New Brunswick

Injured workers will pay price for lower WorkSafeNB premiums, ombud says

New Brunswick's ombud says injured employees will pay the price for lower workers' compensation premiums.

The PC government introduced legislation Tuesday which aims to reduce premiums

Employers say premiums to WorkSafeNB are costing their businesses too much money. (Dan McGarvey/CBC)

New Brunswick's ombud says injured employees will pay the price if WorkSafeNB premiums are lowered. 

The new Progressive Conservative government introduced legislation Tuesday that could see rates start to come down by the end of January, after three years of increases in the premiums paid by employers.

Charles Murray, who as ombud has had a longtime interest in workplace fairness in New Brunswick, said those increases were needed because WorkSafeNB ran irresponsible deficits, giving employers hundreds of millions of dollars in premium rebates and setting unrealistically low rates.

"I'd say WorkSafe has become a cautionary tale about what happens when an agency of government runs irresponsible deficits year after year and then is suddenly forced to face the reality of those decisions," he told Information Morning Fredericton on Wednesday.

Murray said that in the past 20 years there has been a "very stable system in the province, where rates hovered around $2."

New Brunswickers have to recognize there's no such thing as a free lunch.-Charles Murray, ombud

But in recent years, he said, "huge" rebates on premiums were given to employers, and the fund for compensating injured workers was "drained of literally hundreds of millions of dollars."

"We took the fund from 140 per cent protection to 110 per cent protection in just a couple of years and surprise, surprise now the piper has to be paid. ... Now the money has to go back into the system."

Ombud Charles Murray warns that any reduction in the rates will mean less protection for workers and higher costs elsewhere in the government. (CBC)

Murray said trying to maintain fairness will be "extremely difficult" because of pressure on the government to lower the premiums, and a weak counter-voice from injured workers. 

Starting Jan.1, employers will pay an average of $2.92 for every $100 of payroll — a figure that's almost double what they were paying just two years earlier.

But if the PC bill passes quickly, there's a narrow legislative window that would allow WorkSafeNB to partially roll back the increase before Jan. 31.

Less protection for workers

Murray warned that any reduction in the rates will mean less protection for injured workers and a shift in costs to other taxpayer-funded programs, such as New Brunswick's health-care system.

"New Brunswickers have to recognize there's no such thing as a free lunch," he said.

"You can't decrease premiums, decrease the money going into the WorkSafe system without decreasing benefits if you're going to seek some sort of balance." 

Krista Ross, CEO of the Fredericton Chamber of Commerce, says she wants the system to be fair to workers but also affordable. (CBC News file photo)

WorkSafeNB has said that as a result of decisions by the Workers Compensation Appeal Tribunal's over the last four years, the cost of future benefit payouts is projected at $800 million, a cost that premiums must cover.

The premium was $1.11 in 2016, $1.48 in 2017 and $1.70 this year.

"We — over the past few years — have literally drained the fund of hundreds of millions of dollars rebating that to employers and now our rates are going back to where they need to be to maintain protection," Murray said.

A system that's sustainable

Krista Ross, CEO of the Fredericton Chamber of Commerce, said there's been no suggestion of taking away benefits from workers and injured workers will be protected.

Ross said she wants the system that protects workers to be fair but also affordable.

"We couldn't agree more that it needs to be fair but it needs to be fair to both sides," she said.

"The best way to protect employees is to have a system that's sustainable. Businesses have to be able to afford it." 

Ross is pleased with the move to lower the rates employers pay for workers' compensation and said there's widespread support for the change.

"What we were seeing was a potential projection of huge increase year over year and with these changes that hopefully won't be taking place."

With files from Information Morning Fredericton, Jacques Poitras