Businesses owners in New Brunswick have seen WorkSafe New Brunswick insurance premiums increase by 33 per cent this year and it’s sparking concern with many companies within the province.
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In 2016, the premium was a rate of $1.11 per $100 of payroll. A year later, the average rate is $1.48 per $100 of payroll.
Urban Machinery Coporporation production manager Harald Kopp has 45 employees who work nine hour days. He said he also works with local producers and suppliers and said the increase will raise costs across the board.
“WorkSafeNB is important, we know it, it’s important to have it here, it’s important for New Brunswick, but you cannot increase the rates, the basic rates, so significantly,” Kopp said.
Canadian Manufacturers and Exporters vice-president and SPARK executive director Joel Richardson said there needs to be a “stable, predictable and affordable workers compensation in New Brunswick .”
Richardson said businesses across the province have already faced a number of increased costs over the last several years, such as corporate taxes, payroll taxes, minimum wage, property taxes and HST.
“The more burden you add on employers and on entrepreneurs, the harder it is for them to be able to invest in their companies and for us to be able to attract investment and create jobs in this province,” Richardson said.
He said businesses of all sizes are impacted, and said many businesses are “struggling to keep people employed right now.”
“We’re trying to make sure that workers are protected through the worker’s compensation system, but at the same time that employers are not put into too much of a position that they can’t afford to be able to protect workers through the [program],” Richardson said.
Fredericton Chamber of Commerce CEO Krista Ross said the chamber is one of several in New Brunswick promoting a letter writing campaign.
“The chamber has spoken out on [the premium increase], we have talked to WorkSafe, we have talked to politicians, but we felt it was really important for businesses to express this to their elected officials,” Ross said.
Ross said business owners are encourages to write letters explaining how the increase will impact their business and they decisions they have to make based on the changes to their business.
“Businesses just can’t continue to absorb these increased costs and continue to keep people employed. It’s not a matter of how much profit they’re putting in their pocket, it’s a matter of sustaining their businesses,” Ross said.
Richardson said if WorkSafeNB plans to increase the rate again for 2018, employers and manufacturers and business of all sizes will be calling on the provincial government to work with WorkSafeNB to “bring the rate down to a manageable level so it’s affordable by all companies in New Brunswick.”
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Premier Brian Gallant told reporters Tuesday he understands the right balance needs to be struck between protecting workers and ensuring that there continues to be economic growth in the province.
“For us, what’s important is to remain competitive here in New Brunswick so that jobs can be created and businesses can start and thrive, but also we want to make sure we strike the right balance and have people that are working have the protections that they need as well, ” Gallant said. “So, we’re going to monitor what WorkSafeNB does and if we feel that there’s any issue that has to be dealt with and that’s in our capacity to be dealt with by us as a provincial government we will do so.”
Gallant said he hopes WorkSafeNB will “act prudently” when it comes to any rate increases.
WorkSafeNB Acting President and CEO Tim Petersen said in a phone interview he understands the concerns businesses have and said he realizes the pressure they’re facing in the province.
“I think we also have to also understand that there are concerns on the workers side as well and at the end of the day the solution in this lies in finding a system that is balanced and that’s going to involve some compromise from the employer and worker community,” Petersen said.
“The employers fund the system right, 100 per cent, and where we’ve seen costs going up that’s what’s lead to the increase in rates but it’s really the system, the system belongs to the workers and employers and they really need to really I think come together and strike a compromise, strike some balance.”
He said a stakeholder meeting was held on April 19, and said there will be several more taking place, including one in June.
Petersen said the purpose of the meeting was to get everyone to try to work together to “ensure that something is sustainable going forward.”
“We know that we don’t want to see their rates skyrocket, but on the other hand we’ve got to have a benefit package that is fair for the workers of the province. So really the solution to this lies in working together and we’ve started doing that with that April meeting,” Petersen said.
Why the premium cost increase
According to Petersen, the last rate increase was in 2010, and since then it was going down until 2015. He said the increase is related to policy changes.
“It’s not that necessarily that we’re seeing a huge increase in the the number of claims being filed, where we’re seeing an increase is in the number of claims that we’re accepting and there’s a very important difference,” Petersen said. “Workplaces have not suddenly become unsafe.”
He said there have been “huge improvements” in workplaces. He said the increase in premiums is related to the way claim decisions are made that result “in part from decisions of the workers compensation appeals tribunal.”
“Some of those changes have lead to significant increases in the number of accepted claims and an increase in the length of time people are on claims,” Petersen said.
“So people are not returning to work as quickly and when you have those two factors – you have those two factors kind of working in a downward direction.”
Petersen said it’s why the rate continually declined between 2010 and 2015 due to less money being needed to fund the system.
He said in late 2015, early 2016, the “trends” that caused the rate to decline are seeing a reversal. He said not only did it have an impact on 2017, with the rate increasing by 33 per cent, he said “if the trends continue in an upward direction,” the rate could increase significantly for 2018.