The New Brunswick government says it wants to get a handle on skyrocketing workplace compensation rates that businesses say could force them to lay off workers in the coming year.
Labour Minister Donald Arseneault announced a new task force will study the operations of WorkSafeNB to figure out why rates jumped 33 per cent this year.
'It is a cause for concern and I do not want to see that happen again.' - Donald Arseneault, labour minister
He also said the auditor general has agreed to audit the organization.
Arseneault urged WorkSafe's board to come up with rates for 2018 "that reflect the fact that reports are pending" that could lead to changes.
This year's increase was too high, he said.
"It is a cause for concern and I do not want to see that happen again, because it is a burden for employers."
Rate hike drives layoffs
The Canadian Federation of Independent Business said this week that 39 per cent of its members in New Brunswick plan to lay off employees or reduce hours to cope with the increase, which took effect in January.
Fifty-five per cent of members will do the same next year if rates jump again, the group said.
In January, WorkSafe CEO Tim Petersen told a committee of MLAs he expects another "significant" spike in rates when the board sets them in September.
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WorkSafeNB operates like an insurance fund. By law, it must collect enough premiums to cover the compensation payments it pays out to workers injured on the job.
Petersen attributed the 33 per cent increase this year to new coverage that is required because of decisions by an appeal tribunal that can review WorkSafe decisions.
The agency's policy is to have enough money in its fund to cover 110 per cent of what it has to pay out.
Board will review policy
But in the wake of Arseneault's news conference, Petersen, who attended, said that board policies "are reviewed periodically and that's certainly one thing the board will be looking at."
He said WorkSafe has "a funding situation that's pretty favourable" now, and the board will be able to look at meeting Arseneault's request.
But he also said the circumstances pointing to a need for higher premiums haven't changed.
"The trends are still in an upward direction," he said. "I would say 'significant' is probably still a relevant term."
Petersen told reporters he wasn't worried about Arseneault setting a precedent of having elected politicians put pressure on the supposedly independent board to set rates.
2018 rate not affected
In fact, he suggested Arseneault's comments wouldn't affect how the board makes its decision on 2018 rates.
"What I heard the minister say is that the board should consider all options at their disposal, and that's perfectly fine," he said. "In a normal course of due diligence, the board would be considering all options at their disposal in arriving at a balanced decision.
"The minister's comments were a reinforcement of a lot of things that the board would consider in a normal course."
Arseneault said he hopes the task force will report in 2018 and denied the Liberals were trying to push the issue of premiums past the election to be held in September of next year.
Business groups happy
Business organizations applauded the government's move.
"Hopefully, the task force will be able to get to the bottom of what's been causing this change in cost to the employer," said Krista Ross, CEO of the Fredericton Chamber of Commerce.
Joel Richardson of Canadian Manufacturers and Exporters said the group was "very pleased" with the steps.
Progressive Conservative MLA Bill Oliver also applauded the move and brushed off questions about whether it was a political stalling tactic.
"It's the right approach to take at this time," he said of the task force, which will include worker and employer representatives. "They're really taken a positive approach. It's the responsible thing to do."