In the 1970s, the Union of Injured Workers rallied injured workers with its four demands and its description of workers' compensation as "cheap insurance for boss". After 40 years, the Board in 2015 is proud to announce "even cheaper insurance for boss". They call it a "2015 Economic Statement" and you can find it attached to a recent News Release. It is a continuation of a 20 year pattern that began with the election of Mike Harris in 1995; it is only fitting that his Minister of Labour, Elizabeth Witmer would be at the helm of the Board for this announcement.
A BRIEF HISTORY
Injured worker efforts beginning in the early 1970s led to real improvements for injured workers over the next 10-15 years, and increasing assessments for employers. When Mike Harris' government took office in the 1990s, he promised to reduce benefits and assessments and he did so. Drastically. His government reduced assessments by 30% and benefits by 15% in a variety of ways. This disparity between the assessment and benefit cuts eventually led to a significant deterioration of the WSIB's financial position; it was masked for almost a decade by spectacular investment returns, but this windfall ended in 2007. The WSIB then had to choose between raising assessments, cutting benefits or allowing the Board's financial position to remain poor. The Board decided to raise assessments by a total of 9% between 2008 and 2014 and to cut benefits in a number of less visible ways:
- more claims denied (almost double the previous rate)
- a removal of any concern about sustainability in the return to work process
- much greater use of surveillance to deter claims
- much more stringent decision-making with respect to psychological conditions
- extreme reluctance to accept that middle-aged and even older permanently impaired workers are unemployable
- revision of policies and practices with respect to the aggravation of pre-existing conditions
- reduction of NEL awards by administrative practice
Most of the benefit cuts were achieved without any specific change in policy by administrative fiat from senior management.
THE 2015 ECONOMIC STATEMENT
The modest assessment rate increase and the significant benefit cuts have resulted in a better financial position for the Board. Here's what the Statement says:
Over the past five years, transformational changes in operations and improvements in workplace safety have resulted in a remarkable turnaround in the WSIB’s financial position. Despite some concerns about a slowing economy, there is a possibility for the WSIB to reach the legislated target of 100 per cent funding five to six years ahead of schedule. This gives rise to the opportunity to reduce employer premiums and provide much needed assistance to Ontario’s employers beginning as early as 2017. Once 100 per cent funding is reached and a prudent margin of safety is maintained, employer premiums can be reduced to a level that is well below the Canadian average and more than $2 billion can be returned annually to Ontario’s economy.
And the Statement details what the WSIB plans to do with its foreseen bounty- a reduction in premiums of 13% by 2022 and further reductions until premiums will be just over half what they are today in 2032, levels that Mike Harris could only have dreamed of.
THE UNDERLYING IDEOLOGY
What does it all add up to? Lower benefits for injured workers, lower premiums for employers and "$2 billion injected into the Ontario economy". Wait. Isn't that trickle-down theory? If you give a whole truckload of money to employers in the form of lower assessments, they're going to invest all of it in the Ontario economy, right? Maybe they will and maybe instead they'll return more money to their shareholders. Book those all-inclusive luxury cruises now.
Income inequality has many causes. Sometimes it is dressed up. This is one of those cases.