On October 6, 2021, Monte McNaughton, the Minister of Labour, Training and Skills Development, announced a number of proposed changes that, if passed, will help employers across the province of Ontario cope with the economic hardship imposed by the COVID-19 pandemic. Minister McNaughton expressed that the intention of these changes is to save employers hundreds of millions of dollars that can be reinvested into the economy. At the same time, Minister McNaughton expressed a desire to avoid reducing the benefits and services to which injured workers are entitled.
First, the Workplace Safety and Insurance Board (WSIB), which covers over five million people in more than 300,000 workplaces across Ontario, will cut premium rates in 2022 by $168 million. This means that the WSIB's reduction in premiums between 2018 and 2022 will total $2.4 billion. On average, the 2022 premium rate cut represents a five percent reduction in premiums paid by each employer.
Second, the Ontario Government intends to introduce legislation that, if passed, would allow for a significant portion of the WSIB's current reserve, currently valued at $6.1 billion, to be distributed to safe employers. Currently, the WSIB is not permitted to distribute surpluses to employers. If passed, the proposed legislation will allow the WSIB to return excess funds to employers once the WSIB's surplus reaches 115 percent, and would require the WSIB to return excess funds once the surplus reaches 125 percent. As of March 31, 2021, the WSIB's insurance fund was at a 119 per cent surplus. Each percentage point is estimated to represent $305 million in surplus funds.
Third, the Government of Ontario is proposing a change that would allow the WSIB to work directly with the Canada Revenue Agency (CRA) to streamline remittances for businesses. By giving businesses a single place for submitting payroll deductions, this change would reduce administrative costs and improve efficiency.
Finally, the Government announced that the ceiling for worker benefits will be increased by 9.45 percent, while the growth of premiums will be capped at an increase of 3.2 percent. This change will be enacted as a regulation under the Workplace Safety and Insurance Act, and is meant to respond to the fact that closures in low-wage sectors during the pandemic have resulted in a sharp increase to Ontario's Average Industrial Wage.
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