Consideration of Bill 99, An Act to secure the financial stability of the compensation system for injured workers, to promote the prevention of injury and disease in Ontario workplaces and to revise the Workers' Compensation Act and make related amendments to other Acts / Projet de loi 99, Loi assurant la stabilité financière du régime d'indemnisation des travailleurs blessés, favorisant la prévention des lésions et des maladies dans les lieux de travail en Ontario et révisant la Loi sur les accidents du travail et apportant des modifications connexes à d'autres lois.
The Chair (Mrs Brenda Elliott): Good afternoon, everyone. We'll come to order. This is the second hearing of the standing committee on resources development considering Bill 99. I'd like to welcome all of you, members of the committee and those of you here in the gallery. We are also connected to two other rooms where guests have joined us to listen in to the hearings.
For those of you who are here today for the first time and are new to the committee hearing process, I would just like to take a moment to explain to you how this works. This is a standing committee of the Legislature. As such, we are governed in this committee by the same rules that apply to the House. Guests are welcome in the galleries, and we're very pleased to see the interest in this bill. But just as in the House itself, there are no demonstrations or applause permitted at any time. I would ask your cooperation in this regard, particularly in the committee process when presenters come forward to make presentations on this bill. I think it's very important that they're able to come forward and make their presentations without interference in the best atmosphere of courtesy that we can provide to all. I do ask your cooperation in this regard.
The Chair: We have this afternoon before us seven presentations from various organizations and we'll begin with the first presentation, representatives from the Board of Trade of Metropolitan Toronto. We welcome David Brady. Would you please introduce your colleague for the record. You have 20 minutes within which to make your presentation.
A little bit about the Metro board of trade: It is the largest community board of trade/chamber of commerce in the country. The membership is comprised of many types of business entities: many self-employed businesspersons, public sector, private sector, of course small, medium and large employers. There's a huge interest as far as the board is concerned in Bill 99.
We support the government's initiatives to reform Ontario's workers' compensation system. Bill 99 recognizes the need to bring health back to an ailing system. The act over the years has been pushed and pulled by amendments, resulting in a system, in our view, that hasn't worked well, is not financially viable and does not serve workers and employers as it should, because, fundamentally, the existing system, amended over the years, by design is beyond the WCB to manage. The WCB has always been criticized by both employers and workers. The reason for that is it has a system, by law, that it is unable to manage because of the design. So Ontario does need a new act.
When the minister made the announcement in November of the new act, there were some significant focus changes. Prevention of workplace accidents has got to be number one. Following that, there has to be a significant effort to return injured workers to work, where that effort is one that comes with positive duties to cooperate in the workplace for that to happen. Lastly, if a worker is unable to return to work because of a workplace injury, compensation ought to flow.
Brief comments about the safety aspect, the front-end engine, middle section and last section in the train: The concept of an accreditation system is wonderful. It should be something that is based on a rigorous health and safety audit and it should be placed on the fact of an excellent safety record in terms of severity and frequency of accidents. If there is an accreditation, employers ought to be recognized in that effort, and that effort isn't alone. Trade unions would be part of that and obviously workers would be part of that. There ought to be a reduced role for government and this would be, I suppose, reflected in the Occupational Health and Safety Act. There ought to be some significant financial rewards which would attend the excellent health and safety record of that particular employer.
Coming to the return to work, we think the return to work is the jewel in the new bill because it addresses the ills of the existing system. I'm going to spend a little time in our 20 minutes to focus the most attention here. In our view, the existing system is not benign; it is destructive. The existing workers' compensation rehab model presents barriers to reinstatement and re-employment of injured workers and tends to make employers and workers adversaries instead of allies in getting injured people back to work.
The first is insufficient information about the injured worker's functional abilities. Right now the injured worker, the employer and the health care providers often do not communicate with each other directly, and if they do communicate indirectly, they usually operate on misinformation.
The second ill is that the medical information is often too little, too late. If there's not an early intervention in terms of someone returning to work, the longer they're out there the less chance that they will ever return to work. It does a disservice to the health of those injured workers.
The third thing is the workplace parties -- and in the definition of Bill 99 that means the employer and the worker; we'll have something to say about that in a second -- right now do not have to work together for an early and safe return to work. Workers drift and some employers allow workers to drift, and that ought to be stopped.
The fourth thing is that health care providers are often put in a position of being advocates. They ought to be knowledgeable facilitators. They ought to be the link between the injured worker and the employer, and that link has got to be healthy and vibrant to have a real potential for a return to work.
The fifth thing is that the WCB right now by statutory mandate allows the workplace parties to deflect return to work, duck the task, and takes the task on itself. When the WCB does it, then you have to ask, how is it doing? The answer is, it's doing very poorly. The existing system is well intentioned but it doesn't work because in section 53 of the existing act the WCB has a discretion, after 45 days, as to whether it's going to get involved with voc rehab or not, and only after six months is it mandatorily required to get involved. That is far too late. It is slow, unfocused. It's reactive. It has a terrible track record. It all operates at huge expense and, though well intentioned, as I mentioned earlier, in our view it doesn't work.
So what does Bill 99 do? It says to workers and employers, in section 40, "You have to cooperate with each other." That's wonderful. Cooperate: (1) No drift. Workers have to keep in contact with employers; employers have to keep in contact with workers. (2) They have to work together to identify and arrange suitable work. Who better to do that? No one better. That is joined with good information at the front end, which is functional abilities information, as a result of a filing of a claim where there is consent for that information to be provided to those workplace parties, and a duty on the health care providers to provide the information.
There are penalties that go along with the lack of cooperation and there's a quick response time in the WCB. If you don't think your opposite party's cooperating, the flag goes up, the WCB's in there, you mediate. If that doesn't work in 60 days, you're going to get a decision. That is superb. It's fast, it's proactive and will get the job done.
Section 40 is the new section, as you are aware. Section 41 is just what section 54 used to be, and that's the positive obligation to re-employ and reinstate. Now we've got two things operating together. Section 40 allows the job to get done. Section 41 identifies clearly what job it is that has to be done. Penalties go for the lack of cooperation along the way. From an employer's perspective, the penalties which would be provided under both sections 40 and 41 have in addition to them the NEER experience rating penalty that if someone is not returned to work and is therefore someone who has reserves for that claim as a cost base identified in the NEER statement, that has a dramatic effect on rebates and surcharges, and that's appropriate.
In our view, the new system is built on employer and worker rights and obligations. Where you have a right, we see that there is a responsibility. It is designed to operate quickly and it's designed to be based on objective medical information. So we applaud the return-to-work provisions, sections 40 and 41 together.
We ask a question, however. Thus far, the workplace parties have been worker and employer, and we say, who best? But that isn't the workplace party cadre. Those who are members of bargaining units and members of trade unions often, and rightfully so, work together with their bargaining agents in sorting out their rights and obligations in returning to work. Why isn't the trade union a workplace party that is recognized in the sections? And why isn't there a positive obligation on the part of the bargaining agent to act reasonably -- no more, no less -- act reasonably. Right now there's one section, subsection 47(14) that talks about seniority, and the bottom line is, this subsection does not operate to change the seniority provisions of a collective agreement. In our view, that doesn't tell us anything.
It suggests, though, that seniority might be raised as an absolute barrier for those who are not members of a particular bargaining unit to enter into that bargaining unit, where suitable work may be found. That's not to say that those bargaining unit members ought not to have any seniority rights against the foreigner outsider. What it does say, in our view, is that there has to be a balancing of interests by the bargaining agent. In other words, no doctrinaire, no absolute, no seniority as a barrier, but a reasonable approach and a balancing of interests as between members of the bargaining unit and where jobs may reside for those people who are outside and in the employ of that employer and they can do the work because they've got the functional abilities to do so. We would ask that that be considered.
We have, in our submission, given you an excerpt from the Renaud case. It comes out of the human rights Supreme Court of Canada case law and it very simply says to you that trade unions have a duty to be reasonable when it comes to accommodation. Why can't that fact and that law, which is beyond debate, be reflected in the realm of workers' compensation in Bill 99?
Last couple of points: Bill 99 does make a lot of changes in terms of compensation, and that is certainly an area of large debate and where I think the interests of many of the people in the room lie. The financial viability of the system and its health are significantly important.
In our view, the various things that have been introduced in the bill are appropriate in terms of a new benefit level. The benefit level compares favourably across Canada. It does take into account the income tax aspects of receipt of benefits under the act. The inflation formula is adjusted but it is adjusted in a way that is consistent with the adjustment of the previous government.
In terms of stress and chronic pain, one of the major things at issue here is objective fact and causality. We certainly are endorsing chronic pain and certain aspects of stress to be compensated. We think that those demarcations in the bill are appropriate.
We think that compensation ought to be based on fact and not formula, and what we mean there is the formula in Bill 99 is 85% of the net average earnings as between what the worker was earning and what the worker would be capable of earning on a re-entry to the labour force.
A last thing to say to you about claims and adjudication: It is nice to see in Bill 99 some reference to mediation, both at the board level and at the tribunal level. That ought to be a dispute resolution mechanism that is used as much as possible.
Beyond endorsing that concept and recognizing that it has limits, the thing that is of primary contention I think in this WCAT jurisdiction is subsection 117(2), and that's where the new bill says that the tribunal will be bound by board policy.
We think that's appropriate in principle, because the board has the responsibility -- it comes back to rights and responsibilities -- of managing the system. The tribunal has no such responsibility, and all of you can appreciate that if you have a management responsibility and there's an absentee manager out there that's telling you how things ought to go, it really makes the management of the system very, very difficult.
In principle it's fine, but we wonder about the practicality of the current expression "board policy." We don't really know what it means. It can mean various things: board minutes; what's contained in policy binders, which are sometimes up to date and sometimes not; what happens if there is quite a distinction in terms of the interpretation and application of a particular board policy. We think there is a lot of room for litigation there that it's not the intention of Bill 99 to stimulate. So we would suggest a definition of "board policy" in order for the workplace parties, which we hope would include trade unions, employers and workers, to better know, going in, what the jurisdiction of the tribunal is respecting "board policy."
In conclusion, we're satisfied on the facts that workers' compensation reform is absolutely necessary for the financial health of the system. We're satisfied that compensation under Bill 99 is one that does reflect the various kinds of entitlements that ought to be allowed under the act and compares favourably across Canada. The emphasis on accident prevention is superb and the return-to-work provisions are not only correct but they are fundamental to the management of the system, a system which is well designed and that really works for workers and employers.
The Chair: In point of fact, there are two minutes remaining for questions and, as agreed in the subcommittee, when the time for questioning is short, I shall keep a separate roster and it will go to one caucus only. So in this particular case, the questioning will go only to the Liberal caucus, and we'll have a separate round in other circumstances.
Mr Brady: No, I haven't. My concept is that it's perhaps one or two pages and it's for medical practitioners to either fill in the blanks or indicate, as simply as possible, what the functional abilities are, but I have not seen it.
Mr Patten: Okay, perhaps we can get a copy of that form and you might have some comment on that after the hearing. I'm running short of time. I did want to ask another question. There are many concerns, by the way, around the sharing of medical information going directly to employers and the worry that that might be, in some instances, not in the interest of the workers. So I'll just leave that one with you.
