary to that wish, that request, that demand, has chosen to omit this important aspect of the business recommendation in this piece of legislation. In fact, the amendments that are being put forward by the bill will compel the Workers' Compensation Board to expand entitlement in cases such as stress and then require the board to hike assessment rates to pay for the expanded entitlement. This is the exact opposite of what the business advisers recommended and I don't understand why that advice has been rejected.
With this legislation, the Workers' Compensation Board will be forced to increase entitlements, regardless of competitive implications. If medical science supports the payment of stress, which the Workers' Compensation Appeals Tribunal has concluded, then the WCB would be forced to pay for these types of claims, regardless of the financial consequences. That seems to be what this government does in so many of its things: It doesn't consider the financial consequences.
The government really, with this legislation, and this is the most serious of all the issues I wish to address tonight, has in fact seized control of the policy, of the agenda, of the Workers' Compensation Board.
One of the founding principles of the Ontario workers' compensation system is the deliberate separation of the government from the administration of the Workers' Compensation Act to ensure politics-free, arm's-length administration. The government would design the legislative boundaries of the system, while an independent agency would oversee the implementation of that legislation.
The system was designed over 89 years ago and there was concern then, as there is a concern prior to this legislation, that an independent agency such as the WCB would be open for manipulation by partisan political considerations. Since then, there's been an endless effort to ensure that the board is truly independent and that the government is unable to interfere with the day-to-day operation of the board.
Now, with this bill, and specifically section 65.1, for the first time ever, this government is going to have unprecedented political control over the policy workings of the WCB. For one year after proclamation, the Ministry of Labour will assume complete control of policy.
Subsection 65.1(1) says: "The minister may issue policy directions that have been approved by the Lieutenant Governor in Council on matters relating to the board's exercise of its powers and performance of its duties under this act."
Subsection (2): "In exercising a power or performing a duty under this...the board shall respect any policy direction that relates to its exercise."
And finally, subsection (3): "The board shall report to the minister whenever it exercises a power or performs a duty that relates to a policy direction."
This government, with this bill, has simply taken away the independence that has been so greatly protected by government for almost 80 years, in a swift draw of the pen. The new board of directors, with this piece of legislation, will be indeed powerless. The politicization of the Workers' Compensation Board effectively renders powerless the new bipartite board of directors. The government should speak to the board through the law it passes, not through measures that make a mockery of the very board the government is purporting to change.
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That would appear to be an end to the consultation that this government of the province of Ontario has sought so much over the years. We will now see the direct policy of the government of Ontario being implemented by the WCB and it will no longer be independent.
There's a very brief period of time which I have, and as one of the previous speakers indicated, we really don't have adequate time. The critics for the Liberal Party and the Conservative Party have spent some time on many of these issues and no doubt they will be raised during the hearings, but I perhaps will only make one more comment and that is with respect to the recommendation to reduce the unfunded liability that I submit and many others submit is full of holes as far as this legislation is concerned.
One of the key recommendations advanced by business was the adoption of what is known as the Friedland formula. The government plans on adopting the Friedland formula, and that is 75% of the consumer price index minus 1%, with a cap of 4% per year. That's the formula. The formula is with respect to calculating increases in pensions. Currently, as many of us know, pensions are adjusted at the rate of the CPI. However, rather than accept the recommendations of the business caucuses to apply this to all cases, the government isn't going to be doing that with this bill.
The government has provided exemptions for 45,000 people, which immediately limit the impacts. Moreover, the government is increasing pensions by $200 a month for life for about 40,000 workers who receive older worker supplements; in other words, for pre-1990 injuries. It has been estimated that these increased pensions -- and the member for Sudbury, or whatever, indicated that wasn't happening. Well, there's no question that the pensions are being increased by this legislation and will add $1.5 billion to the unfunded and will cost about $86 million per year.
Mr Speaker, I have simply run out of time. I can tell you that the answer this government has with respect to the problems of workers' compensation, of simply having a royal commission to study the issue, to stall off the issue, isn't enough. We need action now. This bill is clearly in the long run going to add to the liability fund even greater than what we'd ever dreamed. I too will be voting against this legislation.
The Speaker: I thank the honourable member for Dufferin-Peel for his contribution to the debate and invite any questions and/or comments. The honourable member for Middlesex.
Mrs Mathyssen: I'll be very brief. I listened carefully to the member for Dufferin-Peel and I found it fascinating that he bemoans the fact that the new WCB will be accountable to government. I thought that was precisely the point, that we had a difficulty that goes back to 1980, when the unfunded liability began to grow out of control. As anyone here who knows anything about interest rates will understand, an unfunded liability that began at $400 million and was by 1985 $6 billion and by 1990 $10 billion is clearly out of control.
