B y all indications and based on recent performance, in 2018 the WSIB will accomplish a monumental task that has been decades in the making: it will officially eliminate its unfunded liability (UFL). Eliminating this debt, which peaked over the last decade at approximately $15 billion, will come almost a decade earlier than what was required by provincial legislation in 2012. The UFL has plagued WSIB for more than three decades. In 1984, with a debt of $2.7 billion, the WSIB (then the Workers’ Compensation Board) designed a 30-year funding strategy with the objective of eliminating its UFL by 2014. To accomplish this, the WSIB introduced a rolling surcharge on all employer premium rates. The initial surcharge in the 1980s was set at 33 per cent of the overall premium, but over the years this debt tax has increased to account for up to 50 per cent of the premium rate charged to some employer rate groups (i.e., construction). Despite introducing this significant employer surcharge, the UFL steadily grew to the point in 2009 when funding levels dipped below 60 per cent of their required levels. This compelled the provincial Auditor General to make a public announcement questioning the WSIB’s ability to meet its financial obligations. The message to the province was clear: fix the debt or the province will become responsible for it. This sparked political action, with the government imposing legislation that required the WSIB to eliminate its UFL and maintain full-funding by 2027. Austerity measures were immediately launched at the WSIB to meet its new obligations. Under the direction of successive Board Chairs Steve Mahoney and Elizabeth Whitmer, in tandem with Presidents David Marshall and Tom Teahen, the admin- istration managed to successfully steer the organization to a more sound financial footing. As a result, mid-way through 2018, the WSIB is expected to eliminate its UFL for the first time in more than a generation. While the WSIB leadership deserves credit for this accomplishment, such success would not have been possible without the cooperation of employers in the province. For 34 years, Ontario employers have been carrying artificially inflated premium rates and have received regular rate increases over much of the last decade, despite steadily declining lost-time injury rates. This over-taxation allowed the WSIB to collect billions of dollars in excess revenue every year since 2010, which was ultimately used to pay off its UFL. This approach did not come without consequences. When compared to other jurisdictions employers in Ontario pay disproportionately high premium rates, which has driven up the overall costs of operating a business in the province and made it less attractive for investment. Nevertheless, the current generation of employers absorbed this burden for the betterment of the long-term business environment in the province. REMOVE THE DEBT CHARGE So, now that the legislated funding target has been reached, the time has come for the WSIB to remove the debt surcharge that Ontario employers have been paying since 1984. It is no longer necessary to over-tax employers. It is a sign of good faith that the WSIB recognizes and appreciates the role that employers in the province have played in this important endeavour. This adjustment will also demonstrate its confidence in its reformed administrative processes and ability to insulate the WSIB from accruing further debt. Removing this surcharge from the 2019 premium rates is not only essential from a fairness perspective, but also to help ensure Ontario can resume its position as an attractive destination for business operations. A UFL-free premium rate equates to $2 billion a year being returned to Ontario employers, and would place the province amongst the lowest average insurance rates in the country. Considering the eradication of the UFL, the inflated rates employers have been paying for decades, and the significant benefit that removing the surcharge will have on the province, such a reduction is indisputable. OSWCA, along with a coalition of like-minded construction associations, has been meeting regularly with the WSIB and government officials to lobby for these changes. We will continue to meet with the new government to ensure your premium rates are reflective of this significant change to the WSIB’s bottom line in 2019. OSWCA DIRECTOR OF GOVERNMENT RELATIONS AND COMMUNICATIONS’ MESSAGE WHY WSIB CONSTRUCTION RATES MUST BE CUT IN 2019 PATRICK MCMANUS, DIRECTOR OF GOVERNMENT RELATIONS AND COMMUNICATIONS 16 UNDERGROUNDER Fall 2018