The last one: I'm pleased to see that you identify something that has been identified by the injured workers union and the council of employers for compensation, and that is the relationship between WCAT and the board. In the definition of "policy" I agree with you, it's not clear. Our worry is that the independence of WCAT could be compromised if indeed they are seen to be overridden every time by what they do. There has to be a very clear definition of the role. Some people are saying that this has in fact undercut the capacity of WCAT to really perform its duty, in all fairness to workers and even in some cases, obviously, to employers. So that's a big concern.
The minister said that she was prepared to entertain suggestions. There are a couple of suggestions that did come forward on the first day and they sound interesting. I wonder if you have any further comment on that.
Mr Brady: No, I think the lack of definition is problematic. I think the theory, as we have said, is appropriate in terms of rights and responsibilities and absentee management, but for example, the policies that might have to do with hearing loss or with mesothelioma and various kinds of occupational disease, right now, the policies are reasonably but not wonderfully well defined. I would take it that those kinds of policies, when they would go to the tribunal, ought to be honoured by the tribunal.
There are a lot of subjects that are not perhaps as clear cut. Employers are very concerned about assessment policies, because they are scarce, they are not very fulsome and they allow a very large discretion in the board. On the assessment side, if the board were to certify a policy, but the policy doesn't cover the ground, I would think the tribunal would assume jurisdiction. I think the same thing would happen on the claims side.
On the face of Bill 99, it appears that the WCAT is narrower and perhaps compromised. But when you get into board policy and what it is and what it says and how it's interpreted, and if there's a difference in the view of the interpretation, WCAT will take that jurisdiction. The present bill doesn't say that can't happen. I think a lot of latitude is still there for the tribunal, even on the existing language.
Mr David Baker: Let me introduce Nancy Kaspersma, who is an injured worker and a client of ARCH. We appear today as her legal counsel. She's taken her holiday time to come into Toronto to present to you. She'll be speaking first.
Ms Nancy Kaspersma: I have work-related injuries. Because of them, I lost my job for two and a half years. After much fighting to get my job back, my union got it back for me through negotiations of the 1995 contract. When I returned to work, it was to find a poisonous environment by my fellow co-workers and management against me because I was a disabled worker.
Every day I was harassed one way or another. Tools and parts to do my job would go missing, to be found somewhere else in the department. The one job I did was off-line. The worker on the other shift would leave the job not completed. This resulted in me having to do their work, my own work, plus making sure the job was caught up for the worker on the next shift. Because of this I ended up doing more physical work than my WCB restrictions allowed.
I endured verbal abuse and threats from my fellow co-workers on a continual basis. My team leader changed my WCB rotation to make me do the more physical job four out of five days instead of every other day as set up by my WCB case worker. When I questioned him on this, he told me he had the authority to do this and nobody could stop him. Management knew all this was happening and turned their back to me.
Because of the harassment I became very sick and had to go off work. A WCB worker told me the only stress that was covered by WCB was instant stress. The worker told me that an example of this was if I was a police person and I saw my partner get shot. Another example given to me was that if another worker had hit me, that was instant stress. In these two cases, stress of this nature is covered by the WCB act. Going through a living nightmare for six months on a continual basis was not covered by WCB because it wasn't instant stress.
The company I worked for has done a full investigation into my former harassment complaint. The employee relations worker from the company who handled my case has acknowledged that I was harassed by fellow co-workers and management. He apologized on behalf of the company for failing to provide me with a harassment-free environment.
Mr Baker: Ms Kaspersma is here because the circumstances of her case are currently in dispute before the WCAT. They rely on the current board policy of excluding compensation for mental stress. The issue is specifically addressed in section 12(4), which would exclude it permanently from compensation. I'd like to indicate that there are some considerations that I think the government should take into account when making a specific exclusion of this kind.
"Mental illness is one of the least understood and least accepted of all illnesses. It creates fear and stereotypical responses in people. Yet who are the mentally ill? Potentially they can be people who suffer from varying degrees of illness, from short-term situations that temporarily incapacitate an individual to long-term illnesses that require continuous support and attention. Psychiatric disabilities have many possible causes, sometimes physical, sometimes psychological and sometimes social. For a great many people, such illnesses are shameful and embarrassing and as a result they are very reticent to stand up for their rights or to protest when injustice has been done to them."
The Supreme Court in that case went on to strike down as a violation of equality rights a provision in a long-term-disability policy that specifically excluded mental illness. The case was Gibbs and Battlefords. It's referred to in the material we have provided to you. The case was one in which my office was involved and it came down at the end of October. Therefore it may not have been known to the legal advisers to the government when they chose to put this exclusion into the statute. I would point out, though, that the charter is the supreme law, the charter would apply the same principles, and that there will be a charter challenge to this exclusion if the government proceeds with it.
I'd like to conclude by pointing out that we're not asking you to address this strictly on a legal basis, although I hope the government will go back to its legal advisers and seek an opinion as to whether the point we are making, as to its constitutionality, is a valid one. But the reasoning behind the Supreme Court's decision I would urge on you as well.
It's not just the legal work that needs a second look, but the kind of motivation the court looked to in that case for saying: "Why single out the mentally ill? Why say that this group will not be compensated when they have the same disability, the same incapacity to work, as anyone else as a result of a work-related injury? Why are we doing that?" That's the question the court asked itself. They said, "The reason is that this group is vulnerable because the public does not understand mental illness well, because people do not assert their rights in these circumstances." That is the reason the court found in the Gibbs case that it was discriminatory to exclude protection for people with mental illnesses.
I would say to you, the courts will find precisely the same thing about this legislation if it is to proceed for third reading. We respectfully request that the government look at this decision and look at the thought and the reasoning that underlies this decision. Ask yourself whether you don't know people who have a mental illness, who could have become ill as a result of workplace stress, and ask, why single out this one disability for treatment in this way?
Mr Patten: I appreciate that information. It's helpful and useful because occupational stress is expressly excluded. The advice we've been receiving is that this surely will lead to further legal costs, legal challenges for both employees and employers in this particular case. Not only that, but someone who may obviously have a particular injury, be it mental or physical, if they are deemed to be uncooperative because they don't want to return back at a time at which they feel they're unable to, loses benefits as well. It then transfers any support system out of the realm of the board to welfare or some other kind of system. It's an area that obviously needs to be addressed.
In your experience in a legal area -- and you've said yourself that there will be a court challenge if it does not take place. Notwithstanding that, is that your view as well, that this would lead to continued litigation outside of the confines of the board?
Mr Baker: The Supreme Court of Canada said very clearly, in the context of long-term-disability insurance, which is the private equivalent of workers' compensation, that it is discriminatory. It is only going to be a higher obligation under the charter and imposed on the government than what the Supreme Court of Canada was prepared to impose on private employers and private insurers. I cannot conceive how, in light of this decision, the government could proceed.
Mr Patten: The other question I have is with the introduction of a time limit of six months. As you know, especially in terms of mental stress which would occur over accumulated periods of time or incidences that may occur, the definition of the date of injury is difficult perhaps to pin down. On the other hand, the malady may be -- and let's assume it is -- real. This makes it very difficult for that particular individual when in fact that time line may have passed and they may have lost any entitlements at all.
Mr Baker: Again, the courts have struck down limitation periods in circumstances where people, because of their mental disability, were unable to assert or to protect their rights and that limitation period would not stand up. I can't resist saying that for generations there has not been a limitation period; that has been a very significant part of workers' compensation. It's a sad day that it's threatened.
The question I guess is "discriminatory" in general, but I'd like to get your reaction to this. When it comes to the issue of mental stress or mental illness as a result of stress on the work site, what about discriminating more against women from the point of view of potential mental stress as a result of sexual harassment on the job, the fallout and the impact of that and having to endure that and as a result dealing with further difficulties? Do you see a real vulnerability there, if this is allowed to stand, for women who would be victims of sexual harassment on the job site and then would obviously deal with the fallout from that from the point of view of mental stress, and that possibly what should be a compensated item would not be? Is that a real concern?
Mr Baker: I understand the issue was raised on Monday, and certainly it would be a matter of concern. The kinds of issues that contribute to workplace stress are of general concern and need to be looked at. I would say though that it has up until now been a very high standard. I understand fewer than 10 cases have been accepted over the years, so that it's not something where we're talking about a huge number of cases, because you have to establish the social basis for the mental stress. It's not something that can be psychologically or genetically based.
None the less, in the cases where it is real -- and Ms Kaspersma's case is clearly acknowledged to be one of those situations. The employer even acknowledges that it should have done something and apologized to Ms Kaspersma for what occurred, where she brought to their attention the harassment and nothing was done and nothing was done and nothing was done. You reach the point where you're holding on to your job and the only outlet you have is that you snap, and there's no other way of looking at it. In those circumstances, clearly people should be entitled to compensation.
Mr David Christopherson (Hamilton Centre): Thank you very much for your presentation, Dave. Yesterday we heard from L.A. Liversidge and Associates, with whom you may be familiar; I'm sure a lot of other people are. He made a presentation on behalf of his company speaking in favour of Bill 99 and thought that the sun rose and set on Bill 99 -- my words.
When we talk about stress, in his presentation -- I want to raise two things with you in terms of comp and get your response. One is, and I'll read directly from their presentation, because this is their argument against including any kind of recognition for stress:
"The principal concern of employers with respect to stress claims has been with the multi-factorial cause of stress, the difficulty in assessing employment-related stressors and the inability of the medical profession to determine if employment contributed to the cause of the stress. In short, the concern has been the test for entitlement and not whether or not stress which could be definitively related to the workplace should be compensated."
Mr Baker: Those are the kinds of arguments that were raised by the employer insurer in the Gibbs case. They're saying this poses evidentiary problems, but the Supreme Court was not prepared to accept that, and I would submit that compared to the evidentiary problems in many other cases of industrial illness, and accident for that matter, the evidentiary problems are minuscule. The basic point is that these cases have been heard and it's not as if a tidal wave has passed over us all. There have been fewer than 10 cases in eight years. One would not expect that necessarily to change, and if it did change, I would submit it's because there are serious problems in the workplace for which employers should not be escaping liability.
"Bill 99 removes the board's jurisdiction to consider claims for `chronic occupational stress.' There is an inherent pitfall in the complete removal of chronic occupational stress claims from legislation which may open the doors for courtroom action against employers. It would be preferable to set out in very rigid and strict language what the entitlement criteria are, ensuring only that those very rare cases will be deemed compensable."
When I saw that, we'd picked up through the rumour mill that there were a couple of areas of concern that employers have had, and the minister has indicated she's listening to them. She's not listening to injured workers but she's listening to employers raise their concerns. When I read this and heard the comment Monday, my thought was, what they're worried about here is that complete removal, to put it in layperson's language, by completely removing it out of Bill 99, it leaves open the opportunity for courtroom action, since it hasn't been ruled outside the court's jurisdiction by being in Bill 99. Therefore what they want to do is make it absolutely airtight so that only a very few cases can get through, but ensure that no employees or employee representatives can actually take companies to court. What is your opinion of what they've said and my interpretation of what the game plan is here?
Mr Baker: If injuries are not compensable under this legislation, then the issues will return to the courts at great expense to everybody, including employers. The point they're making is they would like to have something which continues to discriminate but perhaps leaves open a slightly greater opportunity for compensation so as to foreclose those tort actions or at least to delay them until they've gone through an adjudicative procedure, and then you're left to face a whole new one from the starting point.
