This column was published in the August 2018 edition of the Business in Calgary and Business in Edmonton Magazines.
A few years ago, then MLA now premier, Rachel Notley, told the Canadian Injured Workers Association of Alberta that our province’s workers’ compensation board (WCB) “is an incredibly cheap insurance system for employers,” and that “we don’t even have a system of even keeping the WCB accountable to the crappy-ass legislation we have in this province.”
Well, that certainly sets the stage for the rough ride employers are now in store for. Effective September 1st, ideologically-driven changes will fundamentally alter Alberta’s WCB, shifting the system from one that balances the interests of businesses and workers, to one that is ‘worker-centric’.
The Canadian Federation of Independent Business (CFIB), tracks business owners concerns over time. Survey findings from over a thousand business owners show the WCB has become a concern for entrepreneurs. In fact, 26 per cent of businesses reported workers’ compensation as a serious issue for their business in 2014, compared to 42 per cent now. Concern about having fair and balanced provincial labour laws went from 15 per cent in 2014 to 48 per cent today.
The WCB system is 100 per cent funded through employer premiums. For many years, the Board’s policy has been to refund employers the excess monies over and above what is needed to properly fund the workers’ compensation system.
When the WCB’s funding position (assets versus liabilities) exceeds 128 per cent, an automatic distribution is triggered. To put that into perspective, about two billion has been returned to Alberta business owners in the past five years.
This policy helps workers. Entrepreneurs report using the refunds to invest in newer safer equipment, offer training opportunities, and to stay afloat by paying down debt.
Government meddling with this policy is problematic because the workers’ compensation system is supposed to be independent from government.
During a government mandate review, the Minister of Labour rejected a recommendation from the review panel to redirect the surplus monies to other areas. Yet in a recent letter, the Minister directed the Board to conduct a consultation and to change their policy.
The Alberta government seems to be trying to minimize political fallout: getting their desired outcome for the labour movement while trying to avoid public uproar from the small business community. Quite frankly, business owners will see through this thinly veiled scheme to redirect the funds.
Policy makers should instead be talking about lowering the threshold at which a refund is triggered, to put more money back into businesses. According to a research report by CFIB, an Alberta business with five employees would receive a $4,960 rebate this year if monies over a 110 per cent threshold were refunded, instead of at the overly cautious 128 per cent level. Yet, this policy is not even on the table for discussion.
Job creators will soon be paying the price for the government’s ideological agenda under the guise of WCB reform.
CFIB is Canada’s largest association of small and medium-sized businesses with 110,000 members across every sector and region. Learn more at cfib.ca