CONTENTS
Thursday 29 September 1994
Workers' Compensation and Occupational Health and Safety Amendment Act, 1994, Bill 165,
Mr Mackenzie / Loi de 1994 modifiant la Loi sur les accidents du travail et la Loi sur la santé
et la sécurité au travail, projet de loi 165, M. Mackenzie
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Président: Vacant
*Vice-Chair / Vice-Président: Cooper, Mike (Kitchener-Wilmot ND)
Conway, Sean G. (Renfrew North/-Nord L)
*Fawcett, Joan M. (Northumberland L)
*Ferguson, Will, (Kitchener NDP)
Huget, Bob (Sarnia ND)
Jordan, Leo (Lanark-Renfrew PC)
*Klopp, Paul (Huron ND)
*Murdock, Sharon (Sudbury ND)
*Offer, Steven (Mississauga North/-Nord L)
Turnbull, David (York Mills PC)
Waters, Daniel (Muskoka-Georgian Bay ND)
*Wood, Len (Cochrane North/-Nord ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Arnott, Ted (Wellington PC) for Mr Jordan
Duignan, Noel (Halton North/-Nord ND) for Mr Huget
Hope, Randy R. (Chatham-Kent ND) for Mr Waters
Jamison, Norm (Norfolk ND) for Mr Ferguson
Mahoney, Steven W. (Mississauga West/-Ouest L) for Mr Conway
Rizzo, Tony (Oakwood ND) for Mr Waters
Witmer, Elizabeth (Waterloo North/-Nord PC) for Mr Turnbull
Also taking part / Autres participants et participantes:
Ministry of Labour:
Murdock, Sharon, parliamentary assistant to the minister
Cohen, Sherry, solicitor, legal services branch
Toker, Mitchell, manager, workers' compensation board
Clerk / Greffière: Manikel, Tannis
Staff / Personnel: Spakowski, Mark, legislative counsel
The committee met at 1015 in committee room 1.
WORKERS' COMPENSATION AND OCCUPATIONAL HEALTH AND SAFETY AMENDMENT ACT, 1994 / LOI DE 1994 MODIFIANT LA LOI SUR LES ACCIDENTS DU TRAVAIL ET LA LOI SUR LA SANTÉ ET LA SÉCURITÉ AU TRAVAIL
Consideration of Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act / Projet de loi 165, Loi modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail.
The Vice-Chair (Mr Mike Cooper): We'll be continuing our clause-by-clause deliberations on Bill 165.
Mr Mahoney had the floor when we adjourned yesterday. It's my understanding that Mr Offer has some questions and then Mr Mahoney will do the wrapup for their position.
Mr Steven Offer (Mississauga North): I have some questions with respect to the Progressive Conservative motion and I'm wondering if I might get a little bit of help just before we commence.
This is an amendment to section 5 of the bill, which refers to section 35 of the act. Section 35 speaks to "scale of compensation," but it is referable to death to an injured worker. So I would like if maybe the ministry could confirm that section 35 comes into play when a worker is not injured and living, but where a worker has died. I see that the ministry is --
Ms Sharon Murdock (Sudbury): Compensation to the spouse, yes.
Mr Offer: Yes. So section 35 refers to where a worker is doing work in this province and has died as a result of an accident.
Ms Murdock: Right.
Mr Offer: So my question then is to the Progressive Conservatives: Is it the position of the Progressive Conservatives that, where a worker has died in this province and is survived by a spouse with children, they are in favour of the reduction of the benefits to the spouse and children of a worker in this province who has died?
Mrs Elizabeth Witmer (Waterloo North): The motion that you have before you would mean that all future payments as far as benefits are concerned would be reduced from 90% to 85% once this bill is proclaimed into law.
Mr Offer: Thank you very much for that because section 35 is not the benefits to a worker who has just been injured and is living and is trying to get returned to work, but we're talking about those terrible, terrible situations where a person lawfully, legally and responsibly doing their job has the most unfortunate of accidents and loses his or her life and the workers' compensation system now provides benefits to the spouse of that worker which are now being sought by the Progressive Conservatives to be reduced to the dependent children of the worker, if that child has to be educated, for the education of that child and indeed if there is a guardian, if there isn't a spouse benefit to the children through a guardian.
So I must say I have some incredible concerns that this amendment would rip their benefits from the hands of the children and spouses of a worker who has died as a result of an accident, and I'll hand it over to Mr Mahoney.
Mrs Witmer: Excuse me, Mr Chair. I'm wondering then if the legislative counsel, who obviously drafted this amendment, has incorrectly done so, because the intention was not to the spouse; it was to the recipient.
Mr Mark Spakowski: I don't think it's appropriate for legislative counsel to discuss in committee instructions we received and motions that are drafted. I'd be happy to discuss with the member what this motion does or what it doesn't do, but I don't think it's appropriate to discuss instructions that we received or may have received.
Mrs Witmer: Could you tell us then what this does do?
Mr Spakowski: It reduces --
Mr Paul Klopp (Huron): What did Mike tell you to do?
Mrs Witmer: Nothing.
Mr Spakowski: This would reduce to 85% -- well, throughout that section. The ministry may be able to go through and explain the exact effect, but I think it would reduce the amount of compensation.
Mr Ted Arnott (Wellington): For my purposes I think it would be helpful to get an explanation from the ministry of exactly what compensation benefits are available to the family, the survivors of a worker who has been killed during the course of his or her employment.
Mr Steven W. Mahoney (Mississauga West): On a point of order, Mr Chair: I'm now starting to get confused. We have two amendments. The one before us deals with subsections 35(4), (6), (11), (13), (17) twice and (18). If you read the act, on page 23 of the act, each of those sections as pointed out by my colleague Mr Offer, subsection (4) deals with, "Where a deceased worker is survived by a spouse...compensation in an amount equal to 90% of the net average would be paid to that spouse," the widow or the widower in that instance. This amendment reduces it to 85%. That's quite clear. Subsection (6) says, "Where there is no spouse" and gets into the kids, it would again reduce it from 90% to 85% where there is not a surviving spouse. So you're dealing with the descendants of the deceased worker in reducing that.
Subsection (11), the same, subsection (13) -- all of these subsections deal with an injury that has resulted in a worker being killed and the benefit levels that would then accrue to either the surviving spouses or the offspring of the dead worker.
Mr Arnott: Point of order.
Mr Mahoney: If the Conservative Party wants to withdraw this motion, we'll deal with the other issue --
Mr Arnott: Point of order.
The Vice-Chair: We're on a point of order.
Mr Arnott: Is this a point of order?
Mr Mahoney: Yes.
The Vice-Chair: Yes, it is.
Mr Arnott: You've ruled it as a point of order?
The Vice-Chair: Yes, it is.
Mr Mahoney: Well, it isn't finished because the point of order is you're now asking for the staff from the ministry to explain the impact of your own amendment, which is the most bizarre thing I've ever heard of.
The second amendment deals with subsection 37(1) and clause 37(2)(a) and that deals with reducing 90% to 85% for the worker himself or herself. So I don't think that we need to ask the staff to take time to tell the Progressive Conservative critic or member what their amendment does. That's the most bizarre thing I've ever heard of in committee.
The Vice-Chair: You're right, Mr Mahoney; it's quite clear.
Mr Arnott: I appreciate Mr Mahoney's endeavour and he appears to be wanting to be helpful in this regard --
Mr Mahoney: Absolutely.
Mr Arnott: -- but I did want to receive the clarification from them -- not necessarily the amendment but the information as to what is the normal procedure that the Workers' Compensation Board follows and what benefits are extended exactly in the case where an individual is killed as a result of his employment and what benefits generally are available to his or her family survivors.
Interjection.
Ms Murdock: Yes. She or he would get the 90% of net monthly benefit. I believe under subsection 35(1) there's a lump sum payment and then there's also rehabilitation allowed under the existing legislation. That's as it stands right now and then there's dependant allowance up until you're 19 or finished school.
Interjection.
Ms Murdock: For the spouse.
Mr Arnott: Okay. For the spouse.
Ms Murdock: If a spouse has to be retrained to enter a workforce in order to earn money, then yes, there's rehabilitation allowed and the dependants until they reach the age of -- I think it's 19 or when they finish school.
Mr Arnott: Could I ask how the lump sum is calculated?
Ms Murdock: I'm not a board employee, thank God, but there's a formula that's used and they would determine it based on the earning capacity -- no? Well, then, I'll let Mitch answer.
Mr Mitchell Toker: The lump sum award is established in clause 35(1)(a). I'll read it and then explain it:
"(a) compensation payable by way of a lump sum of $40,000 increased by the addition of $1,000 for each year of age of the spouse under 40 years at the time of the worker's death or reduced by the subtraction of $1,000 for each year of age of the spouse over 40 years at the time of the worker's death. But in no case shall a spouse receive a lump sum payment of more than $60,000 or less than $20,000."
Mr Arnott: And then the -- sorry.
Ms Murdock: And then there's the burial. They also pay for the burial.
Mr Arnott: Okay, the temporary total benefits at present are 90% of the net earnings --
Ms Murdock: It's a different section.
Mr Arnott: -- would continue to be paid to the family for what period of time?
Mr Toker: Clause 35(1)(a) and (b) establishes the periodic payments and I'll read that as well:
"(b) compensation by way of periodic payments in the manner and to the extent provided in this section."
There are various subsections in section 35 that describe the periodic payment, so if one were to go down to sub (4), that deals with the case where there is a spouse with children. Sub (5) deals with the case where there is a spouse with no children. Sub (6) deals with a case where there are dependent children and no spouse, and the section goes on.
Mr Arnott: Okay, can I give you another set of example? Say, a 30-year-old worker is killed during the course of employment at his factory. His widow is 30 years old; they have two children. Would the widow receive temporary total benefits at the rate of 90% for 30 years or how long would it last?
Mr Toker: According to section 35, the widow would receive the lump sum according to that formula. She would receive a periodic payment. From the fact situation you've given to me, she would likely fall under sub (4), the spouse with children, and I can read that:
"Where a deceased worker is survived by a spouse and one or more children, compensation in an amount equal to 90% of the deceased worker's net average earnings at the time of injury shall be payable to the spouse until the youngest child reaches the age of 19."
As Ms Murdock mentioned, there are rehab services, there are burial expenses as well.
Mrs Witmer: On a point of order, Mr Chair: I would indicate to you that we do support this amendment. The point I was trying to make is that this is not retroactive. However, once the legislation is passed, this reduction in benefit level would apply to all individuals who are going to be impacted by the legislation, so maybe that answered Mr Offer, but it's not retroactive.
Mr Offer: It doesn't. I think the Progressive Conservative position is quite clear that you will reduce the benefits to the children of workers who have died in the province and you will reduce the benefits to the surviving spouses of workers who have died in this province, and you will effect an impact in the event of the need for continuing education for the children of workers who have died in this province.
My point is recognizing a whole bunch of issues that we've discussed in this area, the issues around compensation, Friedland formula, unfunded liability and all of those things. It is just a personal feeling that I believe that there are a lot of employers, many, many employers, who would be a little concerned with the reduction of benefits to this level where the worker is not injured but has died.
I just have some real concerns, significant concerns, with the direction and the impact that this amendment will have on those who have to try to put their lives together and go on with their own lives when their mother or father has died in the workplace in this province.
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Mr Mahoney: I have a couple of other questions that relate -- unfortunately Ms Witmer has left. I don't know if Mr Arnott, not being the critic, would have the answers for them but --
Interjection.
Mr Mahoney: Well, I guess I can try because what's puzzling to me about the first amendment -- the first amendment, as Mr Offer has pointed out, is where a deceased worker is survived by a spouse and one or more children, so perhaps I'll just hold for a moment.
Ms Witmer, I just had a couple of other questions for clarification on this amendment. The first amendment, subsection 35(4): Section 35 is comprised of I think about 18 subsections, all of which deal in one way or another with a widow or widower with a surviving child or children and the benefit levels that they get. Your amendment to subsection 35(4) reduces the compensation level from 90% of a deceased worker's net average being paid to a spouse with one child or more to 85%. That's quite clear.
The next part of it, you don't touch. I just wonder if you have a position on it, subsection 35(5), that where the deceased worker is survived by a spouse with no children, they receive 40% to a maximum of 60%. I just wonder, are you intent on changing those benefit levels to a surviving spouse with no children?
Mrs Witmer: Obviously, if we don't have an amendment indicating that we're making a change, we're not making a change. There would be no change in those sections.
Mr Mahoney: It's only for a surviving spouse with children that the benefits would be cut. A surviving spouse with no children there'd be no change.
Mrs Witmer: The benefit levels in all cases would be reduced. As you know, they have been in many other provinces across Canada as well --
Mr Mahoney: No, but "in all cases" is not accurate, I'm sorry. They're not being reduced for a surviving spouse with no children. They are being reduced for a surviving spouse with children. They're not being reduced in all cases.
Mrs Witmer: We're not touching the other sections.
Mr Mahoney: Okay. I should point out -- members would be interested to know as well -- that you'll recall at the request of committee members very early in these proceedings, we asked for comparisons of the PLMAC-WCB reform framework and the actual bill, Bill 165. There was an agreement by the parties involved in the PLMAC process that they could not make a decision on an issue such as this.
But they did say -- and I would quote from this report -- "There was agreement that some recipients of WCB benefits need special consideration. These groups were identified as" -- (1) -- "survivor and dependant benefits."
There was even an agreement within the business community and the PLMAC process and the combination of labour and management who met with the Premier on this, that on the survivor and dependant benefit issue there needed to be some concern addressed about the impact that this was having.
Quite clearly it's really a most unfortunate situation that these particular benefits would be tackled. The next motion would deal with strictly the injured worker, which is where I always thought the Conservative Party was coming from, and frankly, was quite aghast when I realized, as pointed out to me by Mr Offer, that these seven amendments that we're debating here this morning indeed did deal with the survivors, the spouses, and even more incredulous when I realized that surviving spouses with children were being penalized.