My submission would be that 12(1) defines the circumstances under which a disability is compensable in the legislation. If it discriminates against people on the basis of their type of disability, it will run afoul of the law. It should simply be a matter of repealing (4) and consequentially (5) of section 12. That is what the courts would require.
Mrs Margaret Marland (Mississauga South): Mr Baker, you and I have done quite successful work in the past on behalf of injured workers in this province. My first question is, I notice that you've said this is before WCAT, so is it appropriate for this case to be a focal point of the hearing today?
Mr Baker: We feel the facts speak for themselves. The legal issues and the specific facts have not been disclosed beyond what is common ground between all parties. That is, the Workers' Compensation Board has consented to the issue going to the WCAT because it is contrary to board policy; it is a case of mental stress. On that basis and subject to the limitations set out in the material, we're prepared to discuss it.
Mrs Marland: Well, I'm a little nervous because WCAT is a quasi-judicial body. As a government member, I don't feel I can discuss this particular case that you bring to us as an example because I wouldn't want to jeopardize that case on either side.
Mrs Marland: Okay. What I want to ask you is, thinking back on some of the issues and situations that we have dealt with in the past, and looking at what the subject is that's before us today in this bill, how far do you think -- you have been describing a unionized workplace. If not in this case, which I don't want to discuss, if we have a unionized workplace in a private industry or corporation or business, how far do you think government should go to control that private business, commercial entity or corporation or workplace? Do you see that the long arm of government should go in and say to the private sector, "You're not protecting your employees" in terms of any kind of harassment? I think the question from my Liberal colleagues about other forms of harassment was an important one. What do you see as the role of government in terms of controlling that private employer?
Mr Baker: I think the principles in the Gibbs case again apply. That is, if the government offers, as a substitute for tort litigation, workers' compensation legislation that is there to compensate people for injuries arising out of and in the course of their employment, as is clearly the case in many cases of mental stress, the intrusion should go no further than is necessary to compensate those people for their injuries that were caused by their employment. That's the tradeoff that went back to 1917 when workers' compensation was introduced. It's the tradeoff, if you like, that will carry forward with Bill 99 in whatever form it is ultimately passed.
The question I raise is, why this specific exclusion? Is it not discriminatory to single out the mentally ill and say, "You can't be compensated even though you qualify in every other way for workers' compensation"? What justification is there for that? I don't believe it's an intrusion into management's prerogatives.
The Chair: I now call upon representatives from the Toronto-Central Ontario Building and Construction Trades Council, I believe represented by Mr Cartwright. Welcome. Before you begin, please introduce yourselves for Hansard.
Mr John Cartwright: My name is John Cartwright. I'm the business manager of the Toronto-Central Ontario Building and Construction Trades Council. With me are Mike Grimaldi and Tracy Lowe, who work with the building trades WCB services. That's a project of ours that deals with the hundreds of injured workers in construction that we see every year. I'm going to go through the brief and read it.
Since its enactment in 1914, the mandate of the Workers' Compensation Act was to provide fair compensation for injured workers for the length of time their injury existed, in exchange for not suing their employers. The union movement has never viewed this as being an equitable tradeoff by itself. Over the years, we have tried to ensure that the broader agenda of safety and health was addressed, with compensation provided when necessary. Making health and safety part of the agenda requires that there is a balance between workers and employers in the workplace.
What we've seen in the last two years is that this government has rolled back the gains made by workers, in the name of cutting red tape and allowing for business flexibility. The effect has been to remove the requirements of employers to invest in health and safety, and it is workers who will pay the price.
The priority shift is also being carried out with the operation of the WCB itself in a "financially responsible" manner. The termination of the Workplace Health and Safety Agency, limiting funding for the Workers' Health and Safety Centre, decreased compulsory training for health and safety committees, eliminating the Occupational Disease Panel and moving to what's called self-reliance and self-compliance between employers and workers disrupts the balance and points to the fact that long-term health and safety is clearly not a priority for this government.
We have lost the opportunity to have equal representation with employers on the board that is to govern and ensure health and safety at work. The board, dominated by employers and insurance representatives, will ensure that their interests and investments are protected while ignoring the concerns of workplace hazards, which require financial commitment.
Under the present act a claim can be established for an injured worker by a doctor or employer, but under Bill 99 workers must obtain a form and initiate the claim. Currently, a claim can be started by a doctor upon a visit to any emergency room. Under Bill 99, a worker must get an application form from the employer or try to obtain one from another source. Where and how workers on construction sites in remote locations can obtain these forms is unclear.
The financial reward for reducing the number of claims has already motivated many employers, particularly in our industry, to intimidate workers into not filing a claim. The construction industry is characterized by the fact that there is no seniority protection, the industry is in constant flux and the work is unsecured as there is no protection from layoffs, and this combines to create an environment ripe for coercion. Under Bill 99, this government expects injured workers to ask their employers to file claims for compensation. Anyone who understands the construction industry knows this is a recipe for non-compliance.
Particularly in housing, where many of the workers do not have English as a first language, the intimidation factor will be severe. Faced with these barriers, many workers will not file a claim. Placing the onus on workers to approach their employers makes a mockery of the concept of coverage, and there will be unscrupulous employers who will profit even more than they do today.
There is already overwhelming evidence of employer evasion of their financial obligations, such as employers operating under numbered companies with several names; companies which open and close to escape soaring assessment costs because of poor safety practices; hiring compensation consultants to vigorously reduce their costs; and faking modified return-to-work programs only to receive rebates through the rating system. Obtaining claim forms through the employer will only exacerbate this problem.
I want to talk about one other area that's unique to our industry where major employers in this province are escaping their obligations to pay, and that is around so-called independent contractors. We have huge employers in the construction industry, some who have 300, 400, 500 people working for them, all of whom are independent contractors. As those people get hurt, particulary in the housing industry, the rating experience of the main employer is never touched and they never pay for the fact that they don't have a proper health and safety program or plan, they never pay for the true cost of compensation, because it's all set up to be claimed through so-called independent contractors. The Ontario Labour Relations Board has dealt with the issues of independent and dependent contractors and the Workers' Compensation Act should do the same.
There are tens of thousands of construction workers in this province, yet Bill 99 discriminates against this very large portion of the working population. Construction is fundamentally different from other industry sectors. The work is prone to cyclical fluctuations and requires that construction workers move with the work site. Thus, under Bill 99, when determining average earnings, construction workers will be penalized because of the variations in their employment. Getting injured while on a construction site could mean absolute poverty if the worker did not work for 52 complete weeks out of the year because of a rainy spring or economic slowdown. This is particularly true today, when we are just getting out of the worst recession since the 1930s. But the future work picture for a tradesperson is much more favourable, largely due to the low interest rates. On the one hand, workers' earnings can be reduced because they were sick for part of the year or there was a slowdown in construction. On the other hand, with the bill, if a worker has a particularly good year their earnings would be capped.
One result of Bill 99 that does not escape notice will be the downloading of compensation costs on to municipal tax rolls. Not only do workers suffer, but the community as a whole will also suffer as some of the injured workers, who will not get adequate benefits, turn to municipal social assistance programs. Others of the 103,903 workers who last year lost wages because of a workplace accident will be afraid to report that and their medical costs will be borne by OHIP. The employers' responsibility is offloaded to taxpayers while employers' profits increase.
Currently, workers are entitled to benefits which equal 90% of their net average earnings during a period of partial temporary disability. Under this proposed legislation, workers will be entitled to only 85% of their pre-accident earnings minus whatever the board deems them to be capable of earning after their injury. Essentially, what this piece of legislation is doing is reducing compensation benefits to far below 85% of their net average earnings.
With respect to return-to-work plans, Bill 99 is unclear as to what criteria will be used to determine adequate return-to-work plans in our industry. As you are probably not aware, construction is physically demanding and strenuous work. If this legislation applied to construction there would be few jobs available on a site that could accommodate repetitive strain or back injury. In construction, a return-to-work plan means counting tiles in a tool shed. Construction workers have once again been discriminated against with this piece of legislation.
Construction workers perform a unique job by using their bodies as the main tool of their trade. The board recognized this and created a special unit to deal solely with construction adjudication and vocational rehabilitation issues. We were part of training decision-makers at the board about the nature of construction. We strongly oppose the outsourcing of labour market re-entry plans to agencies outside the board.
Under Bill 99, if a worker disagrees with the board's plan for their medical rehabilitation or labour market re-entry plan, they may be deemed as being uncooperative and their benefits terminated. Worker rights are limited by the fact that they are forced into cooperating with whatever decision their employer and the board determine is appropriate to return to their work.
Worker rights are further limited with constraints to WCAT appeals. We strongly condemn making WCAT a subservient arm of the Workplace Safety and Insurance Board instead of having its decisions rendered on the basis of law.
In summary, we reject the entire direction of Bill 99 and the government-related actions that erode workers' rights in this field. If the only issue driving this agenda were fiscal responsibility, the bad debts of $173 million that employers owed from 1994 would be collected and the employer rebates, that had exceeded $359 million for one year, would be terminated. More important, the process of education and empowerment of workers that was developed through the bipartite Workplace Health and Safety Agency would be strengthened rather than eroded. The proven record of reduction of accidents and health hazards translates directly to the total cost of compensating victims. There have been, until recently, fewer victims.
But the government has turned its back on that approach and is intent on depriving workers of both their right to a healthy workplace and adequate compensation in the event of sickness or accident. It may be able, in a few years, to point to better statistics as employers exercise their power to ensure that fewer lost-time injuries are reported. But the real impact will not be hidden for those of us in the workplace, as the increase in construction deaths last year will attest. Employers can hide lost-time injuries; they can't hide it when somebody is killed. We'll tell you right now that the reduction in the last period of time is due to employer coercion of people not reporting injuries, and it will get far worse under Bill 99.
Clearly, to us the reform processes in Bill 99 are solely about reducing the costs of dealing with the real victims of workplace accidents and the workplace process in Ontario. This is unacceptable in the face of the human suffering that far too many of our members experience. Thank you for listening to our presentation.
Ms Shelley Martel (Sudbury East): Thank you for appearing today. I want to ask you to reinforce, if you can, some of your concerns around coercion of employees. I'm not sure how many members you represent. I suspect a lot of them would be in remote areas. I don't know where they're going to get a form; I don't know how many of them would be well aware of their rights. Please talk to the committee again about why you're so concerned that if a worker has to initiate his claim, he's not going to because he's going to be too worried about being intimidated.
Mr Cartwright: I think that's a really important element of what we're here for. People need to understand that in construction there is no such thing as seniority. A job site comes, it's built and it's finished, and people are expected to go on to the next job, but they don't necessarily go on to the next job. The ability of an employer to say, "Gee, you are a good tradesperson but I don't have work for you tomorrow; you're gone, and here's your slip," is an everyday reality of our existence.
Even during the boom time, we had employers right here in the city of Toronto, major employers, who were telling employees, "If you want to have a good long-term relationship with this company -- you've been hurt and you'll be off for a week, but we'll keep you on the payroll and you do not claim with the Workers' Compensation Board." That's during the boom times. People did that because they were afraid of being laid off. In the recession in the last number of years, people have been terrified.
When it is strictly up to the employer to have the process vetted through them, more and more workers will not put in any claim. And that's when workers are unionized. In certain parts of construction, the housing sector particularly, a significant number of non-union workers have no rights, no specialists like Tracy or Mike to back them up when they've had obvious injustices done to them. Those people will keep their mouths shut. But the injuries will be there and the injuries will continue to bother those people, and then some years down the road, when they're not able to make a living, they'll be on social assistance, with the taxpayer paying, not the employer.
