Wednesday 24 August 1994
Workers' Compensation and Occupational Health and Safety Amendment Act, 1994, Bill 165, Mr Mackenzie / Loi de 1994 modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail, projet de loi 165, M. Mackenzie
Ontario Hospital Association
Peter Harris, chair
Dennis Timbrell, president
Russ Gurman, chair, workers' compensation committee
Oxford Regional Labour Council
Terry Coleman, vice-president
Kelly Hoskin, representative
Canadian Railway Labour Association
Jim Houston, vice-chair, Ontario legislative committee
Glenn King, committee representative
Ontario Chamber of Commerce
Wallace Kenny, chair, employer-employee relations committee
Toronto Workers' Health and Safety Legal Clinic
Dan Ublansky, director
Ontario Restaurant Association
Rachelle Solomon, manager, government affairs
Paul Oliver, president
Canadian Union of Public Employees, Ontario division
Sid Ryan, president
Motor Vehicle Manufacturers' Association
Mark Nantais, president
Rosemary McNamee, associate administrator, salaried personnel/compensation benefits policy,
General Motors of Canada Ltd
Bruce Waechter, labour relations planning manager, Ford Motor Co of Canada Ltd
Rick Thrasher, supervisor, workers' compensation and medical plans, Chrysler Canada Ltd.
Ontario Nursing Home Association
David Cutler, board vice-president
Shelly Jamieson, executive director
Employers' Advocacy Council
Ron Calhoun, Ontario provincial chair
Steve Cryne, executive director
Industrial Disease Standards Panel
Nicki Carlan, chair
John Macnamara, employer member
Bob DeMatteo, labour member
International Brotherhood of Electrical Workers, Local 1788
John Ives, representative
Hamilton District Injured Workers Group
Paul Gibson, board member
John Battaglio, board member
Trenton-Brighton Disabled Workers Association
Herb Jones, president
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Président: Vacant
*Vice-Chair / Vice-Président: Cooper, Mike (Kitchener-Wilmot ND)
Acting Chairs / Présidents suppléants:
*Klopp, Paul (Huron ND)
*Waters, Daniel (Muskoka-Georgian Bay ND)
Conway, Sean G. (Renfrew North/-Nord L)
*Fawcett, Joan M. (Northumberland L)
*Ferguson, Will, (Kitchener NDP)
Huget, Bob (Sarnia ND)
Jordan, Leo (Lanark-Renfrew PC)
*Murdock, Sharon (Sudbury ND)
*Offer, Steven (Mississauga North/-Nord L)
*Turnbull, David (York Mills PC)
Wood, Len (Cochrane North/-Nord ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Akande, Zanana L. (St Andrew-St Patrick ND) for Mr Huget
Hope, Randy R. (Chatham-Kent ND) for Mr Wood
Mahoney, Steven W. (Mississauga West/-Ouest L) for Mr Conway
Wiseman, Jim (Durham West/-Ouest ND) for Mr Huget
Witmer, Elizabeth (Waterloo North/-Nord PC) for Mr Jordan
Clerk / Greffière: Manikel, Tannis
Staff / Personnel: Fenson, Avrum, research officer, Legislative Research Service
The committee met at 1005 in room 151.
WORKERS' COMPENSATION AND OCCUPATIONAL HEALTH AND SAFETY AMENDMENT ACT, 1994 / LOI DE 1994 MODIFIANT LA LOI SUR LES ACCIDENTS DU TRAVAIL ET LA LOI SUR LA SANTÉ ET LA SÉCURITÉ AU TRAVAIL
Consideration of Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act / Projet de loi 165, Loi modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail.
ONTARIO HOSPITAL ASSOCIATION
The Vice-Chair (Mr Mike Cooper): Today we'll be continuing our public hearings on Bill 165. Our first presenters are from the Ontario Hospital Association, public affairs division. Good morning. Welcome to the committee. The committee would appreciate it if you could keep your remarks somewhat shorter than the 20 minutes allocated to you so there will be time for questions and comments.
Mr Peter Harris: Thank you, Mr Chairman. I am Peter Harris, chair of the Ontario Hospital Association, and with me today is Dennis Timbrell, president of the association, and Russ Gurman of Hamilton Civic Hospital, who is also chair of OHA's workers' compensation committee.
We have provided to the committee copies of our brief. In it, we comment on most of the major issues raised by Bill 165's proposed amendments.
In general, while we appreciate that the bill is only one component of the government's strategy to reform the Workers' Compensation Board, we are in general disappointed with the bill's provisions on two counts.
First, it is not, to us, a real blueprint for fundamental reform. It does not, for instance, tackle one of the largest cost-drivers presently in the system, future economic loss and non-economic loss awards.
Second, it does not truly reflect the March 1994 framework document presented by the Premier's Labour-Management Advisory Committee.
Like other employers, we are deeply concerned about and must strongly criticize the bill's provisions concerning the purpose clause, vocational rehabilitation, policy directions and experience rating.
We are also very concerned that the top-up provisions and the de-indexation protections for certain categories of benefit recipients will add costs to an already financially unsustainable system. If Bill 165 is enacted, the unfunded liability would continue to grow.
As you will see, the core of our presentation today centres around the provisions in the bill to establish a bipartite model of governance for the WCB. Let me be clear from the outset that we are not opposed in principle to bipartism. In fact, we as a sector, and OHA specifically as an organization, participate in several existing successful models of bipartism, such as the board of the hospitals of Ontario pension plan and the Health Sector Training and Adjustment Panel.
However, there is one model of bipartism, the Workplace Health and Safety Agency, which in our experience is not working well, and unfortunately some of its worst aspects could, we believe, be imported into the WCB if Bill 165 provisions are enacted.
Our involvement with the agency's bipartite governance structure over the past three years is, as we state in our brief, a cautionary tale. We believe, however, that it has given us a unique perspective on bipartite labour-management governance, which we felt compelled to share with you.
The organization is an agency of the WCB, fully funded by the employer WCB assessments. It has been embroiled in controversy, scandal and confrontation almost from day one, and its first neutral chair and executive director resigned after only brief stays in their respective posts. The neutral chair was not replaced by an order in council for nearly two and a half years. In the interim, the vice-chairs filled the power vacuum and became co-CEOs and co-spokespersons. They no longer are simply leaders of their respective caucuses, but in effect have become the chief officers and apologists for the agency. They have also consolidated their power by taking extensive control of the staffing of the agency, including the executive director position.
The workings, actions and governance of the Workplace Health and Safety Agency should be of major concern to the Legislature, as the government is asking the Legislature to enshrine in statute another bipartite labour-management board.
There are two very serious deficiencies in the way the agency operates which we would bring to your attention at this time: First, it has no dispute resolution mechanism to resolve conflicts between positions of the two caucuses; and second, the agency has no formal legitimate mechanism for stakeholder input.
Our greatest specific criticism recently of the agency, however, centres around its single-minded crusade to destroy three long-standing safety associations: the Care-Givers of Ontario Safety and Health Association, or COSHA; the Tourism and Hospitality Industry Health and Safety Education Program, THIHSEP; and the College, University and School Safety Council of Ontario, or CUSSCO.
Funding for these associations, under the provisions of Bill 208, was transferred from the WCB to the agency. The WCB currently turns over $60 million in employer WCB payroll assessments to the agency each year. In the case of the health care sector as a whole, this amounts to about $4 million annually, about half of which comes from the hospitals.
Responsibility for funding those safety associations was transferred from the WCB to the agency with the assumption that the funding for these health and safety delivery organizations would be continued more or less unchanged for some years until the agency had established itself as a credible entity in the health and safety field.
In April 1993, the agency board decreed that to achieve unspecified efficiencies of $1.4 million in service delivery, COSHA and CUSSCO should be merged with the Workers' Health and Safety Centre and THIHSEP should be merged with the Industrial Accident Prevention Association. None of the bipartite boards of the three organizations affected endorsed the agency's merger decree.
A counterproposal for the merger of the three was developed and submitted to the agency in December 1993. It was ignored by the agency, and instead the agency confirmed its previous position and threatened to cut off funding to the three if they did not agree to merge or retained legal counsel to fight the agency's directives. These actions clearly exceeded the agency's statutory authority and mandate.
In March 1994, the management caucus of the agency wrote to the vice-chairs, seriously questioning the agency's actions with respect to the merger decrees and its authority to issue them. However, the die was cast and the agency continued to maintain it would cut off funding to the three on July 1, 1994, and reallocate their funding to the workers' centre and the IAPA respectively. In COSHA's case, this represents $1.9 million.
Throughout 1993 and 1994, OHA repeatedly asked for intervention/mediation in the dispute from the Minister of Labour, the deputy minister, the OFL and finally the Premier. But no one could or would successfully intercede with the agency. A confederation of some 20 employer associations also pressed for an orderly resolution of the issues. All efforts were unsuccessful.
The agency steadfastly refuses to consider any other model for merger, thus likely forcing the immediate layoff of some 30 dedicated and experienced employees, the majority of them at COSHA.
For the health care sector, there is absolutely no indication that the workers' centre can meet the long-standing health and safety training information and educational needs of employers and workers therein.
In the circumstances, we have no choice, on behalf of our member hospitals, except to immediately open discussions with the interim administration of the WCB and with the Ministry of Labour with a view to cancelling our members' WCB assessments for health and safety on the principle of no taxation without representation or service. Alternatively, for 1995 we will press that the $2 million in current member assessments be set aside in order to establish some new model for meeting the health and safety needs of employers and workers in our sector.
The implication of all this for the proposals for bipartite governance contained in Bill 165 are very significant.
This is why we are recommending to you today the following:
-- Replace the concept of a bipartite board of directors, proposed in Bill 165, with the conception of a multistakeholder board;
-- Establish a dispute resolution and formal stakeholder consultation mechanism in the bill to assist in board decision-making;
-- Clarify that the chair is to be drawn from outside the caucuses on the board of directors and that the chair is to act as chief spokesperson and representative of the board, with responsibility to mediate, if possible, between opposing positions of directors;
-- The president of the WCB should be a member of the board and report to the board; and
-- Stipulate in the bill that appointments to the board of directors should be made from lists of names nominated by the stakeholders.
We feel that we must focus your attention particularly on governance, because to truly reform the workers' compensation system, the WCB needs to be governed by a board that is not biased towards the position of management or labour. Change starts at the top, where the workings and actions of a stakeholder organization should be determined through a means of consensus-building based on objective and independent advice resulting from open consultations with stakeholder groups. The board structure and composition is absolutely crucial to any successful reform of the WCB. The brief and regrettable history of the Workplace Health and Safety Agency experience with bipartism should give us all pause before making another leap of faith on another bipartite labour-management structure.
In addition to these recommendations, the OHA urges the resources development committee in reporting Bill 165 to recommend that a legislative review of the Workplace Health and Safety Agency be immediately undertaken by a committee of the Legislature.
That concludes my overview comments to the committee, and as I've indicated, the brief is I believe in your hands. We will be happy to entertain any questions that we may have within the time.
Mr Steven W. Mahoney (Mississauga West): Thank you very much for the presentation. I must tell you Mr Timbrell and I have met on this, but I'm very interested in your recommendations. They in fact very closely mirror the recommendations I made to my leader in caucus on reform of the governance to involve a number of different people in the stakeholder community.
Have you given any thought to who they might be? One of the problems I ran into was that I suggested a list of about 12 and of course immediately heard from 12 others who said they'd been left off. So there has to be some way of bringing all of these people together and allowing for their concerns, because it certainly was not my intention to leave anyone out, and yet you don't want a 30-person board trying to make decisions on this. So have you sort of fleshed out your idea with any specifics of how you would arrive at that?
Mr Harris: I think certainly the 30-person board is not viable, but we have had a number of occasions in the past with other organizations where we have been asked to submit the names of individuals who had experience who did not have a vested interest or a potential conflict and some of the other parameters, and I think we've been quite successful in being able to do that in some rather contentious situations. Dennis?
Mr Dennis Timbrell: Yes, I just wanted to add to that as an example, one of the good things, maybe one of the only good things, that came out of the social contract talks was the development in our sector of an alliance of employer organizations in the health sector, organizations that previously had had little to do with one another. We now meet monthly and in fact, as Mr Harris has indicated, from time to time have been asked by, for example, those charged with responsibility for the development of the Health Sector Training and Adjustment Panel to come up with management nominees who would reflect the entire health sector and we've been able to do that where previously that might not have been possible. I think that's a model we would envisage looking to build on.
Also coming out of the social contract talks are closer ties now among all public sector employer organizations. So at least in our part of the workplace I think we've got a much better handle on those communications among employer groups.
Mr Mahoney: Could you tell us the status of your lawsuit with the health and safety agency, and maybe a little bit of history? You explained your concerns about the agency, which I share, but maybe you could tell the committee where you stand.
Mr Timbrell: Well, it's amplified in the full brief, but we've been in court twice, on June 30 and August 5. The case continues. We sought interim relief on June 30. At that hearing, the chair of the agency signed a submission in which the agency said, contrary to what they've been saying to us and to their own members months before, that they never believed they had the authority to force a merger of the three agencies, COSHA, CUSSCO and THIHSEP, and Mr Justice Matlow in fact ruled in our favour on that point. He did not find that he would have jurisdiction with respect to funding, and therefore effectively the funding was cut off on June 30 and we are going to lay off all the staff of COSHA.
Mr David Turnbull (York Mills): When you speak about a multistakeholder board, could you tell me, would you envisage the current size of board but just simply distributed differently among stakeholders?
Mr Harris: I believe that would be the preferred course of action, yes.
Mr Turnbull: I ask that because when we were having hearings on OTAB some length of time ago, we had every conceivable group of people coming forward and saying they should have a seat on the board. You would've ended up probably with 50 people on the board, and that becomes unmanageable.
Would you envisage injured workers actually having seats on the board?
Mr Russ Gurman: I've looked at that, and basically we're looking at a board to ensure that the legislation is followed through the compensation system. I would look at a labour representative, a management representative and a representative from the insurance industry who knows the funding arrangements to try to control it. I think we have to be careful we do not have self-interest groups trying to direct the Workers' Compensation Board.
Mr Will Ferguson (Kitchener): Thank you very much for attending this morning. I think we appreciated your critical analysis of the workplace health and safety centre and the way it operates and the way it's supposed to operate. I'd like to ask you, were the agency boards of COSHA, CUSSCO and THIHSEP bipartite boards?
Mr Timbrell: Yes.
Mr Ferguson: So there are three examples where a bipartite board can function quite effectively.
Mr Timbrell: I point out that in respect of the workers' centre, the board is not bipartite. It is entirely OFL, as I'm sure you're aware. That is again, if you look at the complete brief, one of our concerns, that the funding has been taken away from three bipartite boards and given, in the case of the health sector, to an agency whose board is entirely of labour, with no management members whatsoever. We would maintain, and it's one of the reasons why we suggested that when you report Bill 165, you should recommend an immediate review by another committee, maybe this committee. We maintain that that is in fact an infringement, one of a number being perpetrated by the WHSA, of the legislation.
Mr Ferguson: As you well know, Mr Timbrell, the management people from that board decided to take a walk, and that's entirely up to them.
I have another question. Were you aware in the legislation that with the makeup of the new board, as the legislation will amend the present makeup, it would be up to the board to hire the CAO for the Workers' Compensation Board as well as it will be up to the board to appoint a chairperson?
Mr Gurman: Yes, we're aware of that. Again, it has to be a neutral position that can mediate the discussions between the labour and the management representatives for the other stakeholders on the board.
The Vice-Chair: Mr Harris, Mr Timbrell and Mr Gurman, thank you for taking the time out of your busy schedules and giving us your presentation this morning.
OXFORD REGIONAL LABOUR COUNCIL
The Vice-Chair: I call the Oxford Regional Labour Council. Good morning. Please identify yourselves for Hansard and then proceed.
Mr Terry Coleman: The Oxford Regional Labour Council has been serving its affiliates and communities since 1955. At present, we have 27 affiliated unions which administer over 50 collective agreements and represent 9,000 workers and their families. These workers, and the businesses that they work in, represent an average picture of Ontario's manufacturing and service industries. We're employed at everything from mining of lime and gypsum, to auto parts and assembly, transportation, textiles, retail, municipal workers, health care deliverers and workers in the agricultural products sector.
It's important to have a look at the early history of workmen's compensation, now called workers' compensation, in the province of Ontario. After years of unexpected litigation expense to employers, and the same number of years of uncertain results to injured workers, the province of Quebec set a commission in motion to study labour accidents in 1907. The Quebec wing of the Canadian Manufacturers' Association believed so much in the validity of workmen's compensation that a speaker at the 1908 CMA convention said, and I quote from Industrial Canada dated October 1908: "The whole tendency in our effort is to reduce the cost and get manufacturers out of the hole that they have been in here in this province" -- meaning Quebec -- "...the law courts are full of records of most unjust claims that have been paid through the intervention of juries. We want to get right down in black and white and know where we are." Of all the advantages which would accrue to the employer, the most important was a reduction in costs. It was this argument that carried weight with the business community.
The Meredith commission in Ontario began hearings on compensation in October 1911. In the final report released in 1913, employers condemned the accompanying draft legislation as being too exorbitant. In a nutshell, this is the problem we're faced with here: 80 years later we are still searching for the balance of cost and fairness to working people who are maimed or killed in this province every year, which last year were 373,000.
Workmen's compensation benefited both the employer and the employee, but the benefits were unequally divided. For business, compensation reduced costs and helped rationalize the new industrial order. For the worker, compensation offered only a modicum of security against the dangers of industrial occupations. A severed limb could not be replaced and the reduced earning capacity of a maimed worker could not be wholly supplemented by pensions. Despite a myriad of amendments to the original Workmen's Compensation Act of 1914, the question of accident prevention has not been satisfactorily addressed.
The government of Ontario has introduced important changes to the workers' compensation system. Unfortunately, after the last 15 years of successive government intervention, the compensation act has shown less and less benefits to the injured worker. This latest government announcement has gone far in addressing the most pressing issues in this inequity. However, there are areas of grave concern to the Oxford Regional Labour Council and workers everywhere in the province of Ontario. We will highlight our most pressing concerns here but, for lack of time, we've included an appendix.
We most strenuously object to the Friedland formula for inflation protection. We believe any loss in income to an injured worker who is already on a reduced income is a grave injustice. As an example, we've prepared a hypothetical chart showing the difference between the current full inflation coverage and the proposed Friedland formula.
We just threw this together as an example to show what would happen to a $300 monthly pension over the next three years, considering a 5% CPI in 1995, 8% in 1996 and 1% in 1997. As you can see by the figures that come out, there's quite a bit of difference. When you take the accrued increase, that's a lot of difference. The last line tells quite a big story: You've got an increase in inflation but a decrease in pension. That's totally unacceptable.
The injured worker in this example lost 7.9% of the actual accrued cost of living. Although this may be acceptable in the event of a retired worker with a shorter life expectancy, the effect on a younger worker would result in a meaningless compensation pension in a short period of time. We must not trivialize injuries in this manner and push injured workers, through no fault of their own, to the margins of society.
The next shortcoming in Bill 165 that we would like to bring to your attention is the problem of re-employment. We agree in principle with the notion that the employer should re-employ the injured worker. Hard experience has taught us some valuable lessons in this area. The vocational rehab plan, gradual return to work, runs hand in hand with re-employment. The question is, is the board sending injured workers back to work too early and risking further injury in another body part?
Mr Kelly Hoskin: A case I have been working on involves a worker who had shoulder surgery. The specialist said it would take one year to determine the success or failure of the surgery. However, the board determined after only six months that the injured worker could go back to work on a voc rehab (with restrictions) essentially using one arm to do the work that would normally be done with both. It is the opinion of the injured worker's specialist that the worker's good arm would be subject to repetitive strain. I feel the board should concur with the injured worker's specialist. The board's regional medical advisors do not see the patient. They are not familiar with the injured worker's job. They only see their medical file and make the decision only according to that medical file.
We feel this is exactly the wrong type of message to send to injured workers. The board's medical advisors need to be accountable to the realities of the injury and the workplace. One of the key points of Bill 165 is to return injured workers to their jobs quickly and safely -- "safely" cannot be emphasized enough.
Another serious concern we have with Bill 165 is the question of privacy concerning prescribed medical information. Employers have no need to have access to an injured worker's medical file. In the best scenario, the employer only needs to know when the employee is able to return to work and with what restrictions.
The amendment to section 51 is fraught with pitfalls that could open the door to abuse of an injured worker by the employer and sets a dangerous precedent to society as whole. Any small amount of good it could do in an injured worker's return to the job would be offset a hundredfold by the seeds of animosity and distrust that could develop from this dubious practice. It makes the employer the judge and jury in a return-to-work situation. How will lack of employee consent affect a decision by the board? It could destroy the doctor-patient relationship. In short, it creates a stressful situation for everyone involved, and the job of enacting legislation should be to reduce stress and promote trust in these delicate situations.
Mr Coleman: The most pressing problem for disabled workers is that of poverty. Bill 165 moves in the right direction on this issue. We at the Oxford Regional Labour Council support the initiative of early return to work, and again I must emphasize a safe return to work. We strongly support the provision giving a $200 monthly increase and 100% CPI indexing to the lifetime pensions of disabled workers who were injured prior to Bill 162. It should be expanded to include all injured workers regardless of section 147(4). It goes a distance in assuring a better quality of life for those individuals.
Although we at the council have serious concerns about the experience rating system, it perhaps has been recognized that prevention is a crucial spoke in the wheel of reducing costs of the Workers' Compensation Board. We applaud the government on this recognition, if not in the manner of initiation.
The Oxford Regional Labour Council supports the amendments providing a bipartite board of directors. This is a sensible solution to the matter of governance and leadership. Employers and labour are the stakeholders and will have an equal say in the decisions which will reflect workplace needs and reality.
The council feels that the prediction of an increased funding ratio of the current 37% to 55% in 2014 is financially sound. Regardless of what some lobbyists may say, these types of numbers are very sensible, but it should not come at the expense of injured workers. Bill 165, in the main, is a sound document for the immediate future.
Ontario's workplaces have undergone massive restructuring in the last decade, and so has the economy. Change has come upon us very quickly, and now the Workers' Compensation Act has new and fundamental challenges before it. Therefore we, in the strongest terms, support the announced royal commission to study this issue. We are appreciative of the breadth of the mandate. We are confident that this commission report will establish a new Workers' Compensation Act that will include all workers of Ontario.
The Legislature should pass Bill 165 into law, taking into account our serious concerns and with amendments that clear up the intent of some clauses.
I think it's important, before I stop here, to go over just a couple of things on the appendix that highlight our concerns.
On the first page, titled "Sections 51, 63," the new subsections 51(2) and (3) obligate a physician to provide prescribed information about a worker's physical abilities, with the worker's consent, and will be based on an amendment to subsection 63(2) to create a regulation which sets out the prescribed medical information. This form should be negotiated by representatives of the business, labour and medical communities and be provided to government for the regulation process. It must not contain any diagnostic information.
The intent of the prescribed information is to facilitate early return-to-work programs. The present wording of subsection 51(2) discourages the cooperative environment which is necessary for successful return-to-work programs. Before a doctor should be mandated to provide information, the doctor should feel comfortable that the information provided will be used to help in the patient's recovery and that the patient's impairment will be accommodated safely through a workplace program developed and approved by the WCB.
Although subsection 51(2) requires the consent of the worker, will a worker be deemed uncooperative by the WCB if she/he refuses to consent? In a unionized workplace, a worker may feel confident enough to refuse the information when a joint return-to-work program does not exist. In a non-union workplace, the worker who denies consent will ultimately suffer grave consequences.
Should an employer which has not implemented a WCB-approved return-to-work program have access to a worker's medical information if it has rejected the concept of uncooperative return-to-work programs and refused to implement a board-approved program? Would that employer know what to do with the information? The potential for abuse is frightening.
Subsection 51(2) should be amended to read, "A physician who receives a request from the worker or from the employer via the worker shall provide each of them and the board with such medical information as may be prescribed, where the employer has implemented a board-approved return-to-work program."
Clause 63(2)((h.1) should be amended to read, "prescribing non-diagnostic medical information for the purposes of subsection 51(2) about the ability of a worker to return to work and about any medical restrictions affecting the worker's ability to perform work on his or her return."
On page 4 under the heading "Section 147": There's a small group of workers, all of whom are over 70 years of age, who were not considered when Bill 165 was drafted. These are workers on very small WCB pensions who turned 65 years of age prior to July 26, 1989, and were never able to return to work after their injury. Their CPP contributions were minimal. They were made ineligible for the 147(4) supplement due to their age, yet suffered similar circumstances as those younger then them. Increasing the pensions by $200 monthly for this group would not cost the WCB much money and is an issue of equity and justice.
Clause 147(14)(b) should be amended to read, "if the worker would be entitled to a supplement under subsection (4) but for subsection (7)."
I'd like to thank the committee for the opportunity and look I forward to your questions.
Mr Mahoney: Thank you for your presentation, but I must tell you I find so many contradictions in what I've just heard that I'm somewhat puzzled. Maybe you can help me.
There are four fundamental cornerstones to this bill: Friedland, return to work, the medical amendments and the $200 increase in the supplement and the pension. There are four fundamental legs on this table. You strongly oppose three of those and support one, and yet you say the Legislature should pass this bill into law.
I am just totally astounded at the contradiction there. The other people we hear from who come forward and say they are opposed to those issues -- and we hear them from labour and management opposed to those issues -- come to a little bit of a different conclusion. They suggest we should withdraw the bill. How can you voice such strong and very clear opposition to three of the four major points in Bill 165 and still support this bill?
Mr Coleman: I don't find that as much of a problem as you do. I represent a labour council and we're very well aware of what took place to bring this draft legislation forward. We're here to represent the injured workers in our unions. We deal with this on a daily basis. I'm just putting forward the fact that some of this stuff just isn't fair. It's in the legislation, but I also believe that this legislation is a temporary fix until there's a report from the royal commission.
Mrs Elizabeth Witmer (Waterloo North): You've mentioned here a few times your concerns for the injured workers, and we certainly had a number of them in yesterday who, it appears, had not been treated as fairly as they should have been.
You refer to section 147 and those who are over 70 years of age who were not considered in the draft of this bill and you indicate that if their pensions were to be increased by $200 per month, it would not cost the WCB much money. Do you have any idea as to the exact amount of money it would cost?
Mr Coleman: I'm sorry, I don't.
Mrs Witmer: I guess that's the problem we have because every time you add, you need to take something away. You've indicated that you don't have any concern about the amount of the unfunded liability and the fact that it's not going to be reduced in the future. It's not going to be eliminated because it's not even going to be reduced. Why do you think those figures are financially sound? My concern is if we continue to increase the unfunded liability, the time could well come when we won't have any money to pay injured workers. There will be no money in the pot. Does that not alarm you?
Mr Coleman: If you'll just allow me a second here. I remember it very well; it's just finding it.
Mrs Witmer: By the way, I have a lot of sympathy for those older workers. I think some of them have been unfairly treated.
Mr Coleman: On the bottom of page 6, the prediction is that the funding ratio will be increased over the next 20 years from 37% to 55%.
Mrs Witmer: However, the unfunded liability which stands today at $11.7 billion will increase to at least $13 billion, probably $15 billion and more.
Mr Coleman: In what year's dollars?
Mrs Witmer: We're talking about right now, constant dollars. There's no reduction whatsoever in the unfunded liability and many people predict that the system could go broke eventually.
Mr Coleman: You don't believe the projection, is that what you're saying? The prediction is --
Mrs Witmer: I do believe the prediction, but you don't seem to be unduly or duly concerned about the amount of the unfunded liability. My concern is that if we're not careful and if we don't balance the two factors of looking after the needs of injured workers and making sure that the rate hike to the employer is fair, eventually the unfunded liability will rise to such a point we won't be able to fund the system. It'll go bankrupt.
Mr Hoskin: We're mainly concerned with the injured workers and what they receive as a result of their injuries through the workplace. We represent injured workers on a daily basis and we see the injured workers daily, which many of you people would not see.
Mrs Witmer: We do.
Mr Hoskin: An injured worker might have a bad back, but it goes far beyond just a bad back. It's the financial responsibilities, it's the psychological effects that are being put on to these people.
Mrs Witmer: We see it every day in our offices. We spend half our time --
The Vice-Chair: Thank you, Mrs Witmer.
Mr Hoskin: Our main concern is for the injured worker because we are representatives of the injured worker and not as much as the unfunded liability, as you guys are so concerned about.
Mr Randy R. Hope (Chatham-Kent): Mr Mahoney was confused. I understand where you're coming at. There's a progressive improvement from the current situation, and we've just heard the opposition say, "Well, we care about injured workers too, but we want the bill withdrawn." Then I read the current presentation that was made just before you which talks about reducing the index to 75%, reducing benefits to 85%, reducing the future income economic loss 15% to 40%, modifying the compensation for strain -- when I sit here and I read the presentations that are being made from the employers' groups, they're saying, "Attack the injured worker," and yet we hear the sympathy calls from the opposition over there saying "Withdraw the bill" because they don't want to protect it.
Mrs Joan M. Fawcett (Northumberland): And put in a better one.
Mr Hope: I understand exactly where you're coming, and it's amazing that the opposition plays a sympathetic role and a sympathetic ear to the individuals who come forward. I understand what you're saying. I believe the royal commission will try to address future problems. The year 2014 is still a long ways away, but what we need to do is get the situation under control.
