Debates of March 16, 2004 (day 1)

Thank you, Mr. Speaker. My questions this afternoon are in follow-up to my statement. I would direct them to the Minister responsible for the Workers’ Compensation Board. It is a well-known fact, Mr. Speaker, that the Northwest Territories and Nunavut, under a joint board, have enjoyed among the lowest assessment rates in Canada, but what is alarming is the rate of increase. From four years ago to now, we are looking at rates that are going from a $1 to about $2.40. It is this rate of increase, Mr. Speaker, that I would like to address. My question to the Minister is what are the principle drivers behind WCB assessment rates rising almost two-and-a-half times in just four years? Thank you, Mr. Speaker.

The Minister responsible for the Workers’ Compensation Board, Mr. Bell.

Return To Question 8-15(3): Rising WCB Assessment Rates

Thank you, Mr. Speaker. There are a number of factors at play here and I think the Members may be aware of a number of them. I have been receiving a number of queries on the 2004 assessment rates in my office, so what I have done is sent a letter to all Members of the Assembly to try to give them some background and some explanation as to why rates are increasing. For 2004, the rates are based on actual 2002 claims experience for that year and the average assessment rate will be $2.39 per $100 of assessable payroll. The board, though, will continue to subsidize by 20 percent those rates. So the average assessment rate will, in effect, the rate that employers will pay will be $1.91. I think it is important to keep that in mind, but obviously we know that the returns from investments over the past five years have not been what they were prior, and so the surplus has been diminished. As well as the 2002 claims experience, obviously the cost of claims has been going up as the cost of delivering health care across the country has been going up. So I suppose that is really no surprise, but there are a couple of factors here at work. Thank you, Mr. Speaker.

Supplementary, Mr. Braden.

Supplementary To Question 8-15(3): Rising WCB Assessment Rates

Thank you, Mr. Speaker. So we have a poor market and an increase in the cost of claims and health care coverage. I was interested in finding out really, you know related to the shared jurisdiction that we have here, have the incidents of accidents and the cost of claims been more or less consistent between Nunavut and the NWT? Thank you, Mr. Speaker.

Mr. Bell.

Further Return To Question 8-15(3): Rising WCB Assessment Rates

Thank you, Mr. Speaker. That is a very good question and one that I will undertake to get some more detail on. I do believe that the incidence of claims has been higher in the Northwest Territories, but I will confirm that and get back to the Member. Thank you.

Supplementary, Mr. Braden.

Supplementary To Question 8-15(3): Rising WCB Assessment Rates

Mr. Speaker, I look forward to getting that information. A bit more specific in the area of the recent increase in assessments in the fast food restaurant; this would, I think, apply perhaps largely to the service sector. The one business that I know of is experiencing a 69 percent increase in assessment rates from one year to the next. The information that I have, Mr. Speaker, indicates that there is a policy or guideline that wants to keep rates, if rates are going to increase, to no more than 25 percent. Could the Minister explain the discrepancy between that threshold or that cap and the 69 percent that this sector is experiencing? Thank you.

Minister responsible for the Workers’ Compensation Board, Mr. Bell.

Further Return To Question 8-15(3): Rising WCB Assessment Rates

Thank you. It is difficult to address this question concisely. It probably does require some background. In order to determine what various industries or subclasses will pay, the WCB analyzes the claims experience for those industries. I think there are 29 subclasses or industries. Now, some of these industries have very few employees. So if there happen to be claims in one year it can quite drastically skew the claims experience for that subclass or industry and if we go with the philosophy that each industry should pay its own way, this can be very difficult for an industry with fewer employees in a year. So there is a smoothing effect that takes place and there is a cross-subsidization. The WCB has been looking into this and believes that it is necessary to do a review to ensure that industries are bearing the full cost of that claims experience by industry and that it is not spread over or shared among other industries. I know that a consultant has been hired to analyze this and look at this and make sure that when they come back in the summer and have some discussion with the various different stakeholders and employers, there is more accurate information as to what goes on between subclasses.

As to a 60 percent increase, I don’t have that data in front of me to know if in fact that is the case. I will take the Member’s word for it; it does seem very high. I will go back and look at it and see if in fact that is the case, but the attempt here is to make sure that industries pay their own way and that there isn’t subsidization from other industries. Thank you.

Your final supplementary, Mr. Braden.

Supplementary To Question 8-15(3): Rising WCB Assessment Rates

Mr. Speaker, the Canadian Federation of Independent Business and the surveys that it did last year indicates that with the low rates that we have, we should be looking at this as a significant advantage. The CFIB points out that this is a competitive advantage for the NWT and Nunavut when it comes to setting up business and employing workers in the NWT. It even goes so far as to credit the board here as being a low cost and well managed board. What steps are we taking to protect that advantage especially in light, Mr. Speaker, of the indication that we have here that rates have increased by more than two-and-a-half times in only four years? Thank you, Mr. Speaker.

Mr. Bell.

Further Return To Question 8-15(3): Rising WCB Assessment Rates

Thank you, Mr. Speaker. Workplace safety is obviously paramount and the WCB makes many efforts to ensure that safety training is offered and provided and carried out where employers are concerned, and that we do our utmost to conduct safety inspections at worksites. I think the most important thing here to remember is that we need to keep the incidents of workplace injuries to an absolute minimum, and the WCB is striving to do that. I think it is also important to keep in mind that I would acknowledge that this is a competitive advantage. At one point, I believe we had the lowest assessment rates in the country and I still believe that we are one of the lowest, certainly in the top five. Thank you, Mr. Speaker.