Mr Ted Arnott (Wellington): Thank you very much for your presentation. I certainly appreciated hearing your views. At the start of your presentation, on the first page, you were critical of some of the steps the government has taken recently with regard to health and safety issues. I wanted to ask you if you're aware that the government has hired 20 new health and safety inspectors in the last year and intends to hire an additional 26 this fall.
Mr Arnott: I'm not quite finished. There is quite a list here of additional things that have been done. The Ministry of Labour performed 39% more health and safety inspections of workplaces than were done in 1994-95; and over the same time period increased field visits, which include both inspections and consultations, by 21%; and 31% more orders were issued to correct health and safety violations. The Ministry of Labour issued more than 22,000 orders between January 1, 1997, and May 31, 1997. The government played a pivotal role in the creation of the Safe Communities Foundation, a community-driven initiative to create safe and healthy workplaces in communities. The government committed $415,000 to the youth awareness program, which educates students about occupational health and safety prior to their entering the workplace. And of course the government has begun a comprehensive review of the Occupational Health and Safety Act to ensure it meets the needs of modern workplaces.
Mr Cartwright: No, quite the contrary. Most of those things, if you actually understand the workplace, are essentially smoke and mirrors. Hiring more inspectors has been done at the demand of the union movement, but they've taken away the ability of those inspectors to actually enforce the act by removing the laboratories, by removing the legal backup for those inspectors. We know quite a number of inspectors ourselves, and they are telling us that they've basically had their hands tied behind their backs.
We noticed a massive shift as soon as the government changed. Employers who at that point in time were cooperating with us in developing health and safety programs on the job site suddenly turned to us and said, "We don't have to deal with you any more, because it's our government in place, and we don't think we have to meet any more than every three months on a site." There has been a clear signal to the employer community that they no longer have to work truly as partners. They can now work as paternalistic employers, that if they like something, they'll agree with it, and if they don't like something, it won't happen.
We're robbing ourselves of the skills the actual people in the workplace have to apply to health and safety, because the workers are not being brought into the process in a way that their skills can actually have an impact any more. It's totally at the whim of the employer. As I've said before, unfortunately in our industry we have many employers who are more interested in reducing their compensation costs than they are in actually spending money towards dealing with the health and safety agenda, in putting the time into having proper committees onsite, in allowing the joint health and safety representatives the training that's necessary and then using that skill, not in a consultative process but in a decision-making process, to ensure the workplace is safer.
That's what we saw happening over the last five or six years beforehand. Employers had come to understand that they had to work with our skilled tradespeople and use the benefit of our knowledge, and workplaces were getting safer. We're seeing now that all that is off and it's back to a very paternalistic point of view, that the employer will decide everything.
Mr Agostino: Thank you, Mr Cartwright. I appreciate the unique perspective you've brought on the impact this has on construction workers, particularly the aspect of intimidation in the housing industry, where there often isn't the sort of protection you would have in other trades, particularly that people don't speak English as a first language. I have many constituents who are in construction and whose first language is Italian or Portuguese. We already see the horror stories under the current legislation. The real concern you outlined here is that it's going to be even greater, not only the intimidation factor, because you now have to go through a process of going through the employer to file a claim, but also the language barrier.
What do you see as the result and the fallout from this? The option of some of these folks is going to be, "Either you lose your job or you keep working with an injury, or you cut some other kind of deal that's going to be detrimental to you." What do you see as the fallout for these folks? What can we expect down the line if these types of scenarios unravel as you and we believe they will?
Mr Cartwright: What we see essentially is that the concept of a universal program of compensation for people who are injured or who suffer illness on the job is going to be taken apart and replaced with a program that will apply in some cases, where a union is strong enough or a particular group of workers has some strength, and will not apply in more and more workplaces in this province.
As I said, we'll see injuries and illnesses that will continue to be with somebody through the rest of their lives and will not be adequately dealt with, so at some point in time we'll have more and more people who are going to be thrown on the scrap heap of this society.
Mr Patten: I want to ask you about your concern -- and I've heard this representation made before -- about the cyclical nature of income for a number of workers, that if they get injured and happen to have had a bad previous several months, they could be jeopardized in terms of compensation. Do you have a specific proposal on that in terms of averaging over a greater length of time or something of that nature?
Mr Harry Hynd: Good afternoon. We have an introduction we want to make to the committee, and we have a brief we brought copies of that we hope the committee members will take time to read. It's very important to the Steelworkers and the people we represent.
It has often been said, by many knowledgeable people, that we as Ontarians could be proud of our achievements in the field of workers' compensation. Designed originally by Chief Justice Sir William Meredith here in Ontario, workers' compensation was held up at one time as an example of comprehensive coverage and progressive achievement.
The Workmen's Compensation Act of 1914 grew organically out of the very conditions of work which existed in Ontario from the mid-19th century to the First World War. Simply put, workplaces became sufficiently mechanized, used enough toxins and operated at speeds that were killing, injuring, maiming and poisoning large numbers of workers. Something had to be done. The solution, and it was a creative one, by Tory-connected Meredith was the Workmen's Compensation Act. The legislation was remarkably forward-looking.
In 1914, Ontario workers were being injured and killed at a rate that alarmed even employers. Testimony from the Royal Commission on Relations between Capital and Labour in the 19th century documented the carnage. Details about what was happening to children and, to a lesser extent, women prompted stiffer legislation and the first series of workplace inspectors.
It is important to note that a high proportion of workplace injuries were catastrophic and the design of the compensation system reflected that. When arms and hands were amputated at work or when bones were crushed on the job, in most cases employers refused to be accountable and avoided their responsibility. Knowledge about the impact of occupational disease was very rudimentary, though it is clear in the historical record that there were many new illnesses and diseases that grew out of exposure in the workplace.
The principles of the Meredith decision have stood through decades of Conservative rule in this province. These compensation principles survived two world wars, during which the war economy exacted a staggering toll on Ontario's workers in the factories, fields and mines that supplied the resources necessary to the war. To illustrate how the planned changes to the compensation act are a return to what workers in our mines, mills and factories used to endure, we have collected a few stories which we will read to you today.
The purpose of our once-respected compensation system was to protect the income of women and men whose lives were damaged. In far too many cases, their lives were ended by their work in brutal and horrible ways. This objective of protection meant that those who were responsible for employment and work methods were also financially responsible for the damage caused. This, it was thought, would motivate those responsible to try and prevent the damage.
Instead, the workers' compensation system puts profits, production and productivity ahead of health and safety. We, as Steelworkers, have for many years learned these lessons through the hundreds of widows in northern Ontario mining towns. For years their lives were shaped by a total failure of the compensation system. However, through the work of the Occupational Disease Panel there was hope for the survivors to have their claims recognized. Bill 99 eliminates the independent Occupational Disease Panel and in turn eliminates the hope for widows or the diseased workers.
In our written submission we touch briefly on a few key areas which we identify as priorities in the struggle against proposed changes to compensation as outlined in Bill 99. We discuss occupational disease, accommodation/return to work and the end of vocational rehabilitation, privatization of services, the narrow time window for appeals, and the changed confidentiality obligation for employers. This does not mean that other areas of the proposed legislation do not concern and anger us.
We will use strong language, the words of those who have been affected, because there is no longer any purpose in being polite in these matters. We are concerned about the uncompensated victims. They stand as grim warning of what can happen when government approaches compensation with a bottom-line attitude.
We had hoped to get away from that attitude, but Bill 99 shows us it will become a strong reality. The central theme of our presentation is one continuing message, simple and to the point: If those who benefit and profit most from the work being performed by workers do not pay the costs of the injury and the illnesses inflicted on those workers, it will diminish their reason for doing something to prevent the damage. Only when we treat injured and ill workers as human beings can we address that objective. Painting them as malingerers, frauds and cheats does nothing more than to insult those who have already suffered more than was needed.
However indignant we may sound, this is not just about morality but about prevention as well. What we had hoped was that the compensation system would move forward to prevent hardship for workers instead of falling backwards, as Bill 99 does.
We do not wish to return to the abominable and inhuman conditions of the past. We believe the proposed legislation takes us back in time to the last decades of the last century when injured workers were simply discarded cogs in the industrial machine.
Bill 99 does not propose improvement or innovation but rather a return to something dreadful. We do not oppose innovation or improvement, but there are lessons to be learned from history. The proposed legislation ignores such lessons. Every other previous government, including more than half a century of Conservative rule since the creation of compensation law in 1915, has been informed by past experience and previous policy. Ironically, this current government has forgotten that many features of the system were originally set by Tory governments.
We have letters with us from the Archives of Ontario written by widows and injured workers. We think these letters are important for you to hear, because when we read a letter from the 1920s or the 1930s, after Bill 99 becomes law you can just change the date of each of these letters to read "1997."
Ms Nancy Hutchison: I've brought copies of the letters from the archives in the handwritten notes of the injured workers and widows. We've reproduced the letters in the brief but left out the names of the victims and the widows and some of the doctors. I think you should pay very strong attention to the dates of these letters and reflect what the people are saying to you in these letters and how Bill 99 will make history repeat itself.
"I am writing you to know if you can do something in my favour. On September 14, 1928, while working for the Dominion Bridge Co at Frood Mine, I was injured when a piece of iron weighing about two tons fell on me. I was taken to the Copper Cliff hospital where they took an x-ray. I then asked the doctor if any bones were broken. He said no and that I would be all right. Although I knew I was badly hurt I thought he was telling me the truth. I stayed there five days. I asked the same doctor if I could go home. He said I could. Some weeks later I was transferred to Doctor H.G.H. It was about November 11, 1928, that he found my hip-bone was broken. He told me it too late, he could not do anything. He then looked after me. I lost about six months' work and went back to work with a very sore hip.
"I was never able to do the same work and cannot do it yet as my hip is yet very sore. If I am not careful with it or even in a cold spell it gets very sore, but I have to put up with it and I have to work to support my family. It's not my wish to lose any time either if I can't help it. Last fall my hip got so bad I had to stay home. I went to Doctor H. and he told me to see the company's doctor in Sudbury. He did not like to start on me again unless he was again advised by the board so I stayed home thinking it would get better. After three weeks I went back to my work and my foreman, P.C., advised me not to work before they fixed my hip. He sent me to doctor J. in Sudbury. This doctor examined me and told me that I would get a letter from the board that they would tell me what to do. I came home and waited for a letter which never came.
"During that time I wrote two letters to my foreman telling him I had received no news from the board and wanted to work. I got no answer from him. I got tired waiting and wrote to the board myself. By the time I got their answer and wrote back it was about January 22, 1930. When they got me in Toronto where they examined me, a few days after I received a cheque of $16.33 for the time I was in Toronto and a letter telling me that any further action would not be warranted.
"I lost a lot of time and money but the board doctors will say they can't see the sore in my hip. It seems to me that they can. My left arm has remained 3/4 inches smaller. I have told them the facts and have did the best I could to get what is coming to me. I am in Ontario since the age of 10 and I am now 36 so I think I have rights to the laws of the province. I am well known here and many people know about my case and know that I did not get what is coming to me. I am sorry to trouble you. Thanking you and trusting you will answer.
