Ford’s WSIB: Premium cuts for employers, austerity for injured workers

By Willy Noiles

The recently announced cut in WSIB employer premium rates by almost 30 percent is a good indication that in the eyes of the Doug Ford government injured workers aren’t part of “the people” they claim to govern for.

In what was Labour Minister Laurie Scott’s first major announcement since being appointed to the portfolio in June, she stated that the WSIB’s unfunded liability (UFL) had been eliminated 10 years ahead of the legislated schedule, but that now was a good time to reduce employer premiums. According to Scott, employers had borne enough in the austerity drive needed to eliminate the UFL.

A manufactured financial crisis

This makes a good little story for a press conference, but it completely ignores the fact that, according to a WSIB-commissioned study by Prof. Harry Arthur’s, it was two major reductions in employer premiums that created a great deal of the UFL in the first place. From 1995-2001, during the last Conservative government of Mike Harris, the average premium rates were frozen and then reduced by 30 percent. As well, from 1995-2009 the WSIB’s employer rating programs (NEER, CAD-7, and MAP) resulted in an accumulative “off-balance”—an excess of premium rates over surcharges—of $2.5 billion. Arthurs noted in his report to WSIB that this was “a substantial contribution” to the UFL. In other words the UFL was a manufactured crisis.

And although there were, admittedly, three consecutive years of increases to employer premiums after the UFL crisis was created in 2009, the Kathleen Wynne Liberals cut employer premiums by another 10 percent in 2016-17 and 2017-18, the last as a kind of quid pro quo for the increase in the minimum wage to $14.

In 2009 the province’s previous Auditor General warned the government of a $11.4 billion UFL at the WSIB. The UFL is the amount WSIB would need to pay out all future claims. What the Dalton McGuinty government knew, but never mentioned, was that having no UFL was only a requirement for private insurers. WSIB, as a proverbial arm’s length agency of the provincial government, is different as it has a guaranteed steady revenue source in government-mandated employer premiums.

The Auditor General’s warning was just the cover the McGuinty government needed to make further cuts to injured workers’ benefits. So even though it was employer premium reductions that had created the whole UFL mess, it was injured workers who have had to endure the cuts needed to eliminate it.

Injured workers paying the price

Injured workers first began experiencing austerity at the WSIB as a result of legislative changes contained in Bill 99, the Workplace Safety and Insurance Act, 1997, introduced by now WSIB Chair Elizabeth Witmer during her time as Labour minister in the Harris government. Wage loss benefits were cut by 5 percent from 90 percent of net average earnings to 85 percent. The WSIB’s contribution to permanently disabled workers’ retirement pensions was halved. And cost-of-living increases for permanently and partially disabled workers were deliberately set below the rate of inflation.

After the UFL crisis was created in 2009, more cuts to injured workers’ benefits were made beginning with drug benefits, which were cut by one-third from 2010-15 (there is a more detailed analysis, using the WSIB’s own data, in IAVGO’s Bad Medicine report). In 2011 the WSIB began rigidly implementing its “Better at Work” initiative, which created bad blood between the WSIB and physicians, who rightly felt that their diagnoses were being ignored. Workers were being forced back to work before their physicians determined they were ready. This created a large body of case law at the Workplace Safety and Insurance Appeals Tribunal (WSIAT), where they were granting benefits to injured workers who were permanently cut off by WSIB for following their physicians’ advice. For workers who were unable to return to their employer, WSIB reduced the amount of time allocated for job search training through its labour market re-entry/work transition programs.

Then in 2012, the WSIB began routinely using asymptomatic pre-existing conditions as grounds to reduce or terminate workers’ loss of earnings or non-economic loss benefits. Two years later the WSIB imposed an updated policy introducing new restrictions and entitlements for reoccurrences.

The WSIB’s own statistics show that the percentage of claims in which it accepts a worker as having a permanent impairment was reduced dramatically in the first five years after the UFL crisis began, from 12.7 percent of claims in 2009 to just 5.6 percent in 2015. And the rate of the severity of the impairments was also decreased significantly from an average of 14 percent in 2011 to 9.5 percent by 2014.

Overall, compensation benefits paid out to injured workers have been cut in half. In 2010 the WSIB paid out about $4.8 billion, but by 2017, that was down to $2.3 billion.

More austerity on the backs of injured workers

Now after the pain injured workers have endured for the last eight to nine years, Scott says “workers and their families” can now have “peace of mind” that the WSIB will pay them the benefits they’re entitled to under the law. In the Legislature, under questioning by the NDP’s WSIB critic, Wayne Gates, she said the elimination of the UFL was good news and that injured workers should be happy. What she doesn’t seem to know is that, as far as the WSIB is concerned the UFL won’t be eliminated until they’re at 115 percent.

In other words, the minister has unwittingly, or wittingly, made a bad system even worse. Starting Jan. 1, 2019, not only will there be $1.45 billion less coming in in revenue, but WSIB will continue to cut costs so they can keep throwing money into the UFL bank account.

When Witmer announced the plan for the WSIB to continue cutting until they’ve reached 115 percent last winter, she said they were doing this so they’d have a “cushion” in case of an economic downturn. As for injured workers, the only “cushion” they’re going to have is a cement wall they’ll be crashing into head first.

Gates called the 30 percent reduction a “kick in the teeth for workers in this province.” It’s hard not to agree with his assessment. “Under 15 years of a Liberal government, injured workers claims were increasingly denied,” he said. “These injured workers face barriers to having their claims accepted, resulting in billions of savings for already big employers.”

Our fight continues

Injured workers are rightfully angry at the $1.45 billion gift to employers. For us, the key is to channel that anger into organizing and action. Injured worker groups from across the province have been working hard to organize around the Workers’ Comp is a Right campaign and the Real Healthcare campaign, which have raised the public and political profile of workers’ compensation issues.

Now we have an extra sense of urgency to step up these campaigns. At the end of the day our demands remain the same, regardless of how much employers are paying into the system. We are calling for legislative change on three key issues:

-To respect the medical opinions of our treating health professionals;

-To stop cutting benefits based on “pre-existing conditions” that never impacted a worker before their work injury;

-And to end the practice of “deeming” injured workers to have phantom jobs that don’t truly exist.

We’ve had success campaigning on these issues for the past year, and with this latest show of disrespect to a marginalized community of people, our resolve to win our demands only grows stronger.