I believe that one of the issues brought forward that I agree wholeheartedly with is dealing with those who turn age 65, and we have to try to find a mechanism in the meantime, the temporary fix, until the royal commission can come up with a satisfactory way of dealing with this.
I'm sitting here and the opposition talks about being confused. When I see employers coming before us and saying, "We care about injured workers, but we want to reduce their pay even more when they get an injury in our workplace," it really confuses me.
I wanted to get that on the record. One of the questions I wanted to ask you -- because Mr Mahoney has very clearly indicated that there are employers out there who top up the WCB to make full 100% wage compensation when they get injured -- in the Oxford regional area, are there any employers who top up workers' compensation to make 100% wage compensation when they get injured?
Mr Coleman: I'm not aware of any.
The Vice-Chair: Mr Coleman, Mr Hoskin, thank you for taking the time out of your schedules and giving us your presentation today.
CANADIAN RAILWAY LABOUR ASSOCIATION
Mr Jim Houston: Good morning. My name is Jim Houston and I'm vice-chairperson of the Ontario legislative committee for the Canadian Railway Labour Association representing the Brotherhood of Locomotive Engineers. With me is Mr Glenn King, who is secretary-treasurer of the Ontario legislative board of the United Transportation Union representing conductors and trainmen, and Robert Jones, who is a member of the United Transportation Union and an injured worker.
We, the Ontario legislative committee of the Canadian Railway Labour Association, on behalf of over 15,000 railway workers employed as locomotive engineers, conductors, trainmen, yard-masters, bus drivers and maintenance-of-way employees in this province, are pleased to have the opportunity to appear before your committee to express our thoughts relative to the proposed legislation.
For the most part, the membership of our organization falls under federal jurisdiction for occupational health and safety under the Canada Labour Code. However, they do come under the Ontario Workers' Compensation Act for coverage of workplace accidents and injuries.
By nature, the railway business is a dangerous occupation and the work is quite physical in nature. Injuries sustained by our members who are in the operating end of the railway, sometimes referred to as running trades employees, are usually of a very serious nature and consequently, when they occur, our people are usually off work for very prolonged periods of time. In some cases, they never do return to work in their pre-accident employment and it is necessary that they be retrained for placement in some alternative occupation.
The United Transportation Union, Canada, and the Brotherhood of Locomotive Engineers have both established offices in Ontario which deal primarily with workers' compensation problems. Neither office has any lack of work. In fact, the case loads for both offices since their inception have increased at an accelerated rate.
Our association has participated actively in the WCB reform process that has taken place over the past several years with submissions to the various standing committees that have been established for that purpose.
We are most aware that there are problems within the workers' compensation system. Some of the problems are serious, some perceived to be serious. Our committee recognizes the fact that the government, through the introduction of Bill 165 and the creation of the royal commission, is making an attempt to resolve some of those problems.
The nature of our rail members' work is such that it dictates a high degree of remuneration and in a large number of cases, said remuneration is beyond the maximum allowable in Ontario for workers' compensation purposes, namely, $53,900 per annum. When our members are stricken with the fact that they are not able to return to their pre-accident employment, they are left with employment that compensates them with considerably less than their previous job with the railway. Quite often they are left with a future economic loss award that inadequately covers the situation in which they find themselves and their families.
Older members of our organizations are finding themselves in considerably more serious circumstances. They have found themselves receiving meagre WCB pensions, perhaps with a supplement but quite often without. They also become painfully aware of the fact that their railway pension is invariably reduced considerably. In some cases, our members find that they are not eligible to receive such a disability pension because they do not fulfil the length of service requirements necessary under railway pension rules to receive entitlement.
In summary, they regretfully find themselves in a situation of abject poverty, and in this day and age that's an absolute travesty. Bill 162 was supposed to be revenue-neutral because it placed an obligation on the employer to re-employ workers who found themselves the victims of a work-related injury. Unfortunately, that has not been the case and indeed the direct opposite effect has been the result.
At this point in time, 78% of injured workers who have been off work for more than a year and are thereby entitled to a future economic loss award are still out of work. The workers' compensation system cannot continue to absorb this cost and, as we all know, the longer a person is out of work the more difficult it is to be motivated to return to any form of meaningful employment.
Recent economic downturns, downsizing in the railway industry due to recession, along with the WCB process of deeming injured workers into jobs that they might be capable of working but which are not available to them -- and one finds a major loss of income and an unemployment figure that is in the area of 40% for disabled persons.
Occupational health and safety in the workers' compensation system is an area of deep concern for those of us engaged in the railway industry in Canada. While we are under federal jurisdiction in this area under the Canada Labour Code, we are also employed by schedule 2 employers. This means that our employers are subject to payment of the entire cost of workers' compensation. This issue has not been addressed by Bill 165. The current system of financial incentives and penalties and experience rating encourages employers to challenge entitlement decisions, appeal claims on a regular basis, encourage our members to claim sick and accident benefits as opposed to WCB benefits, hide claims and, indeed, not to report workplace accidents.
It has been documented through the efforts of our unions that these types of unscrupulous actions occur regularly in our workplace. It has even been documented that railway line supervisors -- incremental pay raises, and promotions are dependent upon them maintaining their department's accident statistics at a minimum. Had these statistics been arrived at through sound occupational health and safety practices, we could probably accept this arrangement, but unfortunately that has proven not to be the case. Experience rating does not penalize employers for claims due to occupational disease, discouraging good industrial hygiene practices. Experience-rating programs do little to reward good health and safety practices because they measure the wrong thing.
The initiatives to make the WCB an arm's-length agency from the government is applauded. There is, and has been in the past, all too much interference. Appointments to the board of directors in the past have been something less than desirable. The Workers' Compensation Board should be responsible and answerable to the people for which it was instituted in 1914, the workers and employers of the province of Ontario.
The financial affairs of the board must be considered. The WCB's financial condition today is considerably better than it was some 10 years past. It presently has assets which will cover about 37% of its liabilities as opposed to 32% in 1984. It is the feeling of our organization that if effective health and safety, re-employment, and rehabilitation programs and practices are implemented, this condition cannot help but improve in the foreseeable future.
Claims have been put forth from certain quarters that Bill 165 will result in an increase in the unfunded liability of the board from $11.6 billion in 1994 to $13 billion in the year 2014. These critics neglect to mention that the $13 billion is expressed in inflated 2014 dollars and that the funding ratio is actually projected to rise from 37% to 55% in the same period of time.
Bill 165 does not by any means address all of the concerns of the Canadian Railway Labour Association. However, we feel that it is a good attempt. It reflects the business-labour agreement negotiated at the Premier's Labour-Management Advisory Committee and indicates that concessions were made by both sides in an effort to come up with an agreement satisfactory to both business and labour.
We do have some concerns with the drafted language of the bill and have attached an appendix. The areas of concern are indicated therein, primarily due to the fact that we would not be able to discuss them properly in the time frame allotted here today.
Subsection 51(2) is the section which deals with the prescribed medical information. We do not believe that an employer who has rejected the concept of cooperative return-to-work programs and has not implemented a WCB-approved program should have access to a worker's medical information. Unfortunately, the wording of the present legislation discourages the cooperative environment which is necessary for successful return-to-work programs. Before a doctor should be mandated to provide information, the doctor should feel comfortable that the information provided will be used to help the patient's recovery and that the patient's impairment will be accommodated through a workplace program developed and approved by the WCB. The information provided by the doctor must be non-diagnostic in nature.
There are other sections of the bill that give rise to questions and they are as follows:
Does subsection 8(7.1) eliminate the value of private disability insurance?
Will subsections 53(10) and 53(13) allow a non-cooperative employer to interfere in a worker's vocational rehabilitation?
Does subsection 95(6) allow the Occupational Disease Standards Panel to achieve independence as contemplated by the act?
Can clause 147(14)(b) be expanded to include those workers who are now beyond age 70 who were already 65 years of age in 1989 when Bill 162 provided for supplements under subsection 147(4) but excluded them?
Do we need the cap as called for in the Friedland formula?
Should we eliminate section 93 to give the Workers' Compensation Appeals Tribunal the independence that it needs to be truly a final level of appeal?
Bill 165 provided a $200 monthly increase to the lifetime pensions of disabled workers who are unemployed and who were injured prior to 1990. It does not cover a small group of workers who were 65 years of age when Bill 162 was passed. We feel strongly that in the interests of justice and equity, those workers should also receive the $200-per-month increase to their present pensions. Bill 162 denies these disabled workers the increase because of their age and we certainly sympathize with them.
The Friedland formula will not apply to the most vulnerable workers nor to their survivors, but will affect approximately 150,000 workers who have returned to work. We hope the bill will provide better return-to-work potential and better vocational rehabilitation service to mitigate the erosion of benefits that will be caused by applying the Friedland formula.
The Canadian Railway Labour Association does not endorse the Friedland formula or anything else that will reduce benefits. Experts from around the world agree that cutting benefits will not make a compensation system healthy. There are only two proven methods: prevention and re-employment. We do, however, feel that in light of the fact that the formula came about as a result of the negotiations at the Premier's labour-management conference, our organizations are willing to reluctantly subscribe to same.
The Friedland formula is more suited to pension plans where benefits are provided at or near a normal retirement age, as opposed to benefits being required to be paid to workers who become disabled at a much younger age and who will feel the effects of inflation over a longer period than one who retires later in life.
We are fearful that the cap will erode benefits. The WCB income is inflation protected because it is tied to wages. The board does not need this cap to protect the accident fund in times of high inflation. Benefits will fall behind inflation by 25% of the consumer price index, less 1%, as the board's income keeps pace with inflation. Although the cap was part of the negotiated PLMAC agreement, the cap cannot be justified and should be removed.
The CRLA supports the notion that Bill 165 addresses the poverty issue to a certain degree through increased pensions and return-to-work and rehab initiatives. We endorse the fact that provisions for increased penalties for non-compliance will assist in making the workplace safer and there will be more timely re-employment of injured workers.
Further, the workplace will become safer through the implementation of the experience rating program. These same provisions should have a profound effect on the unfunded liability through prevention of accidents and less exposure to hazardous substances.
Decisions of the board of directors will address the concerns of the stakeholder communities. The government has considered the larger concerns that have not been addressed by the bill, issues such as coverage, universal disability insurance, entitlement, occupational disease, benefit levels and indexing. These issues have been skirted for years because there have never been resources available to address them properly. We feel that the royal commission should investigate and report on the above-noted areas which have been determined to be outside the scope of Bill 165.
Too many workers with disabilities live in poverty. The Weiler report estimated that 6,000 workers die every year in Ontario from occupational disease. This figure is far too many and certainly not justified. There are 700,000 non-covered service sector workers in the province of Ontario still not covered by workers' compensation. Notwithstanding their occupation, this figure is unacceptable.
The Canadian Railway Labour Association Ontario legislative committee looks forward to being afforded the opportunity of contributing our thoughts and ideas to the royal commission. It is our sincere hope that there will be an all-party agreement to implement the report of the royal commission upon its completion.
We most appreciate your time and patience in allowing us to address our concerns through this forum today.
The Acting Chair (Mr Paul Klopp): Thank you very much. One very quick question for each caucus, starting with Ms Witmer, I believe.
Mrs Witmer: I just wanted to bring your attention to one fact. You made a couple of points which I think were not absolutely correct. You applaud the fact that we're going to have this bipartite governance structure and that the WCB is going to be an arm's-length agency from the government. I guess what we need to remember is the fact that under Bill 165, the government is going to have that opportunity, unfortunately, to issue policy direction for one year after the passage of the bill. Now, that makes an absolute mockery of any attempt to establish a truly arm's-length relationship between the government and the WCB, so I'm wondering why you would be applauding the government because this totally undermines the cornerstone of the system that was designed by Justice Meredith in 1914. It will not be arm's length. The government will have control.
Mr Houston: Well, we would hope that that would be just a transitional situation for the one year, and that after the one year is up, then the true bipartite effect would take place. It's my understanding that's the reason that the one year --
Mrs Witmer: So you're not concerned about --
Mr Houston: Well, I'm concerned to a degree, but --
Mr Glenn King: Somebody has to oversee the transition.
Mr Houston: Somebody has to oversee the transition, to go from the way it is now to a totally bipartite operation.
Mr Daniel Waters (Muskoka-Georgian Bay): You touched on one part of it -- and maybe it's a bit off topic -- but it's what you think the royal commission should be dealing with. I have grave concern about occupational disease. I have a gentleman in my riding right now who will die probably within the next two or three weeks after about a 10-year fight with WCB to have his occupational disease recognized. He had it recognized three months ago and will die within the next two months.
Coming out of industry, with a number of different things that we have been subjected to in the late 1950s, 1960s and 1970s, in particular, and a 30- to 40-year latency period, my concern is how are we going to afford it, because these people have to have a living and I think that you're going to see a number of us in the next 10 years end up disabled and somebody's going to have to pay the bill. What do we do?
Mr King: Well, Mr Waters, with the way our health care system is headed in Canada, what is the individual going to be left with? That's my concern. I think they need something here to know that if they suffer a workplace injury, whether it be occupational or whatever, they should have the means to get the medical attention they require. I think it's very unfortunate that a man is going to pass away and he's been diagnosed; it's unfortunate. He should have been cared for a long time ago, but right now within the board there's not that drive to look at the occupational end.
We have repetitive strain injuries the very same way. They're very reflective in our trade, but yet the board fails to recognize them. We also have stress. Stress is a major player in the rail industry today. We're downsizing, we're losing our jobs, there are more demands being put on the working individual. Our only means for our members is to collect sick benefits, and that's only for a limited amount of time.
Mr Mahoney: That answer has actually changed the question. I wanted to talk to you about health and safety training and some of your comments, but I just have to follow up on what you've just said.
Bear in mind that the compensation system in Ontario is not funded by the taxpayer, it's not funded by the government, it's funded by the employers and they, in essence, buy insurance to protect them from lawsuits, and the workers agreed to --
Mr King: That's right, no-fault insurance.
Mr Mahoney: -- give up the lawsuits; okay. So we've got a system that is funded by a specific group of people who are not the taxpayers at large. Should it be then an all-encompassing social safety net, which I think is what many people fear it has turned into, or should it be what Justice Meredith really intended, an income replacement system?
I ask that question in light of your comments, sir, about people need this protection and they need -- I agree with that, but is this the right area for that protection to come from?
Mr King: I think it is when you're looking at the workplace, because between 1914 and today our workplaces have changed dramatically, and our people today are facing a lot of things that they never did in 1914 when the act was first established.
Mr Mahoney: But it's income replacement; that's the question. It's income replacement, not social services.
Mr King: Well, that's an issue that can be addressed at the royal commission level, I would think.
The Acting Chair: Okay, and I'm sure it will. Thank you very much for taking the time to come here today. Your notes and your time will be considered. Thank you.
Mr Mahoney: Mr Chairman, just a point of interest: I think it was either this association or a forerunner that spawned one of the first federal labour cabinet ministers, back in the early 1900s; came out of these people. I don't know if you're aware of that.
Mr King: No, I wasn't.
ONTARIO CHAMBER OF COMMERCE
The Acting Chair: And on that history note, we will move on to another organization that's been around a long time and has had many activities, the Ontario Chamber of Commerce. It's 20 minutes, and we really are a little bit behind, so try to keep your comments short so there can be opportunity for questions. Thank you. Go ahead.
Mr Wallace Kenny: We'll attempt to do that. My name is Wallace Kenny. I'm the chair of the employer-employee relations committee of the Ontario chamber. With me is Joe Couto, who is the chamber's policy coordinator.
We'd like to thank you for affording the Ontario chamber an opportunity to provide our comments on Bill 165. I think it's important to recognize that we have 65,000 member businesses and 205 community chambers of commerce and boards of trade across Ontario that are part of our organization.
I don't think there's anybody in this room who does not recognize that workers' compensation is in crisis in Ontario. There should be nobody in this room who is unaware of the fact that presently we're looking at a $52-billion deficit in 2014, and I'm sure there is nobody in this room who is unaware of the fact that in the Globe and Mail this morning it was announced that the deficit has now risen to $11.7 billion.
There should be nobody in this room who disagrees with the fact that premium payments are already out of sight. They are almost 50% higher than the Canadian average.
There is nobody in this room who ought not recognize that our current benefit levels are generous in terms of other jurisdictions. We are currently 90% of net income.
There is nobody in this room who should not recognize that benefits paid out per lost-time claim are double the Canadian average in Ontario.
Those facts create a huge drain on investment capital within this province. That is a reality. Our workers' compensation system is killing jobs. That is a reality. It is discouraging new employers from investing in our province. It is a reality that the Premier recognized when he asked PLMAC, Premier's Labour-Management Advisory Committee, to look at this issue and attempt to come up with a resolution. It's something which the NDP government, we believed, because of the initiative of the Premier, understood -- the problems associated with this system. The system is technically bankrupt.
When the Premier asked PLMAC to get involved in this process, to assist in this endeavour, we, the chamber, along with others in the business community, created a reference group of over 200 companies and associations, a 16-member steering committee, 14 working groups, to address particular issues within the system. The amount of time, attention and dedication provided by this province's business community to resolving these issues is unprecedented in our history and it is something that I would submit has simply been ignored in Bill 165.
The proposals developed by the business coalition provided a balanced, fiscally responsible solution to eliminate the deficit and bring the system back to health. It did this without eroding benefit levels significantly. The solutions maintained benefit levels at or higher than other Canadian and North American jurisdictions. It is not a proposal that anyone could responsibly argue was being perpetrated on the backs of injured workers. It was fair and balanced.
It was not accepted by the government. The government requested that business go back and seek a consensus with labour. Business did that and business reached a consensus with labour, a consensus which does not go far enough in terms of dealing with the issues but which was an important first step towards correcting the problems associated with workers' compensation in this province. That's the history of this bill. And what came out of it? Well, what came out of it is Bill 165.
When business and labour reached that consensus, there was a clear expectation that the government would accept it and implement legislation which was consistent with the package. This bill does not reflect the agreement of the parties and does not resolve the issues which have brought workers' compensation to a crisis in this province. If it had reflected that consensus, you wouldn't have had every business group that has appeared in front of you say it doesn't. So for the government to suggest that somehow it has implemented this consensus or for labour to suggest that somehow it has implemented the consensus reached by business and labour is a ridiculous position to take.
So let's understand that this was not done and let's understand what impact that's had on the credibility of the process which the Premier asked business to participate in in this province. It is a serious, serious thing to have done. It hurts the credibility of the process and it hurts the credibility of the government. That is why you have heard every business group here object to the implementation of Bill 165. It's a betrayal of the business community's commitment to this process.
Now, you ask, "How is that so?" I think the best illustration of the failure of this bill to recognize the consensus that was reached is evidenced by the purpose clause. If it was the intent of the government to recognize the financial responsibility model that was accepted by the parties, why is it refusing to include the concept of financial responsibility in the purpose clause? What is the problem? We do not understand. We do not understand the sophistry that is going on with respect to this issue. The purpose clause ought to be amended to reflect the financial responsibility model. Without that change, the changes to the purpose clause will significantly impact on the cost to the system.
The purpose clause is to be amended to include for fair compensation. The only people who are responsible with respect to financial responsibility under the bill are the board of directors. It is essential that the Workers' Compensation Board in its decisions and the Workers' Compensation Appeals Tribunal also be subject to the purpose clause in interpreting the act and awarding benefits pursuant to the act. If they do not, in terms of implementing their policies etc, we are nowhere, we have done nothing to correct the problem that we're dealing with here.
Section 65 of the act is amended by adding two new subsections. These subsections require the Workers' Compensation Board to ensure that generally accepted advances in health sciences and related disciplines are reflective of benefits services, programs and policies in ways that are consistent with the purposes of the act. The purpose of the act is to provide fair compensation; it has nothing to do with financial responsibility.
If there is no reference to financial responsibility within the context of the purpose clause, this section, as amended, would now obligate the board to implement new benefits with respect to things such as stress claims or emotional or behavioral conditions without regard to the financial consequences of expanding the scope of entitlement under the act. It's written into the bill.
It totally subverts the entire rationale for the March agreement between business and labour, and there must be a relationship established between expenses and revenues that is both fair to the worker and fair to employers.
The chamber did a survey at the beginning of this year of our community boards and our community chambers and approximately 250 businesses. We asked them to identify important issues to the business community in the province. Over 70% of these individual businesses and their community representatives identified immediate action on annual assessment increases, accountability to the taxpayer and immediate action on the unfunded liability as priorities for workers' compensation reform.
I think more telling than those numbers was the sense of outrage and frustration for a system which is simply not dealing with their concerns. We continue to receive calls from our members who are simply fed up with what seems to be a political football. What is required is some responsible action now to resolve this issue. This is not a time for us to sit around playing little political games with respect to this; the time now is for action. That's what we asked for, that's what business committed to and that's not what we have received.
So the chamber is requesting that this committee recommend that Bill 165 be withdrawn and that the proposals that were initially made by the business steering committee in November 1993 form the foundation of fundamental change to the workers' compensation system. Questions?
Mr Mahoney: You make reference at the beginning that the original proposals from business eliminated the unfunded liability over 20 years. There are, of course, some calls by some people to eliminate it virtually tomorrow and I frankly don't have any idea how that would be accomplished, other than devastating the system. You also say that it was without significantly reducing benefits. Can you just expand on that section of the proposal?
Mr Kenny: Yes. Presently the system has 90% net benefit entitlement. That's net income benefit entitlement. The proposal suggests that be reduced 5%, to 85% of net income. That still, because of the assumptions with respect to net income that are made within the system, means that people are receiving more money by not working than working in some circumstances. That is not a radical proposal and it still left benefit entitlements above those of competing jurisdictions. New Brunswick recently reduced it to 80%.
Mr Mahoney: Do you have any idea how much it generated in savings to reduce the unfunded liability?
Mr Kenny: For that particular proposal, I don't have it at the tip of my fingers, I'm sorry.
Mr Mahoney: There's been concern expressed that whether, frankly, it's 85% or 90% of your take-home pay, because of your taxable situation, because of perhaps being on workers' comp for six months and at work for six months or some balance of that, people would actually be paid 110% or 115% of their income. There was a proposal, as I understand it, and I believe that Mr Wilson of the OFL agreed to this, to cap that, so that whether you do it by an adjustment at the end on the last cheque or you do it in some other way, nobody would ever, under any circumstances, be paid in excess of 90% of his take-home pay. Are you aware of that proposal?
Mr Kenny: Yes, and we support it entirely.
Mr Mahoney: Would that proposal, in your analysis, generate any significant revenue to reduce the UFL?
Mr Kenny: It would certainly generate some, but I can't tell you, again, off the top exactly how much. But again, this comes down to the fact that where consensus was asked for and consensus was reached, why are we sitting here? Why have you been sitting here listening to every business group come in here and complain about this bill?
Mr Ferguson: Because business walked.
Mr Mahoney: By the way, it's not just business that complains about this bill. Labour is extremely unhappy with many sections of the bill, for different reasons than business, but still, we have heard from many organized labour groups asking that the bill be changed dramatically. It's probably fitting actually, because the Workers' Compensation Board satisfies no one, so why should this government try to satisfy anyone?
Mr Kenny: Mr Ferguson, you said business walked --
Mr Mahoney: Excuse me, I'm asking the questions --
Mr Kenny: I'm sorry.
Mr Mahoney: -- not Ferguson. You can go to him when he gets his chance.
Mr Kenny: Fair enough.
Mr Mahoney: It's my day in the sun here. What I'm wondering about here is, on an outreach tour that I conducted on workers' compensation reform I heard from many business groups who said they do not want a worker who is injured on their job site or workplace to suffer financially. I heard from many of them -- legitimately injured.
There's concern about the fraud issue, and there's concern from workers about corporate fraud and medical fraud, but I don't want to deal with fraud. Let's take the assumption that the worker is injured. I believe, unlike comments that have been made by some of the government MPPs, that most companies do not want to see that person suffer. Do you agree with that?
Mr Kenny: Well, of course I agree with that, Mr Mahoney. There's this concept somehow that employers are big, bad guys who want to treat their employees like a bunch of serfs, and I'm sorry, I don't buy into the process. That's not what businessmen are interested in doing and I'm tired of listening to the rhetoric that suggests that's the case.
Your friend Mr Hope --
Mr Mahoney: Yes, Mr Hope made the claim.
Mr Kenny: -- earlier suggested virtually that while I was sitting here listening to the prior submission.
Mr Mahoney: Exactly, and we have heard it from deputations as well. That's why I asked the question.
Mrs Witmer: Thank you very much for your presentation. Now, you made reference to the fact that the financial responsibility obligations have been removed from the purpose clause, and of course that does create tremendous problems. The government argues that they have endeavoured to replace that section in other parts of the bill. Do you feel that what they've done will adequately cover the financial responsibility obligations?
Mr Kenny: No, Ms Witmer, and I think in my submissions I've identified that. As I said earlier, if in fact that is their intent, I don't understand what the reluctance is to place it in the purpose clause, as was expressed. I have heard no explanation for that. I've heard explanations for the fact that it's elsewhere, but I don't understand the reluctance to put it where the parties expected it to be.
Mrs Witmer: Well, the rationale put forward by the deputy minister on day one of the hearings was that the legislators had recommended that it not be in the purpose clause and the entire issue could be dealt with in the other parts. Now, I'm not sure why anybody writing legislation would be quite so reluctant to put it in the purpose clause if the government desired that it be there. I mean. why would you object to that happening?
Mr Kenny: I entirely agree with that comment.
Mrs Witmer: What about the changes that have now been made to the experience rating section? Again there, the government introduced a bit of an amendment. I would not say they're augmenting experience rating; I would say they're dramatically modifying experience rating.
Mr Kenny: We would agree with that. Indeed, they're complicating a system which is reasonably straightforward and that there were no objections to. It was a system within the act that was working, and now they have attempted to place upon this a process concept which we think will confuse the system more than anything else. It's unnecessary and we're surprised at -- the decision was to attempt to place some amendments on it, as opposed to just lead the system. The system experience rating is working perhaps better than any other system that's ever been designed to attempt to improve health and safety in workplaces.
Ms Sharon Murdock (Sudbury): Before I get into my comments, just on that last point, the amendment -- I don't know if you have a copy of it.
Mr Kenny: No.
Ms Murdock: The clerk can provide you with one, but the language that is in that amendment is exactly the same as that taken from the agreement of business and labour.
But I'm glad you raised the whole issue of the history of how the PLMAC works, because the October 1993 agreement that you mentioned, that you're asking this committee to take on as the business presentation -- what they were asking, and I went back to my notes, was Friedland plus a reduction of the 90% net benefits to 85%, plus entitlement cuts, all on the injured worker who is already suffering from the injury itself and from getting less pay than he has gotten.
Then, in the agreement, and I've got it here: "The nature of how this special consideration to special workers, for instance, might be given was not agreed to by both parties. However, both parties did agree that the government must make a determination of how these people will be treated." We made that determination and we've got it in Bill 165.
The other area of disagreement was, "If the language of the act fails to provide the WCB with the authority to enforce employers' return-to-work obligations, then the act should be amended to give the WCB this authority." We did that in Bill 165, as a government with some leadership.
Coverage: "No agreement was reached on the issue of covering all workers by the workers' compensation system. Labour had strong feelings in favour and business had similarly strong feelings in opposition. It was agreed that this was an issue which government must address." We have addressed that issue.
Part VII, pre-1990 pensions, subsection 147(4): "It was agreed that unemployed workers with disabilities who were injured prior to 1990 and who are in receipt of a WCB pension may require some special treatment with respect to that pension. However, there was no agreement, and if there is a need, the government should address the situation," which we have done.
I'm just saying that when, in October -- everybody has been relating to the March agreement. In March, when the process that you talked about broke down -- and it broke down -- then the deal was off. Then the government has to sit and look at what the discussions were and make a determination as to what we reasonably feel can be brought forward. We have done that.
Lastly, my comment in terms of the Globe and Mail article that you mentioned at the beginning of your remarks is that if it is growing at $1 million a day, as all the business groups have told us, then our estimations, which have not been brought into dispute except that it's either $13 billion or $15 billion by the year 2014, if that is the case then, at that $1-million-a-day estimate that the business community is putting forward, I would like to know how, in 20 years at $1 million a day, it will only be $13 billion or $15 billion. The moneys that will be saved in Bill 165, I believe, will keep it at that level and it will grow much more slowly.
Yes, I agree that it has to at some point be reduced and minimalized, if not eventually eliminated. I think Bill 165 does that. So I have no question.
The Vice-Chair: Mr Kenny and Mr Couto, thank you for taking the time out of your busy schedules to give us your presentation.
Mr Ferguson, do you have a question?
Mr Ferguson: Yes. I have two questions of research, and I think it would be very instructive for the committee to have this information.
Number one: The $11-billion unfunded liability is obviously in 1994 dollars. The projection is that it will be $13 billion in the year 2014. I think it would be helpful if this committee could compare apples and apples and try to get some kind of determination as to what that unfunded liability will be in 1994 dollars in the year 2014. In other words, obviously you know that $13 billion today will be worth a lot less in the year 2014. So if we could compare that into today's dollars, I think that would be helpful for members of the committee.
My second request is this: I think it would be also very useful and instructive to the committee to have some kind of historical perspective on what happened over the past 18 months in the discussions on the PLMAC. It has been asserted here many times over that there was an agreement, when in fact the information that I have is that there was an agreement, an agreement that subsequently fell apart.
I would like to know and the other members of the committee would like to know, was there a deal or wasn't there a deal? If there isn't a deal, then I would think it would be helpful for members of the committee to be aware of that so that we are not misled in the future by individuals appearing before this committee saying: "Look, there was a deal. Why didn't you implement the deal?"