I want you to remember when I read these that these are the way they were written by the workers. The grammar, the spelling, everything is the way we saw it in the archives. I've quoted the archive numbers at the bottom of each letter so you can go back and check if you feel you must, and we recommend that you do.
"In regard to his case would say it is a case where we have had him in Toronto for examination twice and the last time he was down in January of this year we had him x-rayed by Dr G.E.R. and had an examination by Dr G., and in his opinion there was very little disability, if any, and he considered he should be back at work; that he had a fracture of the ilium but the fracture was solidly united and there was nothing present to account for his symptoms of pain.
"I worked underground at the Garson Mine for 21 years, from 1910 until 1931, and in that year was discharged from service of the International Nickel Co without any seemingly justifiable cause. Two years later I was offered a job at the Falconbridge Nickel Mines but was turned down by Dr M., the government doctor and examiner, for pulmonary tuberculosis. In 1934 I was again fortunate enough to strike a job at the McMillan Gold Mines but again had the misfortune to be turned down by Dr M. Since then I have given up hope of getting a job underground again.
"I understand the compensation board makes allowances for cases such as mine. I asked Dr M. why I couldn't get compensation if my lungs were no good for underground work and he gave me to understand that my case wasn't bad enough for compensation. If it's bad enough to keep me from the only kind of work that I know, I can't understand why I am unable to collect some compensation. I would appreciate if your department would look into the matter as I have not worked to any extent since 1931, have lost most of the property I once owned and still have a family to support."
"On the 30th of August, 1927, I had the misfortune to lose the sight of my right eye in an accident while employed by the Page Hersey Tubes Company, Welland, Ontario. The injury kept me from working for close on 12 months, during which I received $16 per week and hospital treatment from the Workmen's Compensation Board, which I fully appreciate.
"It happened, prior to receiving the injury to my eye, I had invested in furnishing my home (necessarily, on the instalment plan, owing to my financial position) and during the time I was off work, those payments became due, and ultimately, went behind. To complete my worries, my wife took sick and had to undergo an operation, from which she has never fully recovered. Now, as you, sir, will understand my prosperous periods were taken up in paying off, as far as possible, those debts and every recurring period of unemployment put me farther in debt. I took the matter up with the compensation board to endeavour to come to a cash settlement on my pension, which (I omitted to mention is a pension of $1 per month for life) so that I could consolidate my position, pay my debts and get a new start which would be influential also in improving my wife's health. I am fully aware this is against their usual procedure, but I hoped that my peculiar situation might receive consideration.
"I have been out of work for 10 weeks, having been last employed in the Ford Motor Company for a few months (in fact I have only had 13 working weeks this year) and am behind again in rent and everything else. We already owe a month's rent, with another month coming due on the first of the month. We have a boarder who pays $10 a week, but he must be fed and kept according to his contract with us, so my wife (who, as I already spoke of, is an invalid) and I are in semi-starvation. Not having any family we are not considered to be needy enough to participate in any of the relief measures.
"Sir, my point in writing you is to ask your assistance in trying to got a settlement with the compensation Board so as I could settle my debts and go home to the old country (Scotland, in my case) as my relatives there have hopes of me procuring work there, as I am a marine engineer by trade.
"I am an ex-serviceman, having served with the Argyll and Sutherland Highlanders (Imp. Army) in the Dardanelles and Egypt, having been in at the fall of Jerusalem, which country interested me as the scenes of the troubles of Gideon and the fearless of the 2 1/2 tribes of Manessa.
"Learning from Dr G. that dissatisfaction existed between the Federation of Miners and the Mining Companies regarding the treatment given them at the Hospital in Gowganda, I accompanied him in there. When I visited this camp last summer, I had a number of sanitary improvements made, and the physicians and companies promised to send in their papers to you, and I expected this had been done. However, they are promised within one week now, or I prosecute.
"Without touching on the medical or surgical treatment given, but speaking from a fair understanding of the `Health Act' in the case of A.H. who after being left in camp nine days with injured foot and leg, when taken to the hospital became deranged, then after 36 hours removed to jail and dying there shortly after, was reprehensible.
"Taking the word of the men, it has been customary for them to be discharged from the hospital before being able to do any work and we found one S.B. suffering with a broken collarbone living at the hotel and at his own expense as far as known, after being in the hospital two weeks, the company (or the hospital through agreement) should be responsible for his maintenance during illness. This is one of several of the same nature mentioned to us.
"In the above matters mentioned, I believe the men have a grievance. Of course Drs R. and C. have an uphill job maintaining a hospital so remote and with so small an income, as the different mines do not employ very many men."
Mr Hynd: Let me try and wind up. There are other letters, but this is to try and bring some focus to the current government about going to the bottom, going to the lowest common denominator. The excuse the government has in reducing the payments to those who receive compensation is because the governments in the Atlantic provinces have reduced the payments. This is what we will return to, because if Ontario succeeds in reducing their levels to those in the Atlantic provinces, the Atlantic provinces will go lower and Ontario will follow, and the Atlantic provinces will go lower again.
Ms Jan Borowy: My name is Jan Borowy. I'm a community legal worker at Parkdale Community Legal Services. With me are Ted Hyland, a student at law, working at Parkdale; and Dan Ublansky and Linda Vannucci-Santini, from the Toronto Workers' Health and Safety Legal Clinic. The health and safety legal clinic, unfortunately, did not make it through the first round of people able to speak. We've invited them to attend and participate in our presentation because of the incredibly valuable contribution they'll make.
Parkdale is a community-based legal clinic here in Toronto. It's a community where over 30% of the workers in the community are unemployed. It's a community made up of recent immigrants and visible-minority workers. At Parkdale we represent workers on a variety of issues, including employment insurance, employment standards. Our caseload on workers' compensation is roughly 20%.
We also coordinate the Toronto bad boss hotline, and what's very interesting is that one out of 10 calls to the hotline is about health and safety issues in the workplace and, increasingly, problems workers face due to the lack of enforcement of health and safety, which is directly related to this bill.
Our clients and those who call us on the hotline have no voice or little control in their workplace. If they speak out against an action by their employer, they are terminated, forced out of work or seriously mistreated. They're the workers who are unorganized and are not represented by unions. It's from our perspective of this work, that of the unorganized and vulnerable workers, that we want to respond to Bill 99.
The injured workers and their families that we see in our clinic view workers' compensation as an important line of defence against slipping into absolute poverty following an injury at work. It's not only a question of financial compensation as a substitute for lost income, but equally important for them is the process of medical rehabilitation and vocational retraining to get back to work.
Our clients wanted to testify today. The two who were hoping to come along were unable to do so because of child care responsibilities. I had asked that our presentation be rescheduled, but because of the extremely limited time you've allocated to discussing this bill, it meant they didn't have a chance to present to you. They actually feel as if you don't want to listen to their stories and wanted us to ask why you will not open up the hearings and provide a minimum of at least one day of assembly style hearings so they can present their views. Currently, they're feeling as if this set of hearings is quite a sham.
From our perspective, Bill 99 fundamentally alters workers' access to workers' compensation. It forces workers to go to their employer for a form to file a complaint. Moreover, the employer now has three days to report an accident. The legislation is poorly written and so unclear about the process if a worker's employer refuses to give a worker a claim form that we don't know what's going to happen, but it seems to us that what will essentially happen is that workers will be denied access to workers' compensation. Currently, our clients go to their doctors. That's the main access point for workers' compensation.
If you're an unorganized worker, the chances of getting your job back when you've been injured are very slim. Most unorganized workers actually rely on vocational rehab to improve their access to a new job after their injury. It's very clear that by expecting a worker to go to the employer for a claim form, workers will be denied access to compensation and voc rehab.
It's very clear as well that an employer will deny the accident has happened or certainly intimidate the worker to prevent them from making a claim. Already at our clinic we have people calling us and people walking through our doors asking us, "What should I do?" Their employers are trying to swing a deal with them. They're trying to offer to pay them instead of submitting a claim, in fact removing the workers from workers' compensation protections in the exact process of workers' compensation.
As well, we could tell you many, many stories. We have a story of a woman who was a bartender in a small workplace. She did not immediately report an incident to her employer when she injured her back. That's because she feared she was going to lose her job. Her fears were well founded. In a previous incident where she cut her hand, her doctor had submitted the WCB claim. The employer, subsequent to that first claim, constantly reminded her of her claim and that she would be fired if she had any other further incidents. When she injured her back, the board denied her claim. We've been fighting for her. They deemed it was not work-related because she failed to report it to her employer. It seems to us that unorganized workers know that filing a claim is the first step out the door. They know they've got a choice. They either will lose their job or have to work injured.
Yesterday we had a worker come into our clinic. He was a parking lot attendant. He works alone in a booth at an isolated lot. Last summer, he was beaten up and robbed while working. Subsequent to this, his back and neck have been giving him serious problems. His employer, to date, has been silent about his claim. What's very interesting is that this happened way outside the six-month time limit. Our question is, what happens to this worker? Under the limitation period in Bill 99, chances are he would be denied access to workers' comp or have to put up a huge fight with an advocate to get there.
Another point is the issue around expanded coverage. Workers' compensation under Bill 99 is moving in the exact opposite direction from which it should. In particular, we work quite extensively with home workers, temporary and casual workers. They should be included in this act. We see home workers with repetitive strain injuries, shoulder and back problems as a result of their work. That's work done; they should be covered.
Mental stress: Bill 99 removes entitlement to mental stress unless a worker meets four very stringent conditions. It turns around and adds further protections for employers around their actions relating to work.
We feel the Minister of Labour, Elizabeth Witmer, has been seriously misleading the Legislature and the people of Ontario when she states that a woman who is sexually harassed will continue to have access to workers' comp. Women who are sexually harassed are being abandoned by the system. Sexual harassment is not a sudden event. Harassment is a cumulative set of actions and builds over time. Often, it's related to the actions or inactions of employers.
Yesterday we were part of a press conference outlining how the Human Rights Commission is abandoning women's harassment claims. Today we're here to tell you that it's very clear that Bill 99 is doing the same thing. As we discussed previously, this section is open to a charter challenge.
We would like to add that we urge the government not to reduce the level of compensation from 90% to 85%. This is a particularly disturbing element of Bill 99. One of the other disturbing elements is the removal of any legislated definition of income for the purpose of determining the level of compensation due to an injured worker. We call for the extension of full indexation of benefits, at least for those who are permanently disabled.
I could go on about the shift in the board's discretion it will exercise in the lives of our injured workers and our clients. We feel this will not be helpful for any of our clients. When we meet with them, they say, "When you're dealing with the board, you have to be careful when you're talking to them; they look for any chance to cut you off." It's like the time they cut me off because of the misunderstandings of one of our clients.
Finally and most important, while some of the role of the board has been intensified, it is playing a very secondary role when it comes to assisting a worker for developing a plan to get back to work. The onus is now on the worker, who in no way has the same power as their employer. It's up to them to turn around and go back to that employer to start to reorganize a return-to-work plan. The worker is going to be left alone to try and establish what those terms and conditions are going to be. That will be a system that we see will not benefit unorganized workers.
We can go on about our concerns with the tribunal, perhaps later, in the set of questions. We feel there should be a very strong independent set of appeal procedures. I'll leave it at that and turn it over to my colleague.
