After years of being partners in a workers’ compensation system that was fully funded and seen as a model for the rest of the country, WorkSafeNB (Crown Corporation overseeing the implementation and application of New Brunswick's Workers’ Compensation Act) announced on October 5, 2016 that the 2017 average employer rate for workers’ compensation will increase from $1.11 to $1.48 per $100 of payroll. This decision was made without consulting the employer community and will increase employer premiums by an average of 33 percent.

What RCC Did / Next Steps

As a member of the Coalition of New Brunswick Employers, RCC and its fellow Coalition members met with senior officials from WorkSafeNB. Employers used this meeting to express their concern over the rate increase and the non-consultative nature of WorkSafeNB.

As expected, WorkSafeNB justified the rate increase by pointing out that the 2017 increases to employer rates are due to a declining funding position as well as funding demands stemming from recent decisions by the newly formed Workers’ Compensation Appeals Tribunal (WCAT). WCAT has only been operational in the province since mid-2015 yet many of its decisions have struck down some of the policies and practices of WorkSafeNB. The impact of the WCAT decisions is seen in this year’s $87 million increase to WorkSafeNB’s budgetary liabilities.

WorkSafeNB pointed out that while the past year has only seen a marginal increase in accident frequency, many of the previous decisions rendered by WorkSafeNB are being successfully appealed at WCAT, resulting in additional payments to the appellant. Coalition members also reminded WorkSafeNB that part of the reason for its declining funding position stems from losses in WorkSafeNB’s investment portfolio.

RCC and Coalition members have written to New Brunswick’s Minister of Post-Secondary Education, Training and Labour, asking for a meeting to make the following arguments:

  • The Minister is responsible for the overall viability of the workers’ compensation system.
  • WorkSafeNB and the Workers’ Compensation Appeals Tribunal (WCAT) do not engage in economic impact analyses of the effects of a potential rate increase on the economy of New Brunswick.
  • The private sector is not responsible for WorkSafeNB’s losses in its investment portfolio.
  • The Minister needs to push WorkSafeNB to consult employers in advance of taking such significant actions.

Such consultation could have led to a more reasonable increase in employer premiums or at least recognition that such an increase needs to be spread out over a longer period of time. Given New Brunswick’s continuing economic challenges, it is disappointing to see such action as it does not inspire business confidence.

RCC will continue to work in conjunction with the Coalition of New Brunswick Employers to oppose both the workers’ compensation employer premium increase as well as the overall tax increases that have been occurring in New Brunswick.

Background

In addition to the 33% increase in workers’ compensation employer premiums, the past few years have been difficult for retail businesses in New Brunswick as the government has introduced:

  • personal and corporate tax hikes
  • an increase in the Harmonized Sales Tax (HST) from 13-15%
  • a minimum wage hike to $10.65 which, coincided with a promise from the Premier to raise minimum wage to $11.00 per hour by 2017.

WorkSafeNB has also recently recommended that government amend section 38 of the Workers’ Compensation Act and reduce the waiting period for benefits from three days to two. Staff members at WorkSafeNB readily admit that such a change to section 38 will create significant additional costs that will be borne by employers.

If you have any questions or concerns, please don’t hesitate to contact: Jim Cormier, Director (Atlantic) at: [email protected] or (902) 422-4144