A reality check for the Ontario Workplace Safety and Insurance Board as Harry Arthurs' Funding Review Report entitled Funding Fairness was released to Linda Jeffrey of the Ontario Minstry of Labour on May 4th, 2012.

The 188 page comprehensive report provides approximately twenty-five key recommendations to control the unfunded liability (UFL) fund. In the report, it was noted that the estimated UFL fund ballooned to $12.4 billion in early 2011.

The WSIB's unfunded liability was $9.1 billion in 1990 and stood at $11.5 billion as of December 31, 2008. There was a significant decline in 1997, resulting from legislative reforms to the system that arose from the passage of Bill 99, The Workers' Compensation Reform Act. From 2006 to 2008, the unfunded liability almost doubled in size, increasing from $5.9 billion on December 31, 2006, to $11.5 billion on December 31, 2008. It is one of the highest levels in the history of the WSIB.

The funding ratio (the ratio of assets to lia¬bilities) is a useful measure of the adequacy of a workers' compensation system to pay future claims. A ratio above 100% indicates that the workers' compensation organization has more than suf¬ficient assets to meet its estimated future liabilities.

Subsquently, a low ratio indicates that the organiza¬tion has insufficient assets to meet its estimated future liabilities. As of September 2011 Ontario's funding ratio stood at 54.7%. By comparison, the funding ratio of the other four large provincial boards ranged from 70% to 116% and on average was approximately 102%.

On May 4th 2012, the Ontario government announced that it would establish a new regulation under the Workplace Safety and Insurance Act, to require the WSIB's insurance fund to reach sufficiency of 60% funding by 2017, 80% funding by 2022, and full 100% funding by 2027. Also announced were benefit increases to injured workers on partial disability by 0.5 per cent in 2013 and another 0.5 per cent in 2014.

The Arthur's report, in this writer's opinion, is one of the most comprehensive reports on the current state of the WSIB. The recommendations are sweeping and include premiums paid by employers.

In this writer's opinion, there will be significant and difficult days ahead in order for WSIB to avoid tipping into the abyss. We will be watching to see how the new nominated WSIB chair, Elizabeth Witmer, tackles this enormous challenge.

Will the cost of getting out of this come ot the expense of Ontario employers? As an employer advocate, this writer believes that significant changes are needed on WSIB entitlement policies with stricter entitlement adjudication guidelines. This I believe is a good starting point.

Our office will keep you posted and will monitor any changes.

To read the Arthur's Report click here Funding Fairness

For more information, please contact Greg Sathmary (Ottawa) at 613-260-0600 or Industrial Mediation Professional Corporation at 1-800-660-3554.