To say that it's not practicable to make sure the new board is accountable to government is a rather irresponsible position. We know very clearly that government taking control and saying, "You must be responsible. You can no longer run up enormous debt. You must be accountable to the people of Ontario," is a positive measure.
I would also like to say, in terms of the other criticisms, that we need very, very clearly to take control of this situation; we can't simply say it will take care of itself. This bill does precisely that. This bill is addressing the problems we have seen evolve over the last 14 years. It will be an effective solution to the unfunded liability problems, the problems within the board itself, and the need to put very clear measures in place so that those workers who wish to get back to work have the opportunity for rehabilitation so they can indeed get back to work and make a contribution to this province once again.
Hon Shelley Wark-Martyn (Minister without Portfolio in Health): The presenter mentioned the pension that I receive, and it has been mentioned several times over my period in this Legislature. I think it's important for the member to recognize that not all injured workers receive a pension. They're not easy to receive. Your damages have to be severe to the point that you're not returning to work, that your lifestyle has been affected.
People who receive pensions are people like Steve, who doesn't have an arm any more and can no longer make snowballs with his children outside, who can no longer function like you probably can in your life. People who receive pensions are people like me who can no longer go back to their job in nursing, which is where they'd like to be in their life, who have had to give up skiing and curling and picking up their 18-month-old daughter because of an injury. That's what the pensions are all about.
They're not lucrative pensions. I don't know anybody who's on a WCB pension who says, "This is enough to pay all my bills for a month." This is a recognition of an injury, a loss of their lifestyle, a loss of the vocation they chose earlier in their life, which they are being, I guess you can say, awarded in recognition that this is a loss in a lifestyle they had chosen to lead.
If people have to give up their pensions, does that mean that other people who work and have a pension and retire and then get another job, another employment, have to give up their pension rights? I think we should be very careful when we try to blame people who receive WCB pensions. Those are injured workers. Those are victims of a system, of a workplace that maybe wasn't adequately equipped with safety devices.
Let's also recognize, and it has been mentioned, that in the last four years it's probably the first time you've had so many working-class people working at Queen's Park in this party, representing the people of Ontario who are actually out there working and at risk every day.
Ms Murdock: I'm not planning on using the full two minutes. I just would like the member to bring his mind to page 5 of the amendments on Bill 165, to section 65.2 regarding the memorandum of agreement that must be signed within six months after the section comes into force and be reviewed every five years thereafter.
Frankly, when he brings up Simcoe Place, once again it should be pointed out that the joint venture that was signed with the TD and Cadillac Fairview was done in 1989, and that the penalties and the litigation that would have ensued had we not proceeded were almost the worth of the building. So to keep bringing that up, we will now guarantee in this section that it will never happen again.
The Speaker: Further questions or comments? The honourable member for Dufferin-Peel has up to two minutes for his reply.
Mr Tilson: There's no question that all of us have an obligation to maintain affordable and efficient service to the people of Ontario. There's no question that we have to do that.
I draw to members' attention the inexcusable $200-million building. I don't care what rhetoric you use; it's inexcusable. I also find inexcusable the mounting increase of this debt, this unfunded liability. There doesn't seem to be any genuine effort to reduce it. It's like the debt that the Treasurer is continuing to wrestle with. If we don't reduce it, how is it ever going to be possibly paid off? The spending must be curbed. For Canadians and people from Ontario to have to pay off this debt years from now is simply inexcusable.
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That's why I have referred, as others have referred, to the plans that have been developed in the province of New Brunswick and in the province of Manitoba to make substantially different changes than what is being proposed by this government. I would suggest that all members of the New Democratic Party take a look at those changes and the effect it is going to have on the systems in those two provinces.
At the very least, Ontario should do the same as what has happened in those two provinces. Providing WCB benefits that match or exceed the take-home pay of workers after taxes and employment expenses is an open invitation to abuse, and it's one of the reasons why injured workers spent an average of 43.8 days off the job in 1990, compared to only 23.4 days in 1980.
The Speaker: Is there further debate?
Mr David Ramsay (Timiskaming): To the I'm sure potential relief of those remaining in the House, I won't be too long tonight, though the hockey game is over now and all the channel surfers of course will be moving right over to the legislative channel of Ontario, I'm sure, by the thousands, I would predict, so we'd probably be able to catch a few people. They may be going right by also, but a few minutes I think would be worthwhile.
I would just like to relate some of my personal experience as the member for the riding of Timiskaming and my involvement with the WCB. I think it would be kind of interesting for people out there, who probably wouldn't realize that an MPP would get so involved in cases of their constituents in regard to the WCB. Certainly before I was elected I didn't think I would end up sort of running a couple of mini-Ombudsman offices that one's constituency office becomes in working as an advocate for injured workers in one's riding.
