February 1, 2012

New Ontario Workplace Safety and Insurance Board law will level the playing field: OCS

KELLY LAPOINTE

staff writer

Under new Ontario legislation, Workplace Safety and Insurance Board coverage is mandatory for independent operators and some other individuals carrying on business in the construction industry, beginning in 2013.

“We’ve been awaiting proclamation for a long time,” said Ian Cunningham, President of the Council of Ontario Construction Associations (COCA).

The pre-registration provisions of the Workplace Safety and Insurance Amendment Act, 2008 (Bill 119), became effective Jan. 1, 2012.

The remainder of the Act, which extends mandatory workers’ compensation coverage to independent operators, sole proprietors, some partners in a partnership and some executive officers, who work in the construction industry, will come into effect on Jan. 1, 2013.

The legislation provides a one year period from Jan. 1, 2012 to Dec. 31, 2012 to allow these individuals to voluntarily pre-register with the Workplace Safety and Insurance Board (WSIB) before the requirements relating to mandatory coverage come into force.

There is an exemption for home renovators who are contracted directly with the person occupying the residence and work exclusively in home renovation.

Businesses are also allowed to select one executive officer or partner to apply for an exemption from coverage. This must be an individual who does not perform any construction work on any building site (including on-site supervision).

It’s about leveling the playing field, says Sean Strickland, chief executive officer of the Ontario Construction Secretariat (OCS).

“What happens for those contractors who style their work as independent operators, when they bid on work, they have an unfair cost advantage compared to a more legitimate contractor who has to bid on work based on making those mandatory deductions for WSIB and so on,” he said. “By putting in place mandatory coverage, you’re going to level the playing field for all contractors and not unduly penalize those who are bidding under the rules of the game.”

Added Cunningham: “Some independent operators were never required to register before and they do qualify for compensation in the event that they get injured, so they should pay for these services.”

The legislation will affect an estimated 90,000 independent operators who never had to pay into WSIB before.

Critics say the new legislation will drive workers to the underground economy. Strickland believes the legislation will help combat the underground economy, not add to it.

He pointed to a recent report that indicated that the loss of government revenue through deductions, CPP, EI, WSIB, income tax and so on was between $1.5 and $2.4 billion. Strickland said in the construction industry, most of that government revenue for source deductions was lost through the use of the independent operator class under the WSIB.

“By closing that loophole you’re going with mandatory coverage,” he said. “Governments will be able to track workers and help ensure their safety and also their re-entry to work if they are injured because WSIB will have record of them and also be able to make them better participate in making all those source deductions.”

Frank Viti, President and Chief Executive Officer, Merit OpenShop Contractors Association of Ontario, said his members are satisfied with the initiative, but they do take issue with the overall cost implications.

“They want to see the overall cost through WSIB go down. That’s the real issue, not in terms of inclusion of owner operators,” he said.

During this one-year pre-registration period, premiums will not be charged because the requirement to pay premiums will not be in force until Jan. 1, 2013, which is also when coverage begins.

Starting in January 2012 the WSIB launched a year-long education campaign to make sure that everyone impacted by mandatory coverage in the construction industry knows about the changes and what they will mean.

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