In some kind of strange way, the Conservative Party thinks they should penalize them by reducing their benefits, but if they're not burdened with children then we'll just leave their benefits alone. The logic of that is somewhat upsetting.
Obviously the comments I made yesterday with regard to the overall benefit levels, I'll perhaps speak to the next motion in expanding on those, but just to say that I find this amendment frankly most unfortunate, and in fact if anything, we should be putting an amendment to ask the royal commission to take a look at how we can better help survivors of workers who are killed on the job, rather than cutting their income.
You must realize not only are they losing the dollars that go with it, but they have also lost the support and the leadership that that particular member of the family might bring. That might have been the only working member of the family. In many cases, it probably is. It could require the children to go to work to supplement the family income.
You just don't know the impact that this could have on families, and I would suggest that the third party probably does not know the impact and is just simply doing what is traditional to do when you get into a situation where people are pushing and yelling at you: You just do a broad brush. "So everywhere where it says `90%' in this act, we'll reduce it to 85%," without understanding the impact and who might be hurt.
There would be a lot of people, clearly the most vulnerable people in this situation, the surviving spouse and the surviving kids of a dead worker, who would be damaged severely by this.
I think it's most unfortunate, and it would be my preference that the motion be withdrawn. But failing that, I would certainly ask that when we get to it we have a recorded vote on the issue.
Mr Randy R. Hope (Chatham-Kent): Yes, there is a different shedded light on where the impacts of this proposed change from 90% to 85% takes us in this debate. But I guess I'm not as surprised as Mr Mahoney at the Conservative Party. They've been very consistent in their opinions around workers' compensation. Before we got into this amendment, we were debating amendments that were trying to place value-for-money audits in place in the workers' compensation system. We're now looking at benefit reduction, and I would agree with Mr Mahoney's scenario that it's just wherever you see 90%, hit it and cut it down.
I notice in the Conservative reform package that they've always talked about, their revolution document, they are looking at not only stopping at 85% but to continue that process, because they are looking at ways of continuing reducing the benefit levels and to put it in line with other provinces in this country.
That just sends a message to me that they have been consistent. They've made it very clear that they would reduce benefits no matter to whom. They've also clearly indicated that they would even go further, in their document dealing with the revolution.
They've been consistent in putting forward the value-for-money audit which would probably even reduce benefits even more and affecting those. They're even going as far as not only reducing the benefit levels but, before you even get injured, introducing a copayment scheme where workers would have to pay into a workers' compensation system.
I remember all the presentations that were made before this committee, and I heard the critic, who I believe is very sincere in her thoughts and in her caring about people, but it did not fall in line with the policies that were being put forward by the Conservative Party, and now today we also see it, as part of their amendments that are being introduced, to continually slash at the injured workers, at the families and at the children affected there.
I'm not as surprised to see the position of the Conservative Party as the Liberals are. They've clearly said that they would have a slash-and-burn approach to the workers' compensation system. I don't know why it would surprise you that they would even go after the spouse who is left as a survivor and the children who will be affected by the death of the parent who was injured in a workplace because it's not even his or her fault that the injury occurred and the death occurred. But they've been consistent. Give them credit. They have been consistent in what they've been saying and they're going to slash and burn.
I'm just wondering as we go even further, keeping in mind what their policy is that they talk about and the amendment that's being introduced, they're saying in the revolution document they're even going to go further in reductions. So 85% is not the benchmark of all ends; it's just a continuous process that will be there.
I'm wondering what the effect would be through the co-worker scheme that they plan on introducing, how much effect would then be to those injured workers' spouses and children who are left at home if not able to pay.
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So it does not surprise me. They are consistent. They've been following their agenda, the revolution document. They tried introducing value-for-money audits. They put those amendments forward. We defeated them. Now they're just staying consistent. I know the 85% is not the end reduction factor. They've clearly indicated that in their document, the revolution document, which highlighted a number of points. And not only the reduction of benefit levels; now they're talking about an even further expansion of that program to deal with a copayment schedule.
I've been involved in the collective bargaining process, and I know that employers always say that our workers' compensation premiums are x amount of dollars and that's calculated in this whole basket of compensation for workers. I'm not talking about workers' compensation; I'm talking about monetary issues when you're dealing at the collective bargaining. They take all that into consideration.
So if you're asking me today do employees actually pay for workers' compensation, yes, because they're not receiving that dollar value in their pocket. It's part of the overall wage compensation package that's being negotiated with an employer, which is taken into consideration by the corporation. So the amendment that's being introduced by the Conservative Party does not surprise me whatsoever.
Now, therefore, for the Liberals. Mr Mahoney, I believe, in all sincerity, has his heart in the right position, but I believe his party is --
Mr Mahoney: It's the brain you're worried about.
Mr Hope: No, I never said anything about your brain. I feel you're a very competent person, okay? I just question some of your policies. But I want to deal with this because I notice they also stayed away from putting an amendment forward to this bill. But let's be honest; they do have a document out there. It's Back to the Future. I know I always keep bringing it up. It's a DeLorean, which means it's out of date, there's only a few of them in existence and most of them are gone and there's a high dollar value to a DeLorean.
But let's talk about some of the direction in which they're saying. We talked about the effects on the injured worker. Well, they're talking about a new scheme also, the Liberal Party. They also talk about the Friedland formula and all benefits, past and future. They are talking about, instead of putting the $200 amount in place, "Do it on an evaluation, case-by-case scenario."
It is in part of the amendment that we're talking about the reduction. But as we refer to this amendment that the Conservative Party, which has been consistent in its approach by putting this amendment forward and the reduction factor, listening to Mr Mahoney's comments that he made to the amendment that's there, I think it's also important to reflect, as I make my decision on the Conservative amendment, what the Liberals say and what their document presents, and I think that's very important.
They're talking about a 14-day compensation system that the employers pay for, which is already calculated, as I clearly indicated. The workers are already paying for this. Instead of getting into an appeals process and competent people judging a claim, we get into the human resources people, who will now start judging claims versus the workers' compensation people judging a claim.
So there are problems. Human resources' major concern, when they go before a plant manager, is how many sickness and accident days have been recorded in the month, and that's been one of their focuses. They're talking about a cap on how long a period of time that an injured worker can claim from workers' compensation, so it's very important. I find it even amazing. Recommendation 28 of the Liberal Party -- and they have recommendations from 25 to 37 --
The Vice-Chair: On Mrs Witmer's motion.
Mr Hope: On Mrs Witmer's. Mr Chair, I have to take this all into consideration when I'm going to vote.
Mr Mahoney: Mr Chairman, on a point of order: I would be delighted, if this committee wanted to do a review of the Back to the Future document as part of its legislative agenda, to second the motion if Mr Hope wanted to move it, and we could get into it in a line-by-line, detailed way. I'd be more than delighted to do that, but I thought we were here dealing with Bill 165. Either way, I'm happy.
The Vice-Chair: Mr Hope, could you direct your comments towards Mrs Witmer's motion.
Mr Hope: It is towards Mrs Witmer, because I'm talking openly to people as we try to determine which way we're going to be voting on this amendment.
Mr Mahoney: You don't know? You're not sure?
Mr Hope: It's important while we're examining amendments that we have an open discussion process about issues and where people are coming from.
The Vice-Chair: No. About the motion.
Mr Hope: About the motion, but reflecting on the issue, right? So that's exactly what I'm doing.
If I look at even what they're trying to do, they even made a mistake in Bill 162, which is admitted in there, because they also want to now reintroduce the meat chart that they took out in Bill 162.
They talk about copayment schemes and they talk about how we need the federal government to work with us on unemployment insurance, but I notice that even the federal government is having problems. They're even talking about more drastic cuts on the unemployment insurance.
Mr Mahoney's sincerity around the amendment that is being presented by Mrs Witmer dealing with benefit reduction was very sincere about injured workers, but it fell far short of what their actual policies and their Back to the Future document has presented.
I wish Mr Mahoney would stay consistent. He's criticizing the Conservatives for bringing forward such a drastic amendment; I'm not, because they've been very clear. They said they were going to reduce benefits. They're even going to work on copayment schemes. They're even going to do value-for-money audit reports. They've been very consistent in their amendments that they've put forward. We haven't seen that full direction that the Liberals have been talking about in their amendments.
Just dealing with the impact that's there, there have been some good points brought up. People are being affected, not only with the injury that occurred, the death that occurred, but the continuation of life that has to be, for the spouse who may not have been in a workplace before and now has to venture outside, from a domestic engineer out into the broader workplace; for the children, who are now faced emotionally with the distress of losing a parent through an injury that occurred at work.
Those changes have to be dealt with in a more subtle way, making sure that we take care of our future, which is the children, and to listen to I guess what our hearts are trying to say, that while we're trying to deal with the phantom of the unfunded liability, we're not making draconian changes that are being presented in this bill, which is far-reaching and reaches into a number of other lives, other than the injured worker himself or herself.
This amendment that's being presented by the Conservatives, and future amendments that are talking about benefit reduction, whoever the drafters were just looked for the 90% factor, reduced it to 85% without understanding the consequences that are there faced emotionally.
I don't blame Mrs Witmer. I believe she's a very caring person about people she represents and about injured workers, but the policy which is directed from the corner office does leave her a little bit defending policies that need to be put forward and amendments that need to be put forward in order to stay consistent with the Conservative agenda on the revolution document they've presented.
I know clearly where I stand on the benefit reduction factor and the impacts it has. On this amendment, I guess I would agree with Mr Mahoney, and I don't usually do that too often. I know I've been considered the rebel, and all employers are bad in this province. Not all employers are bad, but I'll show you quite a few who do use the appeal process to prolong claims, and use video cameras and other issues to bear on claims that are out there.
I think it's very important, and I'd ask Mrs Witmer, as Mr Mahoney has, to consider withdrawing this amendment. It may save a little bit of face in the end. I believe, through the person that she is, hopefully she will consider this option, but I also clearly understand that the corner office does dictate the direction in which they need to proceed with amendments to the WCB.
Mr Arnott: Listening to the discussion this morning has been very helpful. The points that Mr Mahoney has made have been an effort to put forward the view of the Liberal Party.
As the present legislation stands, we're compensating 90% temporary total benefits to the families, the survivors of workers who are killed at the job. Listening to the discussion this morning, one could wonder, why don't we make a special provision for them for 100%? Why not 150%? Why not 200%? How can you suitably compensate the family of a worker who has been killed? That's a difficult issue and there's been a lot of compassionate arguments put forward and it's something I think we all need to reflect upon.
But certainly the position of our party has been that these benefits come from money. The benefits paid out are actual dollars and we've got to be cognizant of the overall financial picture. So it's important that we realize that in spite of our best efforts, what we might want to do, still we have to pay for these benefits with real dollars and those dollars have to come from somewhere.
Mrs Witmer: I do appreciate the discussion that has taken place this morning and I think it's been a very worthwhile discussion. As I indicated at the outset, we are concerned about the financial health of the WCB. We want to make sure that the system is sustainable, that injured workers will continue to receive their benefits, that the money will be there. However, at the same time, we need to address the financial crisis that is embracing the entire system at the present time.
Thus, we put this amendment forward to show that there is a need -- yes, it will be painful; it will not be painless -- to take a look at the benefit level.
Having heard the discussion this morning around section 35, and I think it's been good discussion, I have heard the concerns that have been voiced by all people who have spoken and, given what's been said, I will tell you that I think it is important to be responsive to those concerns and so I am quite prepared to withdraw this motion at this time.
The Vice-Chair: Thank you, Mrs Witmer.
Okay, that completes section 5. Shall section 5 carry? Carried.
We have a PC motion and it's new section 5.1, and being subsection (37) is not opened in the bill, this motion is out of order unless we can get unanimous consent. Do we have unanimous consent? No. Okay, that's out of order.
Mr Mahoney: Maybe you'd better explain why that is out of order.
The Vice-Chair: Subsection (37) is not opened in the bill.
Mr Mahoney: Oh, I see, it's not open --
The Vice-Chair: In Bill 165, subsection (37) is not open.
Mr Mahoney: But we did open (35).
The Vice-Chair: Yes, (35) was opened.
Section 6, there are no amendments. Shall section 6 carry? Carried.
Section 7, we have a PC motion.
Mr Arnott: I'd like to request a 10-minute recess at this time so that we have the opportunity to confer on this issue.
The Vice-Chair: Okay, this committee stands recessed for 10 minutes.
The committee recessed from 1055 to 1111.
Mr Mahoney: I want to know who's got the sense of humour in legislative research.
The Vice-Chair: I just read that also, "an accord that fell apart."
Mr Mahoney: Just a note of levity, Mr Chair. The report we have from research is to answer some questions. The first question that committee members wanted to know, "Was there an agreement reached by members of PLMAC?" The answer: "Some witnesses spoke of a compromise agreement reached by management and labour as a result of deliberations of the Premier's Labour-Management Advisory Committee. I have been told by the Ministry of Labour that it is more accurate to view the `agreement' as an accord that fell apart."
Mrs Joan M. Fawcett (Northumberland): Does that mean that a disagreement is an accord that comes together?
Mr Mahoney: There you go.
The Vice-Chair: I think that's quite clear on the actual facts of what did happen. Anyway, on section 7, we have a PC motion.
Mrs Witmer: Yes, I'd like to move that section 7 of the bill be amended by renumbering section 7 as subsection 7(2) and adding the following subsection:
"(1) Section 43 of the act is amended by striking out `90 per cent' in each of the following places and substituting `85 per cent':
"1. The fourth line of subsection 43(3).
"2. The second-last line of subsection 43(9)."
As I indicated in introducing the previous motion, we do believe at the present time that there is a financial crisis at the WCB. We are extremely concerned about the high unfunded liability. As I indicated before, it's somewhere in the neighbourhood of $11.7 billion and it continues to grow. As a result of Bill 165, it will continue to go upward. We know it'll go to $13 billion; some have said $15 billion. I guess it doesn't matter which is which. We simply know we are not going to reach the target of eliminating that unfunded liability by the year 2014, as had originally been determined in the 1980s could be accomplished. We simply aren't going to see that happen.
