What to do with WorkSafeBC’s huge funding? – BC News

B.C.’s Workers’ Compensation Commission faces a challenge that many would envy. The question is what to do with $2.7 billion.

So far, the state Department of Labor says there is “nothing.”

Over the past decade, WorkSafeBC has built up a large surplus through investment from companies and steady premium payments.

Labor Minister Harry Baines described this as a financial victory that allowed WorkSafe BC to stabilize costs while improving services for injured workers.

But companies and labor groups are desperate to get that money spent elsewhere.

Groups like the Canadian Federation of Independent Business say the size of the surplus is proof that members are paying too much and are owed kickbacks.

Unions, meanwhile, argue that WorkSafeBC’s surplus money could be used to help workers injured on the job, many of whom they say continue to fall through the cracks.

“That’s what that money is for. We urgently need investment to improve systems for workers,” said Sasanne Skidmore, president of the BC Federation of Labor.

Coincidentally, I had plenty of money.

WorkSafeBC is the province’s workers’ compensation board. The system is funded by premiums paid by companies based on the payroll size and occupational injury rate of their sector.

This board is the result of more than a century of “historic compromise.” The company agrees to fund the board of directors. Instead, workers cannot sue companies directly for injuries sustained on the job.

In exchange, the board will pay workers lost wages, medical benefits and lifetime disability compensation.

These payments are administered through the Accident Fund, a large fund that funds current and ongoing obligations to injured workers.

Invest that cash in various assets such as stocks and bonds. And in recent years, the returns on those investments have exceeded expectations.

Typically, WorkSafeBC aims for the fund’s asset value to be 30% higher than its liabilities, with a total target of 130%. This is a large cushion and is the largest used by the Compensation Board of Canada.

But the fund still outperforms it. Last year’s funding rate was 146%. Last year, it was over 154%. In total, the value of the Accident Fund has exceeded the standard by 130% for seven consecutive years.

But Emily Boston argues that financial success isn’t necessarily something to celebrate.

“The surplus shouldn’t happen every year, especially when the targeted funding level is that high,” said Boston, a policy analyst with the Canadian Federation of Independent Business.

CFIB is one of the employer groups lobbying the WorkSafe BC Board to return some of the surplus to employers in the form of rebates, and Boston said that He argued that it would help weather tough economic conditions without jeopardizing the stability of the country.

“Employee safety and health is a top priority for small business owners. The last thing they want to see is hustling money into a fund that just sits idle,” Boston said.

Greg Cairo, labor critic for the BC United Party (formerly the BC Liberal Party), also said he wants the government to consider rebates that would require legislation.

“We need to think about the other side of the equation,” Cairo said. “At some point, businesses will go out of business and close their doors.”

But Baines says the idea is a non-starter.

He said employers already have an agreement because WorkSafeBC’s surplus allows them to keep premium rates artificially low. A briefing note prepared for Chancellor David Eby earlier this year estimated that the Council spent $1.7 billion on subsidy payments to employers between 2019 and 2023 alone.

“They’ve been getting discounts since 2006. It adds up to billions of dollars,” Baines said.

“Employers are profiting as a result of the surplus, and at the same time workers are receiving improved benefits. This is a win-win situation,” he said.

Mr. Skidmore agrees that the money should not go to the employer. And he noted that while the surplus is significant, it could still be vulnerable in a recession. “Especially when you’re talking about things like worker health and safety, it’s better to have some money in the bank,” she says.

But the federation and other labor groups are also calling for more aggressive spending to improve compensation for workers injured on the job.

In the early 2000s, the BC Liberal government significantly reduced WorkSafeBC payments for injured workers. The amount of lifetime disability pension paid was limited to age 65. In addition, the amount of the payment was changed to increase at an interest rate lower than the inflation rate. This means that recipients’ purchasing power will decrease over time. And payments are adjusted less frequently to reflect the cost of living.

A 2018 report found that these changes are “reducing work-related injuries, illnesses, and deaths to workers, their families, and the broader community, including taxpayers, through increased externalized costs to social welfare systems.” “The proportion of economic burden has increased.”

The BC NDP reversed some of these cuts. Mr. Baines introduced a bill last year that included more than $1 billion in one-time costs to reverse changes in interest rate policy.

But the government has yet to restore the lifetime pension, Skidmore said. The federation is also calling for a number of other changes, including improved return-to-work policies, better compensation for psychological injuries and tightening of existing rules.

“The Workers’ Compensation Commission is doing the best it can within current existing law, but it’s not going where we want it to go,” Skidmore said.

Baines declined to say whether there are any immediate plans to increase WorkSafeBC’s spending. He said the government was continuing to consider former employment lawyer Janet Patterson’s 2019 review of the workers’ compensation system, which included a number of recommendations on how to change the system. Ta.

But he also said the government would tread carefully. “Given the volatility of the market, you always have to be very careful,” Baines said.