Ombud tells WorkSafeNB not to lower employer premiums
'Monstrous' idea that 'risks real harm' to injured workers, says Charles Murray
New Brunswick's ombud says WorkSafeNB should not be pressured into lowering employer premiums.
"It really should not be a goal of a workers compensation system to keep premiums down, per se," said Charles Murray. "It should be a goal to fully protect workers, and that should cost what it costs."
A task force is reviewing the workers compensation system after last year's 33 per cent rate hike.
Murray said that despite what business lobbyists are saying, rates are not skyrocketing.
Rates are actually much lower than they used to be, before they were subsidized by profits from WorkSafe's large reserve fund, which stands at more than $1.5 billion, he said.
"The impression you would get from the lobbying groups is that we're in some sort of crisis of exploding rates. We're not. We're in a rebound from rates which were actually far, far too low."
- WorkSafe admits it's taken a risk with employer premiums
- Employers face 15% hike in workers' compensation rates
- Climbing WorkSafeNB rates sent for task force review
In 2015, for example, New Brunswick's rate was $1.11 per $100 of payroll. By comparison, P.E.I's rate that year was $1.79, Quebec's, $1.94, Ontario's, $2.46, and Nova Scotia's $2.65.
Last month, WorkSafeNB announced the 2018 rate will be $1.70 per $100 of payroll, up from $1.48 — a 15 per cent increase.
It comes on the heels of a 33 per cent hike last year and WorkSafeNB has warned future increases are expected without legislative changes.
We have to understand WorkSafe premiums are designed to fully fund protection for workers. That's their goal. They're not a business recruitment tool.- Charles Murray, ombud
The Coalition of New Brunswick Employers has suggested the added expense could force layoffs, reduce new hires and lead to increased automation.
Murray rejected the idea that rates need to be cut in the interest of economic development.
"When you're suggesting that one of the things we should do to encourage business is to lower protection for injured workers, that's a monstrous idea in its very formulation that risks real harm to people whose lives are being destroyed by workplace injuries in some kind of mirage hope that will somehow attract business. It won't."
Murray said his office has "had concerns" about WorkSafeNB for "many years."
The Crown corporation has been operating more like an insurance company, seeking to return value to shareholders, rather than the social agency it's supposed to be, he said.
"We have to understand WorkSafe premiums are designed to fully fund protection for workers, that's their goal. They're not a business recruitment tool and raising them to their historic levels is not a business discouragement tool."
Businesses already see plenty of benefits from the workers compensation system, according to Murray.
They avoid legal costs because employees can't sue them, as well as punitive costs and damage to their reputation, and they are able to plan ahead in terms of costs, he said.
WorkSafeNB's board of directors estimates the cost to manage the workers compensation system will actually be $1.93 per $100 of payroll, which could have resulted in a 28 per cent jump.
But the board has instead revised its target of having 110 per cent of what it has to pay out in its fund to 100 per cent, and found a 16 per cent savings in administrative costs, acting president and CEO Tim Petersen has said.
In May, then-labour minister Donald Arseneault announced a new task force would look into WorkSafeNB's escalating rates. The task force is expected to file a report with recommendations before the end of the year.
The auditor general also agreed to audit the Crown corporation, Arseneault said.
With files from Information Morning Fredericton