Submission draws the Committee’s attention to the significant revenue leakage from the provincial coffers caused by Workplace Safety and Insurance Board (WSIB) claim suppression. In particular this revenue leakage impacts health care and social assistance, budget areas already stressed by the COVID-19 pandemic ….
January 25, 2022
BY EMAIL TO firstname.lastname@example.org
The Honourable Peter Bethlenfalvy, Minister of Finance
c/o Budget Secretariat
Frost Building North
3rd Floor, 95 Grosvenor Street
Toronto ON M7A 1Z1
Dear Minister Bethlenfalvy,
Re: Spring 2022 Budget Consultations: significant revenue leakage from the provincial coffers caused by WSIB claim suppression
Thank you for the opportunity to participate in the 2022 pre-budget consultation. Injured Workers Community Legal Clinic is a legal aid clinic, part of Legal Aid Ontario, specializing in legal advice and assistance to injured workers in workers’ compensation matters. Our mandate includes participating in opportunities to make systemic improvements in laws and policies that affect the injured worker community.
Our workers compensation system is funded solely by employers and is not generally a topic in the pre-budget consultations. However, we would like to draw the committee’s attention to an area of significant revenue leakage regarding health care and social assistance, budget areas that are already stressed by the covid pandemic.
Claims suppression refers to actions taken by an employer to induce a worker not to report an injury or illness, or alternatively, to under-report the severity of an injury or illness or the amount of lost time attributable to that injury or illness. It was identified as a “moral crisis” by Prof. Harry Arthurs in his 2012 “Funding Fairness” report to the WSIB.1 It was called a “real problem” by Prism Economics and Analytics in their 2013 report to the WSIB: “Workplace Injury Claim Suppression.” The 2020 Speer-Dykeman Operational Review found the WSIB’s system of audits and checks does not provide a “credible basis” to make judgments about the system’s performance. Claim suppression has been indicated as a huge issue by government and WSIB inquiries, but to no avail.
In 2013 the Workplace Safety and Insurance Board (WSIB) commissioned a study of claims suppression by the consulting firm Prism Economics and Analysis. That report states “The most important conclusion to be drawn from the research is that claim suppression appears to be a real problem. It is unlikely that claim suppression is restricted to a small number of anecdotal cases.” 2 The study concluded “Based on the research literature, 20% is a plausible estimate of the proportion of likely compensable, work related injuries or illness for which workers do not submit claims.” 3
What are the implications for Ontario’s health care budget? When workplace injuries or illnesses are not reported to the WSIB, they become the responsibility of Ontario’s publicly funded health care system. In 2020 the WSIB spent $503 Million on health care expenses for injured workers.4. If 20% of compensable, work related injuries or illness are not reported to the WSIB, you can project the actual health care costs may be an additional $126 million a year that is downloaded onto the public health care budget.
Similarly, what are the implications for Ontario’s income support programs? In 2010, when the WSIB began its program to eliminate the unfunded liability, the WSIB was paying $4.8 Billion annually to injured workers for lost wages. By 2020, the WSIB was only paying $2.5 Billion annually. What happened? When injuries and illnesses are not covered by the WSIB, injured workers must often turn to the publicly funded social assistance programs such as Ontario Works and the Ontario Disability Support Program. How many injured workers are on social assistance rather than workers’ compensation? How much of that $2.3 Billion dollar a year benefit reduction was off-loaded onto publicly funded income support programs?
The 2020 WSIB Operational Review, WSIB in Transition, repeated the concerns expressed in the 2013 Claims Suppression report and found that the WSIB had significantly reduced its claims suppression audits. It also expressed a new concern, that the biggest risk of the new rate framework adopted by the WSIB in 2020 is that a greater reliance on experience rating could enhance the incentives for claim suppression. The report calls for increased auditing for claims suppression.5
The role of the Ontario Auditor General is to hold provincial public-sector and broader-public-sector organizations accountable for financial responsibility, well-managed programs and transparency in public reporting. We recommend that you ask the Auditor General to calculate the cost of 20% WSIB claim suppression on health care and social assistance budgets. Should the WSIB now give $3 Billion to employers or should it be directed to health care and income support for the benefit of injured and ill workers? How would the public budget be better able to help Ontario and the pressures on health care and the public purse?
Eliminating claim suppression is not only an issue of fairness and complying with the law. It is an issue of preventing significant revenue leakage from health care and other social programs such as ODSP.
In closing, we also endorse the very comprehensive submission presented by Steve Mantis, Treasurer, Thunder Bay & District Injured Workers Support Group and Chair of the Research Action Committee of the Ontario Network of Injured Workers Groups on January 10, 2022.
Thank you for your consideration.
Injured Workers Community Legal Clinic,
per: John McKinnon
Copies: Party Leaders, Ontario Auditor General,
Ontario Network of Injured Workers Groups
- Funding Fairness, (2012) Harry Arthurs, WSIB, page 81.
- Prism Economics and Analysis. (2013, April). Workplace Injury Claim Suppression: Final Report. Toronto, Ontario: Workplace Safety and Insurance Board, page 2.
- Ibid, page 3
- WSIB 2020 Annual Report
- WSIB in Transition, section 2.7 and Recommendation 16