The Vice-Chair: Mr Ferguson, I don't know if that's appropriate, about presenters misleading the committee, but I think it would be up to the ministry to provide the second request on whether there was a deal or not.
Mr Ferguson: Mr Chair, I'll withdraw that. What I want to know and I think what all members of the committee want to know are simply the facts about what happened.
Mr Turnbull: Mr Chair, I would point out that when we had the presentation from the PLMAC group the other day, they were only given 20 minutes. We asked if we could allow some extra time and the NDP, to a man, voted against that.
Ms Murdock: To a man?
Mr Turnbull: And to a woman. Sorry. I beg your pardon, to a person. There were more than you, okay.
The Vice-Chair: The vote was taken at the beginning of this process where we agreed to 20-minute presentations.
Mr Turnbull: We had an opportunity to examine the people who in fact had been working at the Premier's request.
Mr Avrum Fenson: Just the status of the second question --
Mr Ferguson: The second question stands.
Mr Fenson: It stands, okay.
Mr Joe Pinto: My name is Joe Pinto. I am a research scientist and an independent consultant. I'm not affiliated with any employer, union group or any group, for that matter. I'm here as an independent, thanks to my member of provincial Parliament, Gord Mills, who provided my name to your committee.
Mr Chairman, ladies and gentlemen, the Rae government must be congratulated for their attempt to change the WCB act, an act that was created in 1914, of course -- you know that -- some 80 years ago. The government now promises compassion and justice for the injured. This bill largely addresses the policy and broad administrative and financial framework for the WCB. But without restructuring the operational side of WCB, the changes being proposed will be rather cosmetic and in the final analysis it will be business as usual at the WCB.
Let us now look at the involvement of the players in this game.
The employers: It is in their plants that injuries occur, and with four directors on the board, their task will understandably be one of self-interest.
The union: They also have four directors on the board and they will focus on the interests of their unionized workers.
But people not members of a union also get injured, so who will look after their interests? Certainly not the employers, who will be busy denying that an injury in fact occurred. The union may be sympathetic but may lack deep commitment to fight for a non-union worker. So who will champion the cause of the independent injured worker? In my opinion, no one. They will be left to the whims of the WCB staff. My recommendation is that you specifically appoint one more director on the board to represent this category of injured workers.
I mentioned earlier the operational side of the WCB. All your efforts to reorganize the WCB without restructuring the operational side will not provide compassion and justice, as promised by the NDP government.
Here are some of my recommendations for the operational side: Dismantle the in-house medical staff. Many are incompetent, inexperienced and lack the compassion needed to help an injured worker. They should accept the assessments of outside highly experienced medical specialists rather than trying to ignore them or develop their own conclusions. As a board, they should be in a position to accept medical assessments by outside specialists.
As an alternative, the board should establish, perhaps throughout the province, approved independent assessment specialists whose conclusions should be accepted.
The board desperately needs trained and qualified independent investigators to investigate scenes of accident etc, not people brainwashed by the board and/or intimidated by the employers.
The WCB staff dealing with injured workers should be trained in human relations and capable of extending humane treatment to injured workers. It is bad enough that a worker has been exposed to an injury without being further exposed to insults and degrading treatment at the hands of the WCB staff.
The ability to sue the employer must be entrenched in the act. That is the only effective motivation that will get the employers to clean up their unsafe working environment.
Currently, the board accepts injured workers in all categories, from the hourly paid worker to an executive who has been injured on the job. However, they limit their payment to a maximum of approximately $280 of the weekly earnings, even though the injured person may have been earning far more in weekly earnings.
By having the employer place higher-income injured people in the hands of the WCB, the government or the WCB is in fact providing the employers very cheap insurance at the cost of the injured worker.
It is recommended that the act specify the maximum limit of earnings which the WCB can accept for an injured person and that the act further indicate that persons injured and whose earnings exceed the WCB limit be covered by private insurance by the employer for the loss of income etc sustained by the injured worker.
The act should also limit the WCB coverage to injuries sustained in Canada. Any injuries sustained outside Canada should be covered by accident and disability insurance by the employer. This provision should be incorporated in the act.
A time limit should be set for the resolution of claims by the WCB. It is recommended that claims be resolved within two years and thereafter automatically referred to arbitration.
This presentation is based on my personal experience in a large industry, not only as a former manager of unionized workers I was responsible for on behalf of the employer, but also as an injured person who has suffered insults, degradation and unethical behaviour from the WCB, including some of their medical staff.
I was injured in a foreign country in 1979 and have had some 11 surgeries, but my case is still being stonewalled and I continue to suffer. Fifteen years of dealing with the WCB, along with the pain and suffering, not counting the costs involved, is a matter of the deepest concern.
In conclusion, Bill 165, in its current format, does not go far enough in providing the "compassion and justice" it is intended to. After 80 years, the act requires major surgery. The current changes proposed are of course essential to bring about the organizational and financial controls necessary, but may I suggest to you, ladies and gentlemen, that without the changes to the operational side it will be business as usual at the WCB.
This concludes my presentation. I thank you for your kind attention and wish you success in this difficult task. Now I'm open to your questions, if you have any.
Mrs Fawcett: You've put forward some interesting suggestions that I think have been put forward before. I'm interested just on the first page of your presentation where you really say that employers would "be busy denying that an injury in fact occurred." I know others have said that as well; they are very suspicious of employers. But the question asked by my colleague to the previous group would say that maybe that's not totally true for all employers, that they really care about injured workers and want to see them back on the road and re-employed. Are you speaking from having spoken to a lot of people? What has been your experience?
Mr Pinto: I have had experience exceeding 40 years in manufacturing industries worldwide. This particular item has come up in several of my discussions with different groups within Canada and particularly in Ontario. When you hear these things, you just say, "Well, maybe it's an exceptional case." But when it happened to me in my own injury, it required my taking the employer to court on another matter because I couldn't take him to court on the WCB injury. Under the sworn testimony the employer finally admitted, four years after the injury occurred, that yes, they were aware of the injury but they had not yet submitted an accident report. It was the judicial system that forced the employer to provide this information, and that's what prompted my emphasizing this point.
Mrs Fawcett: All right. Maybe then, rather than bringing back the ability to sue, we should clean up some of the bureaucratic problems that happen there. I worry about bringing back the right to sue as a solution because very often it's the lawyers -- and pardon me to the lawyers -- who win.
One other thing is your idea about medical staff and, you know, the runaround. Certainly that's what I hear in my office a lot. Our party is proposing that there be a different system and that possibly a group of doctors specifically who work on WCB would be a good idea. Could you expand just a little bit more on what you believe? How do you see what you have suggested working? Would the person go directly to one of these doctors or be referred from their own family doctor?
Mr Pinto: I think that following all injuries the worker goes to his family doctor. That's the first step.
Mrs Fawcett: Would the employers maybe suggest then to go to this special group?
Mr Pinto: No, I think his family doctor would then direct him to a specialist. If it is an on-the-job injury, he would be directed by his own doctor to the specialist involved.
Mrs Fawcett: Then that specialist's report would be accepted without other groups?
Mr Pinto: Yes, precisely.
Mr Turnbull: Could you offer some proof as to your statement that the WCB is in fact providing the employers with "very cheap insurance"? Presumably you did some research before you made this assertion. I'm under the impression that an awful lot of insurance companies would be delighted to offer WCB insurance and that in some cases, at as much as 3% of earnings, it's quite a hefty premium that is actually being paid.
Mr Pinto: Let's say an executive gets injured on the job. The company directs that injury to the board and yet when the final decision comes in terms of compensation, all the board is able to do is to provide him with perhaps a maximum of $280 per week, whereas he may be earning $1,000 a week.
Mr Turnbull: You've said $280; I didn't think it was correct. Just while you were speaking I was checking with some of the officials here. You're wrong; it could be up to $600 a week.
Mr Pinto: Well, let me again --
Mr Turnbull: You're simply wrong. In the light of that --
Mr Pinto: May I beg to differ on that, because let me talk about my own case. I was certainly earning a lot more than $280 or $600 a week, but I got paid less than $280.
Mr Turnbull: When was that injury?
Mr Pinto: The injury took place in 1979.
Mr Turnbull: Okay, there's a difference today as compared with what existed at that time.
You're suggesting that in fact workers should be able to sue their employer. Now, I don't have too much difficulty with that assertion, but you understand that WCB, when it was set up, was a quid pro quo. The workers gave up the right to sue in return for this substitute program. Presumably you would, I assume, intellectually accept the concept that if they were going to have the right to sue, then they would give up the right to WC, or do you want to have it both ways?
Mr Pinto: Not really. I think, though, some mechanism like arbitration is an alternative to bypass a stonewalling that goes on from the employer's side, and that would be equally acceptable. But there is no motivation for the employer right now to clean up their plants where the accidents occur.
Mr Turnbull: So your position is just simply that employers are bad and wrong and --
Mr Pinto: No, no, I don't say that at all. Some employers perhaps. A lot of them are very responsible people, but it is the exceptions that unfortunately cause quite a bit of the trouble.
Mr Turnbull: The fact is that you're saying you should have the right to sue. The historic bargain was made between employers and labour that they would give up the right to sue. Are you advocating much in the same way as the government wanted to make a bargain between labour and management and has now reneged on that deal too?
Mr Pinto: For 80 years this legislation has not quite worked out. Otherwise we wouldn't --
Mr Turnbull: I agree with you.
Mr Pinto: Giving up the suing part by the workers has also not worked out, because we tend to have injured workers' cases, claims, with the board for God knows --
Mr Turnbull: Let me ask you then --
The Vice-Chair: Thank you, Mr Turnbull. Mr Hope.
Mr Hope: I want to thank you, first of all, for your presentation today. I think what you've done is reflect some of the concerns that most people have dealing with the administration level and the human level. You're absolutely right: If we don't change the structure, no matter what policy directions you do, the same thing is there.
It was interesting that even though at $600 a week maximum you're only talking -- a person making over $31,000 still takes a decrease in their pay. It's not a matter of being an executive. I mean, an auto worker or a skilled technical engineer, for instance, making over $50,000 a year suffers financially because they're not able to.
My question would be around more where you indicate that they maybe purchase another insurance program to cover the additional, to make up that. My concern would be around some of the concerns that you've already raised around the employer aspect, because if it's an agreement or a contract, it's in the hands of the employer who then holds jurisdiction to make decisions based on whether that individual will receive those additional dollars or not.
You raise concerns about employers not fulfilling mandates in creating safer workplaces and about appealing decisions. The chamber of commerce was mad at me because I made that comment. Well, in most of the cases I know the employer has appealed the eligibility of an individual to receive workers' compensation.
My concern would be around the insurance coverage that you indicate to be purchased by the employer, that it would leave too much jurisdiction in the employer's hands. If we're to deal with the skill added value jobs that we're talking about in the future, because we're talking about reform for the future for WCB, then we maybe should be thinking about buffing up that number to accommodate those of skill added value tech.
But I wanted your opinion about where you indicate the employer should purchase additional insurance to cover, to make up the wage aspect, if that wouldn't leave too much control in the hands of the employer.
Mr Pinto: Actually, right now many of the employers do that for themselves, but they limit it up to a certain salary level. In one case I know its cutoff point is $65,000, so if you're over that, you're covered by disability and accident insurance. There is a gap there which the WCB legislation does not take into consideration, and this is what I was trying to focus on.
Mr Waters: I want to get back to what Mr Turnbull was talking about, which was compensation. You mentioned your injury in 1975, I think it was.
Mr Pinto: It was 1979.
Mr Waters: I have a young lady aged 15 at the time of her injury, who lost her arm in a meat grinder, minimum wage as a student. Her compensation for life is based on that minimum wage at that date of the accident. As we talk about fairness and how the act should be changed, and who should be responsible and who should pay, do you think it's fair that a person who is injured, as this young lady was, at a minimum wage job before she had even reached her potential in the employment market, had an opportunity to even come close, that her compensation for life is based on that student wage job? Do you think that's fair?
Mr Pinto: No, it's not.
Mr Waters: Do you think indeed that should be included?
Mr Pinto: It's not fair, of course it's not fair. There's got to be some provision for the difference that you talk about, her potential. If she's not able to work at all, then she's got to get --
Mr Waters: Okay. Then further along, as recognized in the amendments that we're proposing, as the bill comes due for different employers their rates are set basically on a little bit more, anyway, in the line of their incident rating. In other words, those who are good employers, who have a good health and safety record, not many accidents, have an opportunity to be bonused, and the other ones are going to end up paying, have an opportunity to be surcharged because they have not complied, have not kept a safe and healthy environment and indeed have a larger number of claims. Do you not think that's the right way to move? In other words, the guilty employer pays.
Mr Pinto: If you can make it stick, yes, but I suspect that the employers' group on the board will have a major objection to that approach.
The Vice-Chair: Mr Pinto, thank you for taking the time out of your busy schedule to come in and give us your presentation this morning.
TORONTO WORKERS' HEALTH AND SAFETY LEGAL CLINIC
Mr Dan Ublansky: I'm Dan Ublansky, the director of the Toronto Workers' Health and Safety Legal Clinic. I have to apologize for Mr Turalinski. Unfortunately, he's been detained elsewhere.
The Toronto Workers' Health and Safety Legal Clinic is funded by the Ontario legal aid plan to provide legal and technical advice and representation to unorganized workers who face health and safety problems at work. Our activities are controlled by a board of directors which is elected from the community. The clinic provides unorganized workers with information about health and safety hazards of their employment, advice about their rights under the law and legal representation where required. In addition to individual advocacy, we undertake community education and outreach programs aimed particularly at unorganized immigrant workers and engage in law reform initiatives.
Historically. the clinic has not been deeply involved in WCB matters. However, unfortunately in the last year, because of cutbacks in other agencies and long waiting lists in other clinics, we felt obligated to try to pick up some of that slack. We have begun the process of undertaking some WCB cases.
The submission that we've made does not attempt to address all of the issues raised by Bill 165. There will be other submissions made by the workers' compensation network, which is a group of representatives of legal clinics. The social policy review committee within the legal aid system, I understand, will also be making a submission. Injured workers' groups will be making submissions. Generally, we've participated in the deliberations surrounding those particular presentations and we support the submissions that will be made by those groups, but I wanted to focus in our submission on the issue that we have more experience with and to try to put a health-and-safety focus on these issues, the issues that are facing this particular committee.
In that regard, we address experience and merit rating programs both in general and as they are affected by Bill 165. I've quoted the provision in Bill 165 which has been proposed. However, clearly, although we support the need to promote accident prevention and effective rehabilitation as a long-term solution to reducing the cost of workers' compensation in Ontario, we have grave concerns about the use of the merit rating programs to achieve these objectives.
These concerns evolve from, first, a philosophical aversion to the notion that employers should be financially rewarded for meeting their minimum obligations under the law, and from a practical scepticism that providing these rewards will actually produce better working conditions or secure employment for injured workers. The amount of money which is paid back to employers in the form of rebates under merit rating programs is an obvious drain on the board's finances. Approximately $250 million, as I understand it, has been refunded to employers under the board's NEER and CAD-7 programs, and I think the question must be asked whether there is justification for allowing this money out of the system.
I'm sure all of you are aware of what obligations exist on employers in other statutes. In the Occupational Health and Safety Act, for example, there are three sections which specify particular duties on employers with respect to health and safety. There are specific provisions such as the duty to ensure that equipment, materials and protective devices provided are maintained in good condition, and there is also a general duty to take every precaution reasonable in the circumstances for the protection of a worker.
To the extent that merit rating programs reward employers for meeting their obligations under the Occupational Health and Safety Act, they are doing more than encouraging employers to act in their own self-interest; the programs are in effect paying employers to obey the law.
I'm sure you're all familiar with obligations under section 54 of the Workers' Compensation Act. Again, given the direct relationship between the cost of an injured worker's claim and the length of time the worker remains off the job, there's an obvious incentive for employers to provide modified employment. In fact, certainly in my experience, which is almost 20 years at this point, there's no doubt that the introduction of section 54 in 1990 caused employers to focus much more attention on the issue of modified employment than had ever been the case previously, notwithstanding the earlier introduction of provisions dealing with handicap under the Human Rights Code. Those provisions under the Human Rights Code are also described below.
So again, perhaps this is just a personal thing or an issue for our clinic, but we do ask the question: Is merit rating the right thing to do? Our society tends to assume that individuals and corporations should obey the law willingly, and that if they are unwilling to do so, intervention is required and the imposition of sanctions is justified. We've seen what the minimum requirements are by law, both within the WCB act itself and in other statutes, and as I say, the requirements exist quite apart from any impact they may have on employer premiums to the WCB.
Merit rating programs have been introduced by various compensation systems as a means to encourage employers to implement the same measures and procedures that are already required under the Occupational Health and Safety Act and the Human Rights Code. Some might argue there's nothing wrong with offering economic incentives to business to promote compliance with the law; however, we believe workers' compensation is different. It's not just an insurance plan for employers, as has been mentioned a number of times this morning; it's the product of a historic tradeoff wherein workers gave up the right to sue in court for damages in respect of all losses suffered as a result of their accidents, and they gave that up in return for a guarantee of protection against income losses, irrespective of fault. The object of the program is to reimburse workers for the losses that they suffer due to injury and disease, and in our submission it's not acceptable to introduce programs which either jeopardize or diminish the board's ability to achieve that objective.
Merit rating provides a benefit to employers in the form of reduced WCB costs. However, this reduction in revenue is making a significant contribution to the board's unfunded liability, which we hear so much about, and it is the size of that unfunded liability which is being used as justification for the reductions in benefits which are proposed in Bill 165 and which are advocated by the employer groups that have appeared before you. We believe that's a violation of the bargain that has been struck.
As Paul Weiler observed in his study Reshaping Workers' Compensation for Ontario, which is something I would recommend to everybody to reread, perhaps to put ourselves back into focus on what the issues really are here: "An injured worker does not enjoy his form of compensation as a matter of grace. He has been required to give up a common-law right of action enjoyed by everyone else. That right would now be worth a great deal. In return, he must be considered entitled to full enjoyment of the statutory right he was promised in exchange."
If you haven't heard already you're going to hear that injured workers did not agree to take a cut in benefits so the board could pay refunds to employers. Injured workers need the money which is being taken out of the system through merit rating.
We believe that the best way to promote the goal of prevention of occupational injury and disease is through vigorous enforcement and aggressive prosecution of employer violations of the Occupational Health and Safety Act. Employers must be shown that this government takes the act seriously and that there will be harsh legal consequences flowing if the law is disregarded.
Interestingly, Environment minister Bud Wildman was quoted in the Toronto Star in July as saying precisely the same thing with respect to the province's environmental protection laws. He made the same comment in announcing that $2.5 million had been collected from convicted corporations and individuals in 1993.
We believe that workers in this province have every right to demand the same level of commitment to enforcement in respect of health and safety laws. Such a strategy of vigorous enforcement will enhance the existing financial incentives inherent within the workers' compensation system to promote the prevention of occupational injury and disease. We believe employers in this province are aware of the need to place more emphasis on prevention and the benefits which will accrue to them in terms of reduced compensation as a result. It shouldn't be necessary to offer further bribes to convince employers to do the right thing.
Now, that's a philosophical point of view; perhaps others don't share that philosophy. But from a more practical standpoint, does merit rating work? It's quite odd. When you look at this issue, merit rating has been around in Ontario since 1953 and it's been introduced in other jurisdictions since, but in spite of this history, there is very little evidence to establish precisely what impact these programs have on actual conditions in the workplace.
Again, if you go back to Paul Weiler, while he accepted the theoretical premise behind experience rating -- and that theoretical premise, by the way, has nothing to do with the cost of claims; it has to do with improvement of health and safety conditions in the workplace -- what he said was that it should not be introduced until there's an evaluation study along with it to make sure that in fact it was producing the result that in theory seemed to flow. Unfortunately, that was never done. The program has been introduced, but there's no evaluation.
The main criticism of experience rating is that it creates a greater incentive for employers to engage in what's described as inappropriate claims management activities, such as dubious reporting practices, conversion of potential lost-time claims to no lost-timers by retaining workers on the payroll, excessive resort to the SIEF and claims appeals, and inappropriate on-site medical treatment. The reason for this is obvious. From a health and safety point of view, the amount of investment that would be required in order to truly have an impact on health and safety conditions in the workplace is far greater than the amounts that you can save on your WCB premiums, so you're going to concentrate activities on claims management where you can achieve more for less cost.
Similar criticisms have been voiced with respect to the effect of merit rating on rehabilitation. Professor Terence Ison, in an extensive article covering both aspects, concluded that merit rating leads to bogus rehabilitation efforts by employers simply aimed at pressuring injured workers to return to work too early or to accept unsuitable jobs.
Very little study has been done of the actual extent to which these practices result from the introduction of experience rating, but there is a recent article that appeared in the Journal of Occupational Health and Safety in Australia and New Zealand where the author studied statistics following the introduction of a merit rating program in the province of Victoria. As it turned out, the number of claims was reduced significantly; however, the decrease came in minor injuries. There was no corresponding decrease in more serious injuries or fatalities, which, at least for this author, allowed him to conclude that there hadn't really been any improvement in health and safety conditions but simply tighter claims management to screen out more minor injuries.
The Facts and Figures 1992-93 published by the occupational health and safety branch of the Ministry of Labour in Ontario tends to suggest a similar result in Ontario, where we have also experienced a significant decline in the number of claims, and yet the amount of benefits paid out has increased by 25% in real dollars during that same period.
We believe a similar phenomenon is taking place here. If you look at the statistics reported by the operations branch in health and safety, you'll find that the number of events responded to by the Ministry of Labour between 1991-92 and 1992-93 was up 42%, the number of workplace accidents reported to the ministry was up 38%, the number of critical injuries reported to the ministry was up 45%, the number of fatal accidents investigated was up 21%, the number of health and safety complaints received by the ministry was up 50%, the number of work refusals was up 17%, the number of reported accidents where no worker was injured was up 41%, and the number of reported occupational illnesses and diseases was up 84%. These figures do not indicate any trend toward improved health and safety conditions in this province, notwithstanding the decline in the number of claims.
The Vice-Chair: Excuse me. You have about two minutes to wrap up.
Mr Ublansky: Okay. If I could just flip to our summary then, we agree with Paul Weiler's conclusion that it is illegitimate to cut injured workers' benefits for financial reasons, and that the only proper means of reducing the costs of accidents is to reduce the number of accidents and occupational illnesses and diseases. We have concluded that the amendments in Bill 165, which provide the board with the discretion to create additional merit and experience rating programs and voc rehab practices, are well-intentioned but ill-advised. The critics of merit rating have presented sound arguments against the effectiveness of financial incentives in the workers' compensation system in prevention, and there has never been any convincing proof that these critics are wrong. As I've just gone over, there's evidence to suggest that they're right.
In light of that, we don't believe there's any justification for losing hundreds of millions dollars of revenue on these programs. We believe that the best way to encourage prevention is by a joint coordinated effort on the part of the Ministry of Labour and the WCB aimed at achieving compliance with health and safety laws and promoting real change within the workplace. If employers felt that there was a real threat that the Ministry of Labour would vigorously enforce the obligations imposed on them, they would comply with health and safety laws. In addition, if they were informed about the true cost of workplace accidents and disease, which have been estimated to be anywhere from seven to 20 times the compensation cost, they would be more likely to see that prevention is in the best interests of both employers and workers.
Just by way of final comment, the costs of injury and disease will not go away as long as there continue to be accidents and illnesses. We can argue in these hearings about shifting that burden either to society as a whole or to injured workers in particular and away from employers, but as long as those accidents and illnesses are there, somebody has to pay the price, and we do not believe that it was ever the intention to shift that burden to either injured workers or to society as a whole. The whole idea of workers' compensation, and the whole justification for maintaining that system, is to contain the cost of doing business where it belongs, and if business can't operate safely, then that's where the problem exists, not in issues of benefits. The issue is accidents. Reduce the accidents. That's the only way to salvage this system. Thank you.
The Vice-Chair: Thank you, Mr Ublansky, thank you for taking the time out this afternoon and this morning for giving us your presentation. Thank you very much.
This committee stands recessed until 2 pm.
The committee recessed from 1224 to 1405.
ONTARIO RESTAURANT ASSOCIATION
The Vice-Chair: Our first presenters for the afternoon are from the Ontario Restaurant Association. Welcome.
Ms Rachelle Solomon: Good afternoon. My name is Rachelle Solomon and I'm the manager of government affairs for the Ontario Restaurant Association. With me today is Paul Oliver, who is the president of the ORA.
The Ontario Restaurant Association welcomes the opportunity to appear before you today to discuss our views on Bill 165, An Act to reform the Workers' Compensation Act and the Occupational Health and Safety Act.
As you see in the submission, which has already been distributed, the ORA has a number of fundamental concerns regarding Bill 165. Due to the limited time available and since many of the concerns which we have outlined in the submission are similar to those which have already been presented by other employer associations over the last few days, our presentation today will only highlight a few of our most serious concerns with Bill 165, especially the impact it will have on the thousands of small employers who comprise the vast majority of employers in the foodservice industry.
The ORA believes that real and fundamental changes in reform of the Workers' Compensation Board are critically needed. We remain strongly committed to this initiative. Unfortunately, we believe that Bill 165 falls far short of the types of fundamental changes which are required to solve the severe problems facing the WCB. In fact we are concerned that some of the changes contained in Bill 165 may inflict further long-term damage on to the workers' compensation system and put at risk worker benefits, as well as place substantial new costs on employers in Ontario. We believe that real reform must be undertaken so that the WCB system becomes financially sustainable and in turn ensures security of benefits for workers and an affordable system for employers. Unfortunately, the ORA believes that Bill 165 falls far short of these objectives because it does nothing to address the serious long-term financial problems facing the WCB and could substantially increase the administrative and financial burden placed on small employers.
The ORA is extremely concerned that this legislation does not address the financial crisis which is confronting the compensation system. The crisis is very real and cannot be ignored. During 1993 the WCB for the first time faced a negative cash-flow situation, and the situation appears to be worsening.
It is our understanding that financial stability and preserving the long-term viability of the WCB system were the fundamental objectives of this reform initiative. We believe, however, that under Bill 165 the existing underfunded liability of $11.7 billion will continue to grow to approximately $13 to $15 billion by the year 2014. Real reform must include the retirement of this debt.
The growth of the underfunded liability is especially disconcerting to service sector employers, who will be required to burden a disproportional share of the liability as traditional natural resource and heavy industrial jobs decline and are replaced with more service sector jobs. What we have done, and will continue to do under Bill 165, is burden new and future employers with a debt which will become a major disincentive for job creation in Ontario.
The failure to address the growing underfunded liability is one of the most glaring deficiencies of Bill 165. Not only does this legislation not address the serious financial crisis, but it also does not restore confidence in the compensation system.
The purpose clause as stated in the original Premier's Labour-Management Advisory Committee accord was intended to begin to address financial accountability, to entrench in the act the roles, responsibilities and relationships of the system's various components and to clarify the government's intentions in enacting the statute. Financial sustainability was supposed to be an overriding responsibility and theme of the reformed WCB.
Unfortunately, the purpose clause in Bill 165 centres primarily upon a recognition of the workers' interests and is silent on the financial sustainability of the system. It does not address the impact of changes to benefits or programs on employers, it does not establish any financial accountability standards, it does not require a continuing effort to improve efficiency in the workers' compensation system and it does not state the government's ultimate accountability for the system.
The proposed purpose clause does not contain financial responsibility as a purpose of the act and makes no reference to costs at all. We believe that the proposed purpose clause completely contradicts the intent of the accord and fails to recognize the needs of stakeholder groups, including both employers and workers.
Another major concern of the ORA is the gutting of experience rating as outlined in Bill 165, and I will ask Mr Oliver to comment on that.
Mr Paul Oliver: The development and implementation of the experience rating system has been one of the WCB's unqualified successes. Since its inception, the NEER program has been strongly supported by the employer community because it has helped to promote a fairer distribution of the assessment burden by rewarding good employers and surcharging employers who do not live up to industry performances.
Within the foodservice industry, experience rating has been strongly supported since its introduction. The effectiveness of the experience rating system has been very obvious and profound within our industry. The NEER system has been a major factor in reducing accident frequency by almost 30%.
Over the last several years the foodservice industry has been able to bring accident levels down substantially as a result of an increased awareness of the financial and social costs of injuries, internal corporate training, the experience rating program and the training and education undertaken by the Tourism and Hospitality Industry Health and Safety Education Program, known as THIHSEP.
During 1993 the entire foodservice industry averaged only 5,924 lost-time accidents, with the vast majority of these being very short in duration. For an industry employing over 250,000 people, representing approximately 350 million person-hours of work, over 20,000 workplaces and approximately 16,000 employers, this has taken a concerted effort by everyone in our industry to attain.
Most particularly what it means is that the average employer experiences a lost-time injury approximately once every three years. Considering that there are a number of very large employers in our industry, the average small or mid-sized employer is more likely to experience a workplace accident with lost time once every six to seven years. Many small employers simply do not have formalized rehabilitation and re-employment programs in their workplaces because, with the accident frequency which they experience, they simply are not required. They use instead accident prevention.
For many small employers, the NEER system is the only tangible outcome that they see from their commitment to health and safety training and is the only obvious benefit provided by the WCB because they have not experienced accidents in many years in many of their operations. Performance-based experience rating provides small employers with an ongoing and tangible incentive to continue to work towards maintaining an accident-free workplace.
