Quickly-rising WorkSafeNB premiums have been a top concern for businesses, non-profit organizations and municipalities since it was announced in late 2015 that rates would be jumping by 33% for 2016. This jump was alarming, to be sure, but it was still unclear what exactly was driving such an increase since injuries had been (and continue to) trend downward for several years. Little did we know then what was in store and rates subsequently nearly tripled by November 2018 when the 2019 rate was announced.
Make no mistake, the situation is serious – and remains so – and so the Higgs Government deserves praise for acting immediately to begin implementing the recommendations of the employer-employee led WorkSafeNB Task Force. Payroll taxes such as WorkSafeNB premiums are particularly difficult for small businesses to absorb because there is no correlation to revenue the way many taxes do – such as the small business tax – which applies once a business has turned some profit; payroll taxes, however, are a tax on your costs, not on your revenue or profit.
This isn’t business telling government how to solve the problem, its a group of experts made up of workers and employers that worked for a year to examine the situation and come up with a plan. New Brunswick went from the lowest rates in Canada to the highest in three years ($1.11 to $2.92 per $100 of payroll) and absent these proposed changes, there’s no reason to think it would not have continued on that trajectory moving forward. By taking action now, the government is avoiding more dramatic action in the future.
The members of the task force, the province’s Auditor General, the WorkSafeNB board of directors, their CEO, Doug Jones, the business community, municipalities, and non-profit organizations have all clearly identified the problem. The expert task force, clearly identified solutions and the government is quickly implementing their recommendations. This is how good policy-making is supposed to happen.
Clearly our elected representatives agree that the issues are serious and the solutions apparent by passing the first piece of legislation this week. WorkSafeNB CEO Doug Jones has announced that the 2019 rate will be lowered to $2.65 per $100 of payroll (down from the previous estimate of $2.92). Even more important than getting a small reduction to the 2019 rate is simply getting New Brunswick’s worker’s compensation system back on a path to sustainability so that it will be there to protect workers and employers when they need it.
It is also important to note that the rising rates are not about increased injuries in the workplace (the opposite is true) and the proposed solution isn’t about taking away benefits – the legislative changes in 2015 that provoked the out-of-control rates did not add any benefits. Mr. Jones stated it quite plainly on November 27, 2018: “Where the cost savings will occur is that the worker’s compensation system will now not be paying for diseases or injuries that are keeping people away from work for reasons other than workplace injury.” As he stated earlier in that interview, people with injuries and diseases that are not a result of a workplace injury should be part of the social system (not the employer-funded workers’ compensation system).
The most important thing is having a sustainable workers’ compensation system that both employers and injured workers can rely on when they need it. Without this intervention, that stability and reliability would be put into doubt in the coming years. The government did the right thing for everyone by moving quickly to implement many of the task force’s recommendations at their earliest opportunity and we look forward to the implementation of the remaining recommendations in 2019.
Krista Ross is CEO of the Fredericton Chamber of Commerce, a nationally accredited organization with nearly 1,000 members, is an active business organization engaged in policy development and advocacy that affects the competitiveness of our members and the Canadian business environment. The Chamber’s vision is ‘Stronger Community Through Business Prosperity’.