As a result, in this province there are those who are reconsidering their decisions to invest, expand here. People from outside the province take a look at whether they want to come in because they have a very high level of unfunded liability. They know that they're going to have to pay for this debt. If they're moving into this province, they have no choice. Even though they did not participate, they will have to unfortunately pay to discharge that debt at some time.
We're seeing certainly lost opportunities. We are seeing a loss of jobs that might have been created if this unfunded liability had not been quite as high as it is today. Unfortunately, it makes this province less competitive. We know that it is affecting the credit rating for this province. We've been told that numerous times. It is added on to our debt, even though the government doesn't want to recognize that it is. It is a source of concern for the business community and it's the business community that creates the jobs.
At the same time, we have to take into consideration injured workers. Obviously, if we don't reduce the unfunded liability, if somehow the system is placed in a position where it would go bankrupt, there would be absolutely no future benefits for injured workers. So we have to make sure that they continue to be protected, that they continue to receive benefit levels as well. There's a fine balancing act that needs to take place and what we need to do is obviously take some measures that will eliminate the unfunded liability.
Our party still believes in and supports the objective of the year 2014. In order to eliminate that unfunded liability, you can't do what the Liberals want to do, and that is nothing and play both sides of the coin -- agree with the injured workers, agree with business, agree with labour.
You have to take some tough measures and you have to come out with a position, and our position is that if we're going to eliminate the unfunded liability, we are going to have to do what some of the other provinces in Canada have done and that is reduce our benefit level.
We know that some provinces have reduced it to 85%, some have reduced it to 80%, some have reduced it to 75%. We are suggesting that the most fair thing to do at this point in this province and still meet the objective of eliminating the unfunded liability by the year 2014 would be to reduce the benefit level to 85%. Just for your information, Manitoba did reduce it to 85%, New Brunswick reduced it to 80%, and it was Newfoundland that reduced it to 75%. We are suggesting 85%.
We feel that will give appropriate protection to injured workers, it will ensure that they will continue to get the money that is owed to them and at the same time make this province much more competitive. As a result, we are going to see the creation of additional jobs for people in our province.
I guess that's the goal we're looking at. We want to make sure that people do have jobs. We want to make sure that the injured workers get back to the jobs as quickly as possible, that there are opportunities for them.
We hope that people around the table are prepared to show leadership. We hope that you are truly concerned about reforming the system. You need to recognize there isn't a painless agenda. There going to need to be tough decisions that are made, they need to be taken now, because if we don't take those tough decisions, we will all suffer -- injured workers, business will suffer, jobs will be lost and it will have an impact on the lives of many, many people. So I hope that you will take a look at reducing the benefits from 90% to 85% of net average earnings.
As I say, this still maintains a benefit level in our province that is higher than in neighbouring jurisdictions and certainly it would address some of the overcompensation issues as well and it would reduce the unfunded liability by $4.8 billion. Therefore, I move the motion that I have.
Ms Murdock: First of all, we've made our position pretty clear, that our party will never be in agreement to reduce benefits from 90% to 85% in this instance. Ninety per cent of net has already been discussed, when they moved it from 75% of gross, in terms of giving benefits to a worker who is employed by a company and gets injured on the job and thinks it's fair.
But my point that I think is really important here is that this section specifically deals with the deeming provision, where we had I don't know how many groups come before us during the public hearings -- for those who didn't know it before, and most of us do -- and tell us that deeming under section 43 actually has deemed that the person has a job that they don't have, and deemed to be earning money that they aren't getting. So to drop that even more, I just can't believe that it is being suggested.
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I also have trouble with the idea of eliminating, and the emphasis is on the word "eliminating," the unfunded liability by 2014. Actually, Mr Mahoney has made the point eloquently a number of times what the reason is in a long-term pension plan kind of thing that you would have zero unfunded liability and total coverage, assets over liabilities, by that time.
Here again, in this amendment, all it says to me is that we've already got Friedland in this bill, so that's $18 billion paid by injured workers. But on top of that, to eliminate this unfunded liability, which was not created by injured workers, we're going to take another 5% off your net benefits. That's just unacceptable, so I know that I will be voting against this.
Mr Will Ferguson (Kitchener): I'll try to be brief. I think I now know what the Conservative definition of tough decision-making is, and that's a decision that's made that's going to affect everybody else except themselves.
Let's be honest, despite the shortcomings of this bill, and there are some provisions in this bill that I'm not particularly happy with --
Mr Mahoney: Which ones?
Mr Ferguson: The Friedland formula, for example. I'm not happy with that all, Mr Mahoney.
Mr Mahoney: Are you going to vote for it?
Mr Ferguson: I'm not so sure that I am. But if you'll let me continue, please. Despite the shortcomings of this particular bill, I want to tell you something: It's amendments like these that don't make this bill look good; it's amendments like these that make this bill look great, look absolutely great.
I want to tell you that I just think that there's an underbelly to this amendment, which is that everybody on workers' compensation out there is ripping off the system and in order to get costs down, this is the only way we can affect the cost-rate structure. Of course, I think we all recognize that this isn't the only way we can affect the cost-rate structure of this bill. It's, in my view, the Michelin myopic way of doing things.
Michelin in my riding, I want to tell you what they did, a really astute move on their part. Everybody in their plant who didn't have an accident got a turkey, but if you were unfortunate enough to be involved in a work-related accident at Christmastime, you didn't get the turkey. The underbelly to that is no different than the underbelly to the Tory amendment, that somehow it's the worker's fault.
Let me tell you about the injured worker in my riding who is the president of the injured workers' association. He went to work one morning and he climbed up 280 feet of scaffolding. He was a painter by trade and he was painting the ceiling of a church. What he did when he was up there at 9 o'clock in the morning is, he started his job, because the employer asked him to start at that time, and unknown to him, the scaffolding wasn't put up properly, and he and two other workers fell 280 feet. The scaffolding collapsed. That wasn't his fault. He didn't go to work and ask to be injured. He feels fortunate, because the other two individuals were killed on that job as a result of the scaffolding falling.
So I really think that a motion like this really is the greatest tragedy and the greatest insult ever committed against the injured workers of this province and I'm just delighted to be able to be on the majority side of this particular issue to see this motion defeated.
The Vice-Chair: Mr Arnott.
Mr Arnott: The reason I hesitated, Mr Chairman, is because I'm interested in hearing Mr Mahoney's comments on this amendment.
I'm trying to listen to this debate and trying to figure out how the various parties are approaching this issue of reducing overall benefits because, of course, we know -- and the parliamentary assistant said yesterday that it's very difficult for her as a New Democrat -- in fact, I think she said it's anathema for her to support the concept of the Friedland formula, which of course is a reduction in benefits to injured workers. No matter how you cut it, it's a reduction in benefits to injured workers.
Mr Klopp: It's a tough decision.
Mr Arnott: Exactly. It is a tough decision and I would say to the New Democrats it's especially difficult for you to undertake that sort of a position. It's similar to the social contract -- very, very difficult two years ago to recognize that there was a financial problem with respect to the books of the province of Ontario and that something had to be done. The social contract, the reduction in the salaries of the public servants and the broader public sector and the members of the Legislature, let's not forget us, was a difficult decision, especially for New Democrats to do. I recognize that and I give you credit for those decisions because I think they had to be done.
So we're talking about a difference in degree, I guess. We've heard during the course of these hearings that the unfunded liability, which obviously the Premier accepts even if some individual members in this committee from the New Democratic Party side don't accept that it's a problem. The Premier accepts that the unfunded liability is a problem, that its growth is a problem, the rate of growth is a problem, that it must be addressed. Hence he's brought forward the Friedland formula as a partial solution to that. That's what's happened.
I'm interested in hearing what the Liberals have to say on this because we've seen over especially the last two years that any specific measure that's put forward in the Legislature or in the public domain in terms of ideas, any specific measure to deal with any financial problem in Ontario, the debt problem, whether it's the province's books or the Workers' Compensation Board books, they oppose it. Any specific measure to deal with any financial problem, they're against. Therefore, I suppose we conclude that they're in favour of the status quo; they're in favour of the debt going deeper and deeper and deeper. What else can you conclude? I don't know.
Interjections.
Mr Hope: They just can't figure what side of the fence to be on.
Mr Arnott: Perhaps. Perhaps that's it. I don't know. But I am looking forward to hearing what they have to say on the Friedland formula because --
Interjections.
Mr Mahoney: It's tough being the government when the Canadian people keep swinging at us.
The Vice-Chair: Order.
Mr Arnott: No, I am interested in how they're going to vote on the Friedland formula --
The Vice-Chair: Order. The Chair is having great difficulty in hearing this.
Mr Arnott: -- because it is a reduction in benefits.
Again, we heard during the course of these hearings that the unfunded liability is $11.7 billion. For a period of time it was growing at the rate of $2 million per day and we hear now that it's been reduced; it's just growing at a rate of $1 million a day, which I think would shock and appal the average person if they were aware of the implications.
What we've said with this amendment is that, yes, we want to deal with the overall financial problem at the Workers' Compensation Board and we've said that the unfunded liability increasing at the rate of $1 million a day is still too much and we have to take further measures, tough measures, and we accept that. I remember my speech in the Legislature during the social contract -- and I suspect many other members remember that speech that I gave; I'm not sure about that -- but what I said was we don't like the concept of cutting, no one likes the concept of cutting, no one relishes the concept of having to make these cuts, but look --
Mr Klopp: Which way did you vote on that?
Mr Arnott: I voted in favour of the social contract at second reading --
Mr Klopp: Not on third reading.
Mr Arnott: Well, I voted in favour of the principle of it at second reading, which is more than the Liberals did. But in my opinion at some point --
Interjections.
The Vice-Chair: Order, please.
Mr Arnott: -- financial reality stares you in the face, and in spite of what you'd like to do --
Interjections.
The Vice-Chair: Mr Klopp, you'll have your opportunity later.
Mr Arnott: -- if you're the government you've got to do something, and when the unfunded liability is still increasing at a rate of $1 million a day it's my position that we're not doing enough to address the unfunded liability. So I support this amendment.
Mr Mahoney: I'm delighted that Mr Arnott and perhaps others are anxiously awaiting my comments. You see, I think one of the fundamental problems is that people, particularly I think in our line of work, are somewhat reticent with all the pressures that we have to get too involved in the details of an organization like the WCB. To a degree that's probably good because I think if we had our fingers in more than they're already in we'd probably have greater problems.
But what happens is you tend to look for simple solutions. These are not simple problems. The unfunded liability is not a simple problem. It wasn't created by this government. It was created probably in the last 15 years, maybe a little less, 14, 13 years. The Tories are culpable, our government is culpable, and you people are culpable. We're all responsible for this.
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The document that I put out that seems to get so much attention around this table does not bash the current government for the problems at the WCB, but you've got the limos, ladies and gentlemen. Bob Mackenzie's the minister. You're in charge. Under this bill, Bob Mackenzie's going to be solely in charge of workers' compensation, with complete and unabated authority to do whatever he wants with regard to policy directions or compensable levels or anything he wants to change.
Mr Len Wood (Cochrane North): A very capable person.
Mr Mahoney: Well, that may be your opinion. I won't be nasty about someone who's not here to defend himself, and I would not rely on any of you to justifiably defend him either. But I would say that he's going to have a tremendous amount of authority and power. So what we have here is, we have people grasping at straws. You say you want to know the Liberal position. Well, read Back to the Future. It's very clear.
Mr Arnott: You lent me a copy, and I appreciate it.
Mr Mahoney: I gave you a copy. I don't need it back. I know the document. I wrote it.
In that document, we do not look for simple solutions to major problems. Yes, the unfunded liability is a problem, but talk to some people in the financial world about it if it really is the problem that you hear when you hear the rhetoric about, "It's got to go down to zero now," and, "The only way to resolve the unfunded liability is to slash benefits." You know, we forget what this is. This is an insurance program. Is it being run like one? No.
But when Justice Meredith released his royal commission report in 1914 and the government set up a workers' compensation system, it was based on the historic compromise that I have referred to on numerous occasions, and members know it well but it's important to state it again: Workers gave up the inalienable right to sue an employer for negligence or any other cause when an accident occurred in the workplace.
I think in a free, democratic society like Ontario and Canada we consider the right to sue pretty significant, and if you're going to give it up, it should be replaced with something significant. And it is quite significant that a worker would get rehabilitation services and health care services provided, that a worker would get retraining assistance, that a worker would get some form of attempt to return that worker to work either in the pre-injury job or some other form of a job, that a worker would get the right to maintain their dignity and go back to work and be a productive member of society, and, as an insurance program, that a worker would not lose a lot of money.
It is income replacement insurance. It does not replace 100%, and the wisdom on that is based on the fact that the worker does not incur the same expenses in going to work that that worker does in going to a rehab centre or staying at home or looking for other employment opportunities. But that worker does incur expenses, and some of those expenses are covered.
So you've got a fundamental system, the principle of which is sound. As I said yesterday, if I were looking for a place to invest and I had a choice between one jurisdiction that had an insurance program that prohibited lawsuits from putting me out of business and another place that had no such program, I'll tell you where I'd go. I'd go to the jurisdiction that had a compensation system, knowing that I could pay some premiums to ensure that I would not be put out of business by some wacky decision awarding millions and millions of dollars because of an accident.
We've got to remember one thing here: The key word is "accident." Sure there are abusers in the system. There are workers who fake injuries; I believe that. There are employers in the system who strive not to report injuries; I believe that. There are medical professionals in the industry who abuse the system, and I believe that. Fraud and abuse: big problem. Whose numbers do you want?
