Monday 11 December 1995
An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act, 1995, Bill 15, Mrs Witmer / Loi modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail, projet de loi 15, Mme Witmer
Toronto Workers' Health and Safety Legal Clinic
Daniel Ublansky, director
Glaxo Wellcome Inc
Bill Laidlaw, director, government relations
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Président: Gilchrist, Steve (Scarborough East/-Est PC)
Vice-Chair / Vice-Président: Fisher, Barb (Bruce PC)
*Baird, John R. (Nepean PC); parliamentary assistant to the Minister of Labour
*Carroll, Jack (Chatham-Kent PC)
Christopherson, David (Hamilton Centre ND)
*Chudleigh, Ted (Halton North/-Nord PC)
Churley, Marilyn (Riverdale ND)
*Duncan, Dwight (Windsor-Walkerville L)
*Fisher, Barb (Bruce PC)
*Gilchrist, Steve (Scarborough East/-Est PC)
*Hoy, Pat (Essex-Kent L)
*Lalonde, Jean-Marc (Prescott and Russell/Prescott et Russell L)
*Maves, Bart (Niagara Falls PC)
Murdoch, Bill (Grey-Owen Sound PC)
*Ouellette, Jerry J. (Oshawa PC)
Tascona, Joseph N. (Simcoe Centre PC)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Martel, Shelley (Sudbury East / -Est ND) for Mr Christopherson
O'Toole, John R. (Durham East / -Est PC) for Mr Murdoch
Also taking part / Autres participants et participantes:
Mitchell Toker, manager, workers' compensation unit,
workplace policies and practices branch, Ministry of Labour
Clerk / Greffier: Arnott, Douglas
Staff / Personnel:
Hopkins, Laura, Legislative Counsel
McLellan, Ray, research officer, Legislative Research Service
The committee met at 1533 in committee room 1.
WORKERS' COMPENSATION AND OCCUPATIONAL HEALTH AND SAFETY AMENDMENT ACT, 1995 / LOI DE 1995 MODIFIANT LA LOI SUR LES ACCIDENTS DU TRAVAIL ET LA LOI SUR LA SANTÉ ET LA SÉCURITÉ AU TRAVAIL
Consideration of Bill 15, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act / Projet de loi 15, Loi modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail.
The Chair (Mr Steve Gilchrist): Seeing a quorum, I call this meeting to order. Good afternoon, all. Our thanks particularly to the two groups that, unfortunately, were unable to make their presentations last Wednesday. We're particularly grateful that you've found the time to come back a second time to make your presentations to us today.
TORONTO WORKERS' HEALTH AND SAFETY LEGAL CLINIC
The Chair: Our first group is the Toronto Workers' Health and Safety Legal Clinic. Mr Ublansky, good afternoon.
Mr Daniel Ublansky: Thank you. For those of you who aren't familiar with the clinic, we are 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 elected from the community. The clinic provides workers with information about health and safety hazards in their employment, advice about their rights under the law and legal representation where that is required. In addition to individual advocacy, we undertake community education and outreach programs aimed at unorganized immigrant workers and engage in law reform initiatives, such as the presentation of briefs to standing committees.
Every year, thousands of Ontario workers are killed or injured on the job. The exact number of injured workers is difficult to determine with precision. Although WCB statistics are the usual source of reference for this information, many have argued that the actual number of workers experiencing some form of occupational injury or disease is much greater.
A Statistics Canada survey that was done in 1991 found that two thirds of adults working at a job or business in Canada felt that they are exposed to health hazards at work. Half of those adults exposed to health hazards reported that they have actually suffered some form of adverse health effect as a result of that exposure. That means that less than 10% of workers whose health is damaged by their working conditions actually receive benefits from the Workers' Compensation Board.
In our submission, the real crisis in workers' compensation today is unsafe and unhealthy workplaces. No matter what numbers are used, the facts are undeniable: Too many workers are being injured and made sick at work. Employers in this province must be held accountable for the compensation crisis which they have created in their workplaces.
Employers have a responsibility under the Occupational Health and Safety Act "to take every precaution reasonable...for the protection of a worker." The Ministry of Labour employs over 200 inspectors to cover almost 120,000 workplaces in Ontario and enforce the provisions of the Occupational Health and Safety Act. In 1994-95, inspectors made 30,000 visits to workplaces and issued 40,000 orders in respect of violations. These violations, together with the 300,000-plus claims which are allowed by the Workers' Compensation Board, speak for themselves as to the lack of commitment of employers to the health and safety of their workers. It should come as no surprise to anyone that compensation costs are as high as they are when there is such little regard for health and safety legislation.
We do not accept or believe that it is impossible to reduce accidents and occupational illnesses to a manageable level. There are responsible employers who are committed to health and safety in their workplaces, and the results show up in their accident frequency rates as well as in their profit levels. However, the majority of employers view safety legislation as a nuisance and refuse to make the additional expenditures required to avoid lost-time injuries. These employers are being subsidized by the good performers and by injured workers who have had to absorb reductions in benefits in recent years. How long are we going to continue to let these poor performers off the hook?
Earlier this year, Liberty International Canada commissioned a study of the workers' compensation system by William Wilkerson. The conclusions and recommendations of that study provide a balanced approach to WCB reform. The study attacks the notion that accidents are inevitable and proposes that WCBs take a much more aggressive approach to the issue of prevention. In fact, the study places the highest priority on encouraging employers to improve their health and safety performance.
The potential for savings in this approach is enormous. If one examines the lost-time accident frequency figures for firms in the same industry, there is a tremendous range of experience. The following table extracted from the study demonstrates this variability. If you look at the numbers before you, it's just striking how the worst performers are so much worse than the average.
Dupont Canada Inc is an example of the spectacular results that can be achieved as a result of a corporate commitment to health and safety. Dupont has a lost-time frequency rate that is 100 times better than the average of Ontario manufacturers. If the level of lost-time claims costs in Canada could be reduced to a level that is 10 times higher than the Dupont Canada rate, the reduction in costs could eliminate the unfunded liability and eventually contribute to a reduction in employer assessment rates, according to the study.
The study describes the research which has been done to try to identify the factors which distinguish the good performers from the bad. Again, without getting into a detailed description of that research, one conclusion is clear: Many of the most important determinants of frequency of injury claims are factors which employers can control. That is the bottom line.
Having identified the substantial potential for improvement, the study proposes a series of win-win strategies that offer cost containment as a natural outcome, not a driving strategic purpose. These strategies focus in on the two key drivers of cost in the system: accident frequency and accident severity. The study concludes, "The only long-term way to reduce workers' compensation costs is for everyone to commit to the idea that all injuries and illnesses are preventable." When accidents happen, there must be a disability management program in place that ensures "the duration of lost time is the minimum necessary to return the injured worker safely to the job." In other words, the two strategies are keyed to reduction of accidents and early return to safe work. Those are the long-term solutions to the problems of workers' compensation.
The importance of the Liberty International Canada study is that it shifts the focus of reform back where it properly belongs: to the workplace. Employers control what goes on in Ontario workplaces and employers must accept the lion's share of the burden for implementing the long-term solutions to problems in the system. As the study points out:
"It is important to underline the role of employers in the first two stages of the win-win strategy. They must make a solid commitment to the mutual problem-solving approach and the concomitant changes in the working culture that are needed to foster shared decision-making. They need to lead an exceptional commitment to safety and prevention of accidents in the workplace. They must be supportive to the injured worker and participate fully in return-to-work activities. There must be a diligent search for modified work activities and a willingness to make justified work process changes that reduce risk. In short, there must be an acknowledgement that an important share of the burden of workers' compensation reform rests with the employer. Where employers are prepared to take on this leadership role, success will be achieved only if workers and unions are fully committed to a mutual problem-solving role."
This approach is in contrast to reform efforts which focus on the management and administration of the WCB per se. Sometimes there is a tendency to believe that improvements in the internal administration of the WCB combined with legislation that compels workers and employers to behave differently will result in better outcomes for all parties. Although some benefits can result from this approach, they are far less lasting and far less beneficial than when the workplace parties have developed the solutions themselves.
Unfortunately, Bill 15 is one of those reform efforts that focus on management and administration of the WCB for the most part. It introduces a series of punitive measures against employers and workers which will likely create a great deal of apprehension and confusion and do little to improve the Workers' Compensation Board's financial position.
Just to highlight several features, the provisions which require reporting of "a material change in circumstances" and create an offence for failure to do so are much too vague to be understood by injured workers. How is one to judge what constitutes a material change? This is a complex legal question that can't be answered in a vacuum. If there are specific areas of conduct that the government wishes to deal with, then they should be identified and particularized.
Similarly, the provision making it an offence to make a false or misleading statement or representation in connection with entitlement to benefits creates the potential for considerable abuse. This goes far beyond dealing with deliberate attempts to defraud the board in order to secure the payment of benefits. What constitutes a misleading statement or representation in connection with any person's entitlement to benefits? Again, an open-ended question. This is a complex legal question which, if interpreted broadly enough, would serve as an intimidation factor in the representation of injured workers. Surely the board is able to sift through misleading statements or representations and render its decisions on the basis of the facts that are before it.
Finally, and of particular concern to the clinic in light of the comments I made earlier, are the amendments to the purpose clause. On the one hand, while we support the inclusion of paragraphs 5 and 6, which add the prevention of occupational illness and injury and the promotion of health and safety to the purposes of the act, by subjecting these purposes to the proviso that they are to be accomplished in a financially responsible and accountable manner, it sends a mixed message to employers, in our view. If the intent of these qualifications is to say that it is acceptable to put a price on worker health and safety, then we believe this will be counter-productive. As the Liberty International Canada study points out, it is important to encourage employers to view safety as an investment. We believe that this provision will focus attention on the cost element and provide a justification for inaction.
I thank you for the opportunity to make these submissions. If there are any questions, if we have time, I'll be happy to address them.
The Chair: Actually, Mr Ublansky, your timing was perfect, just fractionally over 15 minutes. Again, we appreciate your coming and making a second trip to see us, and particularly for bringing your comments in written form. That will assist us this afternoon.
GLAXO WELLCOME INC
The Chair: Our second group this afternoon is from Glaxo Wellcome Inc. Good afternoon.
Mr Bill Laidlaw: Chairman and members of the committee, thank you for the opportunity to make this presentation today. I was here last week but, unfortunately, couldn't present to you for reasons that you're aware of. My name is Bill Laidlaw and I am the director of government relations for Glaxo Wellcome Inc. I would like to start by giving you a brief description of our company and our presence in Ontario.
Glaxo Wellcome was created by Glaxo Canada's acquisition of Burroughs Wellcome in March of this year. Glaxo Wellcome is one of Canada's largest research-based pharmaceutical companies, with annual sales of approximately $400 million. We're also the largest brand-name company in the world at this point in time.
Glaxo Wellcome Canada manufactures a wide range of prescription products for markets in both Canada and the United States. In Canada alone, Glaxo Wellcome invests more than $50 million annually in research and development, including basic clinical research through partnerships with companies, academic institutions and support of independent research.
Glaxo Wellcome operates two facilities in Ontario: a head office in Mississauga and a manufacturing plant and development laboratories in Etobicoke. In total, Glaxo Wellcome employs 1,100 people in Canada and 800 in Ontario.
