Over the past two years, NB businesses have seen increases in minimum wage, property tax, corporate tax, HST, EI rates and land transfer tax amongst other costs. An unknown carbon tax and CPP hikes are looming in 2018 and 2019 respectively. All the while, we are seeing economic growth around 1% annually - and are actually happy to see even that minimal growth. While decreasing the province’s small business tax is helping, those benefits are being swallowed up on multiple fronts.
This was the context last fall when WorkSafeNB announced that the average rate increase for New Brunswick employers would be 33% for 2017 - coming as quite a shock to the business community. Cooperation between workers and employers have made workplaces safer, resulting in steadily decreasing premiums since 2010 - great news for several reasons, I think we’d all agree. It meant injuries were down and that employers were able to create jobs, add hours or in some cases, even just able to keep the doors open and people employed.
Increasing any expense with such a large hike is difficult to absorb for a business - just like in our homes. Imagine if your power bill or car payment increased by 33% overnight. You would likely take little comfort that your bill was still lower than it was in the 1990s or that other people in other provinces paid more- especially if those people had higher incomes and had lower expenses in other areas.
There has been little information provided about what is actually driving these costs. Are accidents increasing? In what sectors? What ages? What types of injuries? What locations? This is information employers and employees need to stay ahead of issues and give extra attention to problem areas.
I have also heard some discussion that employers have benefitted from ‘rebates’ over the past several years as rates have been falling. This is a mischaracterization - they are more accurately labelled a ‘refund’. The workers’ compensation system has been up to 137% funded in recent years - meaning employers had paid 37% more than the system required to be fully funded. This excess is then distributed amongst employers as rate decreases over a period of several years, to get down to WorkSafeNB’s goal of being 110% funded - indeed, 2017’s increase is only
33% because of these previous overpayments. It is similar to receiving a tax refund on your income tax. Should the government get to keep your refund to ensure they have enough money to cover their quickly increasing costs? Of course not. You receive a refund because you paid too much tax over the previous year. It’s the same with WorkSafeNB premiums - you can’t be ‘rebated’ your own money.
We are cognizant that WorkSafeNB’s expenses have seemed to escalate around the same time that the newly-create Workers’ Compensation Appeals Tribunal (“WCAT”) began making decisions. Centrally important to the tribunal issue is their ability to overturn and rewrite WorkSafeNB policy on any case. WorkSafeNB creates policy and determines benefits based on data, statistics and evidence and try to find the right balance of workers’ benefits and costs to the system (which is entirely employer-funded).
In other words, the WorkSafeNB board and staff are actively trying to ensure that the system is sustainable. The chair of the tribunal has specifically stated that it is not it is not within the appeals tribunal’s mandate to consider costs to the system. We can debate whether the tribunal should be concerned with sustainability of the system, but without changes to the relationship between the tribunal and WorkSafeNB policy, we can expect continued exponential cost increases putting the system in jeopardy.
To let government know how WorkSafeNB rates are having tangible effects on businesses and jobs, the chambers of commerce in Fredericton, Moncton and Saint John launched a letter-writing campaign last Monday. The effort was quickly joined from other business groups across New Brunswick. The campaign was intended to be a reminder that business, workers and government all have the same goal - to reduce injuries, to grow the economy and to create jobs. The lower WorkSafeNB rates are, the more each of these goals becomes reality.
For these reasons, we applaud the announcement late last week by Minister of Post-Secondary Education, Training and Labour Donald Arseneault that the government was intervening to: ● create an employer/employee task force to examine current financial situation, the governing legislation and the overall objectives and effectiveness of the workers’ compensation system; ● request that the Auditor General conduct a value-for-money audit of WorkSafeNB’s operations; and ● Formally request that the 2018 rates set by the board of WorkSafeNB reflect the fact that reports are pending from the task force and the auditor general.
These actions are timely and reasonable in the circumstances. Now it is important that this work begin immediately with the goal of positively impacting 2018 rates. Workers’ compensation systems work because they are mutually beneficial to employers and employees - starting with their very sustainability. This is what the business community hopes can be achieved with this announcement by Minister Arseneault. No one should be opposed to trying to shape the system so that works for everyone. By definition, a key measure of this goal is low rates. Not only does this mean fewer accidents and workers getting back on the job quicker, but employers can reinvest in their business and create more jobs - truly a win-win.
Krista Ross is CEO of the Fredericton Chamber of Commerce. With more than 950 members, the Fredericton Chamber of Commerce is one of Atlantic Canada’s largest chambers of commerce. A dynamic business organization, the Fredericton Chamber of Commerce is actively engaged in policy development that affects the competitiveness of our members and of the Canadian business environment. It’s vision is Community Prosperity Through Business.