As a follow up to previous comments on the WSIB is confirmation from the Auditor General of the sad state of affairs at the WSIB. What is perhaps most the  distressing and obvious  observation is that while the Ontario Board is crippled with the costs of a huge Unfunded Liability other Provincial Boards have no liability and are completely funded. In other words the WSIB’s problems are not caused by the short term economic downturn but are the result of years of fiscal mismanagement. This is a made in Ontario crisis.

There are many reasons why we have opposed the Government’s legislation intended to force all independent operators to buy WSIB coverage but this must certainly be at the top of the list. How can an organization not capable of managing its’ present fiscal  obligations possibly be expected to properly manage thousands of new customers who want no part of the system. The Government in its’ 2 terms has introduced numerous “reforms” with the promise up until this spring that they were on target to eliminate the Unfunded Liability by 2014. The earliest estimate is now 2022.

Tell your MPP that Mandatory Coverage is just another step in the wrong direction for the WSIB and will compound an already serious financial threat to the viability of the system.

As Mr. Liversidge notes, ‘fundamental change is needed.’    

David McDonald

President

Merit OpenShop Contractors Association

Ph 416-483-3856 or 1-888-303-9878

Fax 416-483-3095

dave@openshop.ca

www.openshop.ca

Auditor General says WSIB unfunded liability could threaten future benefits

Just a few minutes ago Ontario’s Auditor General released his 2009 Annual Report.  I will be presenting a full and detailed account later this week, but the analysis I have recently presented has been affirmed by the AG.

The AG said that unless the WSIB starts to address its significant $11.5-billion unfunded liability (it’s actually more now – he is referring to the 2008 level) “today”, it may ultimately not be able to meet its existing future financial commitments to injured workers.

Just as I have been suggesting for more than a year now, AG McCarter said, “The time to start addressing this problem is now; otherwise, there is the risk that the WSIB may not be able to meet its obligations, or it may have to raise premiums well beyond what employers can realistically afford.”

Using comparisons with other Canadian jurisdictions similar to those I presented in the November series of The Liversidge e-Letter, the Auditor General’s Report also noted that the WSIB’s funding ratio—the percentage of assets available to meet its financial obligations—was 53.5% at the end of 2008. By comparison, the four large provincial boards the Auditor compared Ontario to (British Columbia, Alberta, Manitoba, and Quebec) averaged 102%.

Just as I have been arguing, the AG suggests that “fundamental legislative changes may also be needed before any significant progress can be made in reducing claims duration”.

While I called the Board’s plan to eliminate the unfunded liability by 2014 “impossible”, the AG said it was “ambitious.”

In the October 5, 2009 issue of The Liversidge e-Letter, I said that it would be wise to question the Board’s recent and oft repeated confidence that “the workplace safety and insurance system remains secure”.  The AG meets this head on.  In addressing the WSIB argument that the unfunded liability is only a problem at time of wind-up, the AG asserts “we do not agree with this argument”. 

My bottom line take on the AG’s report? As I have been arguing for more than a year now, fundamental change must be the new order of the day.