Workers’ Compensation Board Recommends Changes to Nova Scotia’s Workplace Safety and Insurance System

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HALIFAX, Sept. 30, 2003 – Following extensive consultation with workers and employers across the province, the Board of Directors of the Workers’ Compensation Board of Nova Scotia is recommending that Government make changes to the Workplace Safety and Insurance System during the Fall 2003 sitting of the Legislature. The recommendations flow from the Nova Scotia Workers’ Compensation Program – A Focused Review (Dorsey Report, March 2002).

Key among the Board’s recommendations is to increase the annual indexing of workers’ compensation benefits (from 50% to 55% of the increase in the Consumer Price Index). This will help pensions to better keep pace with inflation. The Board also wants to eliminate the three-worker rule effective January 1, 2005. Repealing this rule will ensure all workers in industries where workers’ compensation is required are covered in the event of a workplace accident. This change also will provide protection from lawsuits to these employers who currently are not required to register with the WCB. Further, the Board is recommending that the maximum assessable/insurable earnings increase in 2005. This change will allow workers to receive compensation based on a greater percentage of their earnings. Currently workers’ compensation benefits are based on maximum earnings of $41,800.

These recommendations are in addition to a number of other changes that will simplify the System, and a $20 million enhancement to the Supplementary Benefits program implemented last December.

Louis R. Comeau, Chair, explained the Board’s response to the Dorsey Report. “We take the Dorsey recommendations seriously, but with a price tag of over $240 million, that is not all doable in the short term.” Over the past several months, the Board of Directors has worked with stakeholders to prioritize the Dorsey recommendations. “We have talked to people who represent thousands of workers and hundreds of employers in Nova Scotia. They told us that, if we are to maintain the financial stability of the workers’ compensation system, we must phase-in the Dorsey recommendations over time. The Board believes this approach achieves a balance between fair benefits for injured workers, maintaining assessment rates and fiscal sustainability,” said Mr. Comeau.

The changes will be funded in part by an increase in the average assessment rate from $2.54/$100 of payroll in 2003 to $2.57 in 2004. Mr. Comeau said, “After this increase, barring any unforeseen circumstances, assessment rates will remain stable until the elimination of the WCB’s unfunded liability in 2014.”

These changes build upon the WCB’s record of progress. For the past 10 years, the average assessment rate was held at $2.54. During that time, the WCB improved its funded percentage from 27% in 1994 to 73% at the end of 2002. “We have committed to our stakeholders that when funds are available in excess of those required to eliminate the unfunded liability by 2014, the Board of Directors will consider moving forward on more of the Dorsey recommendations,” said Mr. Comeau. “We will discuss the balance of recommendations, including rates, with stakeholders at annual meetings which we will be holding each spring.”

In addition to legislative change recommendations, the WCB has been working with stakeholders and the other agencies in the Workplace Safety and Insurance System (Workers’ Compensation Appeals Tribunal, Workers’ Advisers Program and Occupational Health and Safety Division) to build a strategic plan for the System. The plan will mean more efficient operation of the System and greater accountability to stakeholders through the introduction of System Performance Measures. The planning process is now complete and the implementation of the plan is underway.