Diane Francis says it's half a billion a year. Brian King, when he was with the board, said it was $150 million a year. Pick a number. Pick Diane Francis's number if you want; it's half a billion. Eliminated entirely, what does it do? It takes your unfunded liability from $11.7 billion to $11.2 billion. I don't think that fixes the problem. Having said that, I think there should be zero tolerance for fraud and abuse in the system.
This government and the next government and subsequent governments should do everything they can to ensure that we eliminate as much as humanly possible the fraud and abuse that occurs at the worker level, the employer level, the practitioner level, whether lawyers are involved in it, whether advocates abuse it, whatever. We have to eliminate the fraud and abuse. I couldn't agree more.
I asked some people who are involved in the financial side of this business, "How serious is the unfunded liability?" Their answer to me was, "The serious problem with the unfunded liability is the growth rate." As Mr Arnott has pointed out, the figures bounce around all over the place. What's that old thing about liars figure and figures lie? I don't know. But it's $1 million, it's $2 million a day. Whatever it is, we know that it's on a curve that is going through the roof. We know that. It cannot go unabated. It cannot be ignored. But it should not and must not be the only issue we concern ourselves with in looking at major reform in this system.
I give the example when I go out and speak to groups about my report that workers' compensation reform is like putting a glove on in the wintertime. You've got to have all your fingers and your thumb inside the glove and it pulled up over the wrist for it to do the job, to insulate your hand. You can't do it partway. You can't pull the glove half on. You can't leave your thumb outside. You can't put it on and not make sure it's snug around the wrist. The reason I use that analogy is that that's exactly what all governments have done with workers' compensation reform.
I think we have to start at the top if we want to cut the cost, because the real answer to resolving the issue of the unfunded liability is to adopt a long-range plan -- it could be 30 years; it could be 50 years; I don't care what length of time it is -- and say that we're going to set targets and goals.
The Liberal document says we'll set an immediate goal of 50% funding. We're at 37%. We have a $6.8-billion asset fund. Think about how long it would take for that to turn into $10 billion, $20 billion. As a matter of fact, by the year 2014, extrapolating out -- we had an analysis done by our research people on this committee. They showed that by 2014, with reasonable CPI predictions, it would be something in the neighbourhood of $50 billion in that asset fund by the year 2014.
We can make the assets grow. The facts are, the investment fund of the WCB in last fiscal year returned somewhere around 12%. I stand to be corrected, but it's around that figure. The teachers' pension fund in that same time period earned 22%. Why? Obviously they were more aggressive with their investments. They perhaps involved the private sector in making investment decisions. That's a lot of money; 10% on $6.8 billion is a lot of money.
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One of our suggestions is that we split the investment fund in three and put it out to private sector money managers who are experts in this and not rely on simply having -- I realize they do some external investment, but the majority of the fund is controlled internally.
There's a standard human reaction that if you're on staff and you're responsible for certain investment decisions, you're going to be cautious. If you're not cautious and you get stung, you're probably going to lose your job. If you're an investment firm, you have many clients, and, yes, you want the best possible return, but there's a different attitude, an attitude that says: "We have a little more expertise. We live in the financial world on an ongoing basis. We can be more aggressive. We have huge sums of money to invest from numerous clients and therefore we can get a better return." I accept that and I think that's the way we should be looking at our investment fund. So we must increase the income.
The Vice-Chair: On the motion?
Mr Mahoney: Well, it is, because the attempt on this motion is to reduce benefits and the justification by the critic for the Conservative Party is that it will eliminate the unfunded liability -- or reduce it. She didn't say "eliminate." It will reduce it.
I respect the critic and the honest attempt to get at a problem but I'm suggesting there are many more comprehensive ways to reduce the unfunded liability with a realistic long-term plan. I used the rather simplistic example yesterday that I'll use again, that if you've got a $20,000 debt and the person you owe the money to says, "I'll give you 20 years to pay it," do you put $20,000 in the bank today to cover it? The answer's obviously no. So, that doesn't mean it's not a serious debt. That doesn't mean that you don't concern yourself with paying something off on it each and every year and it doesn't mean that you don't have a long-term investment strategy that says, "We're going to generate enough revenue to make sure that this long-term liability is covered." Of course you do all of that, but you look at your income on the investment side and then you look at your expenses.
People have said and accused in the debate around here in dealing with this issue and the previous motion that was put forward and subsequently withdrawn -- people, I guess for a lack of understanding of the issue -- I don't know; I don't want to be unfair -- have tried to attack our position as sitting on a fence or something. We're very, very clear, very specific in that document, that you can increase your revenue but you've also got to decrease your costs. It's no more complicated than a family household. So you've got to decrease the costs, and we make numerous recommendations.
Mr Hope made reference to the two-week self-insurance, voluntary self-insurance. You expressed concerns that someone in human resources is now going to have to make the decision. That's nonsense. The health care adviser to the worker, who could be a doctor under our model, it could be a chiropractor under our model, it could be numerous health care professions under our model, they would make the decision, they would establish, along with the employer, a program that would rehabilitate them and get them back to work as quickly as possible.
Seventy-two per cent of the claims that are filed in the workers' compensation system are finished with within two weeks. Well, if that's the case, why are we putting them into the bureaucracy, I ask? Why would we not have a system that would allow those 72%, or at least a portion, probably a major portion, to be resolved within the two weeks? Should the worker risk losing income? No.
The employers that I've met around this province have said very clearly to me, "We would rather have Revenue Canada and the Gestapo come into our establishment than to see a workers' compensation inspector." If that's the case, let's give them a chance; let's give the workers a chance to work with the employer to resolve the injury, to cure the injury, to fix the worker, to get them back to work, to establish modified work.
You're going to reduce the number of claims by a huge amount, and if you reduce the number of claims with the average costs -- and I know there's dispute over this, but my information is, the average cost is $24,000 a claim in this province; the largest number of claims in the entire country is in the Ontario workers' compensation system. If you reduce the number of claims, you're going to reduce your costs.
So just a couple of simple ideas that need a lot of work, that need to be looked at by a CEO. We need to change the structure of the board. The list goes on. We cannot continue to tinker with this system and think we're going to resolve the problem.
I have asked people in the business community, "If we reduced workers' benefits to 85%, will it solve the unfunded liability?" The answer is, "No, it will not." And the fact that other provinces have done it: God bless them. The province of Alberta reduced its unfunded liability by $300 million without reducing benefits a dime, and with a 7% increase in premiums over two years. That workers' compensation system is chaired by a doctor from Ontario, Dr John Cowell, who put in place a new culture in their workers' compensation system. They didn't cut benefits. He didn't believe in it. They didn't see 30% increases in premiums. He didn't think it was necessary. And their unfunded liability on a per capita basis was very close to ours. It has now been reduced dramatically.
Some in Alberta would argue that they've made it more difficult to get a claim through. That may or may not be true, but the fact is, they've changed the culture and they're on their way to fixing the system.
The British Columbia model -- very similar story. They put competent private sector, well-trained, actuarially sound people in charge of the system and they're turning it around. They made changes that were very dramatic.
I see, in addition to slashing benefits, the Conservative Party adding to the burden of the workers' compensation system by having them include in a future amendment, the Industrial Disease Standards Panel; the office of the employer adviser; the office of the worker adviser; the Ontario Workers' Compensation Institute, which is a story unto its own; the WCAT; and the health and safety agency, all brought under the auspices of the workers' compensation system. I find that amazing.
I totally agree with the health and safety agency being shut down and a department being established under workers' comp under the direction of a vice-president and working cooperatively with the private sector, but why you would want the workers' compensation system to totally control WCAT is beyond me -- you're going to add to the bureaucracy and the cost -- why you would want them to control the employer adviser and the worker adviser. If there are two offices in this province that are doing a terrific job, that are overburdened, that are overworked, it's those two offices.
If anything, we could help the workers' compensation system: leave the benefit level where it is, put more resources into the hands of the worker adviser and the employer adviser to try to smooth the system through to get it to an appeals tribunal that is totally, completely separate from the Workers' Compensation to get better and quicker decisions on appeals. That would save us money, and isn't that what we want to do?
I then see motions further on. My report clearly identifies the issue of the older workers receiving and additional workers receiving the $200 a month. I believe in the justice of that, but until I can find the money I can't support it. Yet we hear the Conservative caucus saying in a motion later on: "The board shall pay an additional $200 per month to a worker who is less than 65 years old and who is receiving an amount awarded for permanent partial disability...."
So they want to expand the $200 a month to all the workers and they accuse me of trying to be on the side of injured workers at the same time as being on the side of the employer. What nonsense. That's not how you reduce your unfunded liability, ladies and gentlemen. That's going to add probably in the neighbourhood of $1 billion to the unfunded liability, by staff estimates, by the year 2014.
Where are we going to find that money? On the one hand, we want to slash benefits to 85%, and the justification is the unfunded liability, without any in-depth analysis of other alternatives, and that's what we in our party have tried to do.
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Let's take a look at fairness, and I think there are enough savings within the workers' compensation system in the bureaucracy alone. I had a person come before our committee in Thunder Bay who is in the bridge repair business and gave a great analogy. He said if you want to repair a bridge, you don't start at the bottom because the foundation will crumble and the whole thing will fall on your head. You start at the top, and we have to start at the top.
This bill goes a little way towards that, but still leaves the power for a year in the hands of the political operatives, and does not expand the board, which is what needs to be done and I know the Conservatives agree with me on this idea, to become a multistakeholder board. There are more people who have a stake in the reform and the success of workers' compensation than just workers and employers. They have a stake, they have an interest, and I think we should draw on the expertise that exists in all of those organizations to improve the functioning at the board, and stop making this what it really is and that is an issue of empowerment. That's what this is all about. This is strictly power between organized labour and unorganized business.
That's why you get the rhetoric. That's what the health and safety agency has become, nothing more than a mini-Legislature, where the labour caucus on one side with a very dominant vice-chair in Mr Forder, whom I met with earlier this week; delighted to have a tour of the facility, but a very strong individual. The fact is, if you wanted somebody to run your business, Paul Forder might be a good choice because he's sure a strong-willed guy, but you've got a very dominant labour caucus, dominating over a management caucus whose religion is not health and safety. They just want to get through the day. They want to keep their businesses alive. We need to expand the culture of health and safety, encourage training, get major companies to do the training. We'll reduce the cost. If you reduce the quality of the health and safety, if you really want to attack the unfunded liability, cut down the number of accidents that occur. It seems so simple and yet it isn't.
But Bill 208, which was introduced by the Liberal government, was a bill that was designed to try to get at the health and safety issues. What's happened is the agencies become political. It's got totally, in my view, off the proper agenda. The business community has recoiled in fear because of the letters they get from the agency, and the threats they get and the deadlines that are put on them, and they're not cooperating and they're not registering. We have a mess. We have to say to business and labour: "Come on, folks. Let's sit down at the same table, cut out the nonsense and see if we can't improve the level of training that exists for a worker and a supervisor on a job site in Windsor, in Sault Ste Marie or in Ottawa."
Surely to goodness we can teach people to protect themselves better against accidents occurring. Surely to goodness there are some simple messages that we can give to people that will reduce the number of accidents, that will reduce the number of claims, that will reduce the cost of the bureaucracy at the WCB, that will reduce the burden that the business community has to pay.
In wrapping up, I just want to say that we really do need some consistency in trying to attack an issue that should not be and yet is a major partisan issue. It's my hope that if indeed there is through the transition team a group of independent business people put in charge of the WCB, and they make some changes to the fundamental way that board does business and we concentrate on delivering health and safety services to the broader public sector and the private sector, we'll have a real opportunity to do what the Conservative party says they want to do, and that is reduce the unfunded liability.
Let's not forget, however, that the board is showing a negative cash flow in addition to an unfunded liability, that the $200 a month that the Tories are moving, and I believe the government is moving in a different way but the same effect, will generate additional cash flow requirements in 1995 at the Workers' Compensation Board of $32 million; an additional unfunded liability impact of $250 million in the year 1995 and $1 billion in the year 2014.
So I just have some difficulty with saying we should reduce benefits to injured workers. Should injured workers be part of the solution? You're darn right they should. They're going to get hit with the Friedland. We're making a motion to eliminate the cap so that at least they are not murdered by inflation, but we cannot reduce benefits. It's the wrong place to look. There are so many options that have to be considered, and I would invite anyone who wants to look at serious reform to get in right up to your elbows into the WCB and look for solutions to that.
I would like as well, when the time comes, for a recorded vote on this particular motion that we'll be voting against.
Mrs Witmer: I appreciate the comments that have been made. I hope that all of Mr Mahoney's plans for dealing with the issue of reforming workers' compensation do indeed come true in his plans to reduce the unfunded liability because, if I go back and take a look at the Liberal record, I'm not terribly impressed.
Mr Mahoney: Neither am I. I'm not impressed with yours either.
Mrs Witmer: It was during the Liberal tenure of government that the unfunded liability escalated from $2.7 billion to $9.1 billion.
Mr Hope: How much was that?
Mrs Witmer: It was $2.7 billion to $9.1 billion. The Liberals, as you know, introduced a number of changes to the Workers' Compensation Act that actually accelerated the growth of the unfunded liability.
In December of 1985, they introduced Bill 81. They decided to index injured workers' benefits to inflation and this added $2 billion to the unfunded liability. In July of 1989, we had Bill 162. They changed the compensation for permanent impairment. This added $1 billion to the unfunded liability.
Then, of course, we had Bill 162. We had a statement made by the Minister of Labour, Mr Sorbara, who said, "Oh, yes, it is going to be revenue-neutral." In fact, I quote: "The overall financial impact of these reforms will be revenue-neutral. They will reallocate resources within the workers' compensation system to compensate for loss of earning ability and help focus our efforts on the priority of rehabilitation."
So that's why I hope that the solutions being offered by the Liberal Party today are much more concrete and will much more effectively deal with all of the problems at the WCB because, at the present time, neither the worker nor the employer is being responded to very well.