Glaxo Wellcome has made significant investments in Ontario over the last few years. In 1991, our Mississauga headquarters was completed. This marked the first phase of a multimillion-dollar expansion by Glaxo Wellcome, including a state-of-the-art manufacturing plant. Many members of the Liberal, Conservative and NDP caucuses were at that opening.
Construction of a new $111-million manufacturing and product development facility, adjacent to the administrative offices in Mississauga, will be completed in 1996 and operational in 1997, when we hope to have an opening. Glaxo Wellcome will employ approximately 350 people at this facility. All manufacturing of Glaxo Wellcome products will be consolidated in the new Mississauga facility, including the production of tablets, medicated creams, ointments, liquids and finished packages.
These investments have resulted in a significantly increased workforce. In the past seven years Glaxo Canada, now Glaxo Wellcome, has more than tripled the size of our workforce. More than 70% of these jobs were created in Ontario. Our commitment to Ontario and to our employees is the reason I am here today.
Glaxo Wellcome Canada competes directly with other Glaxo Wellcome companies worldwide for investment and product manufacturing mandates. As a result, a receptive and encouraging business environment and a productive and healthy workforce are critical to our success.
As we grow, so does our contribution to research and development, to the quality of health care for our customers and to the Ontario economy through investment and job creation. Our continued success is in large part the direct result of a capable and committed workforce.
In turn, our company is committed to providing a safe and healthy work environment for our employees. Our health and safety record is very strong and our WCB claims rate is low compared with the industry average. This is the direct result of a proactive approach and commitment to occupational health and safety throughout the company, which includes such things as: joint health and safety committees which meet regularly; an electronic, online health and safety manual, and a health and safety library accessible to all employees; compliance with federal and provincial legislation, including WHMIS and regular safety inspections and audits; a fitness centre and an occupational health unit -- a nurse and doctor are on site; and a proactive claims management program and modified return-to-work programs.
First, let me say that Glaxo Wellcome supports the government's commitment to completely reform the workers' compensation system in Ontario. With an unfunded liability of $11.4 billion, near-paralysis of policy decision-making created by a bipartite board structure, inefficiencies in the system, benefit levels which are the highest in Canada and continued uncertainty about entitlement in several key areas, the interests of injured workers and employers were not being well served.
In reforming the system, a balance must be struck between securing reasonable benefit levels and an effective service for injured workers, and establishing sufficient accountability and financial integrity to ensure that employer contributions which fund the system result in its long-term sustainability.
It is clear that short-term, Band-Aid solutions do not resolve these complex problems. A complex overhaul is needed to ensure a financially stable system that responds effectively to the needs of injured workers and employers. Bill 15 is an important first step in the achievement of this goal.
Glaxo Wellcome supports changing the structure of the Workers' Compensation Board of directors from a bipartite to a multi-stakeholder model. The workers' compensation system would be best served by a board made up of experts in a range of disciplines relevant to an effective insurance system for injured workers. In addition to representatives of employers and workers, representatives from such areas as health care, occupational health and safety, and the insurance industry, for example, would provide important perspectives and valuable advice on workers' compensation issues.
As with corporate boards, directors should use their individual expertise to the betterment of the overall organization in the case of workers' compensation systems. In doing so, they represent the interests of the system's stakeholders, ie, employers and employees. In the past, Workers' Compensation Board members were appointed to represent the interests of either workers or employers, which often caused decision-making paralysis and resulted in decisions that didn't necessarily benefit the system as a whole.
We support the board structure proposed in Bill 15. It will allow employers and workers to be represented but also enable the board to have a broader expertise, critical for running an effective workers' compensation system.
Glaxo Wellcome also supports the introduction of greater financial accountability measures throughout the workers' compensation system. The future needs of injured workers will only be met by a system which is financially sound and able to meet future commitments. Employers must also have confidence that the funding they provide is used efficiently and effectively for its intended purpose; namely, the fair compensation, rehabilitation and timely return to work of injured workers.
The purpose clause introduced in Bill 15 is an important step towards establishing financial accountability through the system. While the board of directors was already required to act in a financially responsible and accountable manner, according to the changes made by Bill 165, passed last year, its ability to ensure financial accountability through the system was limited. The new purpose clause will require all actions by those in the system to be performed within the framework of financial responsibility and accountability. This can benefit everyone the system serves by ensuring the long-term financial stability of workers' compensation in Ontario.
Glaxo Wellcome also supports the initiatives taken in Bill 15 to eliminate fraud. These measures will ensure that the funding provided by employers goes directly to helping injured workers be rehabilitated and return to work. Fraud only serves to weaken the system by increasing costs for employers and creating an atmosphere of mistrust for the vast majority of injured workers who have legitimate claims.
Clear rules and stiffer penalties for employers who report incorrect information, or do not report at all, are another important measure taken in Bill 15.
Under value-for-money audits, they're simply a good business practice. Bill 15 requires an audit of one program each year to monitor whether revenues are spent efficiently and in a way that achieves the goals of the organization. We support the use of value-for-money audits until the unfunded liability of the system is eliminated. However, we believe that auditing only one program per year is not sufficient to identify waste and improper spending quickly, given the current financial state of the system and the unfunded liability.
Glaxo Wellcome supports Bill 15 as an important first step in reforming workers' compensation in Ontario. The changes in Bill 15 will set the stage for what we hope will be a complete restructuring and refocusing of the system in the longer term, including benefit levels and entitlement and assessment rates. We look forward to the important work of Minister Cam Jackson in the next stage of the reform process.
Thank you for the opportunity to make the presentation. I will be pleased to respond to any questions you might have.
The Chair: Thank you, Mr Laidlaw. We have five minutes and will start this round with the official opposition.
Mr Dwight Duncan (Windsor-Walkerville): Just a couple of questions regarding your statements, first of all, on the structure, moving into a multipartite structure. Does your company have any views on whether or not the proposed bill should be more specific with the exact composition of the board as opposed to the clauses which are in the bill right now?
Mr Laidlaw: We did make a suggestion in our presentation that a broader group of people be included. I come from an insurance background. I worked at Paul Revere Life Insurance Co for five years and I obviously have a bias in that it's important to have the right people at the helm making the right decisions, but today workers' compensation is a little bit different. I think it's important to have people from a number of sectors. That would be my answer.
Mr Duncan: Finally, moving on to the question of value-for-money audits, how does your company do value-for-money audits? Do you have a rotating policy?
Mr Laidlaw: I know we do them. I don't know the exact details as to how we do them.
Mr Duncan: How often would you do them?
Mr Laidlaw: We have a very good track record. We actually get a refund, and we have done in the last two or three years, based on how we manage our claims.
Mr Duncan: No, value-for-money audits in your company. Do you do them very often?
Mr Laidlaw: I don't know that; I can't comment.
Ms Shelley Martel (Sudbury East): Mr Laidlaw, on page 6 you talk a little bit about the bipartite board, which of course this bill is getting rid of. You said, in particular, "In the past, Workers' Compensation Board members were appointed to represent the interests of either workers or employers which often caused decision-making paralysis and resulted in decisions that didn't necessarily benefit the system as a whole." Most of the employers have come before us and said that, and I've been pretty clear about asking each employer group that's come if they could give me one or two examples of where that did occur under the board of directors that was put in place under our government.
Mr Laidlaw: I sit on the Business Research Network or the Novatel Group. Glaxo Wellcome does that because it's important for us to look at all issues other than just pharmaceutical issues. I guess the group that is composed there would be made up of people from GM, Ford, Chrysler, IBM and others. The examples that I have heard from them and members of other associations indicate to me that -- the scenarios and the anecdotes are quite astounding -- there was gridlock there and there were examples of it. Now, for me to give you a concrete example of a personal one, I can't give you one, but having sat there through a number of committees, I guess my general read on the situation was that there had to be a better system.
Ms Martel: Don't feel bad. The other employer groups couldn't give me concrete examples either, so you're in the same boat as they are.
Mr Laidlaw: But I can get you something, Ms Martel, if you'd like.
Ms Martel: That would be helpful, because actually, the worker representatives who came -- there were two of them: John Martin from Steelworkers and the rep from UFCW -- made it very clear, as members who had sat directly on the board, that the minister's characterization, which is the same characterization that business is using, was, frankly, grossly unfair and that a number of good measures were passed in the times that were there; but yes, there was give and take as there should be give and take in any set of negotiations between the workplace parties.
It would be helpful if you could get that to this committee, because we haven't been able to track that down on the employers' side yet.
Just one other quick question. Where you say, "As with corporate boards, directors should use their individual expertise to the betterment of the overall organization, in this case the workers' compensation system," given that the representatives who were on the bipartite board were selected, five from worker organizations and five from business, don't you think that both business and labour would have been very careful and very clear about putting people on who would do just that: use their expertise to the betterment of the association or the organization?
Mr Laidlaw: Based on what I read and heard, I think they tried to, but the fact that it was a 50-50 split and the workers' union people seemed to clearly represent that group and business the other group -- there was always a gridlock. I would think that the people who were appointed before were acceptable, but that 50-50 split is difficult when you're only representing your particular group. I think what this government's suggesting in terms of a multi-stakeholder group would be a lot more effective and efficient.
Ms Martel: If you could get us those concrete examples, that would be very helpful.
The Chair: We have time for one quick question, Mr Carroll.
Mr Jack Carroll (Chatham-Kent): Mr Laidlaw, on the same idea of the makeup of the board: If we designated the board as having two people from labour and two people from management and, say, three people from the community at large, with that designation in the rules, do you think that those people could come, as you say, to represent the betterment of the overall organization; or, being specifically named in the act to represent labour or management, would they have to come necessarily to represent that constituency?
Mr Laidlaw: I think when you look at representing, that's difficult. If we, in companies, had people on our boards who represented only one particular group of people, then we wouldn't have the best-managed companies. I think you've got to clearly establish the criteria for selection and get the very best people you can get, based on merit, and maybe it should be an independent group that looks at that. But certainly, just focusing on, "Okay, if I'm there, I'm going to represent only my issues" -- you've got to open up your mind and look at what's best for the actual Workers' Compensation Board.
The Chair: With that, we've reached our 15 minutes. Thank you very much, Mr Laidlaw, for not only coming to see us today but for making a second trip down, and thank you for your presentation and for your comments.
With that, we are finished with our presentations and we may now proceed to clause-by-clause. With the exception of Ms Martel who I'm sure will correct us if we take any missteps, if the clerk doesn't catch us first, I think we're all new to this process.
With your indulgence we'll proceed through, and as the first order of business -- I think you've all had proposed amendments circulated; there have been a number proposed by both the official opposition and the third party -- we'll go through this bill, as the term suggests, clause-by-clause and with your indulgence I'd first ask if there are any comments, questions or amendments to part I of the act.
Mr Duncan: What is the rule on comments? Why don't we have this discussion right now so we understand what the process is and we don't get tied up in procedural debates later on? How are we going to do this? Are we allowed to make a comment on each clause if we choose or how are we going to handle that?
The Chair: Mr Duncan, recognizing that all three parties had suggested they would respect a two-hour deadline, the Chair is open to any comments you care to proffer on any section, recognizing the fact that I would think you would want to save sufficient time to deal in depth with your amendments.
Mr Duncan: Are we going to deal with the amendments as we come to those sections? Is that the idea?