The ORA is extremely concerned by the wording contained in Bill 165 because it appears that the government plans to fundamentally alter or eliminate the existing experience rating programs. Recent statements made by the Minister of Labour before this committee were positive in that they recognized that there is a problem with this legislation. However, the minister has failed to fully comprehend the concerns of the employer community, especially the concerns expressed by small employers that comprise the majority of the foodservice industry.
It is the ORA's view that Bill 165 will move existing experience rating programs from a results-based program to programs which will reward or penalize employers based on a measure of process rather than experience. This should be seen as a fundamental departure from the existing program because it will substantially reduce or possible eliminate the performance component of individual employers through the reduction of individual employer accountability.
Within the small business community this change will have a major and negative impact because it will create a new and expanding administrative burden. The experience rating program should evaluate and reward employers based upon results and not according to how many programs or processes they have in place or how much paper they can push.
In the future, if you want to get a rebate or avoid a surcharge, we fear that many small employers will be required to put into place costly programs which will serve no tangible benefit. Other small employers will be excluded from the rebate system because they simply do not have the resources capable of complying.
If the program is not broken, why try to fix it? The existing experience rating programs are working extremely well, and there is no need to change one of the few WCB programs which is functioning well. We are therefore asking this committee to remove this provision from Bill 165.
As I mentioned earlier, one of the factors which has reduced accidents within our industry has been the training undertaken by THIHSEP, which was founded in 1988. I regret to inform this committee that as of August 31, 1994, this program will no longer exist and the unique industry-specific training it provides will evaporate.
This is a move which has not been supported by either the THIHSEP bipartite board of directors or the hospitality industry. However, the Workplace Health and Safety Agency has ignored the industry's concerns and unilaterally moved to dissolve THIHSEP. This is in spite of the fact that our industry completely funds THIHSEP through WCB assessment charges. During 1993 THIHSEP was funded with a grant of $985,000, yet our WCB rate groups were charged $2.5 million to fund it; so in effect we paid for THIHSEP three times over. Even with the industry paying its own way, THIHSEP will be disappearing on August 31. We fear that this is a major blow for health and safety preventive training in the foodservice industry.
In conclusion, the ORA strongly supports efforts to reform the workers' compensation system, provided that the changes are balanced and financially sound. Unfortunately, the ORA does not believe that Bill 165 accomplishes either of these objectives. This legislation does not solve the long-term financial crisis facing workers' compensation. Instead of reducing the underfunded liability, it will actually grow under Bill 165. As well, this legislation will place an unfair and unbearable financial and administrative burden on small businesses, seriously undermining employer confidence in the system.
Since this legislation does not accomplish the goal set out by the Premier when the PLMAC process began, we believe it should not proceed forward in its current form. The ORA believes that before WCB reform proceeds forward, fundamental changes must be made to this legislation. Without these fundamental changes, the credibility of the compensation system will be seriously undermined and its future placed in serious doubt.
Mr Mahoney: Thank you. I notice, and I guess it's due to time constraints, you highlighted the areas of your greatest concerns, but you also address in your report the governance issue, vocational rehabilitation and return to work. Could you in some kind of précis way express your concerns around those three issues, particularly the governance? I'd like to know your feelings on that.
Mr Oliver: Yes. Certainly we have some strong views on governance. We're concerned that the legislation will adopt a bipartite structure at the WCB. It will have an equal number of management and labour representatives with two outside people, one management and one labour, appointed by their respective communities.
We are concerned that bipartism has not worked at the governing board level. The failure of it at the Workplace Health and Safety Agency is a clear indication that bipartism works at the workplace but doesn't necessarily work at the policy level or the governing level.
The board at the Workplace Health and Safety Agency appears to be completely gridlocked on addressing issues. They've been completely incapable of addressing the concerns expressed by the small business community. The work that they've done to eliminate THIHSEP, COSHA and CUSCO in spite of the bipartite boards in those respective communities not supporting it, has just been, in our opinion, a disaster. The last thing we need to do is put a board in place at the WCB which will likely gridlock very quickly, and that's what we're seeing is happening at the Workplace Health and Safety Agency.
What we're recommending instead is to move towards one that has both management and labour representation on the board, but also what we would consider non-aligned professionals, both from the health care field and from the financial community.
Mr Steven Offer (Mississauga North): Thank you for your presentation. I'd like to touch on the first part of your presentation, which spoke about the purpose clause and financial responsibility. As you will know, we have heard that from other presentations. I would like, if you could express to the committee, what is the impact if the financial responsibility aspect of WCB is not put in the purpose clause? What do you see as the negative impact as a result of its being missing from the purpose clause?
Mr Oliver: Well, it doesn't bound outside agencies or bodies that would influence the board of directors or the WCB system. WCAT and the government could unilaterally direct the board to start compensating for things that aren't covered or take a different approach. There's no governing that maintains that that has to be done in a financially viable or sustainable environment, and that's one of the reasons we're sitting now with, at last count, an $ll.7-billion underfunded liability, because we have not put financial accountability into the system. If we don't put it in now, I fear that that will continue to grow.
For the service sector that's especially disconcerting, because we've seen manufacturing jobs, heavy industry and natural resource jobs declining in Ontario, and that financial cost is being shifted on to new service sector jobs. If we're competing in a global economy for head office jobs, for computer jobs, these are the types of jobs that every time you create a job in Ontario you're going to be attaching a pricetag to it. Employers are going to say, "Why would I locate here, where I inherit a debt the day I create a job, when I can do it anywhere else in the world with new technology, new telecommunications?"
Mr Turnbull: Along the same lines, I suppose my concern is that in listening to the submissions here, which is not unlike other issues that we've had before us, there are the two extreme views of the different sides. It seems that the compromise that was reached by the working group that the Premier appointed earlier this year, to a point -- and yes, there was a certain standoff at a certain point. The government has decided to cherry-pick the parts which labour wanted out of there and just abandoned all of the quid pro quo. You mentioned the impact of business locating here from around the world. Could you just expand upon that as a result of this?
Mr Oliver: I'll comment on two things. One is the accord that was reached. It was a compromise, as you say. When any accord is reached, it's a compromise. From the small business community, we certainly weren't happy with everything that was included in the accord, but there were tradeoffs that were made. We expressed our concerns to some of our business partners or employer partners, but the compromise was made. It was something where we said, "There are benefits here and there are negatives there, but we are willing to support it." We were quite frankly surprised that the government moved away from that accord so quickly.
The cost, though, for new businesses setting up within the foodservice industry -- often people think you have to be located where your market is. But what we're finding is that a lot of companies now can do a North American mandate for purchasing, payroll and administration. They could be running it out of Orlando, Florida, or Minneapolis or anywhere in North America.
Those jobs will be extremely difficult to get in Ontario if we're attaching a potential deficit to every job that's being created. When other environments have lower tax rates and other things separate from those, they don't get a debt as soon as you create a job. You get rewarded, welcomed to Ontario: "Thank you for setting up a job. This is now your portion of the underfunded liability." That simply will be a disincentive to those higher-tech jobs -- managerial, marketing -- those types of jobs which are very common in our industry but are also very mobile.
Mr Turnbull: I guess there's the fear that the last person out the door is the one who's holding the bill.
Mr Oliver: The one who turns off the lights or is the last one out the door isn't always the person who pays the bill. In fact, when a factory closes down they don't pay a penalty. But it's when you create the job that you inherit the bill. At some point employers are simply going to say that they can't afford to create a job and assume a liability.
Mr Turnbull: It has been suggested by the government that in point of fact this increase to some $13 or $14 billion by the year 2014 is nothing to worry about, that because of inflation it will be relatively less than we have now and therefore we shouldn't worry about this. Could you comment on that?
Mr Oliver: Certainly we've already seen the impact a bit on rate assessments within the service sector industry. The percentage of debt on assessment used to be capped at 25%. This year it has been adjusted to up to 35%, in my understanding. Our industry's paying for it. Even though we have not incurred a large percentage of that debt, our industry's paying for it because it has new jobs that have been created in the last 10 years. In a lot of sectors where huge debts were built up, the job base just isn't there to sustain them.
Mr Hope: I have a number of questions. You speak about the experience rating. This morning we had the Toronto Workers' Health and Safety Legal Clinic come before us. You tell us that it's working well; it's reducing accidents. But the numbers presented to us in the document that was presented to us this morning, on page 10, clearly indicate that workplace accidents reported to the ministry were up 38% from 1991-92 to 1992-93; critical injuries reported to the ministry were up 45%; fatal accidents investigated, 21%; the number of health and safety complaints received by the ministry were up 50%; work refusals were up 17%; the number of reported incidents where no workers were injured were up 41%; and the reported occupational illnesses and diseases were up 84%.
There seems to be a conflict of what you're telling me about how the program is working, how corporations are being rewarded for their efforts, but evidence that's being presented to this committee indicates that complaints since 1991 compared to 1991 and 1992 are on the uprise.
It was also indicated in the report that managers or supervisors on their performance rating are also using accidents that occur in their departments as part of a prorating process. What's the issue of people trying to make sure that their performance record is not jeopardized by accident claims being reported?
I'm just having a hard time understanding. You're telling me the system is working; we get information provided to us that says it's not working. Everything is on the uprise; it's not on the downsize, and we're hearing that we've got to control deficit, but I'm still hearing employers saying, "We still want the moneys under the experience rating program to come to us, not to go to help offset the deficit situation that's there."
Mr Oliver: Excuse me, but I'm not sure what the question -- I'm not sure what point you were making.
Mr Hope: Your report tells us how great the experience rating process is working, and how employers are really utilizing it, cutting accidents, reducing accidents, and this morning I get a report, on page 10, from the Toronto Workers' Health and Safety Legal Clinic that tells me everything's on the uprise.
Mr Oliver: So you want --
Mr Hope: Well, you're telling me it's working well; they're telling me by statistics it's not. Is it working or isn't it?
Mr Oliver: There are two points here: One, I wasn't aware that you had to formally file all your accident claims with the Minister of Labour. It was my understanding that you filed them with the Workers' Compensation Board, and that there are more workplaces that are putting higher emphasis on workplace accidents and are also filing those with the Ministry of Labour.
I think there's certainly an increased awareness of accidents and occupational industrial disease. I think that's reflected in those statistics, and I think it's reflected also in the work that groups like THIHSEP have done in enhancing training in the workplace. The workplace parties know more about accidents, know how to report them, and report them now to not only the Workers' Compensation Board but also the Ministry of Labour. I don't think they're incompatible; I think they're actually complementary.
Experience rating raises the importance of accident prevention in the workplace, and accident prevention starts in the workplace. It starts with knowledge and it starts with education, and that's what groups like THIHSEP are doing. They're doing the training and it's increasing the awareness of it, and people now are reporting it to two places. They report it to the Workers' Compensation Board and also to the Ministry of Labour.
The Vice-Chair: Ms Solomon and Mr Oliver, thank you very much for taking the time out and giving us your presentation today.
Mr Offer: I was wondering if we can get some clarification from ministry officials as to why, based on this presentation and previous presentations and, I think, presentations to come, financial responsibility was not also put in the purpose clause for changes to the Workers' Compensation Board. I'm not asking for an answer now, but I would like to get some rationale as to why there is no financial responsibility in the WCB system.
Ms Murdock: I think, Mr Offer, the suggestion is very valid, but it should probably come from legal counsel rather than the Ministry of Labour. We're abiding by the views of legal counsel and the drafters of the legislation, and they should probably explain it in detail to us.
Mr Mahoney: I'd just point out that Mr Thomas, in his presentation -- I would be quite happy to see something come from legal counsel in responding to Mr Thomas's explanation on page 7 of his report, on the initial day of these hearings, wherein he says, "The purpose clause is not the place," blah, blah, blah, and gives his reasons. Whether or not they're valid reasons from a legal point of view I think is what Mr Offer is asking for, and I think that's something that, if it's agreeable with government members, we could ask for legal counsel to give us an opinion on.
CANADIAN UNION OF PUBLIC EMPLOYEES, ONTARIO DIVISION
Mr Sid Ryan: This is the Canadian Union of Public Employees, Ontario Division. We represent 170,000 workers in this province. On my extreme left is Jim Woodward, our legislative assistant; to my immediate left is Ralph Carnovale, our staff rep dealing with workers' compensation issues; and to my right is Bill Harford, the chair of our Workers' Compensation Board committee and also the third vice-president of CUPE Ontario.
The Canadian Union of Public Employees appreciates the opportunity to present its views on the proposed changes to the Workers' Compensation Board contained in Bill 165. I'd like to make some general comments first before we get into our detailed analysis of the bill.
The changes proposed, in our opinion, are of a mixed bag. Most we can endorse, but others we believe have altered the promise made to provide a fair and equitable compensation system to workers in Ontario. Even though we've got some reservations about a few of the sections of the bill, we do want to commend the government for having the guts and the courage to tackle the issue of reform of the Workers' Compensation Board.
CUPE supports the proposal to create a bipartite board of directors. This process has worked extremely well with the Workplace Health and Safety Agency and will produce positive results for the continuing reform of the Workers' Compensation Board.
Contrary to the previous speaker, who made some reference to the workings of the Workplace Health and Safety Agency, quite frankly, I don't know what he's smoking or where he's coming from. I sit on that agency and in the past three years, using the bipartite process, we have made over 300 decisions reached by consensus and one decision was reached by having to vote. In fact, on that particular occasion, the employers voted with the employee representatives on the board to give us the core certification and training program. So I don't know where he's coming from. It works extremely well and it's a process that we would most certainly want to see put in place in the Workers' Compensation Board.
We believe that the proposal to increase the pensions of unemployed workers with permanent disabilities is a humane and needed change. We applaud the proposal to improve the return-to-work and vocational rehabilitation sections. We also support the formation of a royal commission on reform to workers' compensation. We look forward, in fact, to participating in that forum.
We oppose some of the other proposals contained in this bill; for instance, the regressive proposal of the de-indexation of the COLA provisions, provisions we believe will take billions of dollars away from the incomes of injured workers.
We are conscious that employer organizations in Canada have been waging a campaign for many years now over the cost of compensation assessments. They've used, with very good effect, the proposition that unfunded liabilities of boards are out of control and threaten the wellbeing of compensation funds and threaten the competitiveness of Ontario employers. However, this campaign has always concentrated on lowering benefits to workers and rolling back entitlements to benefits.
The real problem has been underfunding by the employers. They have constantly resisted any increases to assessments. They have also fiercely resisted any improvements in safety legislation that would bring about better protection programs at the work sites. I can speak to that first hand because, as I say, I sit on the board of directors of the Workplace Health and Safety Agency and I deal with it every day of the week, practically, where we have employers in this province fighting the implementation of safety programs that will eventually lead to lower rates in the compensation system.
Added to this is the fact that successive Ontario governments have failed to provide aggressive enforcement programs designed to reduce the injuries and deaths at work. Against this background, CUPE feels that to focus on the unfunded liability is an attempt to camouflage the real problems of workplace injuries, deaths and diseases.
In our opinion, there is a social contract that was struck between workers, employers and the government when workers' compensation was first introduced. That social contract still exists. Workers have waived their rights to obtain fair and equitable compensation through the court system in exchange for the promise of a no-fault system that provides income replacement for moneys lost because of workplace injuries and diseases. The Friedland formula is a reversal of this social contract.
We also believe that changing the act to give employers unrestricted rights to the medical records of employees is an invasion of privacy. It will provide employers with information that they will use to rid themselves of workers who might become a long-term liability. They will certainly use it to contest workers' claims for legitimate WCB payments.
Compounding our concerns, CUPE has difficulty in accepting that the board of directors will have to make all their decisions based upon financial considerations. This provision will be used constantly to thwart and dilute any needed policy changes or decisions. It will usurp workers' rights to a fair and equitable compensation system.
Because of the time allowed here today, I'm not going to go through all of the changes that CUPE would be proposing. We have given you documents in front of each of you which detail the changes. I will make some general comments.
Section 1 we believe is a good move, to change "industrial disease" to "occupational disease." It makes a lot of sense to the public sector workers, where the majority do not work in industrial settings but do suffer from workplace-related diseases.
Subsection (7.1): This proposal could jeopardize pension entitlement of workers who have been injured in more than one province. We believe that there is a statutory requirement to provide compensation based on entitlement. A small pension from one province should not prohibit Ontario from paying benefits to workers who are entitled to them under the Ontario act. We recommend that this change be dropped.
Section 51, which deals with the return-to-work reports: This proposal could violate a person's right to privacy. These rights have been addressed in a number of forums, the most well known being the Krever commission on medical confidentiality.
Over the past few years, there has been a virtual explosion of employer representatives whose main purpose is to contest WCB claims, whether they be legitimate or not. In the same period, many consulting companies have sprung up who offer such services or who provide training sessions on how to frustrate WCB claims. A major segment of their program is to show how claims can be overturned by contesting medical evidence through the introduction of past histories of the injured workers. This, in CUPE's opinion, is the major purpose of the employers' demand to have access to private information.
The proposal only adds to the cost of the workers' compensations claims, because the board will have to pay for any reports obtained under this section. In addition, we feel the injured workers could be pressured or coerced into providing medical information. We definitely oppose this clause.
Section 58: This section requires that the board of directors has to act "in a financially responsible and accountable manner" when exercising its power and duties. This section could be interpreted to mean that the board of directors must ensure the assessment rates applied to employers are sufficient to meet the requirements of the board, including the unfunded liability. We suspect, however, that this section will very quickly come to mean that every decision will be measured against the employer's financial ability to pay for the measures.
This is a formula that will very quickly lead to gridlock of board decisions. The net result will be a board unable to make any decisions.
We suggest that it is a breach of the original social contract signed between workers and employers in 1914. We ask, when have employers ever admitted that they can afford changes to workers' compensation, or health and safety policies and legislation, for that matter? CUPE opposes the proposed language in this section.
Section 103: We support this change, because it will allow the board to act when employers are not living up to their vocational rehabilitation responsibilities.
Section 103 will give the board the ability to assess penalties on employers who have poor health and safety programs or practices. This is good if the board uses it to force better programs and practices. Hopefully, this will be used to greater effect than the present Work Well board program. The failure of this program is partially due to the inability of the board to conduct proper monitoring of the program. They rely instead on the employers to administer self-audits. If that practice continues, then these proposed changes will do little to reduce the number of claims.
We note with regret that the experience rating system is maintained. This policy rewards employers who can show a reduction in workers' compensation claims. Providing incentives for employers who show a reduction in claims has done little except to give birth to a whole new industry dedicated to disputing workers' compensation claims. The shabby practices that are implemented by employers in order to qualify for an assessment reimbursement include putting pressure on injured workers to return to work while still injured, having employees use their sick leave instead of workers' compensation, forcing injured workers to take inappropriate light-duty jobs to avoid claims and hiring personnel dedicated to disputing legitimate claims by whatever means necessary.
CUPE endorses a scheme that identifies employers with demonstrated bad health and safety records. We condemn schemes that reward employers for simply obeying the law to provide a safe and healthy workplace.
Subsection 147(14): We support this proposal that many permanently injured workers who exist on small pensions receive a $200-per-month increase. However, we are concerned that many will not receive this money. The qualifying requirements are tied to the supplementary payment award. We would suggest that this requirement be deleted by adding another clause, 147(14)(c), stating, "if the board determines that the injured worker is receiving an inadequate partial disability award." We should allow the new bipartite board to be able to make that judgement.
Section 148, the Friedland formula: We oppose this section. These changes will reduce the present cost-of-living allowances that were implemented after many years of struggle. The new formula that is to be applied will save the board billions of dollars from the employer side; one estimate is $27 billion. This is money that will be taken away from injured workers who are at present entitled to that money. The changes are simply a money grab, and a very large money grab, that is designed to lessen the employer obligation to fully fund the Ontario workers' compensation system. CUPE recommends that this change be dropped and that the present section 148(1) be maintained.
I'll finish up by saying there are three issues that we would have liked to see you address in this bill, but I'm positive they will be addressed in the royal commission. One is the question of deeming, where the board deems them able to perform such jobs and hence able to earn the amount of money that these pretend jobs would have paid and reduces the pensions by that amount. We would like the question of deeming to be addressed in the royal commission.
We would have liked to have seen coverage extended. There are over 700,000 workers in Ontario -- the financial sector, banks, insurance companies, brokers, broadcasting, lawyers, dentists, nursery schools etc -- we believe should be covered by this plan. In addition, we've got some 20,000 employers who evade coverage by failing to register with workers' compensation.
Enforcement: There is a direct link between violations of the province's Occupational Health and Safety Act and workers' compensation claims. An examination of the findings of coroners' juries in occupational fatalities will establish this link. In almost all inquests, the jury is able to identify violations of Ontario's health and safety law and regulations.
Every year, thousands of violations are recorded by the Ministry of Labour's health and safety inspectors. When one looks at the prevalence of back injuries that repeatedly occur in ever-increasing numbers, one must ask the question if employers are taking all precautions reasonable. Not only are back injuries recurring with regularity; at many work sites they often recur to the same worker.
An enforcement system designed to punish those who continually violate the health and safety requirements would go a long way towards reducing the number of injuries and claims. We believe it is time to stop blaming the workers' compensation system for being so expensive and concentrate on the real reasons for the high cost of compensation -- namely, accidents and occupational diseases. Prevention could greatly reduce the costs. Enforcement seems to be the only way to ensure compliance. By blaming such issues as unfunded liabilities and overgenerous awards as the reasons for the funding crisis, we ignore the real issues: far too many injuries and far too many occupational diseases.
A proper enforcement program should be aimed at reducing the frequency of occupational injuries and diseases. CUPE believes that stronger emphasis must be placed on enforcement. We must stop divorcing the cost of workers' compensation from the issue of poor enforcement and proper health and safety regulations in the workplace.
As I said, we welcome the royal commission when it is established but believe that you should deal with the three issues we have raised and that are not covered by the proposed changes.
Thank you for your time, for listening today.
The Vice-Chair: Mr Mahoney, about two minutes.
Mr Mahoney: In two minutes I can't get into a debate on the health and safety agency, so we'll have to save that for another day, because I would certainly take some difference with respect to your analysis of how it's functioning.
Mr Ryan: I thought you'd say this.
Mr Mahoney: I want to deal, though, with a number of the concerns. Thank you for the detailed presentation. As I know you had to skip to get it all in and go over a few things, I've gone through and I've identified 12 areas in this bill that you categorically, without any question, oppose, and do so, in your usual fashion, very strongly.
How then do I reconcile the statements at the beginning of congratulating the government and supporting the reform and the courage to tackle this thing and what I take to be the position that, if you indeed were sitting on this committee or were a member of this Legislature, notwithstanding the fact that you oppose this in 12 major areas, you support the bill? Help me with that.
Mr Ryan: Very simple. To begin with, your government had an opportunity when you were in office, and so did the Tories when they were in office, to address workers' compensation in this province. You repeatedly ignored --
Mr Mahoney: Can I get an answer to the question?
Mr Ryan: You're going to get an answer, if you just wait long enough.
Mr Mahoney: I don't really care about your opinion of former governments. I have clearly and publicly said --
Mr Ryan: You asked a question. I'm trying to answer the question.
Mr Mahoney: -- that all former governments are complicit in this.
Mr Ryan: Why don't you wait for the answer?
Mr Mahoney: Why don't you answer the question?
Mr Ryan: Why don't you just listen and you will hear an answer.
The Vice-Chair: Mr Mahoney, you've asked the question. Would you like a response?
Mr Ryan: You asked me how could I support it, and I'm telling you how I can support it. I happened to be the unfortunate individual who sat through 40 years of Tory rule and six years of Liberal rule in this province, and you had an opportunity to introduce reform to workers' compensation and you never did. So here's a government that brings in legislation, and like all pieces of legislation, it's not exactly what I would like. There are some changes, and that's what this process is about. My organization came in and we identified for your committee changes we would like to see in this legislation.
We did identify some of the strong reasons why we would support it, and that is the bipartite board -- it's long overdue -- and pensions for those people who have been excluded by your government and by Tory governments for the past 20 years. That's why we support it, because we're hearing loud and clear from those workers they want to have protection against inflation, they want to have a decent wage, they want to have a decent standard of living.
I listened to those people come into these hearings last night, injured workers coming in with neck braces, walking in here with walking canes and sticks, pleading with this committee to make sure we provide them with adequate pensions, and that's what I see this piece of legislation doing, providing them --
Mr Mahoney: Despite 12 areas in the bill you are strongly opposed to, you would vote in favour of this bill.
Mr Ryan: It's a democratic process, Mr Mahoney, and all of us live in a political system. We don't always get all of the cake. We're coming in here and we're trying to influence the system as best we possibly can to make sure we get the best possible product. That's why we've highlighted for you and for the rest of the committee some changes we'd like to see made to this bill.
Mr Turnbull: I just want to go on record as saying that I object to the fact that we cut off the employers' group that had advised the Premier. We couldn't allow any extra questions because we had to adhere to 20 minutes, and now we're going over the 20 minutes.
The Vice-Chair: We're only 16 minutes into this presentation.
Mr Turnbull: I want to ask you, would it not make a great deal of sense, given the number of areas of concern that you've got, to wait for the royal commission to report and then to see what the royal commission has to say? I mean, you've identified several areas where you have great concerns.
Mr Ryan: I think injured workers in this province have waited long enough. As I say, your government had 40 years to implement changes and never did, and the Liberals had five or six. I don't believe injured workers can afford to wait much longer for very much needed changes.
Royal commissions have a way of taking their time about conducting their business, reporting back; other governments have ways of taking their time to implement the recommendations of royal commissions. Here we're seeing a government that's taking the bull by the horns and saying: "These are some very much needed changes that have to be made immediately. They have to be done because injured workers are saying, `We desperately need'" --
Mr Turnbull: That's what they said about the social contract.
Mr Ryan: That's a different issue, Mr Turnbull. I can address the social contract --
Mr Turnbull: That was then; this is now.
Mr Ryan: -- just as forcefully as I can address this issue. But anyway, the short answer is that injured workers cannot afford to wait.
Mr Mahoney: So de-index their pensions.
Mr Hope: I want to thank Mr Ryan for the presentation, as he has clearly outlined in specific sections of the act where he agrees and where he doesn't agree and it's helpful for committee to look at those. I haven't gone through them all because we had to skip through the process, but I believe some of the issues you brought forward were well deserving.
I notice when you were trying to get an answer across to Mr Mahoney, I'm sure you'd want to tell him that the revenue-neutral aspect of Bill 162 was supposed to put a $1-billion unfunded liability to the workers' compensation system, but I'm sure he wouldn't want to hear that.
Mr Ryan, people have been coming before this committee -- and I know you've been involved in negotiations. When a group of people who are bargaining a contract or working out an agreement walk away from the table, in your opinion, does that agreement stand when one party leaves or does the agreement dissolve itself?
Mr Ryan: You mean when both parties agreed to --
Mr Hope: Let's say, for instance, you're in negotiations and you run into a stalemate and one party walks away from it. Does the contract still live or does the contract die? I'm asking you this because we're hearing employers saying there was an agreement put in place, but the employers walked away from the table. I would just like your experience in negotiations -- and I see your colleague beside shaking his head up and down. Maybe you'd like to answer it. I would like your opinion on that.
Mr Ryan: I was part of the PLMAC in the early days before I resigned from it, not because of workers' compensation, I can assure you; it was because of the social contract. The question you're asking me was, I believe there was an agreement between both parties, and if one party wishes to walk away from it, I believe the agreement still stands and should stand, and that's what we've done in this particular case. We've now implemented the main elements of that agreement in this legislation.
The Vice-Chair: Mr Ryan, Mr Carnovale, Mr Woodward, Mr Harford, thank you for coming here today and giving us your presentation.
Mr Reuben Roth: My name is Reuben Roth. Members of the committee, Mr Chair, the Ontario Workers' Compensation Board, established in 1915, has had a long history of administrative affliction. Indeed, some speculate that the WCB has had such a problematic past precisely because it lacks the legislative clout and authority necessary to fulfil its mandate.
The newly proposed Bill 165, An Act to Amend the Workers' Compensation Act and the Occupational Health and Safety Act, is an effective though flawed beginning which attempts to remedy the board's current malaise. I speak to you today in support of Bill 165. However, I have several reservations regarding this piece of legislation. I will begin with some general remarks which I hope will set the stage for my views.
According to Dee, McCombie and Newhouse, authors of a book on workers' compensation in Ontario:
"Workers' compensation is a unique mixture of law, social policy and plain old political lobbying. It developed in the days which preceded almost every social protection scheme that we now associate with the `welfare state'.... Because of its unique funding mechanism by which all money paid out in benefits derives from assessments on Ontario employers, with no money from the provincial treasury, the ebb and flow of workers' compensation development has been left to the two major `users' of the system -- injured workers and employers. As long as neither group was disgruntled, there was no reason for the politicians to worry too much about `saving taxpayers' money' or `expanding social programs.'
Therefore, because of workers' compensation's pre-Keynesian roots, it has retained a rather different structure from its other administrative-board cousins.
Had Ontario's compensation board been established during the period around the Second World War, for example, it may well have not resembled its current structure. But the logic of linking workplace accidents to employer responsibility seems to have been forgotten in the interim, and the WCB's potential debt has been portrayed as a burden on the public purse and business competitiveness. The bogeyman used to facilitate the view of the WCB as a runaway train is the so-called unfunded liability.