I'd like to say as well that we recognize that you don't just reduce the benefit level. In fact, I've been out on the road since 1991 with a PC proposal that has various components to it. We have looked at a solution. We had six points and the business community and injured workers and employees are well aware of our proposals, and what we indicated was this:
(1) We needed to put a moratorium on all new entitlement until there was a plan in place to deal with the unfunded liability because we felt that to expand coverage or benefits was irresponsible.
(2) We have consistently talked about the need to improve the management of the workers' compensation system and we have indicated that we would like to select someone from the private sector to run the WCB -- we do not support the politically appointed chair -- and we feel that would make a significant difference as far as running the WCB more like a business.
In fact, we're very supportive of what Alberta has done. In fact, I think that's a Conservative government there at the present time, because they are a jurisdiction that has been able to start lowering their workers' compensation costs and they appointed, as has been said, a businessman and a physician, Dr John Cowell. He's done a tremendous job of cutting the unfunded liability in half. He's running an operating surplus, and he's still delivering the necessary services. In fact, he says next year he's going to be able to reduce the assessments.
But it's the management area where we have long indicated there is a need for change. So that was our number 2 point.
The Vice-Chair: If I may, Ms Witmer, as we have a short lunch, maybe you could continue after lunch.
Mrs Witmer: Sure. Happy to.
The committee recessed from 1201 to 1317.
The Vice-Chair: Mrs Witmer, you had the floor.
Mrs Witmer: Before lunch, I referred to the fact that we, the PC Party, have had a six-point plan since 1991, with suggestions that would improve the level of service being provided at the WCB and also deal with the financial situation facing us as well, the unfunded liability of $11.7 billion.
I made reference before lunch to the first two points. I indicated that part of our action plan was to put a moratorium on all new entitlements, such as stress compensation, until we did have a plan in place to deal with the unfunded liability.
Our second point was to eliminate the politically appointed chair and fill that position with someone, hopefully a manager or an executive from the private sector, who could manage the system more effectively, and I made reference to the fact that this had indeed happened in Alberta, where there's been a real success story when they brought in Dr John Cowell, who has cut the unfunded liability in Alberta in half. He is now running an operating surplus and they are still able to deliver the necessary services.
Of course I also made reference to the fact that this is a Conservative government that has been able to effectively deal with the situation, and I think that's important to note. Traditionally, Conservatives are good money managers and they still are able to provide a good level of service as well.
Third, we would direct the management to cut costs. We would direct management to develop an action plan. We have certainly spoken -- I have -- to people within the WCB, many who feel very frustrated themselves with the role they are forced to play within the organization. They do see a lot of waste and they do see ways that the delivery of service could be improved and things done differently to streamline administrative procedures, so that's why I say we would direct management to cut costs.
I think if you involved the people directly who are part of the administration and asked them for help, you would get some very good advice as to how and why certain changes should be made, and I think in the end we would certainly have a system that operates much more efficiently, that would deal with claims much more quickly and also get injured workers back to work more quickly.
We also would like to take a look at those lifetime pension awards. We realize that needs to be reviewed and addressed, and that's part of the cutting of the costs.
Fourth, we believe that if you're going to have new management objectives, that will require that you control your costs and also at the same time much more effectively serve your injured workers, which as MPPs we all know at the present time isn't being done in a very satisfactory manner.
In our constituency offices, sometimes as much as 50% of our case load is devoted to WCB claimants who simply are not able to communicate, get through to the system, and feel very frustrated. So our very sympathetic staff try to help to facilitate and ensure that their claims are dealt with effectively and also in a more timely manner.
We believe there's a need for value-for-money audits and internal spending controls. I think a good example of the need for this is the fact that it really was ridiculous that the WCB was able to get away with awarding a contract to build a new $200-million office tower which it didn't need and couldn't afford without first getting government approval or at least being accountable for that decision.
Now we have learned, just a couple of weeks ago, that the new building, which supposedly was to house all of the staff of the WCB -- in fact that was the story we were given repeatedly in questions, that this was to bring them all together -- can't even accommodate those individuals. We know that at least 45 people and possibly as many as 300 staff are going to be moved to Downsview. What's going to happen now as well is, there is not only going to be the expenditure downtown at Simcoe Place for a new building but we also have another $7-million renovation taking place at Downsview. We believe there's a need to get the spending under control.
Fifth, we recognize there's a need to do a very serious review. We could enlist the help of the private sector to develop and implement more effective and less expensive ways to retrain, to rehabilitate and to respond to the needs of the injured workers so they can re-enter the workforce much more quickly. That is a very serious undertaking and that's a very serious review that needs to be done as quickly as possible, because the response time at present just is not addressing the concerns those individuals have.
Finally, we recognize there is a need for long-range planning. We need to embrace new directions in terms of our philosophy and our attitudes about workers' compensation. We all know that workers' compensation is not, and it was never intended to be, a substitute for unemployment insurance. It was intended, as we've said time and time again, to financially compensate and physically rehabilitate injured workers until they got healthy and back to work. So again, we need to take a look at, and we've always stressed, the need for a long-range plan. That's why we feel so very uncomfortable with Bill 165, because we feel it is a short-term plan trying to deal with a long-term problem.
Those have been the points we've been taking out to the public. That's certainly what our whole proposal for reform of WCB is based upon. I think it's evident from the discussion this morning that we are willing to sit down and listen to all sides. We're willing to make compromises if compromises need to be taken. We want to consult, we want to listen, we want to reach some consensus with people in this province.
However, we also recognize that part of the proposal would be to reduce the benefit level from 90% to 85%. As I indicated to you, this is being done in other provinces. I mentioned Manitoba, New Brunswick and Newfoundland, where the rates have gone down to 85%, 80% and 75% respectively. Other provinces are taking a look as well. That's not the whole goal to reform the WCB, but certainly it's part of the whole package, where we need to contain our costs and we need to be able to deliver our services more effectively to the injured workers. That's why we've put our proposal here at the present time.
I just want to take a look at the WCB. I want to do a bit of a financial comparison, and it's based on the January 12, 1994, report that was released by the Financial Executives Institute Canada, wherein they did a comparison of workers' compensation boards across Canada. They state: "Ontario is responsible for 70.25% of the accumulated $15.8-billion debt." What is significant here is the fact that although we are responsible for over 70% of the debt, our workers make up only 39% of the Canadian workforce.
Then they go on to say that Ontario, Quebec, Nova Scotia and Alberta have the highest unfunded liabilities, and of course we know that's changing now for Alberta.
They go on to say that Ontario's cumulative unfunded liability is also very substantial compared to the size of the fund. Ontario's $11.028-billion unfunded liability is equivalent to 4.4 years of revenue. This has increased significantly since 1990, when the unfunded liability was equivalent to 3.5 years of revenue. Quebec's unfunded liability is equivalent to 2.7 years of revenue.
Then they take a look at the substantial variance in benefit paid per lost-time claim. We all know that this province continues to exceed by far all other provinces. At $23,500 per lost-time claim, it is well ahead of the second and third provinces, New Brunswick at $14,900 and Nova Scotia at $14,600. I think that addresses the need to take a look at how we're managing this system.
Ontario's volume of lost-time claims has steadily declined, from a level of 208,500 in 1988 to 136,900 in 1992. However, during the same period benefits paid per lost-time claim have grown from $14,710 to $23,506. That statistic reflects not only the recession, which makes it harder for injured workers to return to work, but it's also the result of the full implementation of the Liberals' Bill 162, which introduced a dual award compensation system.
As we know, Ontario's average premium per 100 of payroll is $3.16. Maximum insurable earnings of $50,800 are the highest in the 10 provinces. We are at a point where the cost to maintain the system is higher than elsewhere. Quebec has an average premium of $2.24, and the maximum insurable earnings are $44,500.
Our administrative expense as a percentage of revenues is 14.8%. It's the fourth highest in the country. Alberta was at 19.7%; we know that's come down. Our administration costs, by the way, have been climbing, from 9.9% in 1989 to 14.8% in 1992, so we're going the wrong way. We're not managing our system the way we should. We're increasing the cost to the system.
I think it's clear that the costs of the system in this province cannot continue to be passed on simply to the employer community through ever-higher assessment rates. We really need to take a look at all other avenues for change as well. That's why, as I say, we believe there's a need to do a couple of things. One is to reduce the level of benefits, which we are proposing. Also, we need to take a look at administrative change. Obviously our long-term goal, as well as our immediate goal, needs to be focus on prevention of accidents in the workplace. This is one step in what we see as a long-term plan for reform of workers' compensation, but certainly the end needs to be to ensure that the number of accidents in the workplace decreases.
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Mr Offer: I'm happy to be able to take part in this debate on this particular section, and certainly I think the position made by the Labour critic for our party, Mr Mahoney, on this matter in his opposition was both well said and quite direct. There was one other aspect that I particulary support and that's the fact that we sit here as three parties and it's our responsibility, and one can't lay the blame for the current situation at the WCB solely at the feet of any one particular party.
I think that's a correct approach, I think it's a responsible approach and I think it's an approach that is on the right track in terms of getting this worker's compensation system under some control. Certainly I think that the work done by Mr Mahoney in the Back to the Future document has produced a framework document for the proper approach.
Ms Witmer spoke about her position, and one of the things I found quite interesting was the Progressive Conservatives' continual slamming of the other two parties' position on Bill 81. I don't think a day has gone by when --
Mrs Witmer: Bill 81?
Mr Offer: Which was the indexation. Even in your opening remarks just previous to this, you continued to attempt to remind people that the unfunded liability was a result of the introduction and passage of Bill 81 back in 1985.
One of the interesting things is that I think I might be the only member on this committee who was actually elected in 1985, and I had occasion to look at the Hansard. Now, the Labour critic for the Progressive Conservative Party, Mr Gillies at that time, spoke on this issue quite eloquently and stated, "The direction in which the minister is moving in trying to improve the situation of injured workers in this province is one we can all laud."
He goes on to state the Progressive Conservative position on Bill 81. "After due consideration" -- I'm reading from Hansard, by the way, page 2710 -- "I am very pleased to be able to inform the House our party," the Progressive Conservative Party, "will be supporting Bill 81 and we believe the time has now arrived for annual increases, however determined, to be granted the clients of the Workers' Compensation Board, not as a matter of annual legislative review but as a matter of right and as a result of automatic increases."
But that wasn't all, because there was quite a lineup of Progressive Conservatives.
Mr Hennessy: "People judge a community by how it treats its injured workers and residents. If this bill is passed, I think people will judge the members well.... I support indexing workers' compensation benefits."
Mr Shymko: "I too join my colleagues in supporting this bill."
Mr Barlow: "I will conclude my remarks by commending the minister for this step. It will certainly get my support and that of my colleagues."
Mr Gordon, another Progressive Conservative member: "I consider it a privilege to be able to rise at this time to add my voice to those of the other members of the Legislature who have spoken so eloquently about the necessity of seeing that injured workers benefit from the indexation of the moneys they receive."
Mr Wood: What did Mike Harris say then?
Mr Offer: It moves on. I don't mean to ignore the New Democratic Party. They took part in this.
The point of the matter is this: Mr Mahoney's point is well made and this proves it. The Progressive Conservative Party and Mike Harris cannot continue to perpetrate the myth that they are somehow absolved from the current situation of the workers' compensation system.
Lastly, when one takes a look at the vote on the passage of Bill 81, though not recorded, a place in which Mr Mike Harris was a member at the time, Ms Witmer, the vote was unanimous. Bill 81 passed. I make this point only to say --
Mrs Witmer: We don't object to Bill 81.
Mr Offer: You may make whatever position you may make; that is quite understandable.
Mrs Witmer: On a point of order, Mr Chair: We never have made any comment in the past three days. In fact, today was the first time I actually specifically made reference to Bill 81, and I simply was indicating how the unfunded liability had grown. However, we did not offer our opinion as to whether we were for or against that.
Mr Mahoney: A point of order.
The Vice-Chair: We're on a point.
Mr Mahoney: On her point, I don't know if we could get Instant Hansard quite this instantly, but I would be delighted to review the comments made by the critic for the Conservative Party, who I think, as Mr Offer is pointing out, was in some way trying to lay the growth in the unfunded liability at the foot of the Ontario Liberal Party, which is absolute nonsense. The point that I have made on numerous occasions, which Mr Offer has just reiterated, is that everybody involved in the compensation system over the past -- I said somewhere between 13 and 15 years -- is culpable, including the party of Michael Harris, Esq.
Mr Arnott: On a point of order, Mr Chair: It seems to me that Mr Offer indicates that perhaps he is the only member of this committee presently who was in the Legislature at that time, and he indicated that there was no recorded vote on Bill 81. On what are you basing the suggestion that it was unanimous?
Mr Offer: All I would do, Mr Arnott, in response, is direct your attention to those proceedings, and you will see that it passed unanimously.
The Vice-Chair: On this point, I think we have a difference of opinion here rather than a point of order.
Ms Murdock: But he said, "On the same point of order."
The Vice-Chair: There is no point. Mr Offer.
Mr Offer: I can't remember where I was when I was interrupted. Oh, yes, I remember where I was.
The Vice-Chair: If I may be of assistance, you were creating controversy. If you could speak to the motion, please.
Mr Offer: I won't belabour the point but just underscore the point that Mr Mahoney made and also explain that everybody in this Legislature in 1985 who spoke on Bill 81 spoke in favour of the bill, all three parties. That's the point, and only point, I wish to make. It bothers me a tad that in 1994 one political party is trying to perpetrate the myth that they did not support Bill 81; they spoke in favour. Their critic, Mr Gillies, indicated in Hansard that it was the position of his party that they shall support Bill 81. That's the only point I wanted to make.
Mrs Witmer: We don't disagree.
Mr Offer: Now you don't.
Mr Arnott: We're still on this amendment, I take it.
The Vice-Chair: We're on the PC motion put forward by Mrs Witmer on section 7.