The Chair: That's correct. So right now, if we could just deal with part I of the act, are there any comments on that?
Ms Martel: Yes. If I might, I want to comment on paragraphs 5 in the purpose clause, which would read, "To prevent or reduce the occurrence of injuries and occupational diseases at work," and 6, "To promote health and safety in workplaces." Much of the change you see happening here in terms of adding those to the purpose clause is because the bipartite health and safety agency has been abolished by this government. We wait to see what will replace it.
Part of my concern with respect to why we're seeing this change now is that I disagree fundamentally with the movement of the health and safety agency and the work that it was doing into the Workers' Compensation Board, because I do believe very strongly that the focus that should be placed on prevention and preventive measures is not a focus and is not a responsibility of the board and one the board staff are going to be able to undertake. They're having enough difficulty just dealing with providing benefits to injured workers.
I'm very much opposed to that change and believe that the ministry and the minister should have kept in place the bipartite board that was established first under the Liberals and then supported by us.
Mr Duncan: We just wanted to comment, as we did in debate in the Legislature, that despite the government's indications to the contrary, really this is nothing but a rearrangement of financial accountability that's already there.
With respect to the addition of points 5 and 6, we initially expressed concern that the health and safety act and the enforcement of the health and safety act not be moved to the board, and both the parliamentary assistant to the minister and the minister have now said that will not be the case.
We see this as simply a rewording of something that was already in the act. It was mentioned by a couple of groups. Indeed, one of the presentations today made note of the fact that financial accountability was already there. This presumably strengthens that. We think that's debatable.
Mr John R. Baird (Nepean): If I could just briefly respond, obviously the two fundamental changes made, in our view, to the purpose clause are re-establishing the importance of financial responsibility and accountability and, secondly, we think it's appropriate that basically what is an insurance agency seek as one of its purposes to promote health and safety in the workplace. That's our view.
The Chair: Any further comments on section 1? All in favour? Contrary? I declare that section carried.
Are there any questions, comments or amendments to section 2?
Mr Duncan: Again, in terms of the significance of the act, making an overpayment a debt due is something that, although it isn't specified in the act, has always been enforced, and we don't see this as a significant change except in the context that it's taken in, that is, the context of somehow accusing or blaming injured workers for the problems that we see at the board and to somehow suggest that injured workers are the reason why there is a big problem there. Again, this is a policy that's already practised by the board and we see this as being something of just stating the obvious.
The Chair: Any other comments on section 2?
Ms Martel: If I might, I think Dwight has moved on to section 3. Section 2 talked about the fines and penalties, which as I understand it just moved it all into the back. So in essence it's what we've already got in the bill as it currently stands. It's just been moved into a new part V.
The Chair: If there are no other comments on section 2, we'll call the vote on that section. All in favour of the section? Contrary? I declare that section passed as well.
Section 3, any comments, aside from the ones already made?
Ms Martel: If I might add to what the member has said, I'm really concerned about this particular section because it doesn't make it clear to people that a good part of the time that there's an overpayment, it's because it's happened at the board level, at the staff level; not purposely, not intentionally, not wilfully, but it happens, and we've seen it often in our office.
As it is written here, it makes it appear, frankly, that an injured worker should be penalized or is some type of criminal who we should go after immediately, regardless of his or her financial situation, in order to get that money back. I prefer to continue to use the current wording, which is in the legislation, which says very clearly that when money is owing to the board, it will be deducted from payments that are already being made to the injured worker, and a schedule of payments will be established that will not make his or her financial situation worse.
I am concerned about how this is written and what signal it will give to board staff in terms of very aggressively and actively going after an injured worker who's received an overpayment who's probably received that because of a fault of a board staff person in the first place.
Mr Baird: I'd like to respond. Obviously, the government's view, if an overpayment is made, whether it's a staff error, a human error, what have you, is that it only makes good common sense that the board would seek to recoup those funds, as is the case with unemployment insurance, for example. This is just basically strengthening the board's ability to do just that.
The Chair: I don't know if we normally allow rebuttal, but if you have any --
Ms Martel: We disagree about what the intentions of the board are going to be, I think, at this point.
The Chair: Okay. Any other comments on section 3? Is it the favour of the committee that section 3 carry? All in favour? Contrary? Section 3 carries.
Going on to section 4.
Mr Duncan: Section 22.1 and the subsequent subsection 161(2), as well as the same sections dealing with material change and the employer community: It would be my very strong recommendation to the minister and the government that they withdraw these particular clauses and refer them to Mr Jackson for further study.
I wrote the minister to that effect on Wednesday or Thursday last week, and she indicated at the time that her officials were looking at this issue. Given the range of concerns we've had expressed about this, both by the employer community and the worker community, I would really strongly, in as non-partisan a fashion as I can, recommend that the government refer these particular sections to Mr Jackson as part of his review.
Mr Baird: I appreciate your motivations in dealing with this issue. Obviously, our view on material change in circumstances is very fundamental to controlling both worker and employer fraud, that the obligation would be there on both parties to report in a positive sense any change in circumstances that occurs. We can obviously differ on that; we just think that it's essential, in terms of clamping down on both kinds of fraud, that when you're stealing money from the WCB by failing to report such a change in circumstances, you're taking money away from injured workers.
That's our view. So again, I appreciate your motive in speaking to that point, but it's our view to proceed.
The Chair: Are there any other comments?
Ms Martel: I guess I find the reference to "stealing money" a little bit strong. I think the PA wants to think about this a little further.
The fact of the matter is, both the employer and the worker groups have made it clear that the definition, or lack of definition, around "material benefit" is of great concern to them. Neither the employer community nor the worker community seems to have any kind of sense or notion as to what that in effect means and what they are supposed to be responsible for reporting to the board. I think that's a serious issue when you have at least that point in common from both of the groups that came before us, which on most other issues were quite divergent and separate in terms of their response to this bill.
I don't think anyone is condoning stealing; certainly no one is condoning fraud, but the fact of the matter is, the two parties that have to deal with workers' compensation have told this government there is no good, clear definition, and without that you are going to be penalizing people who may not have any clue and not wilfully, not knowingly, be in contravention of the act.
I think Mr Duncan is providing you an out on this which would allow some better work to be done and to try and get some consensus about what a material change actually means, and I think the government would be well advised to take that at this point.
Mr Carroll: On that same issue, because I think we used that terminology both as it relates to workers and as it relates to employers, can we get a comment maybe from some of the experts at the foot of the table here about whether the terminology "material change in circumstances" does leave the door open, as the opposition members would believe it does, or in fact do we have some fearmongering going on here? Can we have an interpretation of "material change in circumstance" from your perspective?
Mr Mitchell Toker: My name is Mitchell Toker and I'm with the policy division at the Ministry of Labour. The term "material change in circumstance" will need to be developed by policy at the WCB. The intent, however, of the words "material change in circumstance" is to reflect that something significant has occurred or will have occurred that will impact, in the case of the worker, his or her entitlement to benefits or quantum to benefits, and in the case of an employer, their financial obligations to the board.
In the case of an employer, it would be something that might impact their classification as an employer. If they moved from an accounting company into manufacturing: material change in circumstance. A worker, for example, who returns to employment, that would have an impact on his or her entitlement and/or quantum to benefits.
So I guess my answer is twofold. Policies will be developed. The ministry will be working closely with the board in developing those policies and communicating them clearly to employers and to workers. And, two, just how I explained it, it needs to be significant and it has to impact entitlement, quantum or the employer's obligations under the act.
Mr Carroll: Okay. Just as a follow-up, in your professional opinion, will the average worker or the average employer have trouble deciding that something is a material change in circumstance?
Mr Toker: The board will have to communicate very, very clearly and consistently. In the case of workers, it will, for example, need to go out on a regular basis when workers receive benefits and it will need to explain what might be a material change in circumstance. The board will need to develop policies and communicate them so that it's as clear as possible.
Mr Baird: I was just going to answer Ms Martel's question, but you provided the answer.
Mr Duncan: I'd just like to say to my friends opposite, put yourself in the position of the nine business groups who spoke about that definitional concern and think about, for a moment, the somebody somewhere down at Front Street devising rules and regulations around material change and what that can do to a business or to a worker.
What we've said simply is that Mr Jackson will be bringing back his report, I assume, in the spring. My understanding is the discussion paper will be tabled later this week or next week. It would seem, given the concerns that have been expressed both by the employer community and the worker community, that we ought to think carefully about what the definition of "material change" is. Those of you who are lawyers will know and understand that that definition could be very, very significant. We've heard now not just from union groups but from employer groups, and a variety of them, about their concerns around that.
One of the reasons we're engaged in this exercise is because of the problems at the board, many of which have been created by the very policymakers who are going to be asked to define "material change." So I would suggest that it would be not only in the interest of the employer and worker community, it would be in the interest of the Legislature and the House to refer these particular four sections to Mr Jackson's review so that they can either thresh out more clearly what the Legislature intends by "material change," and with the government's majority they can put it through then without, in my view -- by the time this bill is proclaimed and put into effect, Mr Jackson's report will be coming out, in any event.
So I think you're really potentially prejudicing employers, and we've heard that from employer group after employer group, by leaving the definition of "material change" in the hands of some anonymous officials at the WCB who will put their corporate spin on it, and who knows what they'll come up with. We've heard again repeatedly from the Human Resources Professionals Association, a whole variety of employer groups, about their concern around that.
Mrs Barbara Fisher (Bruce): Just a point of process here, just because we're rookies over here -- at least I'll speak for me. My understanding is at the point where "material change" is defined, it will be back for approval process. It doesn't just happen because somebody decides what the definition is. Am I right or wrong? At some point in time, does the definition of "material change" come for approval?
Mr Toker: I'm sorry; I was consulting. Can you repeat your question?
Mrs Fisher: At some point in time, does the definition of "material change" come before the committee with further amendments to other parts of the act under Mr Jackson or not? Does it come for approval or does it just get decreed somewhere and become fact?
Mr Toker: Once this bill becomes law, it will be incumbent upon the WCB to develop a policy. I might add, and I'm not here speaking of the Workers' Compensation Board, but what I can advise the committee is that the WCB has had for many years now an extensive consultation process where it consults with employers and labour and injured workers on all policies of significance.
Mrs Fisher: My question is, once that definition is created --
Mr Toker: The answer is no. Once the bill becomes law, the WCB will develop a policy, it will be approved by its board of directors, and it will become an operational policy of the Workers' Compensation Board. So the answer to your question is that neither this committee nor any other committee of the Legislature would review "material change in circumstance."
Mrs Fisher: But it will have to be adopted by the board of directors?
Mr Toker: It will go before the board of directors.
Mrs Fisher: So my feeling then is there's still the screening process somewhere where workers, employers and others -- assuming a tripartite board -- will have the opportunity to debate whether or not the definition is suitable. Based on that, given the fact that this is a governance change as opposed to a policy change, I recommend support of the motion.
Mr Baird: I would just speak to the same point again. The WCB will have to develop very clear policies on this area, which it will with every area of the act. They will not simply give copies of Bill 15, once it's proclaimed, to injured workers and employers. They'll have to develop very clear and specific policies, forms, leaflets, communication material to give to those client groups so that they can access both the responsibilities and the opportunities accorded under the act.
