HALIFAX, Aug. 13, 2004 – The Workers’ Compensation Board (WCB) of Nova Scotia will raise the average assessment rate for the second time in 10 years in 2005. The three per cent increase from $2.57 per hundred dollars of payroll to $2.65 will help to reduce the budget deficit in 2005 and provide funding for new benefits.
“Nova Scotia employers pay among the highest assessment premiums in the country,” said Nancy MacCready-Williams, Chief Executive Officer. “Further rate increases can be expected after 2005 unless cost pressures on the workers’ compensation system can be abated.”
Rate pressure has stemmed from a number of areas. Over the past two years, government introduced legislation that provided benefits to firefighters with cancer at a cost of approximately $15 million. The Supreme Court of Canada rendered a decision confirming that injured workers with chronic pain must be individually assessed to determine their entitlement to benefits. This decision has the potential to add another $220 million to the WCB’s benefit costs.
In addition, the WCB implemented a strategy to deal with over $200 million in recommendations contained in the 2002 Dorsey Report, including providing $20 million in increased benefits for low-income, permanently injured workers. The recommendations call for increased benefits and changes to the firms and industries covered by workers’ compensation. The WCB will continue to implement the Dorsey recommendations over time as financial sustainability of the system is achieved.
At the end of 2003, the WCB was 67.2 per cent funded. The goal is to be 100 per cent funded. The current WCB strategy predicts that full funding can now be achieved by 2024. The previous funding strategy had projected the unfunded liability (the debt) would be eliminated in 2014. Recent cost pressures have necessitated a change in target dates.
In 2004, about $0.22 of every assessment dollar will be dedicated to eliminating the liability. This fall, the WCB will be looking for input from workers and employers on its strategy to achieve full funding for the system earlier than 2024. “There can only be significant reductions in assessment rates or increases in the benefits provided to injured workers when the unfunded liability is eliminated,” said MacCready-Williams. “It is not appropriate to make injured workers or employers wait until 2024 for this to be realized.”
It is important for employers to realize that they can proactively reduce their workers’ compensation premiums by preventing injuries in their workplaces,” MacCready-Williams continued. “We currently are developing three programs to provide incentives, support and information to help employers manage their accident prevention efforts.”
The Workers’ Compensation Board of Nova Scotia provides comprehensive workplace accident insurance to over 18,000 employers and approximately 300,000 workers in Nova Scotia.