Ms Murdock: I just wanted to make sure. I was unsure as to where we were in this committee.
Mr Arnott: I just want to indicate that I support this amendment, and I will support it when we vote on it. I listened closely to Mr Mahoney's speech this morning, and it was quite an extensive speech. It turned into really a dialogue about the whole thing that he would like to see changed in the WCB. I think a summary probably of his report to the members, I suppose, the Back to the Future report, which he was good enough to lend me a copy of, and I appreciate that --
Mr Mahoney: Give it to you.
Mr Arnott: -- give me a copy, and I still I have it, I suppose, though I can't find it.
But I had said earlier that in my opinion, in my watching of the Liberals over the last two years, every time a specific, concrete proposal is put forward by the government or by our side to address the financial problem in any aspect of government, they vote against it.
Mr Mahoney: Like the social contract; we were opposed to that.
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Mr Arnott: I asked about the Friedland formula and whether or not they would be supporting that amendment. There's a chance we may not get to that part of the bill this afternoon, I'm afraid; I don't know. Hopefully, we will. But whether or not the Liberals will support that particular amendment, I'd be interested in seeing.
He talked about his solutions as to how we should deal with the WCB problem, and I tried to summarize what he was saying. He had a lot of good ideas, really. He said we've got to adjust the management structure such that we could improve the administration of the board. I agree with that completely. We've got to eliminate fraud at the board. The estimates vary, but probably the most conservative estimate is the one that came directly from the board, Mr King, $150 million, which is an absolute scandal. That should be eliminated if we can do it.
He talked about getting a better return on the investment fund, and he compared the investment fund of the Workers' Compensation Board and the relatively poor return on investment that they received last year to the teachers' pension fund. Certainly, if we could get a better return on our investments, that would be desirable, no question.
He talked about the fundamental problem with workers' compensation; that is, cutting the number of accidents. I would add to this that the other fundamental problem is getting injured workers back to work as soon as possible, as soon as they're physically capable of doing so.
All of those things are desirable. I suspect that over the last four years the government has tried to do all of those things; I suspect that it has. I suspect that when the Liberals were in power they tried to do some of those things too. The fact remains that the unfunded liability is going up at the rate of $1 million a day in spite of probably your best efforts to do those things in principle, as well as the government's best efforts to do those things in principle.
So what do we do? We can continue to work towards those same objectives, and I would encourage any government to do that. I would think that you would agree with that, Mr Mahoney. But I suspect that it is not going to address the unfunded liability problem to the degree that it should be done.
Previous to this announcement of this bill and the announcement that the government was going to apply the Friedland formula, which of course is a reduction in the pensions of injured workers, we didn't know what the New Democrats were doing. But that's what they've said. They've said, "We've got to cut benefits, because otherwise we're not going to make a dent in the unfunded liability problem." I agree with that personally. I think our caucus agrees with that. All we're saying is that it's not making as significant a dent as needs be.
I think what the Liberal caucus is saying is that the unfunded liability problem should not be addressed. That's the only conclusion that I'm drawing based on what I've heard today, beyond what's been done. Again, I think this amendment is a direct and substantive effort to address that unfunded liability problem, which most of us accept as a problem. I think you've said that you accept that it is, but you're not prepared to do anything meaningful about it.
Mr Mahoney: I can't just leave that sitting on Hansard, because the honourable member said at the beginning that he listened carefully to the comments and then said that we don't consider the unfunded liability a problem and are not prepared to do anything about it. Nothing could be further from the truth, and I invite you, if you care to, to read the Hansard of what I said today. I absolutely, in fact, recognize the biggest problem with the unfunded liability is its growth, the fact that it's growing out of control, and believe that we have to do a number of things.
You will recall the analogy I used was the hand on the glove in the wintertime to try to keep it warm. That's all part and parcel of the plan. You can't just simply resolve the unfunded liability by slashing benefits. That's my point. That's ridiculous, and it's trying to place the blame for the unfunded liability at the feet of injured workers. I reject that categorically. It is not their fault. It is not their fault that they got injured, and it's sure as hell not their fault that the WCB has grown into one of the biggest monsters of a bureaucracy in North America.
I believe there are things you can do. You brought out some of them: increasing the investment fund is an obvious one; decreasing the bureaucracy; reducing the number of claims; reducing the cost per claim; getting workers back to work as quickly as possible. All of those things collectively, on a long-term basis, be it 20 years, 30 years, 50 years, will address that unfunded liability.
I also believe that it's patently nonsense to suggest that the unfunded liability must be funded 100% now. I've heard that statement made by members of your caucus in speeches in the Legislature, and I think that it's misleading and I think it's dead wrong. The reality is, I used again the simple analogy that if you owe $20,000 and you're given 20 years to pay it off, you do not put $20,000 in the bank today to cover the cost; you decide what you need to cover the cost in terms of income and expenses and disposable income and how you pay the debt off, and you embark on a plan to retire the debt.
For us to adopt the principles that I have heard some members of the labour movement say, that we could ignore the unfunded liability, would be equally as wrong as any statement that we should eliminate it 100% today. There has to be some common sense and some balance brought to dealing with the long-term plan of the unfunded liability.
Let me add that the reason given by the Conservative Party for fixing the unfunded liability, in what I can only assume is a bit of a sock to the injured worker community on their behalf, is supposedly to save this fund for them, because we're being so gracious. Well, that's nonsense. This is an income replacement insurance plan that is to be coupled with rehab and health care and return to work and getting back into the work force. That's what it's about. They paid the price when they gave up the right to sue. Business must remember that. If at any time the business community wants to go back to the tort system to deal with injured workers, well I suggest to you they'd be crazy and they would not want to do that.
So don't, please, put in Hansard any comment or thought that we're not concerned about the unfunded liability. We are extremely concerned about it, but we're not prepared to throw out the baby with the bathwater and say that it's up to injured workers to solve the unfunded liability. There are all kinds of things that must be done to ensure that the hand in the glove in the wintertime stays completely insulated.
Mr Ferguson: Sometimes I have to question whether or not the Conservative Party -- and I know you folks here today are the messengers of the party; this isn't directed to you personally -- is getting its marching orders from the chamber of commerce or the National Citizens' Coalition, or just who's pulling the strings.
Ms Murdock: Or the ECWC.
Mr Ferguson: It appears to me that you make a suggestion about how to reduce the unfunded liability, but the suggestion is one-sided. It appears to me that in your view the only way to address the unfunded liability is to reduce benefits or put in place some kind of moratorium from the time that one has an accident to the time that benefits would kick in. It seems to be all directed towards the workers in the workplace. I think all of us, or the majority of us sitting in this room today, would agree that perhaps the longest lasting contribution any individual could make towards the unfunded liability is quite simple: not to have workplace-related accidents. That's where it starts for most of us and that's where it ends.
I guess what concerns me about that particular approach is that when this government made attempts through organizations like the Workers' Health and Safety Centre, we just didn't see a whole lot of support coming out of the Conservative Party. In fact, many if not all of the members of the Conservative Party are on record suggesting that the Workers' Health and Safety Centre isn't doing the job it was set out to do, it's too expensive, it's a duplication of service, and the litany of complaints goes on. I would trace most of that back to some of the people who originally sat on the board, and I know there have been some problems with some folks getting along on the board. I would suggest that this perhaps is where most of those problems and criticisms directed towards the agency emanate from.
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But what we're doing here, I think, in this particular bill is solving part of the problem -- not the whole problem, but at least part of the problem. We're suggesting that here are a few steps that we think make financial sense towards the financial health of the board in both the short and the long term, and it puts in place some improvements. Of course, exercising the opposition mentality, as our party did years ago -- and, in my view, much better than some of those who are doing it today -- we recognize that you oppose everything, support nothing and that's the role you play. I recognize that for what it is.
However, I think what we have here before us today is a much more balanced approach. If we took this particular suggestion to its most logical conclusion, I'm sure that the Fraser Institute would be able to document that reducing benefits and eroding benefits much further than what's even being suggested here would in fact be a net drag on the Ontario economy.
While it's fine and well to suggest that we ought to fight this on the backs of workers, I would venture to guess that the majority of these people who receive benefits are not wealthy individuals; the majority of these people who receive these types of benefits are not individuals who are extremely well off. They are probably, not unlike a lot of Ontarians, living paycheque to paycheque, and the dollars that they receive as their insurance as a result of the accident at work go to purchase the basic necessities of life that a whole lot of other people out there spend their time producing.
So I think it's most unfortunate, but this is really a one-sided view of how to resolve what has not been a problem that's just sprung up overnight but has been a problem that's been around for a long time. Quite frankly, I not only question the political wisdom, knowing that of course this is not going to pass, suggesting such a move, I question the political wisdom of advancing this cause, but I also question the economic viability of telling those who are going to spend dollars that, "We're going to cut you back." That to me just doesn't make a whole lot of sense.
So when we look at this, I think what we have today is a balanced approach that isn't going to be a drag on the Ontario economy and that isn't, perhaps just as importantly, going to be an insult to those who are receiving workers' comp, not because they particularly want to but in a whole lot of cases because they just don't have a choice. They're not able, as a result of a workplace-related accident, to go out and do a particular job or perform the job and the duties that they were performing at one time.
Mr Arnott: I just wanted to follow up on Mr Ferguson's comments. I agree completely that we've got to try to address the fundamental problem of workers' compensation; that's reducing the actual number of accidents and encouraging injured workers as their health improves to get back to work. Clearly, that's the fundamental problem, and every effort that we can make towards that objective I think is something that's desirable.
But I want to give Mr Mahoney the last word on this. I just want to ask him one more time, is the Liberal caucus in favour of applying the Friedland formula to the pensions of injured workers? Are they in favour of that or do they intend to vote against that?
The Vice-Chair: If you choose, Mr Mahoney, you can answer.
Mr Mahoney: When we get to that amendment, we'll find out, but you should read Back to the Future. It documents it quite clearly.
The Vice-Chair: Further discussion on the motion by Mrs Witmer? Seeing none, all those in favour of the motion by Mrs Witmer on section 7?
Mr Mahoney: A recorded vote.
The Vice-Chair: All those in favour of Mrs Witmer's motion?
Ayes
Arnott, Witmer.
The Vice-Chair: All those opposed?
Nays
Duignan, Fawcett, Ferguson, Klopp, Mahoney, Murdock, Offer, Wood.
The Vice-Chair: The motion is defeated.
We now have a government motion.
Ms Murdock: I move that section 7 of the bill be amended by renumbering section 7 as subsection 7(2) and adding the following subsection:
"(1) Subsections 43(4), (5) and (6) of the act are repealed and the following substituted:
"Application of subsection (3)
"(4) In applying subsection (3) the following rules apply if the amount determined under clause (3)(b) is not zero and does not consist solely of payments described in clause (7)(b):
"1. The net average earnings in clause (3)(a) shall be adjusted by applying the indexing factor described in subsection 148(1.3), for each January 1 since the day of the injury.
"2. The amount of compensation calculated under subsection (3) shall be adjusted by,
"i. multiplying, for each January 1 since the day of the injury, by the sum of one plus the indexing factor described in subsection 148(1) expressed as a fraction, and
"ii. dividing, for each January 1 since the day of the injury, by the sum of one plus the indexing factor described in subsection 148(1.3) expressed as a fraction.
"Same
"(5) In applying subsection (3), the following rule applies if the amount determined under clause (3)(b) is zero or consists solely of payments described in clause (7)(b):
"1. The net average earnings in clause (3)(b) shall be adjusted by applying the indexing factor described in subsection 148(1.3), for each January 1 since the day of the injury.
"Same
"(6) Subsections (4) and (5) apply in both an initial determination and in a review of a determination under subsection (13).
"Indexing
"(6.1) The amount of compensation payable under this section in each year, other than a year in which an initial determination or a review of the amount of compensation under subsection (13) is made, shall be adjusted,
"(a) if subsection (4) applied in the last calculation of compensation, by applying the indexing factor described in subsection 148(1) for each January 1 since the compensation was last determined or reviewed;
"(b) if subsection (5) applied in the last calculation of compensation, by applying the indexing factor described in subsection 148(1.3) for each January 1 since the compensation was last determined or reviewed."
Mr Mahoney: You'd better explain it.
Ms Murdock: Yes, that's what I intend to do. It is complex and I understand.
If you remember, on the last day or the last few days of the public hearings, we had the Law Union of Ontario come in, we had legal clinics come in, we had the Injured Workers' Consultants group come in, and IAVGO I think was another group that came in with the same kinds of charts, to show us the calculation of what would happen with Friedland, first of all -- that was their premise -- but secondly, the effect of Friedland on FEL awards.
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When you saw the chart form that they had, upon the determination of the FEL award initially, the two-year review and then the five-year review, the effect of Friedland was almost doubled. You ended up that one was being indexed by Friedland, yet your net earnings were being compared to the marketplace out there, where full indexation was being used to determine what you might earn if you had the job that the board has deemed you to have.
I think it's probably easier to explain it this way: I, as an injured worker, would go through my rehabilitation process and not get back with my accident employer. I'd finish my rehabilitation, go through that process, and then the board would determine that I was deemed to have a job and that I would be earning X amount of dollars. The deemed earnings would be whatever the marketplace out there, which was using full indexation and so on, would be. But the net average earnings under Friedland would be Friedlanded, if you know what I mean. So you would end up that what you were comparing was your net average earnings at the time of the accident, having had Friedland imposed upon it, compared to the wages that you would earn out there in this job but which had no Friedland attached to it. So you weren't comparing two similar things.
What this is going to do -- and as I said, it is complex -- is the net average earnings will be fully indexed in order to make the comparison at the time of determining what the deemed wages would be and at the time of the two reviews that follow --
Interjection.
Ms Murdock: Okay, just a second.
Ms Murdock: Basically, what it comes down to is that the FEL awards are going to be indexed differently. They will be indexed -- basically, one part of the FEL award will be determined on market calculations.