Coming from a riding in northern Ontario, as I do, many of the men, almost most of the men in certainly the past generation in my area, made their living from working in the bush, extracting wood, or also working underground or in open-pit operations in the mines.
Unfortunately these occupations are very dangerous, and we have a very high case load of injured workers in our area. In fact, I would say we would have on an ongoing basis at least 150 cases going on all the time in the Kirkland Lake office and probably under 100 in the Haileybury office. Probably there are 500 files, in the nine years I've been there, that are in that office now, as I said, about 150 active.
It's amazing how much time an MPP's staff and those resources spend on being that advocate, that miniOmbudsman. In fact, I've had a constituency assistant with me since day one that I was elected to this place. She's been there for nine years and she's become basically a full-time specialist in working on WCB cases. That's all she does five days a week, work on that.
Interestingly enough, this is not one of those issues that one side is unhappy and the other side is not. Both workers and employers are unhappy with the way this system works. Unfortunately, today I guess we're talking about kind of tinkering with this bill when I think massive revolutionary reform is needed.
I was a little disappointed to see that this government hadn't tackled this earlier and hadn't tackled it based on one of its policies and one of our policies, that you would maybe look at a more universal accident and sickness type of program, rather than just looking at WCB. Maybe we should be expanding the net out there and looking at all the cases of when people are injured.
It seems a little unfair to me, and maybe it's not quite right, that there's a big difference whether you get injured on a Friday afternoon at work or Saturday morning on a soccer field, maybe enjoying some recreation with your family. In either situation or any other recreational situation, one can find oneself becoming a quadriplegic or a paraplegic after traumatic injury and finding oneself in the position of not being able to fend for oneself and one's family. We in this province still haven't addressed that. Other jurisdictions around the world, notably New Zealand, have addressed that issue, and I think maybe it's time that we did that.
I suppose we're going to have to work incrementally, and that's what the government has decided to do, so Bill 165 is an attempt at that. Then they've got the royal commission, which will be another attempt at that.
I'd certainly like to salute my colleague Steve Mahoney, the MPP for Mississauga West, who I think produced a tremendous task force report earlier this year, April this year to be exact, called Back to the Future. I think he did a very comprehensive report.
In talking to my colleague, he sort of had the same feeling that I did, that maybe the way to reform the WCB would be to start over again, that maybe it was not fixable at all, because many of us have tremendous complaints about it and we quite frankly think it doesn't work at all.
Steve had the patience to listen to both injured workers and people in the labour movement, and also to employers, and really started to come up with some good ideas. In fact, he started to travel the country, going west from Ontario. Quite frankly, what he did was cherry-pick all the best ideas from the workers' compensation boards from Manitoba all the way across to British Columbia. Actually, there are some very good, efficiently working workers' compensation boards in Manitoba, Saskatchewan, British Columbia and Alberta. He had some very good consultation with the board members and the employees out there in that area.
He's got a very good plan here, and I would hope that the government members would look at that and that the government's royal commission would look at those ideas, be open to ideas not only in Steve's report but from all the jurisdictions across this country, some of the American states that have some progressive programs and also other countries such as New Zealand and Australia that have very progressive workers' compensation boards.
We really have to do something to make this a financially sustainable operation. As we know, it's $12 billion to $13 billion in debt. Somebody mentioned today it's $2 million a day coming into debt, accumulated deficit. That clock is ticking very quickly. It's going to bankrupt the employers of this province if we don't get on with it. It's time we did get on with it.
My colleagues have been very critical about Bill 165, hoping that the government would do much more than this. One would have to hope that when the royal commission comes in that it does do a comprehensive review and come in with some comprehensive reforms. Whether it will be this government or another government in the future that will bring in reforms, whoever is here will be faced with a very massive set of changes to make sure that the WCB in Ontario works both for injured workers, for all the working men and women in Ontario, and also for the employers that have to fund this program.
The Speaker: I thank the honourable member for Timiskaming for his contribution to the debate and invite any questions and/or comments. Is there further debate?
Ms Murdock, in the absence of Mr Mackenzie, has moved second reading of Bill 165. Is it the pleasure of the House that the motion carry? Carried.
Hon Brian A. Charlton (Government House Leader): The House leaders had some discussion earlier and agreed that we would see a division here this evening and that the vote would be deferred until after routine proceedings tomorrow.
The Speaker: Is that agreed? Agreed and so ordered. Orders of the day.
Hon Mr Charlton: In view of the time and in view of the fact that we had only agreed to do this piece of business today, I'd move the adjournment of the House.
The Speaker: That's reasonable. The government House leader moves adjournment of the House. Is it the pleasure of the House that the motion carry? Carried.
This House stands adjourned until 1:30 of the clock tomorrow afternoon.
The House adjourned at 2319.