here is your October Newsletter

October 2021

Greetings!

Welcome to COCA's monthly Newsletter. Unless noted otherwise, all articles written by COCA President, Ian Cunningham.

View this newswletter as a web page.

WSIB AGM Highlights

The WSIB held its annual general meeting virtually on the morning of October 6, 2021. Here are the highlights:

The BIG news was delivered by Chair Elizabeth Witmer that the average employer premium rate for 2022 will be $1.30, a decrease of 5.1% from the 2021 average premium rate of $1.37. Chair Witmer also noted that this is the fifth decrease in the average premium rate in the last six years and that the average employer premium rate has been cut in half since 2016
After being put on hold in 2021 because of the pandemic, the transition to the new rate framework will be restarted in 2022
As reported elsewhere in this newsletter, class rates were not made available at the AGM and employers will not receive their own rate information until the end of October
Chair Witmer also noted that the WSIB’s funding level on a sufficiency ratio basis is 119.5% and that her agency has $6 billion in reserves
She also referenced an Institute for Work and health research study that showed that for every dollar an employer invests in safety, that employer earns a return of $1.78
Acting President & CEO Tom Bell reported that the transformation of the WSIB continues and that the agency’s primary objectives are: i) to help people recover from their injuries and return to work; ii) to improve the customer experience with the WSIB; and iii) to ensure value for money
Congratulations to Elizabeth Witmer for her decade of service as chair of the WSIB. Under her leadership, the provincial compensation agency has made unparalleled advancements in its governance. Mrs. Witmer is regarded by many WSIB stakeholders as its most effective Chair in the modern history of the organization. She was first appointed in 2012 and her current term expires on December 31, 2021 (and it’s our hope that she will be extended again. It’s hard to imagine anyone better qualified to serve in this role).

WSIB 2022 Premium Rate Information

At its annual general meeting held on the morning of October 6, 2021, the WSIB announced that the average Schedule 1 employer premium rate for 2022 will be $1.30, down from $1.37 in 2021 or a decrease of 5.1%

On September 24, 2021 the government posted a new regulation under the Workplace Safety and Insurance Act, O. Reg. 665/21, which set the maximum insurable earnings ceiling for the purposes of calculating employer premium rates for 2022 at $100,422. This is up from $97,308 or an increase of 3.2%

The WSIB did not announce class rates at its annual meeting as per its normal practice over the past several years. Those class rates are now posted on the WSIB’s website. For construction they are as follows:

Class G1 Residential Building Construction $2.63
Class G2 Infrastructure Construction $2.10
Class G3 Foundation, Structure & Building Exterior Construction $4.11
Class G4 Building Equipment Construction $1.70
Class G5 Specialty Trades $2.36
Class G6 Non-residential Building Construction $1.79

Normally the WSIB sends employers their own individual risk-adjusted premium rates immediately following the annual meeting. This will not happen until the end of October.

The maximum average earnings ceiling, the maximum amount of benefits payable to injured workers, for 2022 has been calculated in accordance with the legislated formula of 175% of the average annual industrial wage as determined by Statistics Canada in June. That amount for 2021 was $102,800 and will increase by 3.6% to $106,500.

The transition to the rate framework that was paused due to the pandemic will resume in 2022. For most employers, their premium rate can move a maximum of one risk band up in 2022, two risk bands up in 2023, and in 2024 the usual rate framework rules regarding movement between risk bands will begin to apply (please note there are special rate framework transition rules for temporary employment agencies and non-profits).

Minister Announces Surplus Funding Distribution

The Minister of Labour Training and Skills Development, Monte McNaughton, recently announced that amendments to the Workplace Safety and Insurance Act (WSIA) will be introduced in the Ontario Legislature which if passed will give the Workplace Safety and Insurance Board (WSIB) the authority to make distributions of funds to employers that participate in its insurance program when the agency’s funding level is between 115% and 125% on an ongoing concern (sufficiency) basis and that will require the agency to make distributions to employers whenever the funding level exceeds 125%. This appears to be consistent with the proposal contained in the government’s consultation paper to which COCA responded last summer.

This is both good news and bad news for the province’s employers. On the good side, it’s better than nothing. The WSIB is now funded at almost 120%. Currently it has no authority under the WSIA to distribute excess funds to employers. Under the government’s proposal, the WSIB would have the option of transferring funds to employers. On the bad side, the corridor of 115% to 125% is far too high and should be lowered by about 10%. We appreciate that the WSIB requires a level of surplus funding as a cushion against unforeseen or unpredictable adverse events. However, such a high corridor:

Keeps surplus to need funds sitting passively in the WSIB’s investment account when they could be in the hands of the province’s employers and deployed in growing their businesses and creating jobs
It allows for intergenerational transfers of claims, i.e. today’s employers paying for claims of tomorrow’s employers
It allows for, it even encourages relaxed management on the part of the WSIB

This high corridor seems to be inconsistent with the mantra of the current government, particularly at a time of economic recovery as the pandemic is hopefully abating, and initiatives to create jobs, help families, to help workers and to help employers are paramount.

Empty Throne Speech Offers Little in the Way of Direction

Readers will recall that Premier Ford unexpectedly prorogued the Ontario Legislature on September 12th. It’s our understanding that this was done to:

allow the federal election campaign to proceed without the distraction of provincial government business; and
to reset the provincial-federal government relationship and agenda after the election of the next government in Ottawa

The federal election on September 20th produced pretty much the identical result as the 2019 national contest with only very minor changes in the parties’ seat counts.

With an Ontario general election only about eight months away, many Queen’s Park watchers were expecting a robust Throne Speech on Monday, October 4th that would sketch out a plan to complete unfinished business from the previous session and serve as an on-ramp of accomplishment and success leading into next year’s campaign. But, the words read by the Lieutenant Governor Elizabeth Dowdeswell offered nothing of the sort.