Interjection.
Ms Murdock: Mitch can explain.
Mr Mahoney: Maybe you could start by taking us to the point in the bill where this will appear and what it's replacing and then relate it to the act so that we get some idea of the context. Because, to tell you the truth, I'm a little lost with this, and not because you didn't try.
Ms Murdock: Well, I know what it's doing. If you remember --
Mr Mahoney: Well, that's good.
Ms Murdock: Yes, because that was a concern of mine, that people who had FEL awards, it's bad enough -- I've already explained how I feel about Friedland, but I also understand how an agreement is an agreement.
Mr Mahoney: This is like casinos, though. We all hate them, but we're going to build them anyway.
Ms Murdock: But bad enough that that was going to happen, but then to have people who were under a FEL award be affected doubly -- Friedland was going to hit them basically twice. So bad enough that you had to have the one, but certainly not the other. So it has to be addressed and corrected, and we think this does it. But I think I'll have Mitch explain how it goes through.
Mr Toker: I'll do my best to try and take people through. I'm not sure I can do a better job than Ms Murdock has done. In taking people through this, I'm going to refer to section 33 of the bill. That is the section that establishes the new indexing formula. I'm also going to be referring to subsection 43(3) of the Workers' Compensation Act, of the act itself, which is entitled "Compensation for future loss of earnings," subsection (3), "Amount of compensation."
I'm going to spend a moment explaining the calculation of the future loss of earnings under subsection 43(3). You'll see there in subsection (3), clause (a) and (b), that there is a formula of sorts that is established in the legislation to determine what a future economic loss or loss-of-earnings amount shall be. The board makes this determination, and it's established later in this section, at various points in time.
Ms Murdock: It's your deeming provision.
Mr Toker: This is the provision that many have referred to as the "deeming" provision.
Mr Mahoney: Clause (b) is the deeming provision, right?
Ms Murdock: Yes.
Mr Toker: That's right. Basically, the calculation is that the amount of compensation for future loss of earnings is equal to 90% of the worker's net average earnings before the injury -- that's clause (a) -- less the net average earnings that the worker is likely to be able to earn after the injury, and that is clause (b).
Clause (a) is subject to the indexing factor, so that in Bill 165 as currently drafted, once we have established the Friedland indexing formula, that formula applies to that amount.
Mr Mahoney: Which is (a).
Mr Toker: Which is (a); (b) is not attached to any indexing formula in the act at all. It's something that the board will determine on the basis of, and Ms Murdock mentioned this, the labour market, the average industrial wage. While it's not attached to any formula in the act, we can say generally that it will reflect more or less 100% of CPI, because it's going to reflect the average industrial wage in the labour market.
Mr Mahoney: Is that because it's a subjective amount or it's an amount that is not -- for example, the net average earnings before the injury, you would know what they are.
Mr Toker: That's right.
Mr Mahoney: So you would have the pay stub that would tell you that.
Ms Murdock: Yes.
Mr Mahoney: But in (b), you wouldn't know. It would be subjective and it would be up to the board to determine.
Mr Toker: That's right, and the board has a list of considerations and factors that go into what kind of job the worker --
Ms Murdock: When he's finished with that, I'll also add to that.
Mr Toker: -- may be able to perform post-injury. Yes, to that extent it is a subjective amount. It's not an amount that you can go to point to and apply a factor to and come up with an amount.
Ms Murdock: Yes, it is arbitrary, but also, for instance, if I have been retrained to be a technician, for instance -- workers' comp has sent me off to Cambrian College in Sudbury to learn how to be an X-ray technician -- then they determine what wage you might be earning if you had the job after you've had the training. They have a list of what that salary would be. That salary list, $40,000 or whatever it might be, is not determined with any kind of indexing factor attached to it at all. At all. That's how they get that (b).
Mr Mahoney: What I'm having some trouble with is, would this not be a one-time calculation to arrive at the figure?
Ms Murdock: I wish. I mean, that's part -- well, no, I don't even wish that. Sorry. I mean, I was one of those people out there fighting against 162. But no. You have an initial determination, then you have a two-year review, and then you have a five-year review.
If you remember, one of the presenters did it far more eloquently than I ever could by stating that, you know, at the initial they determine that you're going to earn $30,000, but when you were working you were actually making $45,000. So there was a $15,000 differential, and you had a 50% PD, so you got $7,500 as your FEL award, half of it. Then two years later they do the review. Now instead of earning $11 an hour, you're earning -- and you don't have a job, mind you; this is a phantom job -- $13 an hour. So now you've been working at this phantom job for two years and you've gone up in pay by $2 an hour. So now your FEL award is reduced because you're making more money. And then in five years they review it again and you've now been working for this company for five years and you've gone up and so your FEL is reduced again. Each time it's reduced, the Friedland formula has another effect over and above the Friedland effect itself.
Mr Mahoney: There's a lot more to this amendment than that, isn't there?
Mrs Witmer: I wonder if we could stand this motion down. Are you prepared to do that?
Ms Murdock: You mean to have it explained more clearly or carefully or what?
Mrs Witmer: Well, I think I'd like to personally have the opportunity to take a further look at the implications.
Ms Murdock: I think we're at a point where that is probably -- it doesn't matter what we do. So, yes, I can agree to that.
The Vice-Chair: The committee stands recessed for five minutes.
The committee recessed from 1411 to 1422.
The Vice-Chair: To the parliamentary assistant, do we have agreement to stand this motion down?
Ms Murdock: The whole section has to be stood down and we agree to that, yes.
The Vice-Chair: We do? Okay.
Mr Klopp: Stand down for how long?
Ms Murdock: Till we get to the section where the indexing formula will be discussed.
Mr Mahoney: Is that clear? Until we get to section 33 of the bill, that's the point that we will --
Ms Murdock: Until we get to the indexing formula discussion, we will stand this down.
The Vice-Chair: Thank you very much.
Interjections.
Ms Murdock: Yes, and we'll make sure they're having one. What we have agreed to do during the recess was that the ministry staff will brief all of the staff or MPPs who wish to have a briefing on this and explain it to them in detail, between now and when we discuss it again.
The Vice-Chair: On section 8, we have a Liberal motion.
Mr Mahoney: I move that subsection 51(2) of the Worker's Compensation Act, as set out in section 8 of the bill, be amended,
(a) by adding after "physician" in the first and second lines "or other health care professional;" and
(b) by adding at the end "on a standard form developed by the board in consultation with health care professionals."
First of all, the issue of the other health care professions: My experience in this has been that when we finished our consultations and put out a report and recommended that the OMA and the chiropractors be on the board, we immediately got phone calls from the podiatrists, the psychiatrists, the psychologists, everyone you can think of, saying, "Why not us?" We were looking at the possibility of about a 30-person board if we were going to accommodate it.
I've also recently had a meeting with the health and safety nurses who are actively involved in the treatment and return to work and find that they actually make written recommendations on when a worker is ready to return to work -- usually to the physician, but also to the WCB -- and have a lot to do with returning workers to work early and quickly.
I think there are a lot of assets in the community that we have not used. Some of them did not come before the hearings that we conducted in the Liberal caucus and it was only after the report was written that they came forward. That's why I've said that our report is not cast in stone, we're prepared to look at changes and amendments within the framework of the basic document. But I think there are a lot of people out there, health care professionals, who can add a lot to the rehabilitation and the early return to work of an injured worker.
I also think that the OMA, from the document they put out, which I thought was really by and large a first-class analysis of the impact on the physicians, was an excellent piece of work. I didn't agree with everything they recommended because there is a reluctance, as you all know, of the family doctor, for example, to make a recommendation that would be, say, counter to the wishes of the injured worker.
Bearing in mind that he or she is the family doctor, think of your own situation; the doctor is going to fundamentally agree with your problem and as long as it's within reason, they don't want to be put in a position of conflict with the patient, with the injured worker whom they have probably known for many, many years, so it puts them in a difficult position to have to make that call. But the OMA has come a long way in saying that they recognize that the involvement of the medical community has got to be greater.
The experience in Alberta that I referred to earlier, where the doctor is the CEO of the board, adds an interesting dimension, because it allows him to still be sort of in the medical fraternity and talk to them, so I think they can do a lot.
Members who were in London will recall the presentation by the professor from the University of Western Ontario. His name escapes me at the moment.
Interjection: Michel Lacerte.
Mr Mahoney: Yes, Michel Lacerte. He really gave us some excellent ideas, I thought, in demedicalizing some of the information. That, of course, is part of the problem as well. I quite agree that we have to be sensitive, that we don't want to be giving out information that heretofore or otherwise might be considered of a personal nature or might be used in some way, in a future hearing, against the worker.
But the principle that we should be sharing medical information between the worker, the employer, everybody involved in making a decision on return to work, notwithstanding the concerns of privacy and everything, is a principle that somehow we have to come to grips with because if you've got a bad employer -- Mr Hope is not here, who would tell you that we have many of those; I would disagree with that, but that's a moot point -- who's going to try to fool around with the system, or is going to appeal every single aspect of the application, is going to try to put a wrench in the works, all that kind of stuff, in my view, we shouldn't be cooperating with any information, if we can determine that.
When you've got a good employer -- I would use the example of when we went to Sault Ste Marie and we toured Algoma Steel as part of our tour. I think members opposite, and the government particularly, would know, with the level of ownership being among the rank and file of that corporation, and the work that's been done -- frankly, I think they were good before, they just ran into serious market problems.
We've got an employer who understands the importance of return to work and rehab and finding alternatives to the job etc, and that's what I would class as a good employer and there are countless of those examples around.
We should be finding a way, whether it's on a standard form, as I've said here, developed by the board in consultation with these health care professionals, of sharing the information that is pertinent to the injury, that is pertinent to the efforts to return that worker to the workplace, whether it be modified work or preinjury work, to get that person back into the workplace, because the ultimate goal -- as Mr Ferguson noted earlier, we want to prevent the injury, and I totally concur with that, but once the injury has occurred, then your ultimate goal is to get it resolved as quickly as possible. You can't do that if both sides refuse to trust one another or deal with one another, or more or less put all their cards on the table. That goes both ways.
I respect the concern injured workers have about the unstated penalty that could occur in the issue of refusing consent and all of that kind of thing, but I think if we can come to a consensus where we have a standard form developed in consultation with the health care professionals and that we use as many of the health care professionals certainly as are identified by the government as being health care professionals, I think it will make the system move a lot smoother.
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Ms Murdock: This is probably one of the few sections of the bill where all three parties are in relative agreement. I don't think one group came before us -- didn't matter whether employer, worker, union, any of the social representatives or agencies that came forward -- that did not recommend strongly that it should not be limited to "physician," and even the physicians themselves agreed that it should be more expansive.
Having said that -- and this is strange, and it feels somewhat awkward -- but when you look at it, our government motion is a little more extensive than the one Mr Mahoney has raised and also the language that we're going to be using in terms of "health professional" rather than "health care professional," and the Tories use "health care practitioner" -- I know that sounds strange, but we're using the language out of the RHPA.
We'll be voting against this amendment because of the motion we're going to be bringing forward, but I don't think there's any disagreement with the fundamental reason all of us are bringing it through. It's just in terms of the presentation of the motion and the extensiveness of the motion, that's all.
Mrs Witmer: We're certainly prepared to support this motion. As has been pointed out, there were numerous health care professional groups that appeared before the committee and indicated the need to bring the act up to date and also recognized the fact that at the present time there are more than just doctors dealing with the treatment of the injured workers. The time has come to acknowledge the roles that are being played by non-physicians within the system, so we would support this, certainly.
Mr Ferguson: I think what's being proposed here by the Liberal caucus is really embodied in the government motion as well. In fact, the government motion goes a little further, because what the government motion says and what this particular motion does not say, is what kind of information should and ought to be shared.
One of those pieces of information that obviously should be shared is the ability of the worker to return to work and any health restrictions that affect the worker's ability to perform his or her duties. That's what's really required.
I think this committee heard from a number of delegations concern expressed about the amount of information that will be shared with the employer and whether or not the worker would be able to consent to it, and what the cause-and-effect relationship would be if the worker decided there was information contained within the medical documentation he or she didn't want shared with the employer -- that perhaps might be in there but might be somewhat remotely connected to the injury.
I certainly agree with Mr Mahoney's proposal. However, I think the government motion is just a little more encompassing of what is really needed to resolve some of the concerns that exist out there.
The Vice-Chair: Further discussion? Seeing no further discussion, all those in favour of Mr Mahoney's motion?
Mr Mahoney: Carried.
The Vice-Chair: Oh. Opposed? Defeated.
Ms Murdock: Mr Chair, can I just ask a question on the next one coming up? Are the next two pages identical? There's nothing on the top of the second page that indicates which one is -- it's optional, but it doesn't say from whom. They're identical? They are not identical?
Mrs Witmer: No, they're not identical.
Ms Murdock: So they're both PCs. Okay. Sorry.
The Vice-Chair: There is a slight difference in them.
Mrs Witmer: I move that subsection 51(2) of the Workers' Compensation Act, as set out in section 8 of the bill, be struck out and the following substituted:
"Report re return to work
"(2) With the consent of the worker, a health care practitioner who receives a request from the worker or the employer shall provide each of them and the board with the information described in subsection (2.1).
"Information
"(2.1) The information referred to in subsection (2.1) is any information the health care practitioner has about the ability of the worker to return to work and about any health restrictions affecting the worker's ability to perform work on his or her return.
"Health care practitioner
"(4) In this section, `health care practitioner' means a member of the college of a health profession as defined in the Regulated Health Professions Act, 1991."
Basically, what we were doing was again responding to the concerns that had been expressed about the need to expand and recognize the increased number of health professionals who were working along with the physicians in treating WCB clients. The wording that we have selected here, "health care practitioner," is the wording that is consistent with the Regulated Health Professions Act.
Mr Mahoney: I'm sorry, but I have two amendments in front of me. Are they not identical?
