When the rate of inflation rose sharply in the late 1960’s and 70’s permanently injured workers on fixed pensions saw the value of their pension drop sharply due to the increased cost of living. In 1985 injured workers won a long fought political victory when the Ontario government changed the law to require that workers compensation benefits be adjusted to keep pace with increases in the cost of living. But in 1994 the Ontario government reduced that adjustment to less than the rate of inflation, claiming that the WSIB was in a financial crisis. As a result of continued pressure from injured workers, in 2018, the law was changed to once again provide full indexation based on increases in the cost of living.
The adjustment is announced every January. When the WSIB announced in January 2022 that workers compensation benefits would be adjusted by 2.7%, something seemed to be wrong. Section 49(1) says that the adjustment is “equal to the amount of the percentage change in the Consumer Price Index for Canada for all items, for the 12-month period ending on October 31 of the previous year, as published by Statistics Canada.” The Statistics Canada website said the percentage change for the twelve months ending on October 31, 2021 is 4.7%, not the 2.7% provided by the WSIB.
The Ontario Network of Injured Workers Groups requested a meeting with WSIB President to discuss this issue. The WSIB refused to meet with ONIWG but defended its calculation. Some injured workers tried to appeal the WSIB cost of living adjustment and were told that it is not appealable. ONIWG was left with no alternative but to take the issue to court. Ottawa law firm Raven Law agreed to represent ONIWG on a pro-bono basis. Lawyers Emily McBain-Ashfield and Amanda Therrien from Raven law worked with a team from ONIWG to make an application to the Divisional Court on behalf of ONIWG and Clara Grisales, one of the injured workers who had tried to appeal the 2.7% adjustment and was told by the WSIB that it was a systemic issue and she could not appeal.
In the WSIB’s court filing it acknowledged that it no longer used exactly the percentage change in the Consumer Price Index for Canada for all items, for the 12-month period ending on October 31 of the previous year. Some years ago it changed that calculation without any notice to the public. It was now using a complicated averaging formula that looks back over 2 years. The problem with that formula is that when the cost of living goes up sharply, as it did in 2002, injured workers benefits do not keep up with the increase.
The case was heard on June 26, 2023 by a panel of 3 judges of the Ontario Divisional Court. The judges did not think the court should decide on the indexing rate because this is a question that should be decided by the Workplace Safety and Insurance Appeals Tribunal. The legislation provides an appeal process for benefits issues and the role of Board policy at the WSIAT. The court stated that
“The process set out by the legislature in s. 126 of the Act has been entirely disregarded by the WSIB. We received no compelling reason as to why. Section 126 expressly contemplates that the WSIAT will review policy. It is an important principle of administrative law that, absent exceptional circumstances, the parties are to exhaust their administrative remedies before coming to the court by way of judicial review. In view of this, I find that the WSIB decision not to allow Ms. Grisales’ notice of objection to proceed was unreasonable. Consequently it must be set aside. I further direct that this matter is to proceed to appeal in accordance with the provisions of the Act.”
So the question of the appropriate indexing adjustment will now proceed to the WSIAT. It affects tens of thousands of permanently injured workers, both those with pensions from the pre-1990 system and those receiving loss of earnings benefits for injuries since 1990. For that reason, the WSIAT will likely develop a leading case strategy with representation from worker and employer organizations. The final decision is probably still at least a year away.
- Read full decision: Grisales v Workplace Safety and Insurance Board, 2023 ONSC 3846 (CanLII)