I think it's very important that the board have the flexibility to change those policies over time should they feel they have a need to. We've heard group after group after group come before this committee and say, "How come employers can get by without meeting fully their obligations under the act?" This gives the board the flexibility to deal with those who would rather duck their obligations under the act. I mean, there are very clear responsibilities, for example, for employers under the act, and I think this gives the board the flexibility. It gives them strengthened powers than they currently hold to meet that challenge.
Ms Martel: If I might, the problem is the employers now have a number of responsibilities that they should be undertaking that the board should be monitoring. We heard from groups time and time again that in fact the board is not following up on (a) employers who refuse to register, and (b) employers who refuse to pay their assessments.
We're talking about a new section now in the act. We're not talking about giving the board or officials at the board some added strength with this particular section to do something more. There's stuff that they're not doing now.
What we're saying, I think, the two opposition parties, is clearly you've had employers and workers coming before this committee to say to you: "We would like this defined before this legislation gets passed. We would like it defined, probably because there are fines and penalties attached to it and we don't want to be responsible for paying fines or penalties or finding ourselves in the position of being fined or penalized because we were not given or do not know or do not have a good definition of `material change.'"
So I think when you see two groups who have come before this committee and said very clearly, "We have some serious concerns that in fact this legislative body is going to pass this section and we are going to let it go to the board and be determined by some bureaucrats over there who don't have accountability or responsibility back to this group or to this assembly," when people say, "You ought to take a second look," that's what we should do.
The two opposition parties recognize that clearly, even if it were to come forward under Mr Jackson's amendments, the government has the majority. The government will have its say and its way at the end of the day. What we are pointing out to you, however, is clearly a concern that has come from both parties that I think would take very little, frankly, for the government to address in an appropriate way.
Mr Duncan: Just in conclusion, because we've gone over it now, this isn't being offered up in a partisan fashion. It's just a very genuine concern that's been expressed by most of the leading representatives and advocates of both sides. I don't see any downside, from the government's perspective, of putting it over into Mr Jackson's report which will come out and which will give both employers and workers an opportunity to have more say in the establishment of whatever policies are established resultant from these clauses to the bill.
The delay of three months, I think, would be in the best interest of everybody to at least allow them some time to find out what the board's thinking is on the issue of material change. My experience in the past with the board on matters of policy, when the policies are developed, is there isn't nearly the opportunity for meaningful input that you have, say, at a legislative hearing, and that it's often very frustrating when you try to bring those concerns to the board. And again, I've heard that from employers time and time again.
Mrs Fisher: I just want to address one point here. I'm very cognizant of the fact that many of the parties, both employers and employees, who attended the hearings questioned what really the definition would be. However, just to come back to one point, I think there is an opportunity for the non-partisan politics to benefit in the creation of a reasonable definition here. If the board is made up of all parties, like is proposed, and if -- I don't care whether it's a bureaucrat, in all due respect. I don't care whether it's a bureaucrat who comes up with the proposed definition or whether it's a politician; the bottom line is it's supposed to be the definition that's best for people.
I think, in a non-partisan way, that then when the board, which is created of all people and all representatives -- the workers, employers and others -- get this new definition before them, it will have to be approved before it becomes something that's acceptable to them to work with as well. I personally am feeling very comfortable that that board is going to be very capable of doing that, with all of those interested parties involved and in part of the discussion. Whether they draft it or whether they revise it in the end, it doesn't matter to me, as long as it's fair to the worker and to the employer in the end. So I think we are taking care of it by passing it.
Again, I come back to the point that this is a governance issue. We're talking about definition of governance, not the actual definition itself, and I think it can be taken care of at the next stage.
Mr Bart Maves (Niagara Falls): I'd like to agree with Mrs Fisher's comments but I would like to add that I believe it's incumbent upon the board to come to some clarity in this area in a timely fashion.
Mr Pat Hoy (Essex-Kent): Just very briefly, this circumstances of material change is a grey area. We've heard this from management and labour sides both. If we're going to decide that the Workers' Compensation Board can decide all of these issues on their own, why are we amending the bill at all? So I think we should clear up this grey area and, as our critic has said, it will come to pass that we get to look at what is "material change," and the stakeholders will know.
The Chair: Thank you. Are there any further comments? Seeing none, I put the question. Shall section 4 carry? All in favour? Contrary? I declare that section carried as well.
Section 5: Are there any comments, questions or amendments on section 5? Seeing none, all those in favour that section should carry? Contrary? Section 5 carries.
On to section 6. There are three amendments. We'll take them in the order in which they appear within the section, which I'm told is the appropriate procedure. The Liberal motion would come first, the one amending subsection (1.1).
May I speak to that? I don't want to take too much of the committee's time. We support the multi-stakeholder model, and we did so in the run-up to the election and in our Back to the Future document. The purpose of the amendment is to give more specificity to the government with respect to the actual makeup of the board itself. Instead of leaving it open-ended, we are suggesting that at least two members of employers and two members who represent workers or workers' groups be a member of that board. Our view is -- am I supposed to read it?
The Chair: Yes.
Mr Duncan: I apologize.
I move that subsection 56(1.1) of the Workers' Compensation Act, as set out in subsection 6(2) of the bill, be struck out and the following substituted:
(1.1) The board of directors shall be composed of,
(a) the chair;
(b) the president;
(c) two members who are representative of employers;
(d) two members who are representative of workers; and
(e) three members who are representative of the public.
The reason we are putting these forward is we believe that there are specific and defined stakeholders: the employer representatives, worker representatives, as well as the broader public interest, which should be represented on the board. This is consistent with the position we took in the election, although it is different definitionally. You'll be familiar, I know, Mr Baird, because of the number of times you've held up that red book, that we were, in our election document, more specific and we recommended a larger board with specific representatives like from the OMA and other professional groups, but for the purposes of saying that we support the multistakeholder model but that we would like to at least define how many worker and employer representatives, we've put this amendment.
Mr Baird: Just on that point: Obviously this goes to the essence of a multipartite board. I think you'd run into a tremendous amount of problems defining who is a representative of employers. If you had someone with an insurance industry background who had held managerial positions before their appointment, I think you'd have a tremendous amount of disagreement -- are they representative of employers if they come from a management position in the insurance industry, for example? So I think this is just further debate on the issue of a genuine multipartite board or a sort of bipartite-like board.
Mr Carroll: I'll be opposed to this amendment. We got a comment from one of the presenters about people coming to the board from some constituency, not for some constituency. It's a very small differentiation but I think it's a very important one. I think as soon as we stipulate in the act that some people have to be there on behalf of a particular group, it is very difficult for them to come and not be for that group. Actually, all people are representative of the public. Whether they're workers or whether they're employers they all represent the public, so I think the open-ended model where everyone comes in the best interest of the Workers' Compensation Board, rather than in the best interests of workers, employers or somebody else, will give us the best chance at a board that is there to exercise its best expertise on behalf of all injured workers and all employers. For that reason, I will be opposed to the amendment.
Mr Duncan: If one looks at the composition of any board of directors in the private sector, you will see that the board is, in fact, made up of stakeholders. It's often composed of its bank, of its consumer groups; there are loads of instances of its major suppliers, of its major clients. That's the norm on most corporate boards. To suggest that certain groups don't have an interest in the functions or the affairs of the corporation is to simply not understand how virtually most private sector boards operate.
Take ManuLife insurance, for instance. The representatives on that board are composed of their bank, composed of their major suppliers, composed of their major clients. To ignore clients and suppliers and others who have a very direct interest in the affairs of the board is, in our view, to take an overly paternalistic view of how the board ought to function. Workers do have a say.
Our fear, quite frankly, with the wording of the bill as it stands is that workers will be left out. We believe it's the intention of your government not to have workers represented, and we think that would be a serious mistake. To not have a client group, a major client group that the board services, represented at the board level, is, in our view, just a very bad mistake in judgement. We think you can have a multi-stakeholder model and at the same time provide for representation for those groups.
We agree that the bipartite model has not worked because it doesn't take into consideration the broader public interest. We've proposed an alternative which we think is balanced and reasonable in the circumstances.
Again I stress to you and to the government, if you look at the makeup of any board of directors of any major corporation, you'll find that their boards are composed of the principal stakeholders of that company. Even in a lot of large companies today there are union people on the board of directors, and we think it's a mistake in a publicly operated insurance scheme that there not be representation spelled out in the act with respect to the client groups and the major constituency groups.
Mr Maves: Following on the comments of Mr Carroll, the one group that did make that presentation said the representatives should be from the business or worker communities if there were going to be those two communities, not representatives of, and they said that it is a subtle but significant difference, and I concur with that because the two members who are representative of employers may handcuff those employers when making decisions on the board that they are representative of employers and therefore their opinions and the way they vote would have to be representative of employers. So for similar reasons to Mr Carroll, I would vote against this amendment.
Mr Hoy: I have some experience at having sat on a board, appointed by a minister of the Ontario government and all the stakeholders came from agriculture, all 10 of them. There was no mix of participants on the board and it happened to work well.
My point would be, what would be the harm where we have representation from employers and workers who, if they did get into this so-called gridlock that happened in the past, would be buffered by the other five seats on the board. Certainly I think the very nature of this board requires that employers and employees be part of that board.
The minister at the time who looked over the board that I was appointed to took an undertaking with the boards verbally -- it was only verbally -- that no past presidents of some such association were immediately appointed to the board, so we got a little bit away from that, politicizing it or making it from the employer group rather than of the employer group. In the other case it would be agriculture that you would plug in, but certainly I think you have to have the people who are most affected represented on the board in a fair and equitable way and then of course the offset is that we're proposing that there be five other people along with suggestions from your bill.
Ms Martel: I'm pleased to join in this debate on this particular section. It would be no surprise to anyone that I don't support the Liberal model of a multi-stakeholder group and I certainly don't support the changes that the government is making with respect to this section and moving from the bipartite model which we brought into place under Bill 165 to the changes that we see now under Bill 15. I want to make a couple of comments about that.
I found frankly that the minister's characterization of the bipartite model and the bipartite group was most unfair; in fact, I found it to be grossly unfair. She was very clear in her comments in the House to say, and I'll just quote again, "Unfortunately, the bipartite, labour-versus-management approach has paralysed constructive decision-making on very crucial administrative, policy and financial issues facing the board."
Part of the reason I spent some time with the delegations that were before us asking them for very specific examples about how and when the board had been paralysed was because I didn't believe the minister and I certainly don't believe her now given what I have heard from the deputations that have come before us. All of the employer community, to their credit, to be fair, used the same words in terms of characterizing the bipartite model.
Yet when we had two representatives from the worker community here before the committee, Ms MacKay from UFCW and Mr Martin from United Steelworkers of America, both of those individuals made it clear that their experience at the board had not been like that at all. Let me also add that we had Mr Dennis Schweitzer here as well from UTU who had been on the board in the lead-up to the more formal organization that was done by order in council in April. None of those worker reps who sat as members, who were involved in decision-making, could clearly give us any example where the board had been either paralysed or anything else as the minister wanted to characterize it.
