Businesses and not-for-profit organizations across the province were shocked in October when WorkSafe New Brunswick announced that the average assessment rate for New Brunswick employers in 2017 will increase from $1.11 per $100 of payroll to $1.48 per $100 of payroll. This 33% increase will have an immediate and significant impact on New Brunswick’s employers and economy. Many businesses are struggling for survival in New Brunswick and their challenges are accumulating.
In the past year employers have seen increases in personal income tax, the minimum wage, HST and corporate tax. Now they are facing a massive increase in worker’s compensation premiums in 2017, a carbon tax in 2018, a hike in the Canada Pension Plan in 2019 - at a minimum. The federal government is now signalling their intention to tax health and dental benefits in their upcoming budget and WorkSafeNB acting President and CEO Tim Peterson has indicated employers should expect another significant increase for 2018 and possibly beyond.
It is our understanding that one of the primary reasons behind the rate increase is rising claim costs resulting from changes to benefit policies. $87 million in additional employee benefit costs have been incurred due to five specific Workers Compensation Appeals Tribunal (WCAT) decisions that are forcing employers to pay more now and in the future. New Brunswick employers recognize it is in their best interests to have a healthy and functional worker’s compensation program. Our people are our greatest resource - our 950 members alone employ nearly 27,000 individuals. In our recent pre-budget brief to Minister Rogers, we emphasized that investing in the province’s human capital is the best way to produce medium- to long-term growth. Their health and safety is no exception.
However, a system that is 100% employer-funded and can increase its costs by nearly $100 million because of precedents set in five individual proceedings simply is not working for anyone. Unpredictable costs have a cascading effect on economic growth - entrepreneurs invest less and take fewer risks without some form of cost certainty - particularly when the province has seen negligible growth for nearly a decade and when costs are increasing across the board, as listed above. This means even lower growth and fewer jobs, leading to lower revenue for the government to provide health care and education.
The heart of this issue appears to be the requirement a WorkSafeNB representative appear at appeal hearings in order to have standing for a future challenge to a WCAT decision. WorkSafeNB cites the expense and lack of human resources to ensure someone knowledge with legal proceedings and consequences appears at every appeal hearing. The WCAT reports that around 90% of appeals are successful for the worker - due in part to a WorkSafeNB (or employer) representative not presenting contrary evidence or arguments at these hearings.
Each of these positions are reasonable in a vacuum. Unfortunately, employers do not operate in this vacuum and they need the provincial government and Minister Arsenault to step in to provide a legislative solution to this issue. WorkSafeNB and WCAT both feel their hands are tied by current policy and the Worker’s Compensation Act. Specifically, unintended consequences have arisen from Phase 1 of the government’s review of the Act - a legislative solution is the only remedy possible.
The Fredericton Chamber calls on Minister Arsenault, WorkSafeNB and WCAT to work with us and the other members of the Coalition of New Brunswick Employers (whose members employ nearly ⅔ of the province’s private-sector workforce) to find a solution that works for employees, employers and indeed, all New Brunswickers. A system that needlessly takes money from business, reduces employers’ ability to create jobs, and pay taxes simply does not work - ultimately it inhibits business growth, which makes it more difficult for the government to provide the health care, education and all of the other services that New Brunswickers deserve.
Krista Ross is CEO of the Fredericton Chamber of Commerce. With more than 950 members, the Fredericton Chamber of Commerce is one of Atlantic Canada’s largest chambers of commerce. A dynamic business organization, the Fredericton Chamber of Commerce is actively engaged in policy development that affects the competitiveness of our members and of the Canadian business environment. It’s vision is Community Prosperity Through Business.