Ms Linda Vannucci-Santini: Concerning the occupational health and safety aspects of Bill 99, the bill changes the name of the board to the Workplace Safety and Insurance Board and moves health and safety promotion and injury prevention from the bottom to the top of the act's lists of purposes, but cynics will point out that the promotion of public awareness and education of employers and workers about health and safety has always been considered part of the mandate of the Workers' Compensation Board. That's why the board has historically provided funding for the safety associations.
Unfortunately, the board did very little to monitor how this money is being spent and this led to complaints about the administrative structure of the associations and the quality of the programs. The Workplace Health and Safety Agency was created in 1990 to remedy the situation and was given the exclusive mandate to develop health and safety training programs and to oversee the operation of the safety and accident prevention associations. The agency was governed by a bipartite board of directors comprised of representatives of management and labour.
This government disbanded the board, dismissed the board of directors and placed it under the control of an interim director. It's been in limbo ever since. Bill 99 closes the book on the agency by pronouncing it officially dead and transferring it to the board.
In substance, Bill 99 does nothing more than restore the status quo as it was prior to the creation of the agency. it certainly does not signal a bold new shift in direction at the board. The board has performed this role before and without distinction. The challenge would be for the board to do a better job of overseeing the network of safe workplace associations and other health and safety partners in addressing health and safety hazards than it has in the past. But Bill 99 offers no clue as to how the board proposes to meet this challenge.
It should be noted that the health and safety promotion unit within the board will undoubtedly be smaller, in terms of both human and financial resources, as compared to the agency. Thus it is not immediately obvious that the board will perform these functions more effectively than the agency which did nothing else.
Concerning prevention of injury and disease: Although health and safety promotion and injury and disease prevention are listed separately within the board's purpose clause, Bill 99 sees the two as going hand in hand. The improvement in accident and disease rates will depend on the effectiveness of the promotion and education programs. As the Ministry of Labour fact sheet points out, "The board's goals will be to promote safe and healthy workplaces by encouraging employers and workers to make health and safety a top priority."
Bill 99 also expands on the system of financial incentives which are intended to encourage employers to invest in health and safety by allowing the board to provide financial assistance to an employer who will modify the work or workplace to allow an injured worker or a spouse of a deceased worker to re-enter the labour force. Critics of the board's experience and merit rating programs have raised serious questions about the effectiveness of these schemes in actually bringing about health and safety improvements in the workplace.
Since the measure of success in these programs is a reduction in claims experience and costs, it is argued that employers are more likely to engage in inappropriate claims management tactics than invest in health and safety. This is the case because the amount of financial returns available through merit rating programs is actually generally far less than the cost of actually cleaning up the workplace. Although merit rating is a common feature of most workers' compensation systems, there have been few studies done to verify their effectiveness, and the ones that have been done have shown inconclusive results. Bill 99 requires the board to evaluate the consequences of any proposed change in programs and policies. Hopefully the board will see fit to do the research necessary to confirm that merit rating actually produces investment in health and safety before any future enhancement of that program occurs.
Concerning the occupational disease panel, Bill 99 eliminates the ODP, which was created in 1985 to investigate possible occupational disease and report to the board on probable connections between diseases and occupational exposures. It is stated in the Ministry of Labour's fact sheet that this will ensure better coordination of research into occupational disease and injury and improve decision-making in occupational disease and injury claims.
As was the case with the agency, the functions of the ODP will be transferred to the board and some significant changes will be made to its mandate. The mandate was to investigate possible occupational diseases and to make findings as to whether a probable connection exists between a disease and an industrial process, trade or occupation in Ontario and to create, develop and revise criteria for the evaluation of claims respecting occupational diseases and to advise on eligibility rules concerning compensation.
Under Bill 99, the board is not expected to originate investigations or develop policies independently to deal with Ontario workplaces. Instead the board will only monitor developments in the understanding of the relationship between work and the prevention of injury and occupational disease, and the relationship between workplace insurance and injury and occupational disease so that -- and this is the term -- "generally accepted" advances in health sciences and related disciplines are respected in benefits, services and programs and policies in a way that is consistent with the purposes of the act.
This language seems to place a variety of hurdles in the path of occupational disease recognition at the board, most of which are unrelated to the quality and persuasiveness of the scientific or medical evidence. What will it take for advances in scientific knowledge to become generally accepted? Will generally accepted advances in scientific knowledge be ignored if the financial implications for the board are considered unacceptable? What does recognition of occupational diseases have to do with improving the efficiency and effectiveness of the insurance plan? I'm going to turn it over to my colleague.
The issue of stress: I think that the provision in Bill 99 which eliminates chronic stress claims, while it may not affect that many people since there aren't that many chronic stress claims that have been accepted, to me is a symbol of the unfairness of Bill 99.
In the mail today I received a copy of a mental health survey done under the auspices of the Canadian Mental Health Association, which found that 40% of Canadians believe that they are subject to serious stress at work; that's 40% of Canadians. That's a very large number. Those same people also identify the attitude of their employer as being negative: 57% of those responding to this survey said that their employers are either not dealing with stress at all or not dealing with it in an effective way.
What kind of a message does Bill 99 deliver to employers in this province? It says you can ignore this very significant problem that 40% of Canadians are experiencing and it says that you don't have to do anything about it because they can't file a workers' compensation claim anyway. Again I go back to the minister's claim that she wants to make Ontario the safest place in the world to work. I don't think so.
Also today in the mail I received a copy from the Workers' Compensation Board, which apparently hasn't heard that the bill isn't passed yet, apparently has published its guidelines for chronic pain. This is outrageous. Chronic pain, which has been recognized in this province for 10 years, is virtually eliminated by this policy document.
Mr Ublansky: Thank you. What it boils down to is, people who have been previously on benefits, for years or perhaps for life, will now be on benefits for four weeks at best and perhaps not at all. What is going to happen to all these people who have previously been receiving benefits for chronic pain? The answer to that is social assistance. You're just downloading the program to welfare.
When we're talking about chronic pain, as opposed to stress, we are talking large numbers. There are many, many injured workers who are receiving benefits for chronic pain. All of that is going to continue, and the people who experience it in the future, instead of collecting WCB benefits will be collecting welfare, if they can qualify for that.
Ms Borowy: We realize that we probably just have 15 seconds left. What we request is that the committee, in case you wanted to slip in any questions for us -- actually before doing that, we want you to answer a question for us and we're quite serious about this, and that is: How shall we explain to that parking lot attendant who was beaten and would be ineligible, how do we explain to the woman who is harassed, how do we explain to the woman who will be cut off chronic pain benefits when she has her RSIs, how do we explain to the waitress I didn't even have a chance to tell you about who was fired when she filed another claim, how will we explain to them that the provisions in Bill 99 create a more efficient system that looks after their needs?
Mr Jim O'Neil: My name is Jim O'Neil. I'm the national secretary-treasurer of the CAW, and with me is Nick De Carlo, who works in our health and safety department and is responsible for workers' compensation in Ontario.
The National Automobile, Aerospace, Transportation and General Workers Union of Canada is the largest private sector union in the country with a membership of upwards of 210,000 workers; 68% of our membership, 143,000, is here in Ontario. We are the largest private sector union in the province. We represent members in automotive parts production and assembly, in aerospace manufacturing and assembly, telecommunications and electronics, in air, rail and marine transport sectors and in the mining, fisheries and hospitality sectors. Bill 99 has a major significance for our membership.
First, we want to declare our opposition to the manner in which Bill 99 is being railroaded through the Legislature of Ontario without room for meaningful public input. Bill 99 involves a complete rewrite of the Workers' Compensation Act. Bill 99 is a bill affecting the entire future of safety, labour relations and the treatment of workers injured on the job. Consultation on such a complex bill with such serious implications for the workers of this province must allow adequate time for presentation and discussion. This is not the case.
As of early June there were approximately 600 requests in the Toronto area and 1,300 requests for all Ontario to make presentations to your committee regarding this bill, before the bill had even been referred to committee. This is among the largest number of requests ever for consultation on any bill. Yet only four days of hearings have been scheduled in Toronto for a total of 10 hours. Only 30 presentations will be made and only six hearings are scheduled for around the province.
Only a handful of those who have requested standing will have an opportunity to present. Requests for standing have poured in from injured workers and their representatives. Yet the response of the government is to effectively shut them out. Injured workers should be allowed to make a presentation at a public meeting to the Minister of Labour.
The fundamental concept of the workers' compensation system is that employers are responsible to compensate workers who are injured at work. In Ontario the first Workers' Compensation Act enacted, based on a report of the Meredith commission, written by Justice Meredith, who was a former leader of the Conservative Party of the day, established firmly that workers had a right to compensation for injuries at work. Workers gave up their health and wellbeing, and yes, in some cases, their lives, in order that employers profited and so employers had the responsibility to compensate workers injured in their employ.
Today, under Bill 99, while cutting benefits for injured workers and handing over money to corporations, while limiting entitlement to compensation for various kinds of injuries, while giving increased power over injured workers to employers, the Conservative government is preparing to transform the system into a for-profit system controlled by private insurance companies, handing them a multibillion dollar windfall. The Ontario government is attacking the Meredith principles.
First of all, Bill 99 attacks workers' benefits. Immediately, income for injured workers will be reduced by 5.6%. This is in complete contradiction to promises made by the Harris government not to attack the disabled. The very people who can least afford it, injured workers, are being asked to pay the bill to cut costs of workers' compensation in Ontario. Employers, on the other hand, are given a 5% gift in the form of reduced payments to the Workers' Compensation Board. This is a loss of $6 billion in income over the next 17 years.
In workplaces across Canada the incidence of injuries is growing, particularly repetitive strain injuries, occupational stress and occupational disease. This is due to the speedup and downsizing. The new act is designed to dramatically reduce the right to entitlement to benefits for certain injuries and reduce the number of claims for other injuries.
Injured workers will also be cut off by the application of "normal healing times." The concept of normal healing times was discussed in the Jackson report and has recently been introduced at the board by an administrative measure. Under this policy the board determines the amount of time a worker will require to heal, based on an arbitrary meat chart. If the worker is not healed in the required time, he or she will be cut off.
The number of claims will also be reduced by time limits introduced under Bill 99. The bill places a six-month time limit from the date of injury for filing a workers' compensation claim. This time limit will make it extremely difficult to file claims for repetitive strain injuries and back injuries. Injuries such as repetitive strain injuries occur over a prolonged period. It is not clear at which point the injury occurs. A time limit on application can be used to disqualify workers with these types of injuries.
Workers already are reluctant to claim compensation. Having to obtain the form from the employer will make it more difficult. Workers, particularly those whose first language is not English, or who do not have a high level of education, will be intimidated. Imagine the combined intimidation effect on a worker who does not speak English well and is in a non-union workplace. Employers will take advantage of changes to the application system to intimidate and influence workers.
The worker must authorize release of medical information to the employer. Should the worker refuse to do so, he or she will not be entitled to benefits. The employer will have increased power to force the worker to see a company-chosen doctor. Companies will recommend treatment by the company physician. The worker will be faced with the choice of cooperating with the employer or being denied a job to return to or, at best, experiencing greater difficulties with the claim.
If the employer is happy with the worker, the company may choose to return the worker to a job. If not, the employer can force the worker into a labour market re-entry plan. The worker, knowing that the company controls the options, will be forced to cooperate by returning to work, whether physically ready or not. While employers will have more power, workers will have less right to the choice of medical care, less right to object, less right to appeal and fewer organizations to represent their interests.