Earlier this spring the PLMAC business caucus made the public proclamation that "If it were a private company, this organization [the WCB] would have had to declare bankruptcy." With this statement, war was effectively declared by business interests on both the WCB and injured workers. The business caucus's publicity wheels had been set in motion the previous year and criticism of the board's unfunded liability had reached a fever pitch earlier this year. But I urge you not to fall prey to a campaign of misrepresentation and denial of responsibility.
Let us be clear on what an unfunded liability really represents: An unfunded liability is not necessarily a clear loss of revenue. It is a calculation of what an organization would have to pay out in the event that its shareholders called in the debt, past and future, owed to them. Few private companies would be able to immediately repay their unfunded liability without suffering bankruptcy, and certainly fewer individuals would be able to respond were the holder of their mortgage to demand immediate repayment.
At any rate, individual injured workers are not at liberty to call in the debt owed to them. In fact, workers have neither the power nor the inclination to call in their debt. Accordingly, the unfunded liability is something of a phantom and unlikely ever to materialize. That injured workers are expected to pay for the business community's phantom is a farce of the worst kind. It penalizes those who can least afford to pay and it ignores the principles upon which workers' compensation was founded.
In 1914 employers, represented through the Canadian Manufacturers' Association, the CMA, demanded among other things that the fund be financed by workers and government as well as employers, that time limits be placed on benefits, that workers who could be shown to have contributed to their own misfortune should be barred from receiving compensation and that a shared scheme with private insurance participation should be implemented topping up payments.
In his final report, Justice Meredith made the following recommendations: (1) the system of compensation be no-fault; (2) an arm's-length administrative board be formed, not a state-run body; (3) benefits be paid as long as injury lasts, with no time limits; and (4) the board's funding to come from the employer sector only.
On the whole it seems that even a former leader of the Conservative Party, Justice Meredith, had ignored the pleas of employers and recommended the implementation of a flawed but fair system of compensation.
Today's PLMAC business caucus might easily have lifted their demands from the 1914 report of the Canadian Manufacturers' Association, such is the apparent nature of business' interest in reforming the act.
For example, the business demand that government pick up the tab and remain involved in the board is akin to the 1914 CMA demand that the fund be financed by government and workers. The business caucus's demand that a two-week waiting period and a reduction of benefits to 85% of net income be implemented to keep compensation costs down is akin to the CMA's demand that time limits be placed on benefits. The PLMAC business caucus's demands to opt out of the act at will and share costs with private insurers is little more than the 1914 call for private insurance participation. Such is the goodwill of the business lobby to negotiate a workable agreement. It seems that business's ideas on the rights of workers injured in the course of their duties is still mired in the early 20th century.
In attempting to modify compensation legislation, I urge committee members to bear in mind that employers have historically borne and should continue to bear the financial responsibility for this system of compensation. Any shortfall between WCB revenue and expenses should be borne solely by business, not by those who are injured due to the practices of business and not by general tax revenue.
Workers' compensation should not be considered part of our social safety net, nor should it be subject to the current mania in both business and media circles to reduce publicly funded deficits by cutting social programs. Simply put, supporting workers' compensation should only be seen as the cost of doing business in Ontario.
Currently, business is generally either unwilling or unable to see that the board's needs, and indeed the board's demands, are as unique, and apparently as unrecognized, as the needs of injured workers themselves. For example, the requirement for a unique space in which to house WCB employees is a direct outgrowth of the elevated standards necessitated by the injuries suffered by the WCB's clientele. That there is no suitable existing office space for the board is seen by business, the media and opposition critics alike as something of an outrage.
Curiously, these critical parties ignore the unique requirements of those injured workers who are to be served by the new facility. They are deaf to the groans of the injured who are unable to convince their accident employers to adhere to legislation which requires a similar accommodation.
In fact these special building standards are similar to the workplace accommodation which injured workers have been granted in previous workers' compensation legislation. However, to date employers have been generally successful in evading the stipulation to provide on-the-job accommodation for their injured employees.
Employers tend to view the injured as a nuisance, a necessary but bothersome byproduct of doing business. This apparent lack of vision is perhaps due to the blinders necessitated by the need to do business in a competitive environment. Indeed, the inability to see the damage it is doing is a good argument to exclude business from a bipartite board.
The corporate view regarding worker health and safety has always been one of cooperation and harmony. Historically, a chief source of this consensus outlook is the provincial health and safety labour legislation, which traditionally sees managing health and safety as a joint responsibility to be taken up between labour and management.
However, Glasbeek and Tucker, who recently released a study examining the 1992 Westray mine explosion in Nova Scotia, discussed this conflict between employer and employee in a market economy and they explain that these relationships are "inherently conflictual" and the illusion of a "truly shared ideology" can be maintained only with a great deal of effort. They conclude that, "To date the effort to uphold this myth has been largely successful," and,
"The degree of danger at work is not just simply related to natural conditions or technical capacity. In this context, the Westray [mine disaster] story is illuminating precisely because the particular conjuncture of unequal power and the near-total acceptance of the need to please private capital made the working of the health and safety regulatory machinery so fraught with danger. But it need not be this way."
Thus it has been declared by the Canadian state that health and safety issues must somehow be dealt with by consensus. Somehow, it is reasoned, workers and management are supposed to drop their traditional adversarial roles and see the issues of health and safety outside of the sphere of labour-management conflict. Glasbeek and Tucker also write that:
"A central pillar of consensus theory, and the regulatory approaches justified by it, is that labour and capital share a common set of goals. In part, if this is so, it is argued, it is because there is some rough equivalence between them. One aspect of this equivalence is in relation to risk-taking. Employers risk their capital, workers their lives and health. On its face, the notion that these risks are equivalent is absurd."
Thus, workers' compensation legislation has been subject to the input of management as well as labour. This clearly appears to be a conflict of interest for management, who are driven by a desire for ever greater profit, often at the expense of worker health and safety.
Therefore, the conflicting demands of profit versus the concern for employees' health is another important factor at the root of the WCB's problems. That these two bodies, employers and labour, are to be the major shareholders on the board of directors proposed by Bill 165 ignores the obvious figure looming in the background: the injured worker.
Injured workers, via their representative organizations, are surely a major stakeholder in the compensation process, yet somehow this obvious omission has been ignored.
The PLMAC process is unusual in the realm of legislation-building. On the one hand, it brings together two of the partners involved in the compensation process, in much the same tradition as the western European labour-management model. On the other hand, the PLMAC process ignores the reason for the board's very existence, the injured workers themselves. Accordingly, there must be a legislated mechanism within Bill 165 which will bring injured workers on to the WCB's board of directors as a partner in the decision-making process.
Unfortunately, at present the various injured worker groups lack the funding to finance an adequate lobby effort. After all, as an organization composed largely of injured workers, it is naturally an organization hampered by lack of money. Without adequate office space, staff and lobbying, the injured workers' groups will continue to be shut out of a process which should rightfully and reasonably include them.
Injured workers can either continue to be the number one problem at the offices of provincial MPPs across the province or they can unite in self-sufficient groups which see the injured help themselves. Although this is currently a reality in Ontario, there is a need for a more secure form of injured worker group funding across the province. A solid financial base would enable injured workers' groups to establish more regional offices across the province. It would also enable injured workers to lobby Queen's Park as effectively as employers currently do and it would augment and relieve the WCB of its now overburdened advocacy services.
To conclude, at the beginning of my submission there is a quote by an executive of Honda motors, Shoichiro Iramajuri. The quote reads as follows: "You have to understand that the human being is the most flexible robot." Mr Iramajuri speaks the language of business. He speaks of the daily reality in workplaces all across Ontario. The language of business does not allow room for the troubles of a pesky minority. The language of business, as we've seen at these hearings, easily speaks of unfunded liabilities, experience ratings and financial responsibility frameworks, but there's been precious little sympathy shown for people.
These are, after all, only people who are harmed in the course of doing their job. However, unlike a broken sprocket, you just can't throw away people. Business realizes this and wants injured workers to simply go away as cheaply and as quietly as possible. You can't blame business for doing what businesses do best, and that's making money.
An example of this businesslike principle is best embodied in the following Bill 165 proposals:
-- Section 33, which hopes to amend 148(1), which contains the unduly punitive Friedland formula: Although very good for business, it's a nightmare for injured workers who already make do with less.
-- Also, the puzzling subsection 58(1) proposal, which states, "The board...shall act in a financially responsible and accountable manner": This is akin to a corporate mission statement which reads, "We shall make as much profit as humanly possible"; in other words, it's a given.
-- The vague section 8, which prohibits compensation to a worker if they are "receiving compensation under the law of another jurisdiction."
These provisions are all the reflection of the competitive business environment and the will to erase phantom unfunded liabilities.
However, what business is apparently not very good at is taking care of injured people. That's the job of government.
I, for one, welcomed the Labour minister's opening statement, that "Ontario's first-ever social democratic government will not reform workers' compensation on the backs of injured workers. It has been a long time coming."
With Dee, McCombie and Newhouse's earlier quote in mind, that "workers' compensation...is a unique mixture of law, social policy and plain old political lobbying," I would like to see a diminished possibility of future interference with the WCB and therefore I feel compelled to give my vote of support to the proposed bipartite structure of the board, with the hope that it will eventually include injured worker representation.
Bill 165 contains some solid proposals which make it worthy of support. Section 32 is a small, albeit long-awaited, step towards alleviating the poverty of an estimated 40,000 injured workers. Its payment should be as foolproof as possible, and it has been suggested that subsection 147(4) is not the best vehicle for these much-needed funds.
Section 27, which allows for a penalty assessed by the board on an employer who does not cooperate in vocational rehabilitation programs, is another welcome amendment. For too long, employers have openly flouted laws which require them to re-employ the workers they injure.
The much-needed royal commission of inquiry is a long-overdue step towards better board programs, such as more accessible vocational rehabilitation provisions, modifying or even eliminating the current systems of experience rating and deeming, studying the link between the rise of lean manufacturing techniques and occupational disease and, finally, including office workers in the act. This last proposal is not a new one by any means. But with the dramatic rise of repetitive strain injuries due to the increased use of computer keyboards, the estimated 700,000 office workers currently not covered by the act face the cruelty of a crippling on-the-job injury without workers' compensation coverage.
Workers who have been injured on the job have given up much more than steady employment or a regular paycheque. As Chris Doran of the University of Saskatchewan writes:
"WCB legislation, by encouraging an individualized and `accident'-oriented notion of `ill health,' prevents workers from formulating their health in the more holistic terms which they had used in the early 19th century. At that time, industrial capitalism itself was seen as the cause of their ill health -- not because it produced accidents in the workplace, but because it led, much more seriously, to the general debilitation of their health. Health, as formulated then, was an aspect of people's lives to be preserved, not compensated."
In other words, workers' compensation legislation has stolen the very idea of good health from workers. That we now take for granted the notion that work is expected to hurt is nothing short of a crime. We have sacrificed the concept of good health in exchange for mere wages. We have internalized the message that workers have no right to complain that their health has been turned into just another commodity. After all, they're getting their comp, aren't they?
Thank you for your time and attention. I now welcome questions from members of the committee.
The Vice-Chair: We have time for about a 15-second comment from each caucus.
Mr Mahoney: Thank you. You obviously did a lot of work in preparing that, and I appreciated your doing it, although I strongly disagree with much of it. But let me just ask you one question. You quote Mr Mackenzie on page 10, where you say you agree with his quote -- "It has been a long time coming" -- that "Ontario's first ever social democratic government will not reform workers' compensation on the backs of injured workers." That was in the written transcript.
What he actually said was "solely on the backs of injured workers." It was interesting. He added the word "solely" to that, not in the written text, but you'll find it in Hansard. In essence, what he's admitted is that by implementing the Friedland formula, by taking the money and giving out the $200 increase and de-indexing all other injured workers' pensions, he is indeed reforming this board on the backs of injured workers, certainly to a degree.
If you couple that with your statement that the shortfall should only be paid solely by business -- well, business feels they are solely paying it, but if you look at the Friedland formula here, now injured workers are paying it. I'm wondering how that fits with your philosophy in this paper.
The Vice-Chair: Mrs Witmer, do you have a comment?
Mrs Witmer: Yes, I would simply say thank you very much.
Mr Mahoney: Don't I get an answer?
The Vice-Chair: We don't have time for questions.
Mr Mahoney: We don't have time for an answer? Let the man answer.
The Vice-Chair: Just a quick comment, a quick comment. Mrs Witmer.
Mrs Witmer: Yes, I simply said thank you very much for your presentation.
Mr Mahoney: He didn't answer my question. What is this?
The Vice-Chair: Ms Murdock.
Ms Murdock: Actually, he's raised a number of issues that have been discussed already by other groups, but also a couple of other areas that I think should be looked at, the issue particularly of similar kinds of injuries in other provinces. So I'll be looking at that, and I thank you.
Mr Roth: Thanks for your attention.
The Vice-Chair: Mr Roth, on behalf of this committee I'd like to thank you for taking the time out and giving us your presentation today.
Mr Mahoney: Mr Chairman, I'd like to suggest that the gentleman be given an opportunity to respond to my question. If he thinks that I was unfair, I think he should be given a chance to respond to it.
The Vice-Chair: As was discussed before, there are 20 minutes for each presentation and there is no time, unless you can get consensus from the committee.
Mr Mahoney: Committee, what do you think?
Mr Offer: I say yes.
The Vice-Chair: Do we have consensus?
Mr Mahoney: What do you think?
Ms Murdock: No.
Mr Mahoney: Oh, you want to muzzle him.
The Vice-Chair: We don't have consensus.
The Vice-Chair: Order, please.
Mr Mahoney: Let the record show that the government members don't want him to answer my question.
MOTOR VEHICLE MANUFACTURERS' ASSOCIATION
Mr Mark Nantais: Mr Chairman, members of the committee, we thank you for the opportunity to be here today before you. My name is Mark Nantais and I'm the president of the Motor Vehicle Manufacturers' Association. With me here today I have Rosemary McNamee, who is the associate administrator for salaried personnel and benefits policy, General Motors of Canada Ltd; Bruce Waechter, labour relations planning manager for the Ford Motor Co of Canada Ltd; and Mr Rick Thrasher, who is the supervisor, workers' compensation and medical plans, Chrysler Canada Ltd.
Ladies and gentlemen, these are the experts whom I have with me today and hopefully there will be time remaining that you can direct some questions to them. They'd be pleased to respond.
I'd like to preface our presentation by outlining the fact that the Motor Vehicle Manufacturers' Association is an industry association representing Canada's major automotive and heavy truck manufacturers. We have nine very prominent companies: Chrysler Canada, Ford and General Motors, or course, as well as Freightliner Canada, Mack Canada, Navistar International Corp, Paccar of Canada, Volvo Canada and Western Star Trucks.
The association's purpose in a thumbnail is to provide a forum whereby issues of common concern can be addressed in a consensual manner. Clearly, this is a subject which our industry has chosen to address in a collective manner.
The motor vehicle industry is critical to the economic wellbeing of Ontario. As noted in your handout, actually one in six jobs in Ontario is either directly or indirectly related to the motor vehicle manufacturing industry. Investment by our industry, primarily in Ontario, where about 80% of all our manufacturing resides, from 1991 through 1993 was about $6.5 billion -- I don't know of any other industry that has made such investments -- and the entire industry accounts for more than 4% of all Canada's gross domestic product. Obviously this represents a much higher percentage for Ontario.
As I'm sure you're also aware, the auto industry is a fully rationalized industry on a North American basis where product sourcing decisions are made. Ontario plants must actually compete with US and Mexican sister plants, head to head, to obtain product mandates. Ontario plants must remain competitive or risk losing allocations of future product. There are no guarantees in the auto industry for Ontario -- or for Canada, for that matter.
This is why the Ontario workers' compensation system causes grave concern among my colleagues and I. In the presentation which we've distributed to you, there are a number of charts which we'd like you to take a look at now.
Figure 1 shows a bar graph illustrating that the Big Three auto makers' WCB costs of $1.85 per hour of production for 1993 is more than double that of their US counterparts, which come in at a cost of 82 cents. Both of these costs are in Canadian currency. This is one more indication why Ontario is not becoming a very competitive place to do business.
In our industry within Ontario, there is currently no connection between the current accident frequency and severity improvements that have been achieved and the cost of workers' compensation.
If you would turn to figure 2, that chart shows a decline in accident frequency, for 200,000 hours worked, from 11.8 in 1991 to 9.7 through June 1994, and assessment cost increases in the same time period from $147 million to $185 million. These statistics represent experience for the Big Three automotive companies.
In figure 3, assessment funding for all Ontario automotive rate groups has increased from $172 million in 1991 to fully $268 million in 1993. Again, in figure 3 the severity of these claims has, for the same time period, decreased from about 530 days to 367. You will note the second cost line on this graph shows the net assessments for 1992 and projections for 1993 as a result of NEER experience cost rating. We will speak to the significance of this later in this presentation.
Turning to figure 4: This relates to our own insurance plans for sickness and accident occurrences which report frequencies actually four times greater than that of work-related disabilities. Even though there are four times as many lost-time claims, the cost factor is about a third of workers' compensation assessments paid during the years of 1991 through 1993. This serves as an example of how our number of disabilities as a result of workplace incidents is out of line with the resultant costs. It should also be noted that the administrative costs for WCB are approximately 20%, while corresponding costs for companies' sickness and accident benefits are approximately 1.5%.
In general, I would reiterate the comments of Mr George Peapples, a member of the Premier's Labour-Management Advisory Committee, when he said that in drafting Bill 165, the government had "cherry picked" from an accord reached between industry and labour on how to correctly reform the Workers' Compensation Board. It is incomprehensible why the government of Ontario would not utilize a package of reforms developed and agreed upon by labour and management. When an agreement is reached between two parties, a third party simply should not change this agreement.
This standing committee has no doubt heard this from previous presenters, you will hear it again in the days to follow and you're hearing it now: There is no business support for Bill 165. Fundamentally, and contrary to what has been reported in the press, Bill 165 does not represent in any way the PLMAC accord that the business and labour communities presented to the Premier back on March 10 of this year.
We are concerned that the bill does not make any provision for a financial accountability framework which would take into account the financial impacts of changes to any element of the system. This financial accountability was recommended in the purpose clause developed in the March 1994 accord, as I mentioned, a provision the government has chosen to ignore. I believe a copy of this was presented to this committee yesterday by the business steering committee.
One need not look beyond the purpose clause of Bill 165 to see how the government has distorted a genuine attempt by the workplace partners to reform the system. Instead of a purpose clause which balances the interests of financial responsibility, administrative accountability and the study of the financial impact of changes to any element of the system, we now have a purpose clause within Bill 165 which only makes provision for expanded entitlement. This will result in a further increase in the unfunded liability because, as we previously stated, there is no financial responsibility framework contained in the bill. A purpose clause is a cornerstone for all involved with the interpretation of any legislation that is being drafted.
The MVMA has a number of additional concerns. In the area of vocational rehabilitation, Bill 162, which was enacted in January 1990, clearly defined the board's role in vocational rehabilitation. The subsequent study in 1991-92 provided for in the Chairman's Task Force on Service Delivery and Vocational Rehabilitation presented many recommendations which have been implemented by the Workers' Compensation Board. Sound judgement, expertise and commitment on the part of the board's rehab officers, working with employers I might add, workers and physicians as well, as mandated by this previous legislation, will ensure positive results. There is no need for yet another assessment of penalties on employers if the WCB administers the current act as it is written.
In the area of governance, the MVMA takes exception to the direct involvement by the Minister of Labour who will, for all intents and purposes, direct the WCB for one year as laid out in section 16 of the bill. The memorandum of understanding which is also to be signed perpetuates this involvement of the ministry in the policymaking of the board. I really have to ask: Does this government lack confidence in the proposed bipartite board of directors' ability to steer a course for the Workers' Compensation Board? It is essential for the board to retain the responsibility of administering the legislation and policy development without interference from those who may be politically motivated.
Within section 32 of the bill, there is a provision for the payment of an additional $200 per month without any individual needs analysis being undertaken. It has been estimated that this measure alone will add $1.5 billion to the unfunded liability. The indexing factor for benefits as contained in section 33 adds a significant exemption to the application of the indexing formula and, as such, the long-term unfunded liability of the system will continue to be adversely affected.
We have referenced other concerns in our submission for your review. However, we would like to take the remainder of our time to address an issue that is of utmost importance to the members of the MVMA and, we believe, the business community at large; that is, the experience rating under the NEER rating system. Provisions of Bill 165 actually obviate a proven mechanism that has been a major factor in reducing accident frequency and duration of lost-time claims within our industry.
Experience rating is a pivotal issue for us. It has proven to be extremely successful in meeting the objectives of the WCB to lower accident frequencies and severities. The experience rating system simply must not be tampered with. Bill 165 proposes to replace a results-oriented, direct incentive-based approach to accident reduction and expanded return-to-work opportunities with an administrative, process-based approach to obtaining uncertain experience-rated rebates or surcharges. This intrusion into a program that by all accounts has been an unqualified success in achieving the board policy goals set for it is unwarranted and adds elements of subjectivity which lead to confrontation. This is diametrically opposed to the PLMAC accord that promoted the notion of an additional incentive component to be added along with the development of a template of best practices.
NEER experience rating rewards or penalizes employers based on their ability to achieve projected cost targets. Our industry became involved in the review of the NEER experience rating as a result of earlier assessment discussions with the Workers' Compensation Board. At that time, increasing accident frequencies and costs were threatening to result in an assessment increase of 30%. The board actuaries were demonstrating that the automotive industry assessments were not even covering the lifetime cost of current-year claims, let alone the necessary resources for paying our portion of the unfunded liability and administrative costs.
Our industry became true believers in the benefits of cost accountability through experience rating, and began a process which implemented positive initiatives to be proactive in the prevention of injuries through improved safety awareness and practices. We also began a process which implemented positive programs to assist workers in reducing their time on claim. Some of these initiatives include establishment of ergonomic committees, hiring plant ergonomists, ergonomic job analysis, enhanced joint company and union safety training programs, in-house rehabilitation facilities, improved Workers' Compensation Board claims management, hiring rehabilitation nurses and therapists, rehabilitation placement committees, and modifying jobs to fit the restrictions of injured workers.
These initiatives resulted in a complete turnaround in our cost experience by the time we entered NEER for the 1992 accident year. This has been demonstrated by significant reductions in our target assessment rates published by the board in each subsequent year as well. Experience rating and the ability to track WCB expected versus actual cost experience by individual claim has been a primary factor in motivating our MVMA companies to take action to reduce both the severity and frequency of accidents in the workplace.
At this point I ask the members of the committee to refer back to figure 3. In figure 3, as I mentioned, there is a net assessment with the NEER line drawn showing the very positive cost reductions for our 1992 and projected 1993 experience. This equates to $33 million for the 1992 accident year and $47 million for 1993. Any assessment levied for past cost and claim experience is not factored into the experience rating review. We continue to pay our fair share of the unfunded liability and overhead costs. We do not get refunds for which we are not entitled due to improved claim or cost exposure. Experience rating merely brings the costs to be paid out by a company more in line with the actual accident experience of the employer. Bill 165 will only remove the certainty of obtaining any incentive for investments undertaken to meet the projected cost targets.
We understand that Labour minister Bob Mackenzie has indicated that the wording of the bill will be amended and has just this week introduced a government motion to the committee to substitute current language set out in section 28 of Bill 165. The major advantage of experience rating is that the rules of the game are clear: It is both measurable and predictable. Employers know that if they do two things -- that is, reduce the number of lost-time injuries and reduce the time off the job for those employees who are injured -- there will be a direct payoff under experience rating. The motion as proposed by the minister leaves experience rating open to subjective interpretation.
If there is a need identified to change existing experience rating formulas, a working group should be established with representatives from the board and business community. We would be pleased to be part of this process, and in fact we insist on being there. Let us be clear that we do not believe there is any need to legislate reform regarding experience rating.
The current NEER experience rating system works well and it is the only tool employers have to ensure the assessment rates paid are in line with their actual accident experience for that year. In colloquial terms, if it ain't broke, don't try and fix it.
The MVMA strongly encourages the committee to recommend that experience rating be preserved as it currently stands. The entire business community will only be further alienated from the process of reforming the workers' compensation system if this program is tampered with.
Without elaborating on all the comments contained in our written submission, suffice it to say that the MVMA believes there are a host of reasons why Bill 165 must be withdrawn, or at the very least revised to totally reflect the context of the accord. There is a lack of support for the bill by the two workplace parties that must work under the auspices of any legislation.
That concludes our formal verbal presentation. As I said, we'd be pleased to field any questions of your members.
The Vice-Chair: Again, we have time for just a brief comment. Mr Mahoney.
Mr Mahoney: Comment or question?
The Vice-Chair: A very brief question -- if you want to respond.
Mr Mahoney: Because we've heard from government members and some presenters that you are the enemy creating the problem, I would like you to answer my question: Does business have an interest in reducing and eliminating accidents and illnesses that occur in the workplace, and do you have any interest in working with labour on an early-return-to-work program?
Mr Nantais: I think the answer to both those questions is an absolute yes.
Mr Mahoney: Can you expand as to what that interest would be?
Mr Nantais: I'm going to turn, if the committee permits, to the experts I brought with me.
Mr Bruce Waechter: We have an interest in both arenas, if I understood your question correctly. One is in the area of accident prevention and safety programs which have been immensely enhanced, and the other is in the rehabilitation and return of injured workers.
We have rehabilitation facilities at several of our locations. We have job placement committees. We modify jobs. We're constantly in touch with employees to get them back into work, into rehab and on suitable job placements.
Mrs Witmer: Thank you very much for your presentation. I appreciate the graphs. They simply are excellent as far as illustrating the points.
You indicate that the amendment made by the minister to the experience rating will not address the concerns you have. You indicate that as it stands, the motion would leave the experience rating open to subjective interpretations. What are some of the concerns you have with that as presently structured?
Ms Rosemary McNamee: I guess the major concern is that now experience rating under the NEER system is tracked by actual cost and experience, and what the board has actually done is devised factors that show what their expected costs are for your industry based on your past experience, and in order to achieve any positive results you have to better your experience with your claims during the current year.
What happens with the amendment is that you could be tracking your costs, be doing everything that you know possible to improve your cost experience, your frequency and severity and working with all the placement programs and modified work programs, and have it subjectively removed and, therefore, the initiative could go downhill at that point in time.
Mrs Witmer: And the predictability as well.
Ms McNamee: And the predictability. One of the possibilities when you are trying to marry actual cost experience to simply a frequency figure is that you could experience a higher frequency in smaller injuries that have not incurred costs, lost time or any undue hardship to the employees, and that in itself could reduce your possible rebates, and that would not have had effect on the bottom line of the board finances or your return-to-work programs.
Ms Murdock: I just want to thank you. I know that many of your programs are similar to the ones a company in my riding, Inco, has introduced. It's imperative that management and labour work together. Your company and Inco, companies like that, that do that show it can work.
But your comments on the memorandum of understanding surprised me. In fact, I was somewhat disappointed that you would have commented on whether the government lacks confidence in the proposed bipartite board of directors when the memorandum of understanding, which has been in existence for a number of years, was strongly urged to be renewed and clarified by the Provincial Auditor when he was doing another review on another part of the Workers' Compensation Board.
The whole point of it, in the Provincial Auditor's remarks, was that he wanted it updated and he wanted that accountability stated emphatically and clearly in the memorandum of understanding so that even though the government, as we all know and previous governments know, is at arm's length from the Workers' Compensation Board, is supposed to be running the show without interference and legislation is how we handle things, there is still some reporting back to the Minister of Labour, whichever government of the day. So I'm surprised that you would see that as the ministry controlling the board of directors, and I wonder why you would make that comment.
Mr Rick Thrasher: I guess I'll take a stab at that one. The concern is that it was left open-ended, and our understanding of it was that it was subjective enough that it would leave the opportunity for the government in power to put in changes at the board, whether it be policy or administration, that allowed, then, the government in power to do that and avoid that arm's-length approach. That's where we had some exceptions to that. We liked the arm's-length approach. It has to be left out there on its own and administer its own policy.
The Vice-Chair: Mr Nantais, Ms McNamee, Mr Waechter and Mr Thrasher, thank you for taking the time out today and giving your presentation.
It's my understanding that the next presenters have cancelled because of circumstances out of their control and have been rescheduled, so I call forward the Ontario Nursing Home Association. Mr Offer.
Mr Offer: Very briefly, I wonder if the ministry staff in the next while can provide information as to whether under this particular legislation WCAT is subject to any financial responsibility section.
Ms Murdock: I'll make sure it's noted and that they can get that information.
Mr Offer: I hope you won't leave that until clause-by-clause. A lot of people are coming before this committee very greatly concerned about financial accountability, and financial accountability is found in some way, shape or form under section 12 of the legislation, but I want to make certain that WCAT, which can also make very important decisions, is subject to the same type of confinements that are now found under section 12 of the legislation.
Ms Murdock: If I might, Mr Chair, it is already in the existing piece of legislation. If you look at that, the board of directors at the present time --
Ms Murdock: Yes, under the Workers' Compensation Act -- control the budgetary requirements of the WCAT. Yes, it does.
Mr Offer: I would like to have legal counsel from the ministry provide the financial accountability of WCAT as soon as possible.
The Vice-Chair: Thank you, Mr Offer.
ONTARIO NURSING HOME ASSOCIATION
Mr David Cutler: I'm David Cutler. I'm one of the representatives from the Ontario Nursing Home Association. I do assist them on the labour relations side at their committee. I do also work for a private employer, Leisureworld Inc.