It is true that when you have two groups who represent the workplace parties, as labour and management do, that you will have to have give and take, that they won't always agree 100% on every issue. But the fact of the matter is, at the time that the board was fired by this minister, a couple of things were happening. Number one, for the first time the board had an operating surplus. Number two, for the first time in 10 years we actually had a down payment on the unfunded liability. Number three, you also had at the board an agreement certainly by the worker reps that they agreed to the financial package that had been put in place by Mr Copeland, who is still there, that would have seen the unfunded liability be reduced by the year 2014, which is the same year that it will be reduced under this bill by this government. So you had some very progressive measures that had taken place, despite the fact that the group represented on the one hand, business and, on the other, labour.
I frankly have found it very offensive to be reading time and time again in employer briefs that the people who have to be selected to serve on the board somehow have to be qualified experts, have lots of expertise etc, to somehow suggest that the people who were there before, appointed either by labour or by business, weren't.
I think that those 10 members whose names were put forward by their two constituencies, labour and business, were qualified, capable, competent people who took their responsibilities seriously, who were very much aware that they were in charge of a massive corporation that provides benefits to workers in this province and assesses employers for payment of the same and who were undertaking that work in a very serious way.
For the life of me, I cannot understand why the minister would summarily dismiss them in the way she did and I can't understand why the employer community would come and, by inference and suggestion in their briefs, make it appear as if the people who were there were not qualified. I am sure that the business reps who were on that board would have been quite unhappy by how some of them came to be characterized in the briefs of some of their colleagues from business.
I clearly support the bipartite model. Obviously our government was in place and I was a member of the cabinet that put that in place. I think it's ridiculous that we would move back to a multistakeholder board model, the same kind of model that got us into the unfunded liability mess that we are in today, because in the same year that that group was in place under the last Tory government, the unfunded liability jumped over $3 billion in a single year, the worst jump in the history of the board to date. I think that we should go back and put back in place the same bipartite model that was in place, that was working up until the time that the minister fired these folks.
So I will say clearly to people who are here, I asked very specifically time and again for all of the groups to give me examples and they couldn't, and that's because there aren't examples of how this group was paralysed. At the end of the day the only reason we had this bill before us is frankly window-dressing for the minister who broke the law by firing these folks because the law that was in place said that the administration at the board had to be bipartite and we find ourselves in a position of dealing with Bill 15 today which does nothing but justify the minister's unlawful action.
I think it's shameful that that's the position we find ourselves in today, and I certainly think it was shameful that those people were dismissed in the way they were and now suffer under some of the accusations that they have repeatedly from the employer community that somehow, somewhere, they weren't doing their job and they weren't qualified to be there in the first place.
Mr Duncan: I just want to appeal to the government members of the committee, if I can. I know that in your mind you hope this never happens, but let's envision a situation where there's a government that is not disposed to even listen to the views of the business community. Your government, having set this clause into the Workers' Compensation Act, has now created a potential animal that may not even have representation from the employer community. It leaves the government, leaves the Lieutenant Governor in Council, tremendous discretion with respect to the composition of the board.
While your party is in office and your government's in office, your friends in the employer community are trumpeting this, and it's all been very well orchestrated, but I urge caution to those delegations and I urge caution to you that you're setting up a board structure that could some day backfire on you, and I think that would be most unfortunate. As a matter of public policy the wording in this section of the bill creates, in my view, a section that thoughtful members, regardless of political stripe, ought to look at very carefully.
We are as a committee, as I understand it, supposed to make comments on these things, and I would suggest to you again that looking at it from the employers' perspective, while it may give some very short-term consolation vis-à-vis their views or their perception of what has happened in the past, you're creating a statute that is going to be very unwieldy in the future and could leave them exposed to a situation or a government that's not as disposed to listen to their points of view as the current government is.
I urge my friends opposite to use caution. We suggest very strongly that while we support the multi-stakeholder model, there ought to be more specificity with respect to the composition. If you don't accept this resolution, I would urge you to urge your minister to look at that whole issue, because what you're setting up here in the hands of another government or in the hands of someone else with a different agenda could be very detrimental to the business community.
The Chair: I'm going to alert everyone again that we have a two-hour time frame and we're on our first amendment. I would remind everyone that initiative was given three-party support. Please make your comments with that in mind.
Mr John O'Toole (Durham East): I unfortunately will not be supporting the proposed amendment to subsection 6(2). First of all, in terms of Mr Duncan's comment with regard to the composition of public boards, their motive is profit and they need to reflect the marketplace they're in, and I think they take those appointments as an important representation of their constituent group, whereas this board has a public mandate in the interest of injured workers. I think that's really what this government's trying to say.
As to the second part by Ms Martel, I tend to override any of her statements with the statements made by most of the businesses in this province, who are saying we have the highest premiums and the highest benefits and that needs to be addressed. Furthermore, the Provincial Auditor's report indicated there was need for reforms, and I think Bill 15 is addressing that need for reform, so I will not be supporting these recommendations.
Mr Baird: I'll speak very briefly because I don't want to belabour the point, but I wanted to respond to the member for Sudbury East's comments about the minister.
With great respect, you can't have it both ways. You just complained about 20 minutes ago that the previous board did nothing to go after employer fraud. This was the bipartite board that you put in place; you were in government for the last five years. If nothing happened, as a member of the cabinet you would have to take some responsibility for it.
To characterize the release of all members of the board, from both business and labour background, as somehow solely against labour is to read something that simply did not take place into the minister's comments, and I think it's an unfair characterization.
As to employer fraud, you complained that nothing was done to address employer fraud while half the board were representatives of employers. I suppose the point you've raised could be one we could all consider. We had one member of the former board who came before this committee and said that an unfunded liability of $11.4 billion was not a problem.
Mr Maves: On operating surplus, I believe that $400 million transferred over into the operations side from the investment fund could account for quite a bit of that.
Second, with regard to whether there was gridlock, quite a debate raged here on the financial improvement package and whose fault it was, the employer side of the board or employee side of the board, that that package got held up. I think it was Mr Mahoney who was pretty adamant about saying it was the employer side. To me, it didn't matter whose fault it was, one way or the other. What it represented was gridlock and that's why that bipartite board didn't work.
Ms Martel: I'd like to remind the parliamentary assistant that the bipartite board that was put in place under this government went into effect on August 6, 1995. That group was in place less than six months before the minister fired them, but in that six-month period they managed to have an operating surplus at the board for the first time. They managed to get the unfunded liability down even by $100 million, and they also managed, at least on the worker side, to agree to a financial package that would have wiped out the unfunded liability by the year 2014.
The mess that has been created at the board for some long time now is not going to be fixed in six months, but I certainly think that, to their credit, that group of folks came a long way in that short period to get things under control, to get the unfunded liability going in the opposite direction for a change, to get a surplus for the first time in 10 years, and to get some agreement to move forward on a package that would do what this government is now trying to do with this legislation.
Second, with respect to Mr Martin's comments about FIP or with respect to the unfunded liability, no, he said it wasn't a crisis. This government has been trying to use this bill to make it out to be a crisis, and it isn't a crisis.
Time after time, the deputations who came before us made it clear that the board itself has over $6 billion in assets; that they have never had and do not now borrow money; that the unfunded liability is representative of payments that would be due if injured workers had to receive those payments all at once, which is not the case in the province of Ontario -- they are not all going to ask for their payments tomorrow; that in fact the bipartite board recognized they had to deal with the unfunded liability and were doing just that at the time they were let go.
I want to repeat that I think the employer representation of some of the folks on that board was unfair, both of the worker reps and of the business reps. I was very surprised that they would have said some of the things they did about their colleagues. But I repeat that I think the minister's characterization was very unfair, because clearly what we had before this committee in deputation after deputation was not one employer group that could give us one single concrete example of deadlock and two worker representatives who gave us clearly a different story.
The Chair: If there are no further comments, I'll put the question now. Shall the motion as read by Mr Duncan to amend subsection 6(2) carry?
All those in favour? Contrary? The motion fails.
The next amendment is proposed by the third party.
Ms Martel: I move that section 56 of the Workers' Compensation Act, as amended by subsection 6(2) of the bill, be further amended by adding the following subsection:
"(1.2) At least one half of the members appointed under clause (1.1)(c) must be representative of workers."
Mr Chair, I think that in my comments to date on the bipartite board I have made my point.
The Chair: There are no new comments arising out of what's substantially the same topic?
Mr O'Toole: If I may, I need a clarification as I'm a sub on this committee. I'm just wondering if perhaps one of the staff people could define -- I mean this sincerely -- what they mean by a "worker." Is that someone who is a member of a union? How do you define that?
The Chair: It might be more appropriate to ask the person making the motion.
Ms Martel: I think I should answer, because I don't expect the staff to respond to my amendment. We are assuming that under this we would be looking both at organized labour and the injured workers' groups in the province to be able to have half the representation on the board.
Mr Baird: I have a question. That would only cover the 30% or 35% of workers in Ontario who are unionized, so the 65% or 70% of workers who are not unionized would not get any representation?
Ms Martel: You see, the difference between your view of the world and mine is that I believe that unionized workers and the gains they make in terms of health and safety, employment, wages, salaries etc benefit all unorganized workers.
The Chair: No further comments? I'll put the question on the amendment as proposed by Ms Martel.
All those in favour of the amendment? Contrary? The motion fails.
There is another amendment pertaining to this section, also from the third party.
Ms Martel: I move that subsection 56(2) of the Workers' Compensation Act, as set out in subsection 6(2) of the bill, be struck out and the following substituted:
"(2) The Lieutenant Governor in Council shall appoint the president on the recommendation of the chair and the members described in clause (1.1)(c)."
If I might just explain this, under Bill 15, the bill before us, it is the Lieutenant Governor or indeed the government, at the end of the day, who chooses the president. The Lieutenant Governor has only to consult with the chair and the members on the board of directors about who will be chosen as the president. Our amendment would have the Lieutenant Governor appoint that person who is chosen as president by the chair and the members of the board.
Mr Duncan: The ability of the Lieutenant Governor in Council to appoint the president is a fundamentally important prerogative of the government. I'd like to remind the members that our government appointed one Robert Elgie in a very non-partisan fashion. Dr Elgie performed admirably for many years. I know the minister was going to announce her appointment last week or was getting it ready, and I hope the appointment of the new president, when it comes about, and I expect it to be fairly soon, will be somebody of a very high calibre. The minister has indicated to me that she's looking for somebody and indicated that they may in fact have somebody.
Again, our experience in government was that we appointed a very respected individual and we were glad to have had that opportunity and to have had Dr Elgie's service in a very non-partisan fashion over the course of some six years that he served as chair of the board. I think and we believe that the government, the Lieutenant Governor in Council, needs this power, as they've always had, to appoint a president of the board.
Mr Carroll: I'm a little confused; I don't understand all the legalese. Do both of these not say that the Lieutenant Governor in Council will appoint -- do they not say the same thing?
Ms Martel: The government bill, as it currently stands, has the Lieutenant Governor choosing the chair of the Workers' Compensation Board. The amendment I am proposing has the board of directors itself choosing the chair, as was the case under the bipartite model. Under the bipartite model, after the five directors from labour and the five directors from business were appointed, it was up to them to choose the president.
Mr Carroll: You're talking about the president.
Ms Martel: Yes, I'm making the distinction between the president and the chair. The chair will be a Lieutenant Governor appointment as well, under your model; both positions would be under the bill that's currently before us. The change I am suggesting is that it would not be the LG who would choose the president.
Mr Carroll: How can we do this for the first president when we don't have a chair and members of a board? How can the Lieutenant Governor in Council consult with the chair and the members we don't yet have before appointing a president?