The Workers' Compensation Appeals Tribunal, renamed the Workplace Safety and Insurance Appeals Tribunal, will be required to follow board policy. Previously independent and able to make decisions based on law, they will be prevented from doing so. The emphasis in Bill 99 is to eliminate worker representation on the tribunal. Furthermore, three-person panels with labour representation will be effectively eliminated. There always was at least some sense of fairness when a worker had a union nominee to hear their case.
It is ironic that one of the government's claims for Bill 99 is that it carries a strong prevention focus. Yet the same day, April 24, 1997, that the labour minister introduced Bill 99 to second reading at Queen's Park, she was consulting in Toronto about the government's discussion paper on the Occupational Health and Safety Act. This paper proposes gutting workers' rights to refuse unsafe work, to know about workplace hazards and to participate in health and safety committees.
The Ontario government claims the workers' compensation system is too costly. They claim that the board is in financial crisis and the unfunded liability is out of control. What is the reality? First of all, the unfunded liability is not a debt. Rather the unfunded liability is the net difference between the WCB's present assets and its expected liabilities. The board is not in debt. As a matter of fact, at the end of 1996 it had assets of over $8 billion, lower than in previous years.
Nor is the board in a financial crisis. Last year, 1996, the board accumulated a surplus of $426 million -- not bad money for any corporation. In 1995 it had a surplus of $510 million -- in two years close to $1 billion.
Costs of compensation are not high in Ontario. The average cost to employers in 1995 was $2.85 per $100 of payroll. In fact, costs are lower when experience rating rebates of approximately $400 million are calculated in. If coverage was extended to all workers in the bank and insurance industry, costs would drop to less than $2 per $100 of payroll. Employer costs dropped by 12% between 1995 and 1996.
The real factor that will cause a financial drain on the WCB is the 5% drop in employer assessments proposed by Bill 99. The reality is that if employer costs for workers' compensation are a problem, it is because workers are getting injured. The real solution is to reduce the number of injuries.
We need improvements to the workers' compensation system. Today, the combination of speedup at work and the introduction of new, dangerous chemicals in the workplace are leading to increasing numbers of injuries and deaths caused by employer greed and government compliance. More workers are getting injured while fewer are being compensated. Workers need more protection today, not cuts.
The government should concentrate on the real priorities of workers: a safe and healthy job, safety in the workplace so that workers can work and contribute to society without fear for their health and security, enforcement of safety standards; a workers' compensation system that guarantees the right of workers to full compensation for workplace injuries and the right to return to a meaningful job; maintenance of a publicly administered, not-for-profit system funded entirely by employer funds, as legislated in Ontario in 1914; workers' compensation coverage for all workers, including bank and insurance workers and independent operators; equal representation for workers on the workers' compensation board of directors; a full cost-of-living protection for injured workers' benefits; adequate recognition of injuries based on exposure to occupational diseases, including occupational stress overload; ending the experience rating system that encourages employers to hide accidents by not reporting them and pressures workers to return to work while injured.
Labour relations through this bill will certainly deteriorate over this issue. You can't take away workers' rights and allow them to be injured with no recourse and not raise anger within the workplace. You can't expect anything but increased tensions in the workplace as workers fight it out with employers over issues of medical confidentiality and company control over medical treatment and their return to work.
The Chair: Order, please. Members in the audience, I caution you, this is a standing committee. The standing orders of the Legislature indicate that no applause or demonstrations of any kind are allowed. It will not be tolerated.
Mr Nick De Carlo: I'd just reiterate that the reality out there is that the situation is already deteriorating in the workplace. What's happening to people who are injured on the job -- one of our members refers to it as the "one-bounce theory." You fall off a ladder and before you bounce the first time, there's a job for you, but it's not a meaningful job. It's a way of covering up the injury and covering up the compensation case and getting an experience-rating rebate.
That's happening today, without this bill being brought in. Once this bill is in, the situation is going to deteriorate dramatically. You are going to have, inevitably, conflict in the workplace. You can't blame injured workers for the anger they feel about this bill and you can't expect that it's simply going to go ahead peacefully without some form of problem. It is inevitable. I encourage you, along with Brother O'Neil, to seriously reconsider implementing this bill.
Mr O'Neil: I might also add that instead of being critical of those in the audience applauding about what they sense is an injustice to workers, I suggest that what you should be doing is criticizing the employers within this province for coming forward and supporting this archaic legislation.
Mr Bart Maves (Niagara Falls): Thank you very much for your presentation. A couple of things, first being the minister on the occupational health and safety. You said she wants to "gut" the right to refuse. She was actually quite clear in saying she wasn't interested in removing the right to refuse. I wanted to make sure that anyone who is watching knows that. There were some problems around the right to refuse and the discussion paper was there. They might discuss that, but she's --
Mr O'Neil: I've seen a presentation by the auto manufacturers' association that has been put forward to the Minister of Labour, supported by the Big Three -- GM, Ford and Chrysler -- that totally guts the right to refuse. I've seen it. It was presented to your minister.
You also said, "The worker must authorize release of medical information to the employer." What we said is that the functional abilities form needs to be released to the employer and there won't be any medical information on that. It'll talk strictly about the functional ability of that worker in an effort to return them to work. That's something we'll continue to try to clarify.
The question I have for you is about issue that's come up with a couple of presentations, and it does concern me. It's illegal under the act for employers not to report an injury, and the fines for that have increased over time, yet we hear many people coming forward saying that employers do refuse to report.
I have also heard from a previous presenter about the difficulty of getting a claim form from an employer. How could I make it easier for an employee who might feel intimidated going to an employer for a claim form to do that? Should I make a rule that they have to be available in the workplace, a public place where they can go and get them? Is there something I can do to make them more available?
To say that, you obviously haven't been in one of our workplaces recently. You should walk through a workplace, injure yourself and see whether the employer tries to hide that injury. It happens every day. Don't be fooled by what the employers tell you. Go into a workplace, spend a summer there. You'll find out.
Mr Maves: Right. One of the problems we have is educating students. That's why this government has undertaken a program to educate students about what they should be doing in those situations in the workplace.
Mr Agostino: This bill doesn't really take into consideration not only the pain and difficulty injured workers go through but the stress the whole system puts on them, their family life, their ability to deal with their kids, their income, all of those things, which obviously are often quite difficult. Unless you or a family member have been in that situation, it's very hard to understand.
You've spoken well to many of the problems in the bill. When you see a bill like this come forward, what do you think that will do to the ability of that individual and that family to continue to deal with not only the injury but trying to work through a compensation system that is going to be absolutely pointed against the worker, against their family? How do you see that adding to the overall problem a worker will have as a result of this bill being implemented?
Mr O'Neil: If the bill gets implemented, it's going to have a major impact, first of all, on workers collecting compensation, reporting injuries. The employers will intimidate them. All I can say is that it'll be chaos. I should add that you shouldn't expect workers and the unions that represent them to stand still for this. There will be a fight in the workplaces. We are not going to let this government or any other government gut the health and safety and workers' compensation benefits provided in this province. It's turning this country back into something like it was 100 years ago, something we're not going to stand for.
Just quickly to the parliamentary assistant, because it has to be responded to, if you think for one minute that anybody in this province who works for a living doesn't believe that when you touch the Occupational Health and Safety Act you're going to take something away from workers, you're kidding yourself. With everything you've touched, you've taken away from workers and added nothing: the Employment Standards Act, the Ontario Labour Relations Act, the Workplace Health and Safety Act, the Occupational Disease Panel, pay equity. With issue after issue you've taken away rights of workers, and you're bloody well going to do it under the Occupational Health and Safety Act. You're not fooling a single person out there.
Let me ask Jim and Nick about one issue that's come up time and time again. That's the Occupational Disease Panel and its importance to auto workers, particularly to those who lose their lives and their spouses and survivors, and what it means to see that killed and folded back into the WCB. What's your take on how that's going to affect your members?
Mr De Carlo: What this means for our members is a very serious area. Approximately 8,000 people a year are estimated to die from occupational disease in Ontario. The Occupational Disease Panel, even with a limited budget, even with limited resources, has been able to establish in a number of areas occupational disease studies that have given benefits and started to make some inroads in the area of occupational disease in Ontario.
When this is gone, and it will be gone under this bill, workers will have nowhere to turn to get expertise and research done. Unions will not have the resources we can apply to the research that's needed. We know that every year more and more chemicals are being introduced in the workplace, with no clear proof in terms of what the effects are going to be, and that means occupational diseases are going to have to rise. The pressure to deal with this issue will be reduced by eliminating the Occupational Disease Panel. That's a serious matter.
Ms Judith Andrew: Good afternoon. I'm Judith Andrew, the executive director of provincial policy with the Canadian Federation of Independent Business. Joining me is my colleague Brien Gray, who is CFIB's senior vice-president, legislation and policy.
I believe the clerk has distributed our kits. Contained therein you'll find our brief on Bill 99 and a number of other supporting documents, including our submission to the Honourable Cam Jackson dated March 1996, as well as a couple of other charts which I'll refer to as we go along.
CFIB appreciates the opportunity to appear before the standing committee today on Bill 99. We are a national business association dedicated to representing the views of independent Canadian-owned businesses before government. The federation's membership of small and medium-sized businesses is quite representative of the business population overall by size, age, sector and urban and rural split. About 40,000 of our 87,000 member first actually do business here in Ontario.
Over the years we've conducted a considerable number of surveys on the workers' compensation issue. Workers' compensation has ranked in the top three or four priorities for CFIB action in the regular survey we do. The recent one, for the first quarter of 1997, which was a survey of 3,500 Ontario firms, found our member concern about the WCB at over 55%. That issue is surpassed only by the issues of regulation and paper burden, deficit and debt reduction, and of course total tax burden. You'll see that illustrated in figure 1 at the back of the brief.
Turning to figure 2, the provincial survey analysis for Ontario shows that within the issue of total tax burden, workers' compensation heads the list of the most harmful taxes to business, with 60% of our members registering concern. I would note that in that list of punitive taxes the worst ones are the profit-insensitive payroll and property taxes, those that fall due regardless of whether the firm makes any profit.
We have been active on the WCB issue since the early 1980s, when it first became apparent on our surveys as an impediment to small business growth. In fact, in 1987 we commissioned and published a comprehensive economic and actuarial study of the system. Over the years we have built up a comprehensive array of CFIB member votes, mandate votes, on various policy aspects of the system. These are included as an appendix to the submission to Mr Jackson. We also delve regularly into specific complaints and problems occasioned by the WCB, and you'll see a breakout of those in figure 3 appended to the submission.
I'm here today to talk about the critical need to overhaul the workers' compensation legislation and its adminstration to do two things: (1) to secure the future benefits to injured workers; and (2) to stabilize the assessment premiums for employers.
The case for reform is very well made in the WCB's annual report results and in government data of the last few years. I would like you to look at figure 4, which is the lost-time injury rate. I think it's also included as a separate page in the kit. The lost-time injury rate in Ontario has been reduced by more than half, which is astonishing, from the 4.4% peak through 1986-88 down to 1.9% in 1996. In absolute terms there's been a substantial decrease as well, and you can see this in figure 5 of our submission. Lost-time claims decreased 46%, from about 192,000 claims in 1988 to about 104,000 claims in 1995.
Meanwhile, the benefits spending increased 50%, from $1.6 billion in 1988 to $2.4 billion in 1995. It's not the case that most recent injuries are more serious and therefore more costly. In fact, the average duration of claims, which is an indicator of the seriousness of the injuries, has also been reduced from its 1991 peak.
