The need for New Brunswick businesses to be globally competitive is probably no greater in any other province than New Brunswick. Our province exports more than 80% of the goods and services produced here. To sell our products it is essential that businesses can manage a globally competitive cost structure.
Individual businesses are limited in their ability to influence what makes up the costs of producing goods. The imposition of tariffs, impact of foreign subsidies, variation in corporate tax rates in other jurisdictions, and adjustments to minimum wage rates are all examples of costs imposed on business that are largely outside their control.
Over the past three years, it has become increasingly clear WorkSafe NB, the employer paid program that provides income replacement to injured workers, is headed for disaster. In 2015, the provincial government enacted legislation rightfully intended to address a backlog of claims appeals. It is clear from the most recent annual reports the impact of these changes will eventually threaten the solvency of the institution itself.
The good news is the evaluation and recommendations of a task force of informed experts indicated the dire projections for WorkSafe NB are neither necessary nor inevitable. In their report submitted on July 17th, they recommended legislative changes that will allow WorkSafe NB to continue to operate in the best interests of injured workers and employers. Their recommendations were based on extensive direct consultation with individual representing business and labour and provide directions to government that will ensure that WorkSafe NB can continue to provide the essential services expected by all participants.
New Brunswickers can be justifiably proud of the operation of WorkSafe NB. The Commission is responsible for and has achieved significant improvements in educating and enforcing workplace safety, rapid access to income replacement, and to active assistance in rehabilitation and return to work. Under the guidance of the Commission frequency of workplace injuries has fallen, the administrative cost of operations has been reduced, and wage replacement claims are being processed within days of their submission. Because of this, WorkSafe NB has for several years been one of the lowest cost, best-run workers’ compensation boards in the country.
But the current reality is that because the 2015 changes in legislation altered the authority of the Worker’s Compensation Appeals Tribunal (WCAT), employer premiums in New Brunswick will rise from the lowest in the country to the highest in the country. This is almost entirely due to an explosion in the number and cost of claims imposed on the Commission via WCAT rulings because of legislation that restricts the Commission’s ability to create and administer claims policy. Even by employing accumulated surpluses and reducing funding requirements, premiums could rise by 90% from $1.55 per $100 of wages in 2015 to a potential $2.95 in 2019.
Everyone in New Brunswick should be concerned when the costs of inputs rise so quickly and so significantly. It does not take a degree in economics to understand that higher costs mean higher prices, less sales, and less potential to invest and create jobs. In the upcoming election campaign, New Brunswickers can count on every candidate telling them their government will create jobs. If nothing changes for WorkSafe NB, this is clearly an example of how governments are not supporting job creation.
There are solutions that will contribute to sustainable wage insurance for workers without imposing huge cost increases on NB employers. But those solutions are for the moment only on paper. New Brunswick needs the next government to commit to immediately addressing the negative impacts of the 2015 legislative changes to allow the Commission to do the job it was originally empowered to do.
The urgency for action is real. Decisions made regarding the operations of WorkSafe NB are having a real impact on the competitiveness of NB businesses and could impact employment and insurance benefits in the long run. These businesses that employ you and your neighbours will be challenged to absorb the combined costs of WorkSafe NB and Canada Pension Plan premium increases and a tax on carbon. Unless governments can moderate these costs, we can expect the price of New Brunswick goods and services to increase.
So if you are concerned about the availability jobs and the future cost of goods in your community, why not start by asking your local candidate if their party is committed to acting immediately on the recommendations of the WorkSafe NB Task Force Report?
Alain Bossé is the President & COO of Groupe Savoie
Huddle publishes commentaries from groups and individuals on important business issues facing the Maritimes. These commentaries do not necessarily reflect the opinion of Huddle.