Mr Toker: If you look to subsection (2.1) below, it says that subsection (2) does not apply with respect to the first president.
The Chair: If there are no further comments, I'll put the question.
All those in favour of the amendment as proposed by Ms Martel? Contrary? That motion fails.
One more amendment, Ms Martel, on that section.
Ms Martel: I move that subsections 56(5) to (10) of the Workers' Compensation Act, as set out in subsection 6(3) of the bill, be struck out and the following substituted:
"(6) The termination by the Lieutenant Governor in Council on November 1, 1995 of the appointment of each member of the board of directors then in office shall be deemed not to have occurred if a court makes a final determination that the termination was not authorized by law.
"(7) If the termination of the appointment of each member of the board of directors is deemed not to have occurred, the following amendments to the act shall be made:
"1. Subsections 56(1) to (2.2), as re-enacted by subsection 6(1) or (2) of the Workers' Compensation and Occupational Health and Safety Amendment Act, 1995, are repealed.
"2. Subsections 56(1) and (2), as they read immediately before they were re-enacted by those provisions, are re-enacted and in force.
"3. Section 59, as it read immediately before its repeal by section 8 of that act, is re-enacted and in force.
"4. Subsection 60(1) and (2) are repealed and re-enacted as they read immediately before their amendment by section 9 of that act and they are in force.
"5. Subsection 65(2) is repealed and re-enacted as it read immediately before its amendment by section 10 of that act and it is in force.
"(8) The amendments described in paragraphs 1 and 2 of subsection (7) shall be deemed to have been made on November 1, 1995. The amendments described in paragraphs 3 to 5 shall be deemed to have been made on the day on which the Workers' Compensation and Occupational Health and Safety Amendment Act, 1995 received royal assent."
If I might explain this section, members will know that as the bill currently stands before us, it makes it very clear that the termination of each of the members who were fired by the minister, in contravention of the act that was in place, cannot be overturned in law, and it says very clearly under sections 6 and 7 that no proceeding, in terms of trying to have the members themselves take some proceeding in court to get themselves reinstated, shall be acknowledged. In fact, the whole purpose of this bill is to make sure that is not permitted to happen.
What we are saying in our amendments is that we disagree with the fact that the minister broke the law that was already in place and is now using Bill 15 to justify the breaking of the law, and that members who were board members at the time that they were fired should have the opportunity to challenge summarily being fired in a court of law, if that court of law agreed and a judge made it very clear that the law had been broken by the minister, that those folks actually should have their positions back and the bipartite model, which was in place, should be reconstituted and reinstated.
All the sections that then follow speak very clearly to policies and procedures that are going into effect now, as we speak, even though a new board has not been put in place and the law hasn't been changed to cover the breaking of the former act -- also would be termed null and void if a court proceeding determined that the minister was wrong and the government was wrong and the folks had to be reinstated.
We feel very strongly that the minister should never have fired those folks in contravention of the act that was the law of the province in the manner that she did, and those folks should at least have an opportunity to challenge that in court. If they win in court, then the bipartite model should come back into effect and that's what we're proposing in these sections.
The Chair: Thank you, Ms Martel. Any comments? Seeing none, I put the question on the amendment as moved by Ms Martel to subsection 6(3).
All those in favour of the amendment? Contrary? The motion fails.
Seeing no amendments proposed to sections 7 through 11 -- I beg your pardon, forgive me. If there are no further comments on section 6 as an entity, and seeing none, it's kind of relevant we pass that section, given the debate we've had.
All those in favour of section 6? Carried unamended, as commented on? Contrary? The motion carries.
Seeing no proposed amendments for sections 7 through 11, are there any comments, questions or amendments to those sections? Seeing none, I will put the question.
Shall sections 7 through 11 carry? All in favour? Contrary? Those sections carry.
The next amendment we have receipt of is from the third party as well.
Ms Martel: I move that section 12 of the bill be struck out and the following substituted:
"(4) This section is repealed one year after the date on which the Workers' Compensation and Occupational Health and Safety Amendment Act, 1995 receives royal assent."
As it stands in the legislation that is before us now, the Minister of Labour is now given the authority to issue policy directives and objectives to the board of directors at the Workers' Compensation Board for an indefinite period of time.
Under Bill 165, which we passed, we gave that discretionary power to the minister for up to a year and then said that very clearly, after the point in time, after a year had passed, when the new board was in place and up and running, the Minister of Labour should no longer have that discretionary power to issue policy statements. What we are seeing with this amendment is that we don't believe that any Minister of Labour, and we included our own when we moved this Bill 165, should have the unilateral right to do that for an indefinite period.
Any new government obviously will want to put its stamp on any of its agencies, boards and commission, and that will happen, and that is probably an appropriate thing to do in a democratic institution like the one we operate under. However, we don't believe, and I clearly don't feel now, as I represent the party, that any minister, regardless of political party, should continue to be able to exercise that authority for an indefinite period of time.
If you're going to put a board of directors in place that you trust and that you hope will carry out its responsibilities in the best and most effective way, understanding the responsibility it has have to the corporation, after a certain point in time it shouldn't have to take direction from a Minister of Labour with respect to a number of outstanding issues. They will deal with those issues in a manner which is best both for injured workers and for employers who share the system.
I would like to see that discretionary power, which appears to be unlimited at this point in time in Bill 15, actually restricted and we revert back to what we had in Bill 165, which would have limited it to a year.
Mr Duncan: I just want to go on record that I don't support the NDP amendment, and to members of the government, I'll refer you to section 65.1 of the Workers' Compensation Act, which reads: "65.1 (1) The minister may issue policy directions that have been approved by the Lieutenant Governor in Council on matters relating to the board's exercise of its powers and performance of its duties under this act."
Frankly, as an opposition party, I relish the fact that the clause be left in the Workers' Compensation Act, because the whole notion of schedule 2 agencies, which the board is, saw them being at arm's length from the government. As long as this clause is in the bill we will be able to say to your minister directly, on any matter: "Minister, you have the authority to act on it. It is not appropriate to say this is a matter for the Workers' Compensation Board." As an opposition party we rather relish that, and I should say, as I said to the parliamentary assistant and as I said to the minister, I suspect you will rue the day that you left this particular clause in the bill.
It is, in our view, contrary to the nature of what were formerly known as schedule 2 agencies. I don't know if they still are, but we suspect that you will rue the day that this clause was left in the bill and we advised the minister that we thought that it's not necessarily in your best interests. However, if you want it there, it's there.
What it does is it says you folks have the power to override the board, and so any time there's a problem at the board -- and there will be problems, no matter how well qualified the people you put on the board are -- it's going to be with the government, and if the government fails to take action, the government will be accountable for it.
We don't feel this strongly about this section, and as an opposition party I can tell you we're quite glad to have it there. It allows us to question the minister directly about the affairs of the board.
Mr Baird: Our friend from Windsor is looking forward to holding this government accountable, which I think is quite admirable. I think it's the government's intention that this power would be seldom used, but there would be a necessary element of our ability to be accountable to the people of Ontario, whom of course this board works for. That would allow the government the ability to act on those seldom and rare cases.
I guess that's a fundamental distinction between our party and yours. We seek the accountability. We want to clean up the WCB and don't want to scapegoat with an answer in question period. I think the intention is there to get a greater degree of accountability to be used on what is likely a rare occasion.
The Chair: Thank you. If there is no further comment, we'll put the question.
All those in favour of Ms Martel's amendment to section 12? Contrary? I declare that amendment failed.
Is it the favour of the committee that section 12 carry? Contrary? Section 12 carries.
Moving on to section 13, I see there is an amendment.
Mr Duncan: I move that subsections 65.2(1) to (2.2) of the Workers' Compensation Act, as set out in section 13 of the bill, be amended by striking out "the minister" wherever it occurs and substituting, in each case, "the Legislative Assembly."
Do you want me to speak to that?
The Chair: Please.
Mr Duncan: We believe that the memorandum of understanding ought not to be just with the minister but with the Legislative Assembly of the province of Ontario. Again, I counsel my friends opposite that, remember, you're writing a statute; you're passing a bill that will affect the function of the board and its relationship not only to the government but to the Legislature beyond this mandate, and our fear, again, is that by vesting most of the powers that are outlined in the memorandum of understanding with the minister, you are overlooking the Legislature and the legitimate role the Legislature may have to play in a body like the Workers' Compensation Board.
Let's take the notion of the minister deciding where the value-for-money audit is going to be conducted every year. Let's just for a minute say that you've got a government that's in power that isn't sensitive to the perspective of the business community and there's a concern around the way fraud is being pursued. That's where you want the value-for-money audit but the minister really doesn't want to deal with that, so the minister appoints the value-for-money auditor to look at the purchasing department of the Workers' Compensation Board.
In effect, by adopting this type of wording around the memorandum of understanding, it's the view of the official opposition that again you are vesting too much power with the minister of the day and not enough with the Legislature. We think the Legislature and the members of the Legislature who get the calls in their constituency offices from the business community and from the injured worker community ought to be the ones the board is accountable to.
It can be argued, and I'm sure the government will, that indirectly, through the minister, the board is accountable to the Legislature. I would suggest to you as long as you have a government that's friendly to your perspective, this clause works well; when you don't, and that's the vast majority of people -- the vast majority of people are concerned with who the government is or they're concerned with the proper functioning of the board and its relationship to the broader public interest -- I would suggest to you that the terminology in this section around the memorandum of understanding is fraught with danger.
Mr Baird: With respect, the Minister of Labour is accountable for the Workers' Compensation Board to the Ontario Legislature. I think that is most appropriate and members of the Legislature can hold him or her accountable for the ongoing activities at the board.
For example, the memorandum of understanding is between an agency and the minister, not the agency and the Legislative Assembly, and that's important to remember with respect to memorandums of understanding. So it would be, I think, completely inappropriate with the memorandum of understanding between the agency and the Legislature when it's not; it's with the minister. So both, I suppose, with accountability in the previous amendment and responsibility, there's a balance there.
Mr Carroll: I'd like to thank Mr Duncan for his concern about the wellbeing of the members of our party in the future. It's very honourable of him to be so concerned about us. I'd like to ask him at the same time if he thinks that this taking away of power from ministers should apply to all ministries or just this particular minister. It seems a rather strange request he's making, and I would like to know whether or not he would intend that this would carry through all ministries, that we take away all their power and let the Legislative Assembly be responsible for all of the ministries.
Mr Duncan: May I respond? If you read section 13, it deals with a specific document, the memorandum of understanding. It is our suggestion that indeed this bill is all about accountability. You've talked about accountability. Why not be accountable to the elected representatives of the people? Why not, in as many instances?
I know that you want to simply do whatever you're told to do by your government, that you won't sit here and objectively look at the issues in the bill, even in a non-partisan fashion, where concerns are raised by virtually every interest group, again around the definitions that we talked about earlier. So yes, if you're intent on coming here and just do whatever they tell you to do, raise your hand and do it, then that's perhaps the way we should govern ourselves.
But with respect, you've talked about accountability. Why wouldn't you want it to be accountable to the elected people? Why not to the assembly? I'm dealing with this specific clause, and this bill is about accountability. Anybody who has been down at 400 University or anybody who has been up on Bloor or down at that new building knows full well that the minister's a shield. Frankly, from our perspective, that's great for the next four years, that's really good. You've set it up so that your minister and any future minister is completely, in your words, "accountable sometimes" -- sometimes, I think you said. Maybe it wasn't "sometimes"; it was when you want them to be accountable.