Here are the highlights:

With the fourth wave of infections beginning to abate, there was a recounting of the steps the government had already taken and plans to take to eliminate the possibility of another lockdown
There was a statement that vaccine certificates or “passports” as most call the proof of vaccinations, are a temporary measure
Despite the fiscal challenges created by the unprecedented high levels of spending required to combat the spread of COVID-19 and to provide assistance to those most in need because of the pandemic, there was a promise not to increase taxes or cut spending
There was a promise to continue to build roads, highways and transit systems
The government repeated its pledge to improve care in long term care homes and to improve transparency, accountability and enforcement and to eliminate bad actors from the business
The speech repeated the promise to work with the other provinces to push the federal government to increase health transfers to the provinces
In the speech, the government promised to work with the Indigenous communities towards reconciliation

The Tories must be saving their best ideas for next spring’s election campaign because the Throne Speech was devoid of substance.

FAO Reports on Federal & Provincial Pandemic Responses

Here are the highlights copied from the Financial Accountability Office’s reports on the federal and provincial governments’ responses to the COVID-19 pandemic. The report was published on October 6, 2021

This report provides an updated summary of the measures implemented in Ontario by the Government of Ontario (the Province) and the Government of Canada (the federal government) in response to the COVID-19 pandemic. The report also provides information on the sources of funding for provincial measures and estimates the timing of provincial spending.

Overall, the FAO has identified 128 federal government measures and 118 provincial measures for a total of 246 COVID-19 response measures.

A complete list of the COVID-19 response measures is available on the FAO’s website at https://bit.ly/39u0kRS.

Combined, federal and provincial direct support measures will provide Ontario with a net total of $170.3 billion in support from 2019-20 to 2022-23.

Federal measures will provide Ontario with $144.7 billion in support and provincial measures will provide $35.4 billion. After accounting for $9.8 billion in federal cash transfers to the Province, the federal government’s share of direct support measures is 85 percent ($144.7 billion) and the provincial government’s share is 15 percent ($25.6 billion).[3]

Most of the direct support measures will benefit businesses ($66.4 billion, 39 percent) and individuals ($65.0 billion, 38 percent), with the remaining support allocated to the  health sector  ($25.3 billion, 15 percent),  municipalities  ($5.1 billion, three percent),  schools and child care ($3.5 billion, two percent), and ‘other’ areas ($5.0 billion, three percent).

The net total of $170.3 billion in direct support measures has increased by $64.7 billion (61.2 percent) since September 2020, with the federal government contributing nearly two-thirds of the increase ($42.6 billion) and the Province contributing over one-third ($22.0 billion).

By category, support for businesses  had the largest increase since last year ($24.3 billion), followed by health sector measures ($18.1 billion) and support for  individuals  ($15.0 billion).

The FAO estimates that of the $35.4 billion in total provincial direct support measures, $18.5 billion (52 percent) is new provincial spending, $9.8 billion (28 percent) will be funded by cash transfers from the federal government, while $7.1 billion (20 percent) is reallocated spending and savings from non-COVID-19-related provincial programs.

This means that, when compared against the Province’s spending plan before the start of the COVID-19 pandemic, the net cost to the Province from its direct support measures is an estimated $18.5 billion over four years, as the remaining measures were either funded by the federal government or from reallocations and savings from other provincial program budgets.

The FAO estimates that of the $35.4 billion in provincial direct support measures, $0.2 billion (0.6 percent) was spent in 2019-20 and $20.6 billion (58.2 percent) was spent in 2020-21. Of the remaining $14.6 billion in measures, the FAO estimates that $12.5 billion (35.3 percent) will be spent this fiscal year, while $2.1 billion (5.9 percent) will be spent in 2022-23.

In 2020-21, spending levels increased each quarter, with spending in the fourth quarter reaching an estimated $10.5 billion or 51.2 percent of total provincial spending on direct support measures in 2020-21.[4]
In the health sector, 70 percent ($5.6 billion) of 2020-21 provincial spending on COVID-19-related measures occurred in the last six months of the fiscal year, reflecting the timing of health sector activity, such as hospitalizations, COVID-19 testing and vaccinations.

The full report can be accessed by clicking on the following link:

https://fao-on.org/en/Blog/Publications/fed-prov-response-2021

Walker Replaces Nichols as Deputy Speaker

Before he was booted out of office by way of a government motion, the former PC MPP and now Independent MPP for Chatham-Kent, Rick Nicholls, took the more dignified route and resigned as Deputy Speaker of the Ontario Legislature. His resignation paved the way for the introduction of a motion from Government House Leader, Paul Calandra, to nominate the PC MPP for the riding of Bruce-Grey-Owen Sound, Bill Walker, to succeed Nicholls in the role.

Nicholls was ousted from the PC caucus because he refused to get vaccinated. Orchestrating his removal as Deputy Speaker by the Tory government was not unexpected. First elected in 2011 and re-elected in 2014 and 2018, Nicholls has said that he will not seek re-election in the June 2022 Ontario general election.

The nomination of Walker as Nicholls’ successor is somewhat surprising. Walker lost his post as Associate Minister for Energy and Minister Without Portfolio for his strong anti-lockdown position.

In addition to Walker, there are three other Deputy Speakers: NDP MPPs Lisa Gretzky, Jennifer French and Percy Hatfield. Unlike the Speaker, when not presiding over the Legislature Deputy Speakers are allowed to participate in their parties’ caucus meetings, participate in debates and perform all other partisan duties of an MPP.

Walker  took his first spin in the Speaker's chair, presiding over the Legislature on the morning of Wednesday, October 6th.

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