Ms Murdock: No. It says "physician or health care practitioner" in subsection (2) in the second one.
The Vice-Chair: In "report re return to work."
Mr Mahoney: I see. Okay. So we're dealing with the larger-print one?
The Vice-Chair: Yes. Further discussion?
Ms Murdock: Just for the record, our basic reasons are the same as what I stated for the Liberal motion.
The Vice-Chair: Thank you.
Ms Murdock: Let me continue for a few moments.
The Vice-Chair: We could have a small pause.
Ms Murdock: No, small pauses always end up being long pauses.
Actually, all of the groups that came before us made very clear the whole concept of having health care providers beyond physicians make reports. But the other thing that I think the worker community did make very clear, and the labour community as well, was that it was very, very concerned about the confidentiality requirement and, as Mr Ferguson noted earlier, exactly what kind of information was going to be disseminated.
Over and over again, the groups that came before us kept saying it was strictly the restrictions or limitations on the injury that were to be reported under this section and that it should not get into any diagnostic information and, as has been noted already by my colleague, that it shouldn't get into any other kind of medical information or previous injuries or other medical history. Although it says "about any health restrictions affecting the worker's ability to perform work on his or her return," I don't think it's clear enough in terms of what information and how confidential it should be in this PC motion.
I believe that the government motion covers it more thoroughly. As well, I believe the information on the prescribed form is also described more thoroughly in the government motion. So we will be voting against both of the PC motions in preference to our own. Thank you. I have nothing further to say.
Mr Mahoney: Mr Chair, maybe we could stand this down and go to the government motions, since Ms Witmer was called out for a moment, or do you want to send the hook out or do you want me to filibuster?
Ms Murdock: The hook is coming.
Interjection.
The Vice-Chair: Thank you for that suggestion.
All those in favour of Mrs Witmer's motion? Opposed? Defeated.
Mr Mahoney: Are you allowed to vote from the parliamentary assistant's perch?
Ms Murdock: Perch?
The Vice-Chair: Ms Witmer, is it your intention to introduce the second motion?
Mrs Witmer: No, I'll withdraw that motion.
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The Vice-Chair: On the government motion, Ms Murdock.
Ms Murdock: I move that subsections 51(2) and (3) of the Workers' Compensation Act, as set out in section 8 of the bill, be struck out and the following substituted:
"Report re return to work
"(2) Subject to subsection (3), a health professional who receives a request from a worker or the employer shall provide each of them and the board with a report containing the prescribed information.
"Conditions under which report is required
"(3) A health professional is required to provide a report in accordance with subsection (2) only if,
"(a) the worker consents; and
"(b) the prescribed requirements, if any, are satisfied.
"Payment
"(4) The board shall determine the reasonable costs of the reports provided under this section and shall pay them.
"Reports privileged
"(5) Every report under subsection (2) is deemed to be a privileged communication of the person making it, and unless it is proved that it was made maliciously, is not admissible as evidence or subject to production in any court in an action or proceeding against the person providing it.
"Definition of health professional
"(6) In this section, `health professional' means a member of the college of a health profession as defined in the Regulated Health Professions Act, 1991."
I think it has been stated fairly clearly that all of the groups that came before us, employers, labour unions and injured workers' agencies, told us that "physician" was too limiting. "Health professional" includes a large number of different types of health care providers and therefore this amendment obviously will reflect that. It's particularly important because of the return to work and the hope of early return to work and being able to get the kind of treatment that might facilitate that instead of through the medical model.
It will appear as "health professional" because of all of those presentations that were made before us. We did have some question, just for the committee's edification, in regard to the concern, "Why aren't you doing it all through the act?" I wanted to explain clearly on the record that because the other sections of the act are not open wherever "physician" appears, we can't open them. Number one, it's out of order, as we have already discovered a number of times in this committee, unless there's unanimous consent; and number two, the word "physician" is oftentimes, throughout the rest of the act, not the only word that's used to describe the medical modality, so you end up with a myriad of different terminologies.
We're going for the return-to-work provisions. We'll be dealing with this "health professional" and not limiting it to "physician" for the purposes of the section on rehabilitation and return to work, recognizing that we thank all of the presenters who made that notification and brought it to our attention.
The other thing is the "prescribed requirements," as I stated in discussing the PC motion. Some of the presenters were very concerned about what those prescribed requirements were going to be, what the report was going to be made up of, what kind of information was going to be going to the employer and then what kind of information the worker would be agreeing to being sent out, and there was a lot of worry around that. So I think that subsection (3), "prescribed requirements, if any, are satisfied," although it doesn't describe it, "a report containing the prescribed information" will deal only with the limitations of the particular injury and the limitations of the worker in doing his or her job. "Medical," of course, is being deleted for the same reason.
I know the legislative drafters are the ones who tell us predominantly how everything should appear and so on, but when I read it I looked at "reports privileged" and said, "What the heck do we need this for?" It's already covered under section 115 of the act. It's been a while since I read it, but 115 specifically names "physician, surgeon, hospital, nurse, dentist, drugless practitioner, chiropodist or optometrist." That's whom they limit confidentiality to and it's "for the use and purposes of the board only." These aren't, and it is not limited just to those groups. That's why that subsection (5) is in there, just in case any of you were thinking of asking.
And then of course the last, sub (6), is for obvious reasons.
Those are our reasons for presenting the amendment as such.
Mr Mahoney: Could someone answer, please, the issue of subsection (5), "Every report under subsection (2) is deemed to be a privileged communication of the person making it, and unless it is proved that it was made maliciously, is not admissible as evidence...." Who's going to determine that and what would the process be for that?
Ms Murdock: I presume the board would determine it if that issue was ever raised. I presume --
Mr Mahoney: Would WCAT, for example, get a crack at that in some instances?
Ms Murdock: I would say yes.
Mr Mahoney: So it could be internally in one of the appeal processes, within the board, or it could be WCAT or it could be a court?
Ms Murdock: Judicial review. I just should point out here that we took the wording directly out of section 115, except for the sections related to the specific medical practices. I'll read section 115:
"Every report made under section 51" -- of which this amendment appears -- "and every other report made or submitted to the board by a physician, surgeon, hospital, nurse, dentist, drugless practitioner, chiropodist or optometrist is for the use and purposes of the board only, is deemed to be a privileged communication of the person making or submitting the same, and unless it is proved that it was made maliciously, it is not admissible as evidence or subject to production in any court in an action or proceeding against such person."
So we took that and applied it to this section only, but also did not limit it to those other groups. That predominantly is for the use of the board but it is also going to employers in this instance and workers in this instance.
Mr Mahoney: Just so I'm perfectly clear, it refers to "is not admissible as evidence...in any court in an action or proceeding against" the person.
Ms Murdock: Unless it's --
Mr Mahoney: Yes, unless -- would "any court" include WCAT?
Ms Murdock: Well, it's not a court. It's a tribunal.
Mr Mahoney: So if the employer wanted to fight the issue right through to WCAT, it could use this information?
Ms Murdock: Well, it says "or proceeding."
Interjection.
Ms Murdock: So it's "or proceeding," and WCAT would be a proceeding. But also it is privileged communication, period.
Mr Mahoney: Interesting interpretation, and maybe it's a legal interpretation that I wouldn't be as familiar with as you, but I would read that to read that it's "not admissible as evidence or subject to production in any court in an action or proceeding" in that court against providing it. I don't see how the word "proceeding" would then encompass WCAT or other appeal procedures.
Ms Murdock: I'm going to let Sherry Cohen, our legal counsel, respond because I'm missing your point.
Mr Mahoney: I may be reading it as a layperson.
Ms Murdock: I'm missing your point and she isn't.
Mr Mahoney: Okay.
Ms Sherry Cohen: There are really two parts to this provision. The first part deems it to be a privileged communication. It's an absolute privilege, so therefore it couldn't be released in any form.
The second part of it is saying that unless it was proved that it was made with malice, with bad faith, some improper purpose, for example, then it's not admissible as evidence in an action or a proceeding against the person who has made the report. This would be a disciplinary type of proceeding; this could be an action for negligence.
So with respect to WCAT, they wouldn't be dealing with a negligence action or any disciplinary proceeding against a health care professional. Nevertheless, the report would be privileged and would not be subject to release.
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Mr Mahoney: One of the amendments we toyed with was around the issue of worker consent, of adding the words "which shall be not unreasonably withheld." We didn't ultimately do it, but I did want to talk about it. I particularly suggested that because every lawyer I've ever met in my life loves that phrase. "Not unreasonably withheld" generally leads to fees, you see.
The interpretation of that is that I think we would not want to see a situation where a worker could unreasonably just say, you know, "I'm mad and I'm not going to take it any more," withhold consent, and yet I would not want to see the other side of that coin, where the worker has a legitimate reason for withholding the consent and is penalized in some way.
I wonder if the ministry looked at that, if there's any way to somehow put in place either wording or an attitude or an idea that could compel the worker under reasonable circumstances to agree to that information being released; and I wonder if the prescribed requirements that are there in your amendment would then mean that a wording such as "not unreasonably withheld" could be inserted.
Ms Murdock: I'm going to let Mitch respond to the first part of that, but I think I would like to make just a few comments in regard to worker consent.
Employer groups, worker groups, injured worker groups, all of them came in here during the presentations, and I can't think of any one of the presentations that didn't agree with the idea that injured workers want to go back to work. They don't like being off; they don't like getting 90% of net; they don't like dealing with the Workers' Compensation Board if they can possibly avoid it. They want to go back to the job as soon as they're ready.
Probably what hasn't been said often enough during the presentations or in this part is that because this is going to be applied in the early-return-to-work portion and getting people back to work through early intervention, medical modality or otherwise, I can't think of too many workers who would refuse to release the limitations only if it was going to get them on the job a lot quicker. It would be the rare circumstance.
If their doctor was saying, "Look, you can do a job as long as you don't lift your arms above your shoulders. As long as you understand that's your limitation, you can go back and do the job.
If the accident employer has that kind of work for you to do or can accommodate the workplace for you to do it, then you can do that," I don't think there's a worker, in my knowledge of all the workers I've come to know over time, who would not agree to releasing information that was of that nature that would allow them to go back and do the job. I think that needs to be said.
In terms of the first part of your question, I will let Mitchell Toker answer, if he even remembers what the question is.
Mr Toker: I was going to ask Mr Mahoney if he could repeat the question.
Mr Mahoney: Are you serious?
Mr Toker: Well, I'll try and describe how I understand the question. You were asking whether the prescribed requirements in clause (b) could in any way talk about the consent and the conditions under which consent is reasonably or unreasonably given or withheld. If I've interpreted that question, the answer I would give is, since in clause (a) the bill establishes that one of the conditions is that the worker consents, you could not in regulation qualify that consent and that the prescribed requirements, if any, in clause (b) would deal with the types of information.
Mr Mahoney: So what you're saying is the consent is absolute and there are no conditions that could be put on the consent, such as its being withheld in an unreasonable fashion. I know that you get into subjective arguments and what's the definition of "unreasonable." There have been court cases that have been fought for years to determine that answer.
Ms Murdock: The other point of that being, given that the whole purpose of this section is to get a quick report in a short period of time in order to get the worker returned to work, there would be little or no point to taking this through an appeal process at the board to determine whether or not the worker is unreasonable.
Let's put it this way: If he says, "No, you cannot have that report," then he or she is not going to be in the fast stream on the return to work. He will go through the regular, normal procedures of how the board operates. But for those people who are working within the returnto-work program and go through that, they can get through a lot faster if their doctor or chiropractor or massage therapist tells them that they can do it with limitation.
Mr Mahoney: I agree with that, and I support certainly in principle the expansion to the term "health professional." I support that totally. I think the actual fallout and the implementing of this activity is going to take some time to see if there are some problems, but I don't know any way of doing it other than trying it, and that's not necessarily in relationship to the health professional issue. That's sort of one issue that says, "Let's use more people in the health professions." That is one issue.
The other issue is, how do we release the information? Who gets it? What do we do with it etc? I think the proof will be in the pudding, and the next time we review workers' compensation, which I'm sure is in all our futures at some point, we'll probably have to take a look at the experience that occurs from this.
Ms Murdock: Yes. I agree with you completely, Mr Mahoney. I know Mrs Witmer withdrew the second motion that she had gone through, but I'm really glad that "health professionals" is in here. Because even that provision where "physician" was mentioned, the board's interpretation of that, should it have appeared with "physician" or "health professional," would have been given some precedence. I'm glad we're just referring to "health professional," which includes physicians. With that, I close my comments.
Mrs Witmer: I have a point of order, Mr Chair: We need to set the record straight. This morning a statement was made, I think by Mr Mahoney, indicating that in other jurisdictions where there had been a reduction in the benefit level, they hadn't cut the benefit level to the survivors. Well, I can tell you in Newfoundland, they were quite heartless. I think it's a Liberal government there, I'm not sure, but they did decrease the benefit level from 90% to 80%.
The Vice-Chair: Mr Mahoney, on the point.
Mr Mahoney: I didn't say that. I don't know if people are lying awake during their lunch-hour dreaming about things I might have said, but I did not say anything of the sort. What I did say is that in the province of Alberta, when the good Dr John Cowell from Ontario took over that operation, he reduced their unfunded liability by some $300 million without reducing benefits to anybody. I was not referring to the survivor benefits issue in any way whatsoever, so I wouldn't want words put in my mouth.
The Vice-Chair: We will have a review of Hansard on that point.
Mr Mahoney: Go right ahead. There's probably a movie coming out about it.
The Vice-Chair: Is there further discussion on Ms Murdock's amendment? Seeing no further discussion, shall the motion carry? Carried.
Shall section 8, as amended, carry? Carried.
Seeing as it is 3 o'clock and the end of our scheduled allotment over the intersession, hopefully the members will come back and we will discuss Bill 165, and not which political party could best fix the system.
This committee stands adjourned to the call of the Chair.
The committee adjourned at 1500.