Ms Shelly Jamieson: My name is Shelly Jamieson. I'm the executive director of the Ontario Nursing Home Association. We were originally on a waiting list to be put into one of your time slots, so we did send 25 copies of our proposal at that time and were assured they would be here today. Unfortunately, I understand they're not, but they're here somewhere. We're extrapolating some of the points from our presentation but not covering the entire presentation in the 20 minutes.
The Ontario Nursing Home Association was founded in 1959, and the ONHA's membership of 296 homes is split into eight regions across Ontario. We represent close to 90% of the province's nursing home beds. Member homes accommodate over 27,000 seniors, making them a key element in long-term care facilities in Ontario. Member homes also employ in excess of 27,000 people, 95% of whom are female and the majority of whom are unionized.
Mr Cutler: I'm going to present part of this and then Shelly will do the remainder. We accept that WCB was founded on the four principles of no fault, statutory benefits, collective liability throughout all businesses in Ontario and independent administration, and those were four very good principles on which the WCB itself was founded. We feel, however, that the independent administration is being eroded by the proposed Bill 165.
Also of critical importance is the financial viability of the system. We feel that Bill 165 should provide for financial integrity, but unfortunately the proposed changes in that bill will not only be insufficient to resolve the problems at WCB but they will force increased problems in relation to the inability to fund the unfunded liability. The predictions are that by the year 2014, this liability could be as high as $50 billion. Just in today's Globe and Mail, page 2 of section B, we see that in the first six months of 1994, the unfunded liability increased by $181 million.
What I have to say about that is, in private business, in any business enterprise, when that business runs out of money, the plug is eventually pulled. What's happening here is there's just an additional burden being created on employers, and eventually those purse-strings are going to snap. So this is a very serious issue.
The rates which Ontario experiences in the premium paid to WCB, being $3.16 per $100 of payroll, are the highest in all of Canada. Ontario is also responsible for 70.25% of the accumulated $15.8-billion debt, yet Ontario workers make up only 39% of the Canadian workforce. Ontario has exceeded all other provinces in benefits paid per lost time claimed; in other words, $23,500 per loss claim, compared to the second province, New Brunswick, of $14,900.
Why is this? Again, we see an expansion of the types of claims and the compensation being paid out on the differing claims and the duration. The lost-time claims have actually decreased, from a level of $208,500 in 1988 to $136,900 in 1992, a significant drop, so why are our premiums going up? Because we continually support extended claims, the length, and are now even considering introducing the admission of stress.
The unfunded liability, the first concern: A grave concern is that the bill fails to deal with this unfunded liability in such a way that it will be decreasing and not increasing, as is evidenced by today's report in the Globe and Mail. The bill doesn't propose to reduce the debt. The plan of action put forward by the Premier's Labour-Management Advisory Committee, business caucus, to reduce and eventually completely eliminate the unfunded liability was ignored.
The figures show that if WCB carries on at the rate it is presently, there'll be no money left by the year 2005. Other provinces have led by example -- not all of them, but some of them: New Brunswick, Manitoba, Newfoundland -- by taking successful action to reduce this liability. Ontario needs to do the same.
Bill 165 also proposes the Friedland formula for most claims. The adoption of the Friedland formula should have been applied to all WCB cases, but the government is planning to exempt 40,000 persons from the application of that formula, and further increase their benefits by another $200 per month. Why?
Business for the last 10 years has accepted a long-term funding strategy to reduce this liability to zero by the year 2014. However, Bill 165 sets out a target date of $13 billion for the year 2014. To enhance the credibility of WCB, planned savings must be real, measurable, and not only just speculative. The public must be able to see that WCB is financially sustainable.
The board itself has taken little initiative in decreasing costs. This is evidenced by their decision to build a new building, for example, downtown, when close to 20% of office space was vacant. This shows a lack of financial responsibility. Really, what WCB needs is accountability, because what's happening is they have an open end to just increasing rates and drawing on the business sector to fund and finance them. As long as you simply open the purse and pay, things cannot improve.
We really need to look at getting some true businessmen and entrepreneurs involved so that suitable action can be taken to bring this liability down. The government itself tried to show some initiative in implementing the social contract, ways of trying to save money, realizing the debt that was facing Ontario. It's time that WCB did the same.
The proposed admission of new claims such as stress is just awesome. It just is going to open the floodgates. This type of action causes stress to employers and to their purse-strings.
We recommend that the business proposal to reduce the unfunded liability to zero by 2014 be adopted in its entirety. Otherwise, if you take what happened to Confederation Life, it's going to happen a lot sooner to WCB. It's better to give those who are entitled to compensation a little less at the moment and remain in business and be able to support them than to give them zero in five years' time.
Just on the governance aspect, Bill 165 proposes to establish a new bipartite WCB board of directors with equal representation from labour and management. Bipartism has produced partisan control and political interference. Bipartism has not resulted in quality management and fiscal soundness.
The history of the Workplace Health and Safety Agency has shown that bipartism does not work. Bipartism at the agency has resulted in a strong element of partisan control over health and safety issues and ineffective, unfair management practices. A lot of it has been dictatorial, such as exactly where people will receive their core certification and their training. It's been dictated; it's not been negotiated.
We feel there was no justification for the destruction of the other health and safety agencies, the delivery organizations. The action has resulted in taxation without representation. In other words, sectors continue to pay into WCB with no corresponding education or training support. In addition, we're being asked to increase our workplace occupational health and safety initiatives with diminishing resources.
Labour represents only those workers who are organized. Bipartism fails to represent all workers. WCB needs a non-partisan, balanced management approach which includes representation from other stakeholders, such as possibly physicians, injured employees. We would support the model suggested by Steve Mahoney in his document, Back to the Future. We also support the inclusion of public representatives, as long as they are non-partisan. It is advantageous to have some health service representatives with expertise in occupational health and safety issues on the board of directors.
Section 65.1 gives the government unprecedented political control over the policy direction of WCB. After proclamation, the Ministry of Labour will assume complete control of WCB policy. This would indicate that it will become a branch of government. The board would be powerless. One would question the validity of having a board during this one-year period. We recommend that WCB have a non-partisan board of directors and that section 65.1 be deleted in its entirety.
Ms Jamieson: Relative to the purpose clause, I'll be brief in summarizing that we supported PLMAC's recommendations, but we feel the adoption of only partial sections of the business caucus's purpose clause has in fact negated the intent of the recommendations. To accept half of the equation without the balance of financial responsibility is to create inequities that will have a far-reaching and negative impact on business viability in Ontario.
The purpose clause as it is now written in Bill 165 does not ensure the competitiveness of Ontario business. It does not require financial responsibility and accountability and it does not ensure the financial integrity of the system. There is no recognition of the employer's role in the system. What it does, however, is compel WCB to expand entitlement even if job loss results.
An example of this is the payment of stress claims, which David referred to earlier. If medical science supports the payment of stress, then WCB would be forced to pay for these types of claims regardless of the financial consequences. The Employers' Council on Workers' Compensation has estimated that even a limited entitlement policy on stress would cost upwards of $180 million per year. We recommend that the government adopt the purpose clause as set out in the business proposal.
Regarding re-employment regulations, WCB has basically been given the power to review on its own initiative whether an employer has fulfilled its re-employment obligation, and it can levy a penalty under existing provisions of the act. Therefore, there needs to be no evidence of non-compliance or even a problem before an investigation is started. These are intrusive and interventionist powers and are unjustified. They're costly and they serve no real purpose. Is there non-compliance within current reinstatement obligations to warrant such changes? If so, where is the evidence or data to support this non-compliance?
Our recommendations are that subsection 54(11.1) be removed and that the powers of the WCB be maintained at the current level and not enhanced.
Regarding worker benefits, the bill proposes that WCB will be required to ensure that developments in health sciences and related disciplines are reflected in the benefits and services and programs policies offered. We believe criteria must be developed with a process involving medical and scientific community input. This proposed section of the act is much too broad and would not allow for consultation. We propose that the entitlement not be further expanded.
Relative to experience rating, we are proposing that the experience rating system remain as it is. The PLMAC business caucus indicated that "Experience rating has been an unqualified success and has achieved its primary goals of reducing the frequency and severity of workplace injury and enhancing the level of individual liability."
Why then is there an attempt to get rid of one of the few successful WCB initiatives? Bill 165 will repeal the current sections of the act allowing experience rating, thereby possibly eliminating refunds and increasing surcharges through purely subjective investigations based on unmeasurable indicators.
There were some areas omitted in the bill that we'd just like to touch on and they're in detail in our brief. We believe that the WCB reform has overlooked the role and impact of the physician in the decision-making process. We believe that one problem in the system is that the most inexperienced person in the entire workers' compensation system, and I'm referring to the adjudicator, makes the most important decisions. All adjudicators much have specialized training and experience to understand the complexity of the issues they're dealing with.
We believe that compensation for strains and sprains must be modified, that it should recognize other factors such as aging and body condition. We think it must be acknowledged that there is fraud and abuse in the system and action must be taken to control it. There's a need to review FEL and NEL awards and develop strategies to decrease costs. We believe that the term "accident" must be redefined to ensure that the work setting is the dominant factor in the injury.
Finally, we believe that the management of claims and the WCB service delivery system must be improved.
Mr Cutler: Just in conclusion, if we go back to the founding principles that I recited at the beginning, WCB is an insurance program and is not a universal compensation system, which it appears to be being used as at present.
The system should provide protection for business from lawsuits from injured workers and it should provide protection for injured workers from losing their income. However, we need to adopt three new principles: a competitive system with balanced inputs and outputs and fiscal soundness.
Bill 165, in summary, appears to be one-sided in its approach. The demands of labour, increased coverage, increased entitlement, increased benefits, are included with no corresponding recognition of the needs of business. A balancing of the needs of both labour and management must be built into any WCB reform.
The ONHA supports a workers' compensation system that provides fair compensation and prompt treatment of injured workers. However, WCB is in a critical situation and serious steps need to be taken to make the system financially viable soon. WCB reform must support a fundamental change in how they conduct their business. They need to be accountable.
Bill 165 should be withdrawn and a new bill should be developed based on these principles as identified above and the recommendations outlined.
The Vice-Chair: Brief comments or questions?
Mr Mahoney: Just a question, and I know in 20 minutes you can't get everything in, but your industry has very specific requirements around health and safety training. Can you tell me how you feel about sector-specific training, obviously to try to reduce accidents and to train all of your staff? Are you getting anywhere with the agency, or do you have any suggestions on that?
Mr Cutler: We have very definite requirements and very specific needs. We can't even get to first base with the agency or with the HSDOs, the health service delivery organizations. We've had people certified as trainers, but labour won't recognize them and authorize their members to undergo the training through certified trainers who have been trained through the agencies and the health service delivery organizations.
We tried to get off first base with just course certification. We can't do that. As far as sector-specific training goes, we've got a whole committee trying to meet, has had input. Input's been ignored. They've got back a response from the agency ignoring everything.
For example, in nursing homes or long-term care facilities or homes for the aged, we don't need a course on how to drive a fork-lift truck or about mining, yet that's a section that is mandatory and is being ignored. The result is that we will have to have three weeks of course certification and another three weeks of sector-specific, dealing mainly with the mining industry in health care.
Mr Mahoney: At a cost of tens of thousands of dollars too, I'm sure.
Mrs Witmer: Thank you very much for your presentation. I guess we will eventually get it and we'll be able to take another look at it. You talked about the fact that the role of the physician was not dealt with within this paper. What type of changes would you have liked to see within the document? How should that have been addressed?
Mr Cutler: The physicians have a lot of knowledge as to length, duration, rehabilitation etc. We're saying it might be necessary to bring them and make them more involved and add the input to the board, and they might be able to give direction in that regard.
Mrs Witmer: Yesterday we had the physiotherapists in here and they were somewhat concerned that the doctors were always the gatekeepers and sometimes the treatment didn't take place quite as quickly because the other health care providers didn't have access to the system. They felt there was a need to take a look at the whole structure.
Ms Jamieson: Probably some kind of holistic approach to that is a good idea, of experts who do these assessments and determine what we can expect in terms of recoveries.
The Vice-Chair: Thank you. Ms Murdock?
Ms Murdock: No; Mr Ferguson.
The Vice-Chair: Mr Hope? Oh, Mr Ferguson. Sorry.
Mr Ferguson: Thank you very much. Three strikes and you're out. You're almost there.
Thank you very much for attending the committee today. You've enlightened us with your presentation. A lot of the presenters who have indicated that they don't particularly support the bill have really skirted the issue surrounding the financing of the board.
Could you tell me whether you would support or whether you're advocating reduction of the level of benefits? Do you think the level of benefits ought to remain at 90%, or should that be reduced?
Mr Cutler: I think in my presentation I said that we should reduce the benefits. I used the example of getting the benefits as they are for the next five years and nothing thereafter, because that's where we're heading. I think the benefit reduction is very relevant and should happen immediately so that the system could last a lot longer.
Mr Ferguson: Just one other very quick question. Were you aware that the average rate of assessment per $100 per payroll today in 1994 is actually less than it was six years ago?
Ms Jamieson: The average rate?
Mr Cutler: Is that average across the country or the province?
Mr Ferguson: That's the province of Ontario.
Mr Cutler: Across all industry?
Mr Ferguson: Yes, the average rate of assessment per $100 of payroll today is less than it was six years ago. Were you aware of that?
Mr Cutler: No, I wasn't, but there must be more employers, so there's more revenue going into the pot and there's a lot more being paid out, obviously.
The Vice-Chair: Ms Jamieson, Mr Cutler, thank you for your presentation today.
Ms Jamieson: Thank you very much. We wish you luck in your endeavour.
Mr Mahoney: Thanks for the commercial on Back to the Future too.
The Vice-Chair: I assure you that that once your presentation is supplied by the clerk, it will be distributed to the committee members.
Ms Jamieson: If you can't locate it, we'd be happy to provide more, but we did provide them.
EMPLOYERS' ADVOCACY COUNCIL
Mr Ron Calhoun: Good afternoon, ladies and gentlemen. My name is Ron Calhoun and I am the provincial chair of the Employers' Advocacy Council, known as the EAC. We would like to thank the committee for this opportunity to present our views on the proposed Bill 165.
With me today are Stephen Cryne to my left; Steve serves as our executive director. To my right is Sherri Helmka; Sherri is our provincial vice-chair. To Sherri's left is Ron Kerr, who is the chair of our policy committee. I might point out also that other members of the EAC sit in the audience behind me. We'd like to thank you, the committee, for this opportunity to present our views, as stated before.
A bit about the EAC: We are a non-profit volunteer organization of employers across Ontario and our mandate is to effect constructive change to the workers' compensation system and to educate employers on all aspects of workers' compensation issues.
With over 1,700 members across Ontario, the EAC represents a broad cross-section of Ontario's diverse economy. We are located in nine centres, with nine chapters throughout the province, and our members include both the small and very large employers. We also have many public sector employers and employers from schedule 2.
Since 1985 the EAC has been representing the views and concerns of the employer community, calling for constructive reform of Ontario's workers' compensation system. Over the past year and a half the EAC has played a key role in supporting the PLMAC process and in the development of the employer proposals for workers' compensation reform.
Although the business community expended thousands of hours to develop constructive solutions to the major problems that exist in the system, it is our view that the government has failed to respond to those recommendations. The EAC was a member of the business caucus that reached the accord with labour representatives in March 1994 and, although support for that agreement was not unanimous on either side, there however was a consensus agreement that we were fully prepared to support.
We are profoundly disappointed now that the government has chosen to ignore the accord in favour of a package of reforms which more closely resembles its own agenda and that of the labour community. Very simply, Bill 165 is not the accord that business and labour agreed to.
The EAC does not support Bill 165 and we fully endorse the submission made to this committee by the business steering committee of the PLMAC opposing the bill.
We believe that Bill 165 will only add to the existing problems and increase the overall cost of the system. As written, Bill 165 will not satisfy the Premier's objective when he requested business and labour, under the auspices of the PLMAC, to review the problems of the workers' compensation system and to work together to produce a new system which will pay workers fairly and meet the test of being financially sound.
I'm going to call on Stephen Cryne now to touch on nine of our major concerns, in a summary of our concerns with the bill.
Mr Steve Cryne: I'd like to begin with the unfunded liability. The EAC is not seeking an immediate elimination of the unfunded liability; what we are seeking is a comprehensive plan to retire the unfunded liability in keeping with the spirit of the accord reached between the business and labour communities earlier this year.
Having attended a couple of the hearings over the last two days, it seems that the committee has been presented with some distorted information about the unfunded liability and employer assessment rates over the last few years, but here are some facts about Ontario's unfunded liability and the assessment rates.
The unfunded liability in Ontario is two and a half times greater than all of the other provinces combined. It's increased from just over $2 billion in 1983 to today's $11.7 billion and it's currently growing at the rate of $1 million a day.
Since 1989, the amount of assessments collected form employers earmarked for retiring the unfunded liability has increased by 57%. New employers opening up businesses in this province pay an average of 28% of their premiums towards a debt that they had no part in creating.
Between 1990 and 1992, permanent job losses left behind a staggering $1.5-billion unfunded liability. The impact of that cannot be ignored. Very simply, that $1.5 billion is now being shouldered by far fewer employers.
Under Bill 165, the unfunded liability increases from its current level of $11.7 billion to a conservative estimate of just over $13 billion. Since 1980, assessment rates in this province have increased almost 200%, compounded by similar increases in the earnings ceiling. That's something you've not heard about in your hearings so far, I believe.
Ontario has the second-highest assessment rate in Canada, second only to Newfoundland, yet our accident frequency has declined by 31% in Ontario.
The unfunded liability is very real. It's not just a number on a piece of paper. It must one day be retired. Not addressing the issue today only perpetuates the problem and unduly burdens employers of tomorrow, jeopardizing future benefits to workers.
Specifically turning to the bill itself, the purpose clause, section 1: This was the cornerstone of the accord between business and labour, but as drafted the purposes of the act in our view will favour the workers' side of the equation exclusively. While the purposes outlined are important principles, they are principles nevertheless that are present in the current system. Whether the WCB is effective in living up to or delivering on those principles is another matter altogether.
The purposes of the act must recognize the critical need for financial considerations. When introduced 80 years ago, the act was intended as a no-fault insurance program that was an affordable and economically viable alternative to the tort system for the benefit of both workers and employers. This fundamental principle is not reflected in Bill 165, even though that was the spirit under which the financial responsibility framework was reached in the accord.
The proposed purpose clause will not restore financial accountability or security of the system. It will not balance the inputs and outputs. Cost implications will not necessarily be a consideration when determining future benefit levels or entitlements. It does not impose a financially responsible framework for decision-making and operation of the system. It does not put ultimate accountability for the system on government, all of which were elements contained in the accord between business and labour.
The bill imposes a responsibility upon the board of directors to carry out its duties in a financially responsible and accountable manner and to reflect changes to the WCB's policies in a manner that is consistent with the purposes of this act. Financial considerations are not one of those purposes.
The report on return to work, section 8: Very simply, this will add yet one more encumbrance on employers who are trying to return workers into the workplace. There are no penalties on workers who fail to provide the return-to-work information and use the consent issue as a shield to extend the period of absence from work. While workers may lose benefits for non-cooperation in vocational rehabilitation programs, that provision of the statute does not apply to section 8 of the bill. This will become a further issue over which conflicts and disagreements will arise, to the benefit of nobody in this system.
In order for employers to effectively return workers to safe and meaningful employment, employers need the tools. Return-to-work information is fundamental to that process. If the government was serious about improving return-to-work opportunities, the worker's consent should not be necessary in the disclosure of information pertaining to the worker's capability and return-to-work status.
Vocational rehabilitation, section 9: In 1993, the WCB spent $753 million on rehabilitation for about 26,000 workers, an increase of 34% over 1992. Employers are concerned, and rightly so, that rehabilitation from WCB is not effective, and in many instances they spend large amounts on internal rehabilitation programs themselves.
As noted in the report of the chair's task force on voc rehab and service delivery, there is a definite lack of focus and the WCB does not have a clear mission statement for vocational rehabilitation. That report also said that the solutions lay in partnerships with employers to build successful modified work programs. The chair's task force was another bipartite report, if you remember. It called for outreach and educational programs that encourage and promote retraining with the accident employer. As employers, we are of the opinion that little, if anything, has improved since that report was filed.
Obstacles to re-employment and rehabilitation cited by employers are:
-- Excessive legal bureaucratic hurdles that delay the return-to-work process.
-- Concerns about medical confidentiality as it pertains to return-to-work information.
-- Quality and availability of WCB services.
-- Disparities in availability of services for medical and vocational assessment centres and work conditioning facilities and services.
Bill 165 has done nothing to address these problems. The proposed penalties on employers will be one more issue over which conflicts and disputes are bound to arise. Penalties aren't the solution. Education and proactive cooperative measures are the key to effective rehabilitation and return to work. Injured workers will come before this committee and say to you, "We only want to go back to work." We are appearing before you representing our constituency and telling you that employers want their employees to return to work. What we need are the tools to do it. Bill 165 is not giving us those tools.
Re-employment, section 10: The proposed changes to the re-employment provisions are arbitrary and provide the WCB with an authority which we believe is unnecessary. As proposed, the WCB will have the authority to make a determination whether the employer has breached the re-employment obligation even where the worker may not be interested in returning to the employment and, in many cases, where entitlement is still in question. The resources of the WCB would be far better utilized to assist employers in developing return-to-work programs rather than policing this system. We view the penalties suggested in Bill 165 to be regressive.
The board of directors, section 11: Any confidence that we held for an effective bipartite model of governance has evaporated with developments over the past four months. It is our opinion that in the absence of a purpose clause which includes the financial responsibility framework as a purpose of the act and holds government ultimately accountable for the system, the proposed bipartite model of governance will be a failure.
Policy directions, section 16: This endowed power undermines the very principle of independent administration that Meredith prescribed some 80 years ago. At the same time, it jeopardizes the success of a truly arm's-length relationship between government and the WCB. Equally concerning is the fact that the requirement on the board of directors to act in a financially accountable manner does not apply to the government during this time.
Mediation under section 21: It's our opinion that the objectivity of adjudication and decision-making will be severely undermined by this proposal.
Experience rating, section 28: Very simply, experience rating must continue in its current form. It has proven to be an unqualified success in Ontario. It had reduced accident frequency by 30% by 1988. I may remind committee members that frequency measures accidents relative to man-hours worked, thereby allowing for the impact of the recession.
Experience rating programs also measure duration in determining a refund or a surcharge. Additionally, with the introduction of more rate groups into the NEER system in the past few years, the powerful impact of experience rating is now evident by the drop in average duration in short-term claims from 16 to 12 weeks, which the Minister of Labour referred to in his remarks to this committee on August 22, 1994.
Experience rating is working. Introducing the components of process will significantly and fundamentally alter the current structure of these programs that are continuing to show success. Workers will argue that NEER promotes the hiding of claims. We suggest that it's quite the opposite and that the penalties under the Provincial Offences Act for non-reporting of accidents, which can be as high as $25,000, act as a sufficient deterrent. We encourage the WCB to aggressively pursue employers who flagrantly abuse and ignore the law.
Equally, there are sufficient remedies open to the government to enforce the health and safety laws of this province. There's absolutely no reason to try to duplicate that power under the Workers' Compensation Act. The current experience programs, in our view, achieve the objectives of distributing costs fairly among employers, reducing injuries and occupational diseases, and promoting vocational rehabilitation and encouraging return to work.
Mr Calhoun: In conclusion, ladies and gentlemen, we'd like to leave seven concerns with you: Bill 165 will not retire the unfunded liability and the future security of both workers and employers continues to be at risk. It will not restore equity and fairness. It will not restore accountability or financial responsibility to the system. It will not improve vocational rehabilitation or return-to-work programs. On the contrary, it will be the source of many more disputes in the system. It will not improve service delivery, efficiency or effectiveness of the WCB programs; in fact, quite the opposite. It undermines the principle of an independent administrative body. It introduces more bureaucracy and red tape without improving effectiveness.
For these reasons, we believe that there is no alternative but to withdraw Bill 165 and return to the proposals presented by the business community to the Premier last November. The employer proposals, if followed, would have virtually eliminated the unfunded liability, secured future benefit payments, improved vocational rehabilitation and placed the system on a secure footing while improving the climate for business investment in Ontario.
Finally, it is our belief that solving the crisis in the WCB system will require very difficult and unpopular decisions. Those decisions should be based on reality and not political reasons.
The Vice-Chair: One minute, Mr Mahoney.
Mr Mahoney: We've had it suggested, just on your point on the unfunded liability, that it's not a problem because the $13 billion that everyone is referring to will be in 2014 dollars. The logic, I think, is that if you extrapolate that, it'll sort of disappear by itself because related to 1984 dollars it won't be a lot of money; in 20 years $13 billion won't matter.
The other thing, of course, is that unless major changes occur in the way we do business at the WCB, that $13 billion, which was arrived at as a result of some prognostication on the part of some people as to how inflation would behave over the next 20 years -- they must have a crystal ball that I've never seen -- could be $20 billion, $25 billion, $30 billion; it could be anything, depending on that. Who knows? I just wonder if you have a comment about the 2014 dollars that magically make the unfunded liability unimportant and about the growth.
Mr Cryne: All I can say in response to that is that the PLMAC project predicted that the unfunded liability, without any changes, would be $31 billion by the year 2014. The WCB, in 1989, predicted that the unfunded liability would be retired seven years earlier: by 2007 it would be zero.
The idea here is that the dollars are real. At some point we have a liability out there. At some point it has to be paid off. Just exactly where that liability is going to end up, I think you're right, is a matter of speculation. I think the issue of 1994 versus 2014 dollars is a red herring, and I would not pursue it.
Mrs Witmer: Just pursuing the unfunded liability theme, we've heard from the labour unions when they come in here that the unfunded liability really isn't important; it doesn't have to be paid off. What is your response to that?
Mr Cryne: I think you just have to go back to what happened in November and see what the bond raters of this province did when they started to look at the fact that we have an unfunded liability, and that unfunded liability is starting to impact on the credit rating. It was a fact the Dominion Bond Rating Service took into consideration.
The other thing I would remind the committee is that the WCB had not only an unfunded liability, but it also had cash-flow problems last year, it's likely to have cash-flow problems again this year, and at some point in time the cheques are going to start bouncing. I don't think anybody in this province wants to see that. It's not good for employers and it's certainly not good for workers.
Ms Murdock: Good to see you again, Stephen. The whole issue, from both sides actually, because I disagree with the comment made by Mrs Witmer that labour is seeing the unfunded liability as not a major issue -- they recognize the fact, like you have stated, that something has to be done and that we can't continue in this vein. I think everybody agrees on that. There hasn't been anyone who has said that they're satisfied with how the system is working and the costs incurred by it.
But I get a sense from particularly the employer groups, more so than any of the other stakeholders who have come before here, that everybody in the Workers' Compensation Board, which is separate from the government -- I don't think that distinction is being made often enough -- should be asking, "Can the system afford it?" before any decision is made. Is that what you're saying?
Mr Cryne: Mm-hmm.
Ms Murdock: Because if your answer is yes, what you're asking then is for the claims adjudicator, at the first stage, when the employer is reporting the accident or the worker is putting in the claim -- you're saying that the claims adjudicator, a first-line employee, instead of saying, "Is this work-related?" which is what should be the question, I think, has to ask the question, "Can the system afford it?" I don't think that's the intent of the whole Workers' Compensation Act.
Mr Cryne: That's not the intent of the proposal we've made where we say the inputs must balance outputs, and that's why it's important that you understand that the ultimate responsibility for this program is on the government to determine the scope of that program and to make alterations to the scope of that program, because the decisions that are made within that program have far-reaching implications beyond just simply allowing one claim. One claim is the thin edge of the wedge. For example, if we're to have stress in this province, the argument that we made on that issue is that that is a decision the Legislature should be required to make, not a bipartite board of directors, not an agency of the government. That's a copout on the government's part.
Ms Murdock: But you're saying --
The Vice-Chair: Thank you, Ms Murdock.
Ms Murdock: -- it becomes political instead of work-related.
The Vice-Chair: On behalf of this committee, I'd like to thank the Employers' Advocacy Council for coming today and giving us their presentation.
INDUSTRIAL DISEASE STANDARDS PANEL
Ms Nicki Carlan: My name is Nicki Carlan and I chair the Industrial Disease Standards Panel. I have brought today with me John Macnamara, who is an employer representative who sits on the panel, and Bob DeMatteo, who is a representative of labour on the panel.
I will be speaking today on behalf of the entire Industrial Disease Standards Panel, and I may be in a unique position for this committee because I will be bringing to you a consensus of the members of the Industrial Disease Standards Panel, who represent management, labour, science, medicine, law and the general public. My comments have received the endorsement of the entire panel, so this is something extraordinary for you, I think, today.
I intend to explain what we do and why there was a need for the establishment of our agency. Finally, I'll explain why we are recommending that the amendment proposed in subsection 24(2) of Bill 165 be significantly modified.
Mr Macnamara and Mr DeMatteo will have a few comments after I've finished my presentation and, following that, we would be happy to answer any of your questions.
Our task or the job of the Industrial Disease Standards Panel is set out in section 95 of the Workers' Compensation Act. We are mandated to investigate possible occupational diseases, identify probable connections between disease and work in the appropriate circumstances and provide advice to the Workers' Compensation Board for the adjudication of WCB claims. Our recommendations are made to the corporate board of the WCB, which has the power to accept or reject any of our recommendations.