Mr Baird: On rare occasions.
Mr Duncan: You want to be accountable on rare occasions. Here you talk about accountability. If you can lay aside and look at this in an objective fashion and look at what's in the public interest, and we can differ on that, but to suggest that our amendments aren't done in any way but to suggest that we agree with the need for accountability and have it at the Legislature -- I mean, how many times has this committee studied WCB bills? How many times have there been special hearings? What we're saying is, let's make that a permanent feature of the way the workers' compensation system operates.
Our fear, from your perspective or from the perspective of members -- and your party's been very good and done a terrific job at representing the interests of the business community. You campaigned on that, you were clear about it, you've made no bones about it. What we're suggesting to you, however, is that if there's another government in power that isn't as sensitive -- and that has happened -- to the business community --
Ms Martel: Name names, Dwight. Come on, name names.
Mr Duncan: The Liberals, of course. You know, us wild-eyed left-wingers. But you're setting up legislation and public policy that, in our view, is flawed and that, I would think and I would argue, the business community ought to be concerned about.
Mr O'Toole: Listening to Mr Duncan, in the previous issue under section 12 we were looking at the questioning of the power of the minister and he was endorsing that. I would remind him that what we're saying here is that the minister, after all, is accountable. It's a specific focus point for responsibility to direct policies and to redirect the actions of the board.
That's really what this government is about. It's making sure that there isn't some vague reference to the Legislative Assembly. Of course we're accountable, and any issues or concerns we have, we should address the minister with those issues and concerns. They are the single point of entry into the system, and that's why I won't be supporting this amendment. I think you should reconsider what you said initially on the previous amendment.
Mrs Fisher: I just would like to also register a comment, and that is that I think Mr Duncan said it best when he said, "Although it might be noted that, in essence, some would argue that they are accountable to the Legislature." They are. I think your point's well made, so why argue it? I think that in the end they are accountable to the Legislature as a minister, and this is one step up the line, to the final line, which is the Legislature in total.
Secondly, I would hope that all parties represent the business community, not just one.
Mr Duncan: We are being entirely consistent in our amendments in sections 12 and 13. We said, very tongue in cheek, that you are going to rue the day. You know, there's a history around the Workers' Compensation Board that has the board very, very separate from the Legislature, reporting through the minister, and -- I forget your terminology -- on rare occasions you want the minister to be accountable. You said on rare occasions you want the minister to be accountable. What we're suggesting to you is that vesting all of this power in the minister is, in the long term, a mistake.
Mr Jerry J. Ouellette (Oshawa): I just think that an elected body, a majority is elected by the people of the province in order to be accountable and that the reason we appoint ministers is to make those individuals accountable. At such time that the electorate of the province no longer believes that those representative groups are accountable to the people, they would elect another government. In that sense, I don't feel that I can support this motion.
Mr Baird: I would wholeheartedly agree with my colleague the member for Oshawa that the Minister of Labour is accountable every day for the activities of the Workers' Compensation Board and correct the record.
The Chair: If there are no further comments, the question is put by Mr Duncan, that section 13 be amended. All those in favour of the amendment? Contrary? The amendment fails.
Seeing no amendments proposed for sections 14 or 15, I would ask if there are any questions, comments or amendments to those two sections. Seeing none, all those in favour of sections --
The Chair: I beg your pardon; I did it again. Forgive me, folks. Is it the favour of the committee that section 13 shall carry? Contrary? Section 13 carries.
The clerk is earning his pay here today, for sure.
Back to the original question, are there any comments or questions for sections 14 or 15? Seeing none, all in favour of sections 14 and 15 carrying? Those contrary? Sections 14 and 15 carry.
Mr Duncan, would you care to speak to your next motion?
Mr Duncan: I move that subsection 77(3) of the Workers' Compensation Act, as set out in section 16 of the bill, be struck out and the following substituted:
"(3) The Legislative Assembly may determine, by resolution, which program is to be reviewed."
The Chair: Any comments to this amendment?
Mr Duncan: Briefly, because I referred to this earlier, but I would again suggest to you that it is in the interest of accountability that the Legislature, or a committee of the Legislature, be the body that determines what part of the board be reviewed. Again, I give you my example. I know this would never occur with your government, but let us say that there is a future circumstance where there is an item that really is bugging the Legislature or members of the opposition, or even indeed backbench members of the government, because I know in your deepest, darkest thoughts you have to question and be concerned about the policies your government is introducing. But let's say that there is an issue of burning interest out there and that the minister quite deliberately doesn't want to have a value-for-money audit done. Let's say you have a situation where you have an entrenched government that just likes the status quo and doesn't want change, doesn't want to make things work better and its interest is in defending what's there already.
I would suggest it would be in the broader public interest if the Legislature had the power to appoint these value-for-money audits, and not simply the minister. I would remind you again that in the future there will be circumstances where it won't necessarily be in the minister's interest, particularly given the fact that you've now given the minister the power to direct the affairs of the corporation. You've given the minister the explicit authority to go in and do something. So let's say that over the course of time the minister doesn't do something and a problem arises. Then it will be in the minister's best interests not to have it audited. So I would suggest to you it's in the broader public interest to have the Legislature determine where those value-for-money audits will happen and not the minister.
The Chair: Any comments? Seeing no comments, we'll put the question. All those in favour of the amendment? Contrary? The amendment fails.
Ms Martel: I move that subsection 77(3) of the Workers' Compensation Act, as set out in section 16 of the bill, be struck out and the following substituted:
"(3) Subject to subsection (3.1), the minister may determine which program is to be reviewed.
"(3.1) An experience and merit rating program established under subsection 103.1 must be reviewed for any year in which the refunds made under the program are greater than the surcharges made under it."
I want to explain this one to people. We know already, when the section passes, that in fact at least once a year the minister will determine what kind of program is to be reviewed. What we are suggesting is, because we heard this at many points in time from the worker community in particular, there is a concern from the worker community that in fact under the experience rating system as it now stands there is much more money that goes out to employers in the form of rebates than the amount of money that comes in as penalties. But we also know that there are a number of penalties assigned to employers which are not paid. Again, in some of the briefs that we heard that point was very clear.
If I might, in 1993 the board paid out $216 million more in rebates than in fines collected, and in 1994 $280 million more in rebates back to employers than in fines that should have come in. What we are saying is that, over and above the single program or any program that the minister chooses to review, in a year where the rebates that are given out to employers exceed the amount of money that comes into the board in the form of penalties a review of that experience rating program also occur that same year.
The reason we're moving that is because we do want to get at the unfunded liability, like everyone else does, and part of the problem around the unfunded liability has been the inability of the board up to this point to be really aggressive in going after employers who, for whatever reason, do not pay the board what is owing. Under this particular section, we're saying that in a year where the rebates are more than the penalties that come in a review of that also take place to determine why that is so and what other action the board should be taking to deal with that.
Mr O'Toole: Just in response, I won't be supporting this, and the reason is I think the new legislation addresses, with penalties, those people who are not contributing to the system or are perhaps fraudulently reporting incidents within their workplace. So I think the new legislation adequately addresses, and in fact the whole experience rating system will become a much more important part of, the value-for-money audits. If that could indeed be a focus of the minister, I wouldn't perhaps omit that opportunity for her or whoever the minister is to do that, but I think the current wording adequately addresses both the workers and the employers who may be abusing the system.
In fact, right now the evidence is that technically the premiums and those benefits to defraud the system are driving the whole system underground. What I've seen in the workplace, where I have worked and been involved in WCB, is every opportunity perhaps is in the employer's best interests to kind of make the information less obvious, to look as if they're improving.
Ms Martel: But that is a part of my concern. The workers' group would have come forward and said that what the experience rating system does is just that, as employers then try and hide or paper over injuries that occur in the workplace. They do that either by having workers come in and sit around at work and have them try and claim disability benefits that the company might have agreed to with a carrier, or in fact have the employer claim it as a no-lost-time claim and, even though they are actually off, not have them off at home but sitting somewhere in the workplace, not doing any work either, because they're not fit to.
What the workers' groups were trying to say clearly to this group is that the down side of the experience rating system as it currently stands in place is that it does for some employers, not all, encourage them to hide accidents so that the assessments that they have to pay are reduced. What I'm trying to say is I think that there's probably a point to that and it probably does happen from time to time with some employers. The way we might get at that very issue is by also encouraging and ensuring in fact that the board, in those years where the rebates that are paid out are higher than what comes in, is forced to look at those employers, is forced to get at that issue again.
I don't see anything in the bill that is currently before us which specifically would deal with the experience rating system and getting at whatever kinds of problems or abuse, if you want to use that word, might be in that current system.
Mr O'Toole: It's my understanding that is addressed in the current legislation, and in terms of material change, the responsibility is on both parties, if there is a change, to be forthright about it. In that respect, failing to do that, there are penalties, whereas before that was not the downside risk. I think there are improvements in the legislation, so I won't be supporting this amendment.
Ms Martel: I don't think the issue has anything to do with material change. Right now, with or without any changes, there are employers who will use the experience rating system to hide the fact that workers get hurt. I'm not talking about a material change and employers shifting from schedule 1 to schedule 2 or shifting from a manufacturing trade to something else; I'm talking about those employers who get a benefit back, a rebate back from the experience rating system because they are not providing the board with proof that people have been hurt on their premises. They're bringing those people into the workplace and having them sit there all day and not claim compensation benefits so that at the end of the day they can have a reduced premium that they pay to the board.
The single way I think you can get at that is by having a particular focus, in the year where there is a surplus in rebates, on the experience rating system to see what those employers were doing and to understand why it is that we have such an excess.
In 1994, the $280 million represented more than the board paid out that whole year to workers who were temporarily totally disabled. So if we could get some of that money back into the pot every year on an ongoing basis, that would go some small way too, I think, to dealing with the unfunded liability problem.
Mr Duncan: Just a point before we vote. Subsection "(3) Subject to subsection (3.1), the minister may determine...." This is the same clause that's already in the bill. Because this is contrary to what we just voted on, I wonder if we can separate out the two clauses. One clause is already present in the bill, correct?
The Chair: Except it's amended by the words "3.1." So it is a substantive change.
Mr Duncan: Okay. It's just that I would prefer to be voting -- I guess you have to vote for them.
Ms Martel: Just vote against mine and then move the one piece yourself.
The Chair: Are there any other comments? Seeing no further comment, the question's been put by Ms Martel.
All those in favour of the amendment that's been proposed? Contrary? The amendment fails.
Now section 16 itself. Is it the favour of the committee that section 16 carry? All those in favour? Contrary? The section carries.
Seeing no amendments proposed for sections 17 through 27, I would invite any comments, questions or amendments.
Mr Duncan: Sections 17 through 24 deal with a number of issues related to information requirements. When I addressed the Legislature, again I stressed to my friends opposite that the government has stated its commitment, its desire, if you will, to make Ontario a more investor-friendly place vis-à-vis cutting red tape, whatever that means.
