Social Policy in Ontario

How the Liberals buried a $14 billion liability late in the day [WSIB]

Posted on June 5, 2012 in Debates

Source: Toronto Star — Authors: Martin Regg Cohn

TheStar.com – news/canada/politics
Published On Mon Jun 04 2012.   By Martin Regg Cohn, Queen’s Park Columnist

In politics, what goes around, comes around — and then goes underground when governments bury bad news.

Good news, of course, is always trumpeted, as it was one recent Friday afternoon when the Liberals clucked about a coup: Tory MPP Elizabeth Witmer had quit the Tory caucus to become chair of the WSIB — opening the door to a Liberal byelection victory that could transform Dalton McGuinty’s minority government into a majority.

The following Friday, the governing Liberals had another announcement. But this time, instead of boasting, they buried it late in the afternoon:

The Workplace Safety and Insurance Board — the same WSIB that Witmer is now taking over — is burdened by an unfunded liability of $14.2 billion that requires “radical and rapid steps” to fix, concluded an independent report prepared for the government.

Now, Witmer is being brought back to clean up a mess of her own making — or at least one she made worse when overseeing the WSIB as labour minister for the Harris Tories. In the late 1990s, she reduced benefits for injured workers, while recklessly reducing employer premiums by roughly double that amount.

The result: a rapidly rising unfunded liability as revenues declined under her watch — and ever since.

Instead of the usual wide release of the 188-page study, a mere handful of copies were distributed just before weekend deadlines — with the executive summary conspicuously absent. Coming so late in the day, the long-awaited report went largely unnoticed.

How convenient for Labour Minister Linda Jeffrey.

The study deserved better than to be discarded by Jeffrey like a radioactive isotope. The report’s findings speak volumes about the way public affairs are managed. The way it was dumped by her office shows how politics is practiced in Ontario.

Oh, and by the way, there is an executive summary to the Arthurs report, even if the government didn’t bother distributing it. But whether you wade through the unwieldy full report or the condensed version, the message can still be summed up in a paragraph:

The WSIB has only 55 per cent of what it needs to meet its obligations. In other provinces, its counterparts are more or less fully funded.

The problem is that Ontario businesses keep complaining they’re tapped out, while payouts and other costs keep rising.

Injured workers counter that they’ve already seen their inflation protection reduced — not just by Witmer and the Harris Tories, but by the last NDP government of Bob Rae.

Both sides agree on one goal: cutting the supposed fat at the WSIB. One union noted that 260 employees earn above $100,000 a year (and that was before the chairmanship was upgraded by the premier from a part-time position to a full time job paying Witmer $188,000 a year.)

When I spoke to the report’s author, former Osgoode Hall law dean Harry Arthurs, he argued that there is no quick fix, nor any hidden gravy train. Businesses demand that the WSIB operate in a more businesslike way, but then demand a break on premiums. If car or home insurance companies provided insurance at a loss — or without well-paid actuaries — they wouldn’t stay in business.

“No insurance company can operate below cost,” Arthurs notes dryly.

The politics of injured workers remains a perennial struggle. Arthurs made an unambiguous recommendation to restore indexation to both fully and partially disabled workers, but the Labour Minister responded with a pittance: She increased benefits to workers on partial disability by 0.5 per cent next year and again in 2014.

As for that unfunded liability, which comes close to the entire budget deficit, the government promises it will be fixed ASAP. Target date: 2027.

You might say Witmer’s work is just beginning. As she returns to the unfinished business of the 1990s — the era of slash and burn — she’ll have her work cut out for her anew, courtesy of her Liberal enablers.

Witmer left the WSIB buried by its own liabilities, and the Liberals buried the report on those liabilities. They owe each other.

And we’ll all pay in the end.

< http://www.thestar.com/news/canada/politics/article/1205847–cohn-how-the-liberals-buried-a-14-billion-liability-late-in-the-day >

Tags: budget, disabilities, Health, pensions, tax

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