We are currently investigating the role gold mining plays in the development of stomach cancer, assessing the reliability of the board's current policies on noise-induced hearing loss and considering the possible occupational sources of chronic obstructive lung disease.
I've asked the clerk to distribute, and I see that she's done that, our most recent annual report. If you have time, you can flip through it and you'll be able to identify all of our current projects.
Workers who suffer from occupational diseases are entitled to workers' compensation benefits. However, the difficulties in assessing the relationship between work and disease have often resulted in a long and difficult adjudicative process. These difficulties inherent in the recognition of disease claims were addressed in the 1983 Weiler report, and those difficulties have continued to date.
For instance, in 1961 the Workers' Compensation Board recognized nasal cancer as an industrial disease that was associated with certain workplaces, but it was not until 1993, more than 30 years later, that the board added this disease to schedule 3 and schedule 4 of the act.
Generally, the board has been slow to add diseases to the schedules, another indicator of the WCB's reluctance to deal with disease issues. In the case of schedule 3, the board has done very little within the last 40 years to make amendments. If you refer to appendix 2 in our submission, which you also have a copy of, you will see what has changed in the schedule in the last 40 years. As a result of these decades of inaction, Ontario has fallen far behind other jurisdictions in the compensation of industrial disease.
Occupational disease adjudication has been discussed significantly during the preceding 20 years by three distinct royal commissions established by governments and a task force. Specifically, there was the Royal Commission on the Health and Safety of Workers in Mines, the Royal Commission on Matters of Health and Safety Arising from the Use of Asbestos in Ontario, the Weiler commission, and the Minister of Labour's occupational disease task force.
Each of these commissions independently came to the same conclusion: There was a need for a body independent of the WCB to research occupational disease and to provide independent advice to the board for the compensation of claims.
To deal with this issue specifically, Professor Weiler recommended the creation of the Industrial Disease Standards Panel. He saw the need for a body that would be independent of the board and would conduct publicly accessible investigations into disease issues.
In 1985, when the legislation was introduced to establish the IDSP, the Honourable Russell Ramsay, the then Minister of Labour, made the following remarks:
"A question was also raised about the functions of the Industrial Disease Standards Panel and the mechanisms for referring matters for its consideration. I know that, at the time, I indicated my own interest in referring issues to the panel once it is formed. However, I do not believe the panel should be required to address itself to all matters referred to it by the minister, by the board or by any other person.
"Rather, as an independent body, it should set its own agenda taking into account representations that may be made to it from any source and the resources it has at its disposal to address such issues. To clarify that the panel has this prerogative, I propose to amend the subsection dealing with the determination of the practice and procedure of the panel to include reference to the fact that the panel should also determine its own priorities."
That amendment was adopted and accepted.
The panel has taken on its work assuming that the government continues to be committed to the need for an independent body to provide advice to the board on occupational disease. However, during the last three years we had an ongoing struggle with the government to achieve and maintain that independence. We are concerned that the amendment proposed by the government would not provide the panel with any independence but would only make us subservient to another master, the WCB. This amendment, in our view, would defeat the original intent of the legislation. The panel is convinced that the government's amendment is further flawed because it does not provide for adequate funding. For there to be real independence, there must be the resources or funding to allow the panel to realize its independence. In fact, the notion of adequate funding was raised in response to the report on health and safety of workers in mines by Floyd Laughren in 1976. At that time he made the following comments to the Legislature:
"Much research needs to be done in the preventive aspects of occupational health. The exposure of workers to carcinogens and other toxic substances is increasing and in some cases we do not yet know the extent of the danger or the safe levels. There has been debate in this House on what are acceptable levels of different carcinogens but some of them we don't even know yet, I suspect, that they are carcinogens. The long incubation period of many diseases such as cancer, silicosis and asbestosis poses a particular problem as well. I think we must move more aggressively from counting the fatalities after the fact to preventing them from occurring in the first place.
"I believe the problem is of sufficient importance to establish a separate ministry with substantial funding...."
Those are the words of the current Treasurer.
To fulfil our mandate, we must undertake thorough investigations of all the available scientific evidence. All of our policy recommendations are firmly grounded in current scientific data. To gather that information, we rely heavily on the assistance of consultants external to the government, with specific expertise in a variety of very specialized areas. The work must be thorough and unbiased and must be able to withstand the scrutiny of scientific experts retained by labour and management. As you may expect, this is an expensive undertaking.
We are careful when extending contracts for this type of work because investigations could be limitless. While we describe our approach as "careful," Dr Warner from Inco recently described us as "parsimonious."
Concerns about financial limits being placed on this type of work have also been articulated by the Ontario Mining Association. In response to a recent review on stomach cancer, the OMA wrote:
"In the issue of stomach cancer, the panel asked for a literature review but set a limit of 40 hours of consulting time. The conclusions show that further research is necessary before a decision involving the transfer of millions of dollars is made."
Even when we take great care about the expenditure of resources, we have issues that will not make it to our agenda for a couple of years. For example, right now we don't have the resources to look at the health effects of electromagnetic fields or antineoplastic drugs. Without the funding to complete the programs that it has agreed to, the panel has no independence. It is for this reason that we are proposing an amendment that would provide the panel with an increased and firm budget.
Of course, we recognize there are limits to all resources and there will always be a need to prioritize our work. However, it is important to be mindful of the actual limits of our current resources. Today our operating budget for the largest industrial province in this country is $1 million. The substantial increase referred to by the minister in his opening statement would increase our operating budget from $1 million to $1.5 million, with a floor of $1.5 million and a ceiling of $3 million. The panel submits that in order to be able to perform its work, it requires a different amendment. The full text of the proposed amendment is in our written submission.
Succinctly put, we are asking for a commitment of not less than 0.5% of the board's operating budget, with the ability to increase our expenditures with the approval of the entire panel to a maximum of 1% of the operating budget. We believe there should be no interference on how we prioritize our expenditures within the limits of the defined budget by either the government or the board. Of course, we intend to be guided by the administrative rules set out for expenditures of the accident fund money.
This mechanism for funding has been described as novel. I would submit to you that it was proposed over 20 years ago by the commissioners who examined the health of workers in mines. At that time, in 1976, the commission made the following statement:
"The commission considers there to have been far too little research on health and safety of workers in mines in Ontario. The excellent epidemiological studies by the Ministry of Health have been conducted in response to major emergent problems. The occupational health protection branch has not had the resources to carry out exploratory research designed to assess the likelihood of there being problems. Research on the statistics of accidents, such as that conducted by the commission, has been non-existent. It is imperative that this situation change. The commission proposes that the government fund research at an annual level of 1.5% of the direct annual costs of workmen's compensation for accidents and industrial disease in the mining industry. The direct costs of such compensation are currently about 6% of gross wages, which total about $400 million. Thus compensation costs about $25 million per annum, and 1.5% of this sum is $375,000." This proposal was made in 1976.
"In addition to a general commitment by the government to research on health and safety in mines it is important that the joint health and safety committees have a direct means of initiating studies of common pragmatic concern."
In closing, I would just like to indicate that I am privileged to have been working with representatives of labour and management, science and the rest of the community who come to our table with an open mind. When I meet with my colleagues for two days every month there is often heated and vigorous debate, but the goal is always to achieve the right answer. We have made recommendations that have favoured both labour and management, and because of the good faith that everyone brings to the table, we have been able to achieve consensus.
I'm not so naïve as to assume that there will not be dissent in the future, but I am confident that these dissents will be based on honest disagreement about the evidence and not political posturing. As Ms Murdock stated yesterday, the purpose of Bill 165 is to correct that which can be corrected now. The status of the IDSP can be dealt with now.
I hope that you can endorse the amendment that we've set on the first page of our amendments so that we can get on with the work that we have been asked to do. Because of time constraints I certainly limited my remarks and I would hope that you would have time to read our submission in total. Thank you.
The Acting Chair (Mr Daniel Waters): Thank you for your submission. We have about two minutes per caucus.
Mr Mahoney: Could I have some help as to where the amendment is that you referred to?
Ms Carlan: In the submission?
Mr Mahoney: Yes.
Ms Murdock: At the bottom of the first and the top of the second page.
Mr Mahoney: I think somebody else wanted to speak.
Ms Carlan: Bob, did you have a few comments?
Mr Bob DeMatteo: Yes, I'd just like to make a few points.
First of all, let me say that labour fully endorses this proposal for the changes to the amendment that ensures the independence of the panel through consistent and adequate funding for the investigation of occupational disease. We believe that the funding proposal that ties the panel's funding to the percentage of the board's administrative expenditures is one of the few options that provides a guarantee of adequate and consistent funding to carry out its mandate and at the same time ensures the relative independence of the panel from the board.
We can, on the one hand, recognize and support the need for an arm's-length agency from the board. At the same time, to subject the panel's funding fate to decision-makers at the board, there's just too much temptation, you know, for the board to put the financial squeeze on an agency. We can't recognize the need for adequate scientific research into occupational disease and not ensure that the work actually has an adequate funding base.
Finally, we believe that the costs generated by the panel's proposal are modest, in fact minuscule, and more than fiscally responsible. More importantly, it is more than justified by even the most conservative estimates of the actual extent of occupational disease that is currently underrecognized in this province. Workers have always been and continue to be given an onerous burden of proof in establishing claims and even protection from occupationally related disease, in the face of, I might add, a paucity of scientific research and a very complex and politically charged area.
Ontario, as the most industrialized jurisdiction in Canada, is most subject to the generation and production of occupational disease and therefore a major public health problem. We therefore have a great responsibility to ensure that this area of public health is adequately and properly addressed. We must stress that this area of disease recognition that the panel is involved in is not only important from the standpoint of just compensation for the victims, but it is also an essential step in disease prevention.
I will just finalize and say that we would also remind you that we are one of the wealthiest provinces in Canada as a result of our industrial activity and that it is inconceivable that we would find difficulty in addressing a major public health problem such as this with the modest funding being proposed by the panel.
The Vice-Chair: Brief comment, Mr Mahoney.
Ms Carlan: Mr Cooper, can I just suggest that Mr Macnamara have a chance?
Mr John Macnamara: I just have a couple of comments. I've been with the panel for three years and I work at Dofasco. It's been a good time for me to be part of the panel. It's been a very informative time. They're a very dedicated group of people and we work well together. The basis on which we work, which the government has endorsed, is consultation with the stakeholders, and wherever we can we reach consensus on all matters.
The time we have spent in the last three years dealing with the Ministry of Labour trying to sort out a memorandum of understanding to deal with our funding has been an inordinate amount of time and unacceptable. We have been not able to perform our work, subject to the controls of the ministry, which are against, we believe, the spirit and intent of the legislation in the creation of the IDSP, and it has not allowed us to do our work.
The amendment proposed in the bill would move us closer to the body that we are supposed to be distant from and independent of, and that's why we find the proposal unacceptable. It has not enabled us to do our work, and we wish to go forward on a basis that will secure independence, which is the basis on which the panel was created.
The Vice-Chair: Thank you, and that takes up all our time now.
Mr Mahoney: On a point of order, Mr Chairman: We've been asked to look at an amendment that's been submitted here, and I recognize the time constraints, but if we don't have time to ask the questions, somehow I'd like some clarification as to what one half of 1% is -- I'm not familiar with that off the top of my head -- and how it compares to your current funding.
Ms Carlan: Can I answer the question?
The Vice-Chair: Okay, we'll go for that response.
Ms Carlan: The operating budget, not the total budget of the board but just the operating budget, is $327 million last fiscal year. So we're talking about, for us, $1.65 million.
Mr Mahoney: So that's a 65% increase in --
Ms Carlan: Except that this year in fact we spent $1.3 million. So the top-off would be 3.2.
The Vice-Chair: Ms Carlan, Mr Macnamara and Mr DeMatteo, thank you for giving us your presentation.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 1788
Mr John Ives: My name is John Ives. I'm a representative with the IBEW Local 1788. On behalf of Local 1788 of the International Brotherhood of Electrical Workers, thank you for the opportunity to comment on Bill 165. We feel that public involvement in the policies of government is extremely important, both in this forum and at the upcoming royal commission. I commend any government for attempting to rectify the problems, real or perceived, with the workers' compensation system. The royal commission must deal with the crisis within the system, but there are problems that require addressing now.
Our local union is an Ontario-wide local serving 1200 construction electricians, linepersons, groundpersons and apprentices servicing the power sector. The majority of our work is with Ontario Hydro.
Construction is a unique sector. The Workers' Compensation Board recognizes this uniqueness by providing an integrated service unit strictly to deal with construction employers and workers. With unique problems, construction must be involved in any reform package that affects our sector. However, no construction representatives participated when this bill was negotiated.
Local 1788 will not endorse any negotiated legislation that neither local union 1788 nor the Ontario provincial building trades had a role in negotiating. Bill 165 was negotiated between select members of the labour and business communities. The provincial building trades council was not among this select few.
We were hoping Bill 165 would deal with more pressing problems with workers' compensation, specifically re-employment, the backlog of appeals and vocational rehabilitation. For injured workers, these problems are real and foremost on their minds.
Bill 162 was introduced by the Liberal government as a revenue-neutral amendment to the Workers' Compensation Act. It obligated employers to re-employ injured workers, thereby saving long-term benefit payments. Today, we can say Bill 162 has not worked. Many injured workers eligible for re-employment continue to remain unemployed and unproductive. The injured worker is, however, eligible for future economic loss awards. These FEL awards place a tremendous cost on the system that cannot be blamed on injured workers. The obligation to re-employ is on the employers. As Bill 162 has proved, employers have not fulfilled their obligations. The idea of employers being hassled by the job police, even in the absence of any complaint, seems to be completely unnecessary and unneeded by the employers of this province. But these are the same people who complain that future economic loss awards are placing an unfair burden on the employers of this province. Do they have a solution? Injured workers cannot look forward to Bill 165 increasing their chances of returning to work.
Bill 162 had a less-than-desirable effect on the workers' compensation system. The consultant, a hired gun used by employers whose only goal is to cut costs at the injured workers' expense, has become a fact of life at the board. These compensation professionals have clogged the system with unjustified and unnecessary appeals, appeals that continue, leading to long delays and costly hearings. It is not unusual to wait six months for a hearing or three months for a decision from the decision review branch. Both the injured workers and the compensation system suffer because of these practices.
Vocational rehabilitation is the only problem facing the board for which a solution is attempted through Bill 165. The amendments to sections 51 and 53 attempt to deal with the employers' reluctance to participate with a successful rehabilitation program. Employers show more concern with unnecessary and unneeded hassles from the board rather than dealing with the successful rehabilitation of their injured workers. In a climate such as this, these amendments will enable an employer to impede an effective vocational rehabilitation at every turn unless specific safeguards are placed to protect the injured workers' rights.
Section 51 appears like a reasonable step in ensuring a safe return to work. This section will, with the consent of the worker, force physicians to release "such medical information as may be prescribed." However, a worker could be ruled uncooperative if he or she refused to consent. Being considered uncooperative dictates additional proceedings, adding to the backlog already at the board.
In a number of claims I have personally dealt with, injured workers have been ruled as uncooperative in their vocational rehabilitation program. The reasons often vary, but one constant continually appears and that is the doctor's advice. In one specific case, an injured worker was sent to a Canadian Tire store to stock shelves as part of a vocational rehabilitation program. The injured worker had a back injury that required surgery. The injured worker's restrictions included no bending, reaching, prolonged standing, sitting or twisting. Upon speaking with the worker, the physician determined that the worker should leave the program because the work was beyond the restrictions. The board subsequently informed the worker he was uncooperative.
How can a worker with these restrictions be expected to stock shelves? How can following a physician's advice on a seemingly simple claim be ignored? Section 51 does not change the policies or procedures of the board. Until the board recognizes family physicians' diagnoses and restrictions, this section is doomed to fail.
The prescribed information requested through section 51 must be specified. Allowing an employer unfettered access to an injured worker's physician will guarantee fishing expeditions by employers and their representatives. This is an invasion of the injured worker's privacy. The eventual goal of such action is to save money by cutting workers' benefits. Any medical information made available to employers must have a specific purpose under specific legislated guidelines.
This legislation must contain safeguards to ensure that medical information is only used after an employer has implemented a proper return-to-work program. The prescribed information must be non-diagnostic and strictly for the purpose of returning an injured worker to work in a safe vocational rehabilitation program.
The amendments to section 53, like section 51, look good on the surface. Section 53 allows for employers in a proactive manner to participate in a vocational rehabilitation program and give the board rights to penalize employers who do not cooperate. However, this section does not go far enough to ensure that employers will establish a proper vocational rehabilitation program.
In one claim we are representing, the employer's idea of setting up a successful vocational rehabilitation program is to meet with the board case worker to discuss the work available, decide what the worker will do, meet with that injured worker and then explain that, "This is the work. You must either do it or get cut off compensation benefits" -- no discussion with the injured worker, no discussion with the worker's physician and no discussion with the worker's representative. This is not a vocational rehabilitation program; this is legal blackmail: "Work or starve."
For any vocational rehabilitation program to work, there must be a cooperative effort made between the employer, employees, the union and the board. Section 53 excludes any input from the union and employees of the workplace. Section 53 will give an injured worker no option but to return to any suitable or unsuitable work that the employer offers, or starve. This is a complete disregard of protecting injured workers.
An employer who does not cooperate from the outset in an effective vocational rehabilitation program still has input and rights throughout the remainder of an injured worker's rehabilitation. After being penalized by the board under section 53, an employer can still be involved in a rehabilitation plan by filing objections and influencing rehabilitation goals. Not only is this not fair or just, but again will add more pressure and cost to a system already in disarray.
My overriding concern with these two sections is the exclusion of worker representatives. Injured workers are expected to sit down with an employer or an employer's representative and negotiate a safe return to work. This is clearly weighted in favour of the employer; that is to say, a professional human resource or labour relations expert negotiating with an injured worker.
In a unionized environment the worker may have some protection through a collective agreement. In a non-union environment the worker is at the mercy of the employer. This bill effectively excludes worker representation and minimizes the input from both physicians and board employees in a successful rehabilitation. Safeguards to injured workers' rights must be added to prevent unscrupulous employers from using the Workers' Compensation Act to penalize workers who get injured at work.
Bill 165 does contain some positive ideas. The purpose clause, for example, outlines fair compensation, vocational rehabilitation and a return to work as the overriding goals of the Workers' Compensation Act. The change in the board of directors to a bipartite board can only help install a fairness in the system. The recognition that WCB pensions require increasing is encouraging. However, the amount and narrow restrictions for qualification need to be addressed.
On the negative side, the Friedland formula for indexing and the cap of 4% must go. Indexing does not increase benefits; it keeps up with inflation. I question how this section is supported by the purpose clause purporting fair compensation.
Bill 165 is meant to fight the immediate problems in the compensation system. With some changes, it might. The overall system requires a larger study. The royal commission being set up must address the entire system with an aim of protecting injured workers' rights.
Mr Offer: Thank you for your presentation. There are a number of areas that can be addressed. But I want to start, if I might, with the final page of your submission. It spoke on the issue of the Friedland formula, the indexing, and your position that this particular formula, as contained in this bill, must go. I guess my question to you is this: Obviously, you know we have heard of that position a fair bit already. In the event that the government refuses to do that, are you in favour of the bill?
Mr Ives: No. I think the bill itself requires a lot of changes. By putting the Friedland formula in place or any kind of formula that de-indexes a pension or a worker's compensation, you're penalizing a worker for being injured.
Mr Offer: The government has said there will be a certain amount of savings associated with workers' compensation over that return-to-work issue. From your experience, does it work in your sector?
Mr Ives: It does not work. Return to work is something that employers will use to cut their losses, for lack of a better explanation. It just doesn't seem to work at all.
Mr Offer: There is a position in the bill that speaks to the injured worker consenting to the release of medical information, and it says it is at the option of the worker. In other words, the injured worker has the option to consent to the release of information.
There are some who have come before the committee and said that even though the bill reads that the worker has the option to consent to the release of information, if they do not there is the distinct possibility that the board will deem that worker uncooperative and exact a penalty from the worker. Have you got a position on that?
Mr Ives: I thought I was clear on that, but I guess not. Yes, that definitely does happen. If the board puts any position forward to any injured worker in today's world and the worker disagrees with it, the worker is cut off benefits.
Mr Offer: So in fact, the way you read that particular part of the legislation, the option the injured worker has is no option whatsoever.
Mr Ives: That's the way I would read it.
Mr Turnbull: Given that you have difficulties with these very main sections of the bill, would you think it might be a good idea to wait for the royal commission to report and then to make a complete change to the bill?
Mr Ives: I think the workers' compensation system needs some help right now. A royal commission -- I don't know how long it will take, but there are problems with the way the system works. Workers aren't getting fair compensation. They're not being treated properly. Again, as I said at the beginning, it was our hope that Bill 165 was going to address these inequities, to get re-employment rights for the workers, to ensure that safe vocational rehabilitation programs and plans were set up. I don't think the bill goes far enough on those points.
Mr Turnbull: As a union representative, how would you feel if an employers' group were to negotiate with you and extract certain compromises in exchange for a deal, but then in the end they reneged on the deal but still insisted they get all of the compromises you had given?
Mr Ives: Sounds like contract negotiations.
Mr Turnbull: So you're saying that's fair game?
Mr Ives: No, definitely not.
Mr Turnbull: You see, that is the basic problem the employers' group has now, in that they negotiated what they felt was a balanced approach to this. There were many issues the unions didn't like that they gave up and there were many issues that really the employers didn't like giving up, but they arrived at a relative compromise on a lot of issues. There were still a couple that were outstanding, but the employers' group that was selected by the Premier to negotiate this felt they had made those compromises and then the government has cherry-picked from the compromises they gave up; they feel they've got none of the things they wanted to receive in return.
Mr Ives: I think that's labour's position also, is it not, that things have been cherry-picked, that they don't like the final wording, that some of the stuff that was negotiated was not put in there? I don't see a difference between that position and the position the OFL or myself has taken.
Mr Ferguson: It's been suggested by many individuals that there is a crisis in terms of financing the cost of workers' compensation in the province of Ontario and that if some sort of remedial action is not taken in the short term as well as the long term, the hole the board now finds itself in will just quite simply become much deeper in the future.
I'm just wondering (a) if you share the view that there is a real financial problem and (b), perhaps more importantly, what you would recommend as some sort of action or measures that the government of the day ought to be looking at implementing in order to resolve this particular problem.
Mr Ives: Stop injuring workers. If workers don't get injured, you don't have to pay compensation.
Mr Hope: One of the things that's been brought out by the presentations from the employers' groups is they're saying freeze assessment, cut injured workers' pay and continue to give money back to the company for upholding the law in what's called the experience rating system.
I'm just wondering your opinions on those three items that have been brought forward. Should we continue to freeze assessments, should we cut injured workers' pay and should we continue to pay companies back money for upholding the law through the experience rating system?
Mr Ives: I don't get paid back when I obey the speed limit. Photo-radar has made sure of that.
Mr Mahoney: Good shot.
The Vice-Chair: Mr Ives, on behalf of this committee, I'd like to thank you for coming here today and giving us your presentation.
HAMILTON DISTRICT INJURED WORKERS GROUP
Mr Paul Gibson: I would like to first of all state that I'm representing the Hamilton District Injured Workers Group. My colleague, Mr John Battaglio, and myself are both injured workers and we come from the Hamilton area. We are board members of the newly formed organization and we have come here today to convey to you a message on behalf of countless thousands of injured workers and their families whose quality of life has been destroyed as a direct consequence of the compensation nightmare that all parties here in Ontario are facing.
I am grateful for this opportunity to share with you some of the concerns of injured workers, most of whom cannot be here today. First of all, I would like to express dissatisfaction that injured workers from the Hamilton area must come to Toronto to have their objections heard before this standing committee. Hamilton, as you know, is the home of the second-largest WCB office in Ontario. At the same time, I believe we hold the record for having the most cases unresolved at this time.
Coincidentally or not, since the evening of the last provincial election, Hamilton appears to hold the record in major cabinet posts and positions as well as zero opposition. Rest assured, Hamilton injured workers will change that and we will publicly expose the hardships that have been imposed upon our injured workers and their families.
In my submission, I will refrain from speaking about the specifics of Bill 165 in the interest of avoiding repetition. Karl Crevar, president of the Ontario Network of Injured Workers Groups, who has spoken previously, made a clear and concise presentation on behalf of all who will concur with the views expressed.
In his opening comments he stated that the 20-minute time limit allotted was insufficient for injured workers to express their concerns. In view of his having raised this concern beforehand, plus the fact that others had used less than their allotted time, the validity of his objections seems to stand firm. In this regard, we are compelled to say that many of us are appalled that he was not given sufficient time to complete his presentation. On the other hand, I ask you to bear with John and me as we attempt to relate some of the elements of horror that injured workers face day after day, day in and day out, year after year.
Our research reveals that under Ontario law an injured worker is entitled to compensation benefits for workplace injuries and disease. Further investigation has revealed that for many workers, upon filing a claim, benefit payments are often delayed for years. This causes unnecessary financial hardships and tormenting stress for many injured workers or their spouse and children. These self-perpetuating tactics result in emotional distress, feelings of despair, discouragement, depression, violence, broken marriages, any of which could lead to suicidal ruination. The question is: Is there anything in Bill 165 that will eliminate these factors for injured workers and their families?
We believe that our hardships are caused by self-serving concerns, attitudes or actions of the corporate employer and the Ontario Workers' Compensation Board as well as the past or present governments. We refer to those strategies, planned or otherwise, which serve to delay the payment of lawful entitlement to injured workers. Perhaps the corporate hierarchy feel justified in their actions and that this is a businesslike thing to do. Regardless of their reasoning, it does nothing to lessen the devastating impact that their actions have upon the injured and their families. In view of the endless horror stories related by injured workers, it is reasonable to conclude that the unfair treatment of injured workers in Ontario is rampant and out of control. To the injured, this is an outrageous contravention of Ontario law. This of course must and will be appropriately determined by un unbiased standing committee or royal commission.
Who are we? We're ordinary folk. We're young or old; we are male or female alike. Many of us are married with children; some are not. Some are members of labour unions while others are not. In our midst there are some who believe in and put their faith in labour unions; on the other hand, some of us do not. It makes no difference in the end to whom our allegiance is directed or what our beliefs are or whether we are members of a specific political party, labour union, or for that matter a particular religion, lodge or fraternity.
Once upon a time we were productive, first-class citizens who were busily engaged in the career of our own choosing. Like many other citizens, we enjoyed a quality of life which accompanies gainful employment and regular paydays.
Then came the fateful day that we became an injured worker, for the most part through no fault of our own. Since that day, many of us have discovered through hard experience that our quality of life is now a thing of the past and that we have been treated unfairly by the country that we served as productive, gainfully employed citizens. Of course we must identify the real causes of our hardships and coordinate and unify our plans in an effort to end the injustices that are systematically imposed upon injured workers in Ontario.
Basically our injuries fall into three specific categories. They are: minor and major, visible and invisible, short-term and long-term. Injured workers seldom have difficulty in receiving benefits for minor, visible and short-term injuries. There are two reasons for this: They most often represent minimal or limited cost to the board or the employer; they are visible and more difficult for the board to deny.
The major problem area for injured workers is with major, invisible, long-term-type injuries. These types of injuries present major costs to the board as well as the employer. These injuries are invisible and harder to diagnose. As a consequence, the employer who is genuinely concerned with spiralling compensation costs implements a plan at the expense of the injured workers which will put a stop to the erosion of profits. As a result, injured workers become sitting ducks for abuses in the form of purposeful delays that successfully delay the payment of lawful entitlements to themselves and to their families, as in my case. This type of spending restraint on the part of the board or the employer may be acceptable to their consciences or economic principles. However, we can assure you it is totally unacceptable to injured workers and their families who continue to be unfairly deprived or defrauded of their lawful benefits.
I'm going to skip along a little bit here. I'm not sure how long I'll be able to carry on. I am a chemically sensitive person. I've had this condition for 12 years. It was one that evolved as a right of atrocious conditions within my workplace, conditions that my employer resented and objected to very strongly, conditions which my doctors worked very hard to identify. To this date I require a number of medications, a five- or seven-day injection. I require oxygen and sometimes I'm unable to carry on. Sometimes I lose my sight almost and I'm unable to read. I'm hoping that won't happen but I am having some difficulty.
What are the basic needs of the injured? First and foremost, we must be treated with dignity and respect rather than as outcasts. There is a need to be heard and to be understood. Our financial and emotional needs need to be met, not endlessly delayed until next year or the year after that. There is a need to understand that we didn't ask to be injured just to qualify for compensation benefits. All too often we are depicted as lazy, sit-at-home couch potatoes whose intentions are to reap the tax-free benefits from a lucrative compensation system. We are tired of being badmouthed by others such as our employers or the board and, in some cases, even our fellow workers or our friends.
Last but not least, we are calling upon good citizens everywhere to speak out publicly on our behalf in an effort to bring to an end for all time the atrocities, the half-truths, the discriminatory practices that have been foisted upon the injured, the disadvantaged and formerly employable good citizens. I ask you, is that really too much to ask?
Often we are relegated to the welfare rolls through no fault of our own. This is usually a direct result of unwarranted delays in benefit payments or appeals. There is a stigma attached to being on welfare. Lack of a regular income, wages, benefits etc, leads to financial pressures. We live in limbo year after year while awaiting compensation payments or decisions. Time and again we are confronted by excuses, even half-truths, about missing files, doctors' reports etc. All too frequently adjudicators are changed. There are endless delays as we await appeal dates and eventual hearings. All of this leads to a stressful situation which takes its toll in terms of the quality of our life.