If you look at figure 6, you will see what small business owners are greatly disturbed about, and that is the juxtaposition of the two opposing trends: benefits spending increasing by 50% at the same time that schedule-1-allowed lost-time claims decreased by 46%.
Smaller employers find it very hard to put any faith in statements made to the effect that they would enjoy assessment relief if only they reduced their accidents. That's not the case. They've reduced their accidents quite dramatically and there hasn't been assessment relief.
CFIB supports the government's goal of making Ontario workplaces among the safest in the world. One important way of doing that is to ensure that the system costs do not keep escalating despite the strides being made on the occupational health and safety front.
I would also point out that the overall cost of administering those 46% fewer claims increased by 31% over the period 1988 to 1995. We now have close to 4,600 WCB staff, which is 210 more people than in 1988, administering those fewer claims.
I guess it comes down to the unfunded liability, the difference between the value of the WCB's assets and what it owes in the future. That currently stands a $10.5 billion. Most of this unfunded liability is related to future payments to injured workers who are currently on WCB rolls. Our unfunded liability is the largest in Canada; it exceeds the combined unfunded liabilities of the rest of the provinces. Actuarial analysis shows that it's not heading in the right direction if nothing is done. In fact, it would grow to more than $14 billion by the year 2014 if there is no change made.
There is simply no more room on the assessment premium front. Ontario's premiums are second-highest in Canada and considerably higher than those in the United States. Within the premium, the average $2.85 rate, the unfunded liability costs 83 cents. If we had no unfunded liability, employers would be paying about 30% less than they do now. For each new worker hired, an employer assumes a share of the unfunded liability equal to about $4,000. You have very concrete disincentives to invest and create jobs in Ontario because of the WCB's financial status.
Anyone who maintains that the unfunded liability doesn't matter because the WCB has had a couple of recent annual surpluses is taking a short-term view of the financial situation. Small businesses want a fair system,but it has to be fair both to employers and employers, that will continue to serve injured workers and employers in the long term.
On some of the specifics in Bill 99 which we support, we support the measures aimed at restoring financial integrity to the system. The overriding objective is to get the financial plan back on track and retire the $10.4-billion unfunded liability by the year 2014.
The CFIB supports the modification of the benefit level to 85% of net average pre-injury earnings. Our members voted strongly in favour -- 91% -- of limiting WCB benefits so that employees' original earnings are not exceeded. In fact, we had recommended that the government adopt the staggered approach to benefits that's currently in place in the four Atlantic provinces. At 85%, Ontario's benefit level will continue to be generous vis-à-vis other areas of the country. It should be clear that the change only applies to workers injured after Bill 99 is enforced. Workers on existing claim are not impacted by this change.
CFIB also supports the further modification of the indexing formula, which has the effect of reducing the unfunded liability by an additional $9.3 billion, and this builds on the $18-billion savings yielded by the former government's introduction of the Friedland indexing formula. This is accomplished under Bill 99 while still protecting those individuals who are 100% disabled and protecting survivors from inflation erosion.
We favour returning the system to a workplace insurance plan. An insurance plan requires clear, contractual language leading to certainty for both the policyholders and the beneficiaries. Accordingly, we support the amendments that will exclude or curtail the grey-area claims such as chronic stress and chronic pain. Additionally, we support the changes that bind the appeals tribunal to WCB policy and that integrate the functions of the Occupational Disease Panel into the WCB.
We also agree with returning workplace safety and health to the WCB, as prevention is the flip side of compensation and it is better to prevent up front than pay for the consequences of accidents after the fact. The other advantage is that the WCB also has the database, which should be exploited to focus prevention resources to best advantage.
Small business supports the goal of achieving early return to work, and it's clear that cooperation between the employer, the worker and the board is pivotal to success in this area. The provision of functional ability information to the employer will assist.
I would like to touch on three things that were excluded from Bill 99 that we're disappointed about. The first is a waiting period. So-called elimination periods are a common and necessary feature of disability insurance plans worldwide. The three-day waiting period was an important component of the Ontario government's 12-point plan for reforming the WCB in its election platform. Our members strongly supported, at the level of 81%, a waiting period. We are disappointed that Ontario did not follow the lead of New Brunswick and Nova Scotia and we continue to recommend re-establishing a waiting period in Ontario.
CFIB also supports the direct payment or deductible model in principle, based on our vote of exactly 50% of members in favour. We think it should be voluntary for all employers and that there should be choices respecting the deductible period, with adjustments to assessment rates accordingly. The direct payment model implementation would be an important first step towards having a private sector insurance option in workers' compensation, a concept supported by 75% of CFIB members in May 1996. In your kits you have that full vote with all the argumentation.
We're disappointed that the government is not proceeding with direct payment at this time. We would encourage policymakers to revisit this issue at an early date, as well as to canvass other means of injecting private sector competition into the government-operated monopoly that is the WCB.
CFIB is also disappointed that Bill 99 does not redefine "accident." We continue to advocate changes, and proposed language we are suggesting is appended to our Jackson submission. We commend it to your attention.
The section 40 duty to cooperate in return-to-work measures: We've seen an interpretation that this is a backdoor way of creating a re-employment obligation for small businesses sized under 20, which doesn't currently exist under section 41. If this is indeed the case, we would be disturbed, as the re-employment rights section has been administered in a very punitive manner towards business. We would argue strongly for removing the section 84 penalty related to that, as there is already plenty of exposure to experience-rating surcharges and the section 41 penalty in re-employment cases.
On the issue of part XII enforcement decisions, we strongly urge that the section 41 requirement to develop fair and reasonable policies on enforcement -- in fact we've dubbed this a code of payroll taxpayer fairness -- be applied across all the collection and enforcement measures and not just to selected ones and that appeal rights be maintained in this area. Our members have certainly experienced the board using its current powers in a very heavy-handed manner, so we believe a code of taxpayer fairness in this area would be very important.
In conclusion, CFIB appreciates the committee's consideration of our comments and concerns and we urge you to take them into account as you carry out your examination of Bill 99. Small and medium-sized firms are anticipating that Bill 99 amendments will take effect at the earliest possible date and provide positive results for the WCB system and Ontario generally. We believe this is belt-tightening with heart, and we encourage you to proceed.
Mr Pat Hoy (Essex-Kent): You cited that WCB shows up as 55.5% of concerns expressed by your membership. All governments are interested in job creation; they were in the past and they will continue to be in the future. I have had business people, small business predominantly, tell me that payroll taxes are a hindrance to job creation. Have you ever polled your members as to what job creation would flow from changes to WCB or any other, we'll call it, regulatory burden that may exist in Ontario now? Have they given you any opinion that perhaps someone who employs between 50 and 99 people may hire one or two more people if certain changes were made? Have you ever done a study like that?
Ms Andrew: We've done that type of study in connection with the employer health tax, which is also a payroll tax. It's obviously very difficult and sort of hypothetical: "If the rate went down, would you hire more people?" But we did get some interesting results which showed that the tax changes the government was proposing on employer health tax and on the personal income tax would yield employment. We're talking here about the sector that is the job-creating sector in the economy. That's certainly clear from all the data. I would be happy to give you a copy of that report I referenced on employer health tax and also some on job creation.
Mr Brien Gray: I think it's really important to emphasize that in Ontario, just as in Canada, firms of 20 employees and less represent 93% to 95% of all establishments in the economy. If you're talking about firms of 50 to 150, we're not talking about the majority. And there is an issue of ability to pay; the larger you get, your ability to pay is that much greater. In terms of effective tax rates out there, the smallest firms, despite the small business deduction, despite other so-called advantages, because they're either not in a profitable position or because they're not necessarily in a position to take advantage of a maze of tax credits or depreciation schedules, their effective rates are pretty darn high.
The fact is that any further advances in payroll taxes at both the federal and provincial levels will kill job creation. It will result in fewer jobs, we are convinced. We'd be glad to send the committee copies of our On Higher Ground study that we did last fall in response to Prime Minister Chrétien. It directly shows that if there's relief on the two issues you've raised, there will be a direct job creation contribution.
Mr Christopherson: Thank you for your presentation. My question relates to your statement on page 3 that you want a fair system, fair for both employers and employees. I have some difficulty trying to find the fairness as it relates to injured workers. Injured workers are facing $15 billion, collectively, being taken away from them, in that they're looking at a 5% reduction in their income when they're hurt on the job, through no fault of their own -- they get 5% less income; they get 50% less money being put aside for a decent pension for them when their work life is concluded, when they're on long-term WCB; injured workers will not be allowed to claim for mental stress; and they're going to have limited claim for chronic pain. Against that is the sight of employers getting in their pockets $6 billion of that $15 billion because premiums have been cut by 5%. It would seem to us that real fairness would not benefit directly, in cash, one party or the other.
In terms of injured workers -- and please, let's not launch into the trickle-down theory -- or healthy workers today who might be watching who could be injured on the job tomorrow or shortly down the road and be affected by this, where's the fairness for them?
Ms Andrew: First of all, the 85% rate: When you look at the fact that benefits are non-taxable in an injured worker's hands and you plot this on an actuarial chart, very many people end up taking more money home when they're on compensation than they did when they were working. We think that's a horrible signal to send to somebody, to make their choice to go back to work that difficult. Every international study shows that insurance plans can't overcompensate at more than 100% and be anywhere near financially viable, so the change from 90% to 85% will help deal with that overcompensation. The other way to do it is to make it taxable, but then you would have governments putting their hands in people's pockets more than they do now. That change is important.
Ms Andrew: That's very equivalent to any kind of pension plan out there. This is still a generous provision, because it will actually confer pension plans where they didn't exist previously. In some cases an injured worker may not have had a pension at all at his or her place of employ; he would have now under the WCB, and his former co-workers won't have, so this is a generous provision.
Mr Jim Brown: My company. I think you've been very polite on page 6 when you say that the WCB has unchecked power to behave badly. You've been very polite to the WCB. They're a bunch of tyrants and a bunch of autocrats. They beat up the little guy who's providing employment, the 93% of Canadian establishments that employ under 20 people. It's the lifeblood of our economy and the WCB runs roughshod over them. When you say here, "We strongly urge that section 41" -- can you just develop that a little bit more?
Ms Andrew: We encounter these cases through our member services departments, very heart-wrenching cases where they're attaching assets and ignoring mistakes they've made and doing all kinds of horrible things.
Ms Andrew: We don't have an overall estimate. We usually try to intervene and solve these things before they drive the person right out of business. But they have done some awful things. They take years to correct a mistake. That's why we said at the beginning that it's not only the legislation but the administration that has to be fixed, and if there was a code of taxpayer fairness -- Brien can talk about what happened with Revenue Canada.
Mr Gray: The concept was developed originally with Revenue Canada. You'll remember back to the late 1970s and early 1980s when it was absolutely running amok and out of control. I must say, if you were to ask most small business people today whether the cultural change towards the client-oriented focus, that didn't deal with only one client base but with all client bases -- I think you'd find that most business people, although they're not overwhelmingly happy with Revenue Canada, they're a far cry more satisfied, and part of that is because of protections for those who use the system and have to deal with the system.
The Chair: I must interrupt, colleagues. Our time has expired. On behalf of the committee, may I thank you for taking the time to come before us at the end of the day. We appreciate your advice and your information.