We had the Corporations Act before the Legislature today that the government brought forward, campaigned on, in the interests of making Ontario a better place to invest. I know that members of the government, as members of our party, have heard from businesses everywhere that the amount of red tape, the amount of bureaucracy they must deal with in government, is stifling and costly, and that in order for them to function well they must have a reduction in the red tape. I spoke to Frank McKenna at some length about this issue, and he told me whenever they modelled Ontario against New Brunswick, New Brunswick won every time.
My fear with these sections -- and we were originally going to propose amendments to repeal them or to remove the sections but we were advised that they may be out of order -- is that I envision our friends down at the board getting these clauses of the Workers' Compensation Act and translating them into a policy, and a policy means more paperwork. I really have some fear around this and about the type of paperwork it could create for employers. Those of you who have operated businesses and who have represented businesses know that every time the Workers' Compensation Act is amended and add something, the officials, the public servants at the Workers' Compensation Board go to it in terms of creating paperwork.
So we flag our concern. We will vote against these sections, as I said in debate, because we think they run contrary to what your government is trying to do vis-à-vis red tape and paperwork everywhere else. We really urge the government to be cautious and to think about what you gain -- a cost-benefit analysis, what do you gain versus what it costs in terms of red tape to businesses. It is our humble suggestion that what you gain by doing this doesn't outweigh the cost to business and the amount of red tape and paperwork you're creating.
Mr Baird: I will just speak very briefly to those comments. The Ministry of Consumer and Commercial Relations, through its Clearing the Path initiative, I hope will expedite and speed up the process for business registration. One of the key components of that, of course, would be to register for WCB, which I think is an important initiative which has been significantly expanded under Minister Sterling from its introduction from Minister Churley.
Mrs Fisher: I would be the first to agree that one of the things we are trying to do as a government is to reduce that red tape and to eliminate the barriers. However, we also are responsible enough to realize that all employers should be somewhat engaged in workers' comp, and I think this is one way of ensuring that that responsibility is held fast by the employers. I don't think it creates anything new. Just because you have a policy development or a policy implementation doesn't necessarily mean new red tape or additional red tape.
I think that having sat through the numbers of days of hearings and listening to all sides of it, labour was very expressive about those who were avoiding that type of registration, and we fully support full registration by all employers. The sections that we're talking about right now certainly provide that that must happen.
Although I agree with Mr Duncan that this government doesn't stand for red tape -- as a matter of fact, its elimination of red tape to small business -- I fully endorse this because it then encourages and makes the responsibility to the employer to be sure they're registered.
Mr Duncan: Again, I just caution, I find it amazing, because I know the government's committed to eliminating red tape. Again, you've been very clear about it. What did you call that initiative you've got going?
Mr Baird: Clearing the Path.
Mr Duncan: Clearing the Path. Today we're throwing some scrub brush on the path, and tomorrow the Ministry of Consumer and Commercial Relations is going to come and take the scrub brush off.
I would refer the members to the very clauses in the bill. You always go back to first source. They taught me that a long time ago. Section 17, amending subsection 108.1(2) of the bill: "When registering....the board may require, an employer in an industry included in schedule 1 shall provide such information to the board as it may require to assign the employer to a class, subclass or group."
Again, I just imagine all those folks down at the board who do this, who write forms for a living and try to get in the way of business in this province, sinking their teeth into this and trying to come to terms with it. I would humbly suggest to the government that you are really doing something that you've really strongly fought against, and you've done it quite well, as evidenced by the numbers in the assembly. I would say to you that you should consider this very carefully.
We can't support it because we agree that we ought to be clearing the path -- is that what we're calling it these days? -- not throwing scrub brush on it. I would be very nervous about sending this stuff down to the folks at the board who make a living out of creating paperwork for businesses. What you're doing is you're directly running in conflict with what your other ministries are doing.
The Chair: Are there any other comments on sections 17 through 27? Seeing none, I'll put the question --
Mr Duncan: That was 17 through 24, wasn't it?
The Chair: No, through 27. All those in favour that sections 17 through 27 shall carry? Contrary? Those sections carry. Which takes us to another motion. Ms Martel.
Ms Martel: I move that subsections 13(3) to (6) of the Occupational Health and Safety Act, as set out in section 28 of the bill, be struck out and the following substituted:
"(3) The termination by the Lieutenant Governor in Council of the appointment of each member of the board of directors as it existed on October 22, 1995, shall be deemed not to have occurred if a court makes a final determination that the termination was not authorized by law.
"(4) If the termination of the appointment of each member of the board of directors is deemed not to have occurred, the following amendments to the act shall be made:
"1. Subsection 13(2), as re-enacted by section 28 of the Workers' Compensation and Occupational Health and Safety Act, 1995, is repealed.
"2. Subsections 13(2) to (8), as they read immediately before they were repealed by that provision, are re-enacted and in force.
"3. Subsection 14(1), as re-enacted by section 29 of that act, is repealed and re-enacted as it read immediately before section 29 came into force, and it is in force.
"4. Subsection 16(8), as it read immediately before it was repealed by subsection 30(1) of that act, is re-enacted and in force.
"5. Subsection 16(9), as re-enacted by subsection 30(2) of that act, is repealed and re-enacted as it read immediately before subsection 30(2) came into force, and it is in force.
"6. Clause 65(1)(b), as re-enacted by section 32 of that act, is repealed and re-enacted as it read immediately before section 32 came into force, and it is in force.
"(5) The amendments described in paragraphs 1 to 3 and 5 and 6 of subsection (4) shall be deemed to have come into force on August 23, 1995. The amendment described in paragraph 4 comes into force on the day on which subsection 30(1) of the Workers' Compensation and Occupational Health and Safety Amendment Act, 1995, comes into force."
The purpose of this section is to again draw attention to two things: One, that the minister, in contravention of a law that was in place at the time, also dismissed members of the health and safety agency in this province, who had been duly constituted, certainly under our government when we were there. She has, in this legislation, Bill 15, attempted to both justify that and protect herself by arguing that the law will not recognize any court proceeding, either done by any of those members who were in place at the time or anyone else who wants to challenge what was done, and that regardless of what the law says or what a court would find, all of those court rulings would be null and void.
Secondly, we are also putting this forward again because we believe, as we did with the bipartite model at the Workers' Compensation Board, that there should be a bipartite model at the health and safety agency, and that the training that was well under way -- over 30,000 people in the province -- when those people were dismissed, was in fact training that workers in this province would have benefited by and from.
We are very concerned with respect to the fact now that we are not sure what kind of other model might replace that particular model. We certainly know that under this particular section, the agency will be composed of one single member, the executive director, and that person will be appointed by the government through the Lieutenant Governor in Council, and we will not have an equal representation of workers and employers, as we did when the bipartite model was in place.
We believe as we do fundamentally with the Workers' Compensation Board that that is the best model to use to deliver health and safety in the province of Ontario, that it was working, that people were being trained, and it was one that we should return to.
The amendment clearly says that as a matter of course people should have the opportunity to challenge the breaking of the law by the minister in court, and that if they so win their challenge in court that in fact the bipartite model would be reinstated and all of the responsibilities in exercising the power that those folks had before they were dismissed would be returned to them.
Mr Baird: I think it's important to put on the record why the government revoked the order-in-council appointments of the board of directors of the Workplace Health and Safety Agency. There was a tremendous amount of problems going on at the board, and the fact that there were these problems is acknowledged by a court who ruled when the Ontario Federation of Labour challenged those actions in court. The court ruled that these problems were significant and the minister acted fully and legally within her responsibilities under the act. The court upheld the actions of the government in accordance with the act. I think it's very important to put that on the record. I won't repeat all the same arguments, because this is basically a mirror amendment to the board of directors of the WCB.
Mr Duncan: Of course, the real issue here is the Workplace Health and Safety Agency. You will no doubt know that we spoke against disbanding the agency, which did run contrary --
Mr Baird: Before the election?
Mr Duncan: No, not before the election. We changed our view, and I said so quite publicly. I shouldn't say that. I should say that the previous caucus had changed its view because it was in fact a Liberal government that created the Workplace Health and Safety Agency, as I recall.
There were two reasons why we did that, both of which came out three years subsequent to our Back to the Future document. The first was Dr Tuohy's report, which came out in February of this year, and in Dr Tuohy's report, there were some 28-odd recommendations that were made to the previous government that addressed some of the problems that were present at the board.
As members of the government are no doubt aware, there was a sunset clause in the Occupational Health and Safety Act with respect to the agency that would've kicked in in 1996. Now Dr Tuohy recommended that the one-year clause be extended to allow her recommendations to be dealt with in a substantive way by the board of the health and safety agency.
The second issue that caused us to rethink our position was the August 28 letter by the auditor who is from one of those big accounting firms on Bay Street -- I think Bill Farlinger's partner, if I'm not mistaken -- who said that this agency is being well run. He served on it. He said it's had some problems, but he says overall it's doing a good job.
So we looked at that and, like thoughtful people anywhere, we would take into account the evidence that was put in front of us and we would say, well, Tuohy, who by the way is very strongly linked to the management community, was saying, "Give it another chance."
Among her recommendations were the removal of the bipartite board and establishing a new board. Finally, as an employer, I can tell you that we used the services of the agency. We came into compliance on April 1, as we were supposed to. Frankly, when I first was made aware of everything we had to do and all that, like most employers, I kind of went aaargh, you know, costs, paper work, all of that. But we sent our employees and we sent our management people for the courses and by gosh they were good and they worked.
So taking all of that into consideration, we did change our position. We did. We recognize that there were significant problems at the board level. I saw a number of problems. There was the perception from the management side that they weren't being listened to by the minister on any decisions. I mean group after group after management group that I met with this summer told me that.
On the other hand, we saw what we thought were some beneficial results, number one. Number two, we saw Dr Tuohy's report and we saw the letter from the auditor, Bill Farlinger's partner, I believe, who signed it and --
Mr Baird: Which firm was that?
Mr Duncan: One of those big accounting firms that support you guys. You know, they all supported you.
In any event, what we said was, given all of this information, let's act on Tuohy's recommendations. Frankly, we'll support this amendment because we think the way you handled the whole thing was inappropriate. It wasn't based on evidence, it was based on ideology, and we reject that kind of thing and we'd ask the government to revisit it carefully as Arthur Gladstone is considering what to do with this agency.
The Chair: Any further comments? Seeing none, I put the question. As moved by Ms Martel, all those in favour of the amendment? Contrary? The motion fails.
Section 28 itself. Shall section 28 carry? All those in favour? Contrary? The section carries.
Seeing no amendments for sections 29 through 34, are there any comments, amendments or questions on those sections? Seeing none, is it the favour of the committee that sections 29 through 34 carry? All in favour? Contrary? Those sections carry.
Shall the long title of the bill carry?
Interjection: I'd like to put on the record that the Liberal member voted for 29 through 34.
Mr Duncan: Please record me in opposition to that.
The Chair: No, it was not a recorded vote.
The long title. Shall the long title of the bill carry? All those in favour? Contrary? That carries.
Shall Bill 15 carry? All those in favour? Contrary? That bill carries.
Shall Bill 15 be reported to the House? All in favour? Contrary? The bill shall be reported.
Thank you all for your input. I appreciate very much the decorum that typified our activities these last few days and weeks. Thank you all. The next meeting of this committee shall be at the call of the Chair. The meeting stands adjourned.
The committee adjourned at 17:49.