Is it any wonder that many of us are depressed or suffer from low self-esteem? Is it any wonder that many of us have recurring suicidal thoughts or that others have already committed suicide? Ours is a tragic situation indeed. Surely there is someone, somewhere, who cares enough to do something about the atrocious treatment of injured workers and their families. Even though the injured workers and their families despise the shameful treatment that has long been imposed upon us, we still love Canada.
Who pays the bill when an injured worker and his or her family are relegated to the welfare rolls? Who pays the bill when a worker is suffering a hearing loss and his claim for a compensable injury is denied? Who pays when the worker's claims are before the board or tribunals for 10 years or more, or when an injured worker obtains the assistance of a government-funded worker adviser, or when a destitute worker seeking justice is granted a legal aid lawyer?
Well, ladies and gentlemen, the recession is over. We hear it in the news each day. Injured workers are pleased to hear that. We hope that the attitude and the necessities of the past few years will change and that the suffering in silence of injured workers has ended. The time has come to restore justice for Ontario's injured workers and their families.
We must eliminate workplace hazards and decrease injuries. We must have enforcement of health and safety laws. This will help to cut costs and save the employer money in the long run. We must stamp out workplace discrimination against the injured. We must eradicate mental cruelty in the conditions that injured workers face. We will not accept Bill 165 in its present form. Some of the aspects of it are good, but there are changes that need to be made. Justice will prevail for injured workers and their families if and when the corporate employer and all others begin to care what's happened to injured workers.
Contrary to what some might say about injured workers, we are not a nuisance with a number. Though our hardships are unbearable, we're developing compassion and understanding for one another, and we will fight for the living and we will mourn for the dead. Injured workers and their families are organizing. Hamilton will soon become the injured workers' capital of Canada.
In my employment I worked for the Ministry of Correctional Services, the government of Ontario. I'm an ex-police officer. I saw conditions in my workplace that are so incredible they're beyond your belief and comprehension. I know that you people have no idea what happened to me, but I've written my story and I will be publishing it from coast to coast to let Canadians know what happens to injured workers.
I was put through incredible experiences. When I became ill, I was threatened with termination if I didn't discontinue my absenteeism. I had wanted to do this; I wanted to be better. It left me three choices: Get better, which I preferred to do, but I could not. It left me a choice of coming to work ill or quitting the job that I loved. I enjoyed my work and I worked hard, and I was a dedicated employee. I was threatened with termination. I've been dismissed twice. My hearings began in 1984. I've yet to get five cents of restitution from the government of Ontario.
So they tell us we're in an economic struggle at this time. Well, it wasn't that way 10 years ago, but I'm still in the same boat I was. I'm in my 66th year now and I want to tell you that the things I've seen make me sometimes ashamed to be a Canadian. I know that there are disgraces that go on against injured workers that must not be tolerated. Yet I understand, because I've been a businessman too, the difficulties the employers are facing with astronomical costs. But life goes on just the same.
But my quality of life is not what it should have been or what I wanted it to be. I've gone so low and I've been so despondent and depressed I've struck my dear wife of 43 years. I'm ashamed of that, but that's one of the consequences that I faced because of what's happened to me as an injured worker in Ontario.
We have a lot of good laws, but there are a lot of abuses of those laws by people in positions of authority. I hope that I live long enough to see the day when someone will make some constructive changes that will help to resolve this horrible compensation nightmare that we all face.
I've been dismissed twice. I was elected to a health and safety committee. I went to work; I did my job. I reported unhealthy conditions. I was fired again. I was threatened with arrest. I've been ostracized by my fellow workers who believed that I didn't know what I was talking about. It took me eight years to prove that the building that I worked in was a sick building. Is it any wonder that I suffer from sick-building syndrome and multiple chemical sensitivities?
My compensation case has been on the board for over 12 years now. I'm finally, at long last, waiting hopefully that I'll get an appearance before the WCAT tribunal, perhaps if not this year, in 1995. I was 53 years of age when I started this pursuit of justice. I didn't want to be an injured worker. I wanted to be a good Canadian. I wanted to protect the life and the health of my fellow workers.
I apologize for the length of time I've gone. I appreciate your attention and I appreciate the privilege of coming here to speak to you today. I am a proud Canadian and I want to see things changed for injured workers, but I understand the difficulties that other people have, be it the present government or past governments or the corporate employer. Thank you for your time.
The Acting Chair (Mr Waters): Thank you. We have about a minute per each caucus.
Mr Mahoney: With regard to Bill 165, the de-indexation of the pensions known as the Friedland formula, are you familiar with that? In essence, what that does is, the government is using most of the revenue that's generated from that to pay older workers whose pensions are quite low an increase of $200 a month. They will not be de-indexed. Those pensions will be 100% indexed to CPI. You will be de-indexed under the Friedland formula to 75% of CPI minus 1%, not to exceed 4%. It sounds a little complicated, but it really isn't. It's about three quarters of what you would currently get.
I hear the very passionate pleas to help injured workers. How do you reconcile the fact that this government is passing a bill that will in fact require current injured workers to take lower benefits in return for this document? You're paying the cost.
Mr John Battaglio: How I look at this is that it is absolutely ridiculous that it should be put on our back in the first place. It should be that the board should cut all of its expenses to its employees. They should put them on the Friedland formula and the 90% to its physiotherapy consultants and doctors. This is where the money should come from. These are the people who have been screwing this system up from day one and they should pay for it.
I don't understand how we ever got into the situation where we expect injured workers to look after injured workers when we're supposed to be in a system that is supposed to be looking after us. It seems like everybody else in this system is getting looked after except the injured workers.
Mr Mahoney: So it's safe to say you're not in favour of the bill.
Mr Turnbull: Just following on from what Mr Mahoney was asking, essentially you're dissatisfied with this bill.
Mr Battaglio: Actually, I'm dissatisfied with the whole system of compensation and the government and the way we do things here in Ontario.
Mr Turnbull: As you're probably aware, a royal commission is supposed to be called on this. My suggestion, and that of our party, has been that they should withdraw this bill, have the royal commission and then, based upon the royal commission, where we will have consulted broadly with people such as yourselves, we'll be able to hopefully arrive at a solution to these many problems.
Mr Battaglio: This would be a great idea, and the idea that if these people we are talking to in front of me, all of you people, ever listened to a royal commission or ever took any good advice in the first place. This whole royal commission means nothing when nobody listens to them anyway. There have been millions of good ideas in this country on how to fix this compensation board that don't get anywhere.
Sometimes injured workers really don't believe that the board runs the board. I don't know who the hell's running this board. It's a mess. The legislation is a mess. They're not even addressing what injured workers need. Injured workers want, first, foremost and always, their money replaced. They're not making their money; they want it. We didn't get in this system to lose money and we are losing it. It's always been a losing situation for people who do not return to work, and any idea that people do not want to return to work is just ridiculous. Look where it's coming from.
Another thing is, we have no representation at all as injured workers. We have everybody looking after us, and this fatherly looking-after doesn't seem to be doing very well for us. We'd like to get more involved in this system.
Mr Ferguson: I certainly want to thank you for sharing with us your very honest and compelling and forthright deputation. I think we've all benefited today by your firsthand experience of how the system, on many occasions, is not serving the people it was intended to serve.
I do want to ask you about the royal commission. I would take from your comments that given the past history of royal commissions and recommendations that, I would agree with you, in many cases just simply sit on a shelf and are not acted upon -- would you be willing to participate with the royal commission in trying to resolve some of the real difficulties that exist out there? I think you would agree that that just hasn't happened overnight. I mean, these are problems that have existed for quite some time and that really have been ignored for quite some time as well.
Mr Battaglio: Absolutely. We would certainly be willing to be involved in any royal commission. But the point is that before this commission even starts, this commission should have the power to implement law, and implement law not with the interpretation of the board distorting it all to hell, because they are in another world when it comes to the English language. It means absolutely nothing to them. They distort the idea of what the hell the legislation was in the first place. The legislation shouldn't be that hard in Canada to understand, but it seems to be Canadians can't understand Canadians.
Mr Ferguson: I think all of us here today wish you the best.
The Vice-Chair: Mr Gibson and Mr Battaglio, thank you for giving us your presentation today.
Mr Tim Eye: Thank you for inviting me. My name is Tim Eye and I'm an injured worker, a former business owner, an elected Durham Regional Labour Council delegate for Local 222 Canadian Auto Workers union, chairman of the labour council's education committee and the day of mourning committee, an elected delegate by labour council to the joint health and safety WCB convention in February 1994, and also the vice-president and case worker for the Durham Region Injured Workers Group, and last but not least, I'm a taxpayer.
Whereas there is an apparent $11-billion unfunded liability affecting the Workers' Compensation Board's ability to pay its financial obligations and although the current state of the Ontario economy is on the upswing, I believe an innovative approach borrowing from current business practice in Ontario may help offset some of those liabilities for the foreseeable future. The current business practice I am speaking of is restructuring. I will attempt to cover three areas of basic business principles with the following topics: (1) workers' liens -- irresponsible employers shall pay for their legal obligations under the act; (2) broaden the employer base by legislating all workers employed in this province coverage under the act; and (3) eliminate duplication by legislating treating physicians full medical authority.
Workers' liens: I was a small business owner from 1982 to 1992 in the Durham region. I worked as a carpenter on a contract basis in the residential sector of the Ontario construction industry. Although I never had to secure a builder's lien against a property owner to secure payment for services rendered, I've always been aware of the procedure of registering a lien against a property owner for non-payment. That is why during ordinary real estate transactions a title search is conducted by the law firm on behalf of the purchaser.
Looking back to what has happened to Ontario's economy over the last 10 years is appalling: some 400,000 jobs lost subsequent to the free trade and NAFTA agreements were proclaimed into law in Ontario alone. Of all these job losses, how many business owners chose to leave the province of Ontario to set up shop in the United States or Mexico? Who is liable to pay compensation benefits for workers who were formerly employed by those businesses that opted for greener pastures? I don't believe it is the responsibility of injured workers under the Friedland formula to do so, nor, I believe, of the rest of the responsible business community through across-the-board increases.
The logical solution is simple: workers' liens. I would recommend a department within the Workers' Compensation Board, possibly financial, be given the authority by legislation to register liens against employers who choose to leave this province or the legislated authority to become a primary creditor under the Bankruptcy Act for those employers who go broke. These precautions will ensure that the financial burden of compensable injuries falls to those business concerns directly liable. Although this may cover only a fraction of permanent injury claims, the financial burden is not unfairly redistributed to those who are not directly liable.
Broaden the employee base: There are over 20,000 employers currently exempt from Workers' Compensation Board legislation, many of them in the service sector of the economy. Those in particular to me are banks, other financial institutions and those in the insurance industry, obviously for monetary reasons. What truly bothers me is a current trend in this province of employers hiring workers under the guise of self-employed contractors.
I know of a case where a young lad got a job as a newspaper boy. His first and only job was to deliver a prominent Ontario newspaper in his local community. As the story goes, this self-employed contractor, while riding in the back of a delivery van en route to his paper route, fell out of an unsecured bench seat. He was in the back of a cube van with the back door wide open while rounding the corner en route to his paper route. The fall to the pavement behind the cube van was serious in its own right. However, the vehicle immediately behind the van proved fatal to that child contractor.
That boy paid with his life to deliver a simple newspaper. The injustice in this case is that the multinational corporation who published the newspaper he delivered was not legally liable. This is because a self-employed contractor is apparently responsible for their own insurance. This has resulted in Ontario seeing the trend in the number of contractors grow, in my opinion.
Most workers who work in the service sector of the Ontario economy are not unionized, for various reasons. Workers who live from paycheque to paycheque usually do not have the financial resources to take up liability suits against their employers to maintain a fair standard of living. Many of these workers who are employed in offices across Ontario are suffering from "secretary's disease," which is tendinitis or carpal tunnel syndrome, a repetitive strain injury directly related to the type of work they do.
To get a better understanding of these problems, ask yourself the following questions:
(a) Why would banks and insurance companies resist becoming a schedule 2 employer?
(b) Why would building companies and multinational publishing corporations hire self-employed contractors?
(c) Would the loss of the sickness and accident insurance market segment of the insurance industry to the Workers' Compensation Board be a direct threat to the insurance companies operating in that market segment?
(d) If they are diametrically opposed, is it because of the amount of profits they stand to gain from holding accident insurance policies in Ontario?
These questions beg to be answered by the people of Ontario, many of them injured workers who suffer every day from afflictions physically, emotionally, from the loss of either real or perceived self-worth. By eventually losing their self-sufficiency to becoming welfare statistics funded by the property taxpayers of Ontario, or because of holes in the system, they become destitute street people or check out permanently after their depth of despair has driven them to suicide.
Eliminate duplication: I have been directly involved with the workers' compensation for over 10 years, the last five of which I became active in the Ontario trade union movement, particularly with CAW Local 222 in Oshawa, as one of their elected delegates to the Durham Regional Labour Council and the Durham Region Injured Workers Group. I have handled many claims for members of my local union and many claims from people who do not have the benefit of a trade union to represent their interests.
An interest common to all injured workers I know is the question of which doctor is right, my doctor or the WCB doctor. Another issue I've been involved with is as follows: The injured worker's doctor and the WCB doctor agree that the injured worker, in this case a truck driver, is left with brain damage. The problem: A claims adjudicator doesn't have enough information to render a decision, despite a wheelbarrow of medical evidence and testing stating that this man suffers from brain damage. This particular case is another "delay and ignore" case. The excuse, four months -- I apologize for the typographical error -- after already waiting six months for a Downsview re-evaluation, is that the doctors' reports are waiting to be typed. The sad point in this case is that the claims adjudicator ruled the injured worker "Fit to drive truck again."
I ask any one of the members of this committee the following question: Would you want to meet this guy on the 401 going west in an eastbound lane, with 20 tonnes of steel behind his cab, especially when you know he can hardly remember his way to his own mailbox? I also ask you this: Who is right? Why are people acting on behalf of the WCB exempt from liable actions in court? Is it because the board is already aware of some severe incompetence? These are the questions and problems that scream for answers and solutions.
I certainly believe that a worker's personal doctor or doctors, by virtue of being most familiar with the individual concerned, is the logical choice in all cases. Furthermore, why is the WCB paying for two medical systems while the Ontario economy as a whole is restructuring? This leads me to two more questions:
(1) How much does the Downsview rehab centre cost the WCB?
(2) How much do the various private agencies, including assessment and/or vocational rehabilitation centres, cost the WCB when many certificates of accomplishment aren't worth the paper they're printed on?
I would certainly recommend the following to this committee: (a) grant full medical authority to the individual injured worker's personal doctor or doctors exclusively through a further amendment to Bill 165, and (b) dismantle Downsview rehab centre and all other assessment and rehabilitation centres that have any current medical jurisdiction funded by the board, and repeal former legislation connecting these agencies to the board.
Common sense will show this committee that money spent on redundant services can be used to pay for the unfunded liability and give some much-needed financial relief to the employer community in Ontario as well as other injured workers in this province.
Since PLMAC was conceived by the current provincial government, injured workers have been left out of the equation. This has left organized labour and the employer communities responsible for a solution that affects all workers, whether unionized or not, and the entire medical community. Although all workers are directly affected by this legislation, the committee that negotiated this agreement did not include any injured workers.
Although all doctors must meet the strict standards of the Ontario College of Physicians and Surgeons to become licensed practitioners in Ontario, only some will have a final say, because many Ontarians see board doctors as recipients of some form of political patronage.
In closing, I would like to thank this committee for hearing this injured worker today. I believe the questions I have asked, when answered, will provide solutions to some of the problems I have addressed today. I have tried to be direct and objective in the recommendations I have put forward to you as well. I hope God grants you all the wisdom and courage of conviction to follow through with the task before you today. Are there any questions?
Mr Mahoney: No questions. Just thank you for the presentation.
Mr Turnbull: Thank you very much for your presentation and your thoughts on this. Just one thing that has been mentioned by a few people is this question of broadening the employee base. I'm not suggesting this is good or bad; I'm just simply trying to inquire.
Presumably, any extra revenue that would be driven by that broad employer base would then be used to compensate those workers from those sections. It isn't as if it's suddenly extra revenue to subsidize the other industries. So I don't see how that solves the problem.
Mr Eye: The point I was trying to make, if I may ad lib here, is that many workers are suffering from repetitive-strain injuries, like carpal tunnel, from doing a lot of typing and this sort of thing in the offices around Ontario. They don't have the benefit of going to workers' compensation to seek benefits.
Mr Turnbull: Okay, so you weren't offering that as a financial solution. It was just simply to say that those people need to be covered.
Mr Eye: These people should be covered, in my opinion, yes.
Mr Turnbull: Okay, thank you very much. The other quick question was, you suggest extending authority to the personal doctor of a person to establish injury. Do you not see potentially a problem in some cases, if the doctor is on a very friendly basis with that person or in a small community? If the person goes and is turned down, I think there's a great deal of pressure on that individual's doctor to say, yes, the person is injured, even if they're not.
Mr Eye: I believe any doctor with any common sense and human decency would not jeopardize his right or privilege to practise medicine in this province if he was found to be incompetent by the college. I don't believe some doctors are more qualified than other doctors by virtue of their services being secured by the Workers' Compensation Board.
I believe simply that a personal physician would be more familiar with the whole case, with the whole history. In some cases, and certainly in some of the smaller communities in this province, you may have a doctor who delivers, personally, half the area residents and grows old in the community. Certainly he would know, or she would know, these people very intimately, I would think.
Mr Turnbull: Do you have any personal difficulty with the concept that somebody may get a partial permanent pension and uses that to have an income which is larger than they had at the time of the injury as a result of having that pension?
Mr Eye: I can speak from personal experience. I was injured on June 1, 1984, in a manufacturing corporation. I nearly had my left hand severed from a sheet metal cut. If it hadn't been for another employee who had St John's Ambulance training, I would be a death statistic today. I can certainly tell you that when I go to bed at night, I go to bed with a certain amount of discomfort and pain and I wake up in the morning with a certain amount of discomfort and pain.
I don't really believe I have a lot of time to get into 10 years of history and my struggle in working uphill to have some common, decent dignity. I think if you'd like to speak to me after this meeting adjourns, I'd be glad to elaborate. I know my time is limited, and to be able to respond properly -- in my case, I'm fortunate enough. I am in receipt of a permanent partial disability award myself. How can you say to one worker, "What is it worth to you?" Is it worth $1,000 a month to you if you're an injured worker and you can't sleep with your spouse because of violent recurrent nightmares? Is it? What is it worth? Can we put a price on this? I don't think so.
Mr Hope: I wanted to ask you, because you deal with injured workers in your community, have any of them ever been under private investigation? You used the brain injury incident as one, where it's an unseen injury. In some of the dealings with workers' compensation that you've dealt with, have you ever run into employers hiring private investigators to follow up on maybe a back injury claim, saying that a person just doesn't want to work and they hire a private investigator to take the videos and to do all the nice little things and to present that before the board to hold up the appeals process?
Mr Eye: I can't tell you about a lot of other people, but I can tell you it happened to me.
Mr Hope: What happened?
Mr Eye: I had one of these compensation "I Spy" guys down on the end of my street. I was out on total temporary benefits from an aggravation of an old injury in 1988, I believe, and I was accused by somebody acting on behalf of my employer at the time of running an outside construction company. I thought it was very amusing at the time, and I believe it was about the February 1988-89 time frame, that the employer would think that I would be out putting fence-post holes in the ground when there were three or four feet of ice and frost in the ground. But this is one of the things that I have personally gone through. Other people? I am aware of it. There's talk of it in the injured worker community and where I live in Oshawa, but I know personally of no other cases.
Mr Hope: In some of the resolutions that you've put forward about dealing with it you've identified -- because there are some out there who say the injured worker doesn't care about the unfunded liability. I see in your presentation you have tried to address some of those cost factors which will help make savings. Are you looking at the savings in the year 2014 to be reduced in the unfunded liability or are you just saying good, proper management, that there might be always an unfunded liability there but it's going to take maybe a little bit longer?
I'm looking at the recommendations. We've had employers' groups that have been very clear, saying: "Freeze assessment. Cut injured workers' pay. Continue to give companies back money through the experience rating program. Continue to give them money back." You've come up with a proposal. Some of it makes sense. Why are we spending for duplication of services in some areas? But in the analysis that you use, are you looking at the year 2014 for this unfunded liability to be reduced?
Mr Eye: Sir, I don't believe I have access to the resources that could give me those crunching numbers. I am a simple carpenter. I work in an automobile assembly plant in Oshawa. I can certainly tell you that proactive health and safety committees work. We just went through a massive retooling in the two car assembly plants without one lost-time accident on the General Motors construction gangs. I know that for a fact. We had a barbecue this spring to celebrate that. Proactive health and safety committees work. They do.
The Vice-Chair: Thank you, Mr Eye, for taking the time out today and giving us your presentation. Perhaps you could introduce the person you brought along for moral support before he leaves.
Mr Eye: The person I brought along for moral support is my son. I thought, what better way to educate a young Canadian than to see him and to be able to be here while government is in action?
The Vice-Chair: Thank you both for participating.
Ms Murdock: What's his name?
Mr Eye: My son's name is Benjamin. Watch out for him about 30 years from now.
TRENTON-BRIGHTON DISABLED WORKERS ASSOCIATION
Mr Herb Jones: Good afternoon, honourable ladies and gentlemen. My name is Herb Jones. I'm president of the Trenton-Brighton Disabled Workers Association. We are here today in response to Karl Crevar for putting forward our objections to this bill. Karl has said it 100% better than what we could do it.
The only thing I would like to add is that injured workers are having a real hard time out there. Injured workers are losing their homes, their wives are leaving, everything like this. They're declaring bankruptcies, everything. With the injured workers, we are more or less classed as third-class people. We were not that before we were injured.
Ladies and gentlemen, welfare is one of the highest-paying organizations the Ontario government has. Why can't injured workers be on the same level as the welfare organization? Thank you very much.
Mr Mahoney: Thank you. Much of the concerns we hear from injured workers, the previous two deputations and I'm sure in your organization you've experienced this, have to deal with problems around service delivery to injured workers on the board. The complaints, when I did the outreach tour, that we got consistently all over the province said that -- we heard the real frustration that injured workers had in dealing with the board. Do you see anything in Bill 165 that you think will effectively improve service delivery to injured workers?
Mr Jones: Not really, sir. I think the biggest thing, if it could be written into this bill, is for the adjudicators and case workers to treat injured workers as a person, not as a number, and when somebody calls in for information, like their spouse, not to snap at them and tell them that they cannot be informed on that claim.
Mr Mahoney: I'm sorry, I didn't follow that. When a spouse of the injured worker calls?
Mr Jones: Calls in for an injured worker, and 90% of the time a case worker or an adjudicator will inform that spouse that they cannot be informed.
Mr Mahoney: But of course, think about that a little bit. How do they know over the telephone that it's the spouse calling? How do they know that it's not perhaps a marital problem? They can't give information out over the telephone to someone based on them claiming to be someone. I think there'd be real serious privacy laws.
I'm more interested in your thoughts on -- the previous gentleman put a lot of emphasis on the involvement of the doctor, the medical community. I have found out and believe very much that the problems are based on the fact that you're an injured worker, you go to your family doctor. I've known my family doctor since we were both seven years old together. If I go to him and say, "Dr Tom, I hurt my back," he's going to say: "Of course you did. We'll fill out a claim form." He's not going to argue with me about it. He's my family doctor.
They don't really want the responsibility that the previous gentleman was suggesting they should get, because then they feel like, as a family doctor, their job is to diagnose, prescribe medicine, help you get better; it's not their job to adjudicate a claim. So they say, "No, don't do that."
I'm wondering if a trained physician within the WCB or within the system, not employed by the board but within the system, specifically trained in the area of the types of injuries that occur in certain industries, because they're very different in construction than they are in steel or very different areas, but trained and specialized in that area, would be the one who would make the recommendation.
What I'm getting at here is that the first decision that's made -- someone said this earlier today and I've said it before -- is usually made by the most inexperienced person who's had three weeks of training. It's not their fault they're inexperienced; they've had three weeks of training. They're an adjudicator, they make a decision. The doctor looks at the report and looks at the file: never looks at you, never meets you, looks at the file. How do they make a decision on that?
From a point of view of service delivery, if you get quicker decisions, you get better decisions, it seems to me, and then a clearer path to appeal directly to WCAT as quickly as possible. It seems to me that's just some idea of how to improve service delivery. I wonder if you have any thoughts.
I don't see any of that in Bill 165. We will be putting amendments that will try to address some of those things, but I'm quite confident that the majority government members will likely defeat all our amendments, because they've got their marching orders from the minister. I think those are the kinds of solutions that need to be put in place to make this system work for you and for the two or three gentlemen who appeared just before you.
Mr Jones: Yes, sir. The biggest problem with having a doctor sitting on the board, he hasn't seen you from the date of your injury or has never seen the X-rays until they are sent to him or he requests them. The biggest problem with having to go and see a WCB doctor is the fear that "Oh, well, there's nothing wrong with you. You can go back to work."
We've had four cases like that right now where they have gone to Ottawa, have seen the doctor in Ottawa, and they said, "Fine, you can go back to work." The injured worker goes back to work. Four days later he's back in the hospital, worse than ever, because they did not go by what the family or a specialist had said. Now, if you could go and see a specialist every time, it might work, but not to drive all the way to Ottawa or all the way to Toronto to see a WCB doctor.
Mr Mahoney: And millions of dollars in mileage costs.
Mr Jones: Yes.
Mr Turnbull: Thank you very much for coming along today. I have no questions.
Mr Ferguson: I would just like to echo the sentiments of other members of the committee. We certainly appreciated your very short, concise, right-to-the-point, direct presentation. We did have as well a number of other people from your area of the province make presentations yesterday. So we appreciated you appearing today.
Mr Jones: Thank you. Our presentation is being mailed in as well. So thank you very much, ladies and gentlemen.
Mr Turnbull: Could I just make a request that the committee ask the researcher to organize the notes in terms of the various categories, showing how many employers and how many workers have objected basically to the various elements so we can quickly have an overview at the end in the report, not just a block number, but a sense as to where the objections occur. It's probably useful for all parties.
The Vice-Chair: I'm sure research can handle that. There is a two-week period before we get into clause-by-clause after the public presentations.
Mr Mahoney: You could even show a category of those who came forward in support of passing the bill who didn't agree with it. We've had a number of those.
The Vice-Chair: Just one moment. Mr Jones, on behalf of this committee I'd like to thank you for coming here today and giving us your presentation. I'll excuse you now while the committee members carry on.
Ms Murdock: I just wanted to clarify the record, the comments on the stats on the adjudicators' training, the three weeks that Mr Mahoney has mentioned a couple of times. I checked with WCB people who are in the back row back there observing us. It's 12 weeks' training on entitlement issues and then, depending on the individual, they get further training -- well, no, all individuals get extra training; depending on the individual, the time limit is different before they even get further training on benefits. Then that benefits training is another period of time. So it is not three weeks.
Mr Mahoney: In British Columbia it's a one-year apprenticeship.
Ms Murdock: It works out that it's well over one year here in Ontario.
Mr Mahoney: That's not what they tell me.
Mr Hope: A couple of pieces of information I was wondering about through legislative research is, dealing with the NEER program, how much was paid last year and the year before?
Mr Fenson: I'm sorry, which program?
Mr Hope: The NEER program. How much was paid to employers for the past two years with that? Also, if you could verify statistics for me, because my colleague Mr Ferguson had used them, between 1990 and 1993 if the rates did decrease by 23 cents for the average rate of assessment per $100 for employers, so the average rate had dropped 23 cents from 1990 to 1993 for employers and also from 1990 to 1994 dropped 17 cents for employers on the assessment rates. I was also wondering if you could verify that during the period of 1984 to 1993 assessment rates went up 78 cents per $100 for employers.
We've been hearing about costs, and if I'm seeing that the cost from 1990 to 1994 has dropped 17 cents per $100 for employers' assessments, I'm just wondering where they're saying the increase in costs WCB has come up with with their assessment fees. That's in conjunction with their NEER money that they're getting back too.
The Vice-Chair: Does legislative research have all that? Okay. Mr Ferguson.
Mr Ferguson: I'll be very brief because I know it's almost 6 o'clock. Mr Turnbull has put forth a request, and I have no particular objection to the request. I think it would be useful to the committee to have some kind of summary.
However, to be fair, I think we all recognize that a number of people who have presented before the committee have supported the bill and not supported certain parts of the bill or have supported the bill and asked for improvements to other sections of the bill. I suppose it depends which way you look at it.
I hope that research will take that into consideration when compiling the scorecard that has been asked to be presented: who's in favour, who's opposed and what the numbers would be. I don't know how you'd want to organize something like that, but the hearing process to date certainly has not been a black and white issue. There's been a lot of grey area where people say: "We support the bill. We disagree with these various sections, but overall generally we support the bill."
The Vice-Chair: I might remind all the committee members that in the past, in other pieces of legislation and in other committees, legislative research has done very excellent jobs in producing their summaries in a timely fashion so we can get into clause-by-clause.
Mr Ferguson: I wasn't suggesting that in fact that would not be the case. However, I just wanted to get the point on the record that there's been a lot of grey area and people who are neither particularly enthused nor particularly opposed to this piece of legislation.
The Vice-Chair: Thank you very much. Seeing no further business before this committee, this committee stands adjourned until 10 am tomorrow.
The committee adjourned at 1758.