Focus should be on safety, not short-term savings

Friday December 11, 2009

By Richard Mostyn

Instead of focusing on the bottom line, Yukon businesses should start focusing on safety.

Too frequently, the two are at odds in the territory. And both employers and employees are suffering as a result.

Too many workers are getting injured. And businesses are paying for it.

Unfortunately, Yukon business doesn’t seem to understand this.

Instead, they are looking to subsidize their injury costs.

A case in point is the Whitehorse Chamber of Commerce’s latest stab at reducing workers’ compensation board assessment rates in the territory.

It ignores the territory’s awful injury rate and, instead, attempts to get other Canadians to pick up the tab for the bottom-of-the-barrel practices in this jurisdiction.

It’s also kooky, a fact laid bare by Yukon Workers’ Compensation Health and Safety Board chair Craig Tuton this week in the legislature.

See, the chamber commissioned a study to examine how the Yukon Workers’ Compensation Health and Safety Board board could lower assessment rates.

This year, 1,100 Yukon businesses are seeing their rates increase. But another 1,800, or so, are seeing them come down.

Nevertheless, the business sectors with the worst injury rates are seeing an increase. And those businesses are hornet angry, and want relief.

So the chamber sought alternatives.

Its study was done by Ivan Dechkoff, the board’s former employer consultant, who had his contract suspended in 2004 after the board decided it did not receive value for the post, which had been funded through a two-year grant worth $450,000.

Dechkoff’s report came up with the crazy idea of outsourcing the jobs and responsibility for the WCB to BC.

The territory was too small to sustain its own operation, said Dechkoff’s document, noting the territory lacked the proper “economies of scale.”

Which is another way of saying there are too few businesses in the territory to deal with the high cost of the thousands of worker injuries every year.

Dechkoff’s report barely mentioned the Yukon’s abysmal safety record and horrifying injury rate, which is one of the highest in the country.

Instead, its scheme is to farm out responsibility to BC, and spread the cost of Yukon’s pain and suffering among the province’s much larger business pool.

The chamber sent out a petition demanding the government examine this solution.

Thursday, Tuton and Valerie Royle, the WCB president, responded to the chamber’s report in the house.

It is riddled with errors of fact and methodology, said Tuton.

First, WorkSafeBC, the equivalent to the Yukon’s WCB, has stated the province’s businesses will not subsidize the territory’s employers.

Second, before BC would consider running the territory’s program, Yukon would have to adopt BC’s lower compensation rates and much more stringent and comprehensive safety rules.

Bottom line, injured workers would receive substantially less time-loss benefits Ã� Tuton’s example was 21 per cent lower than the current Yukon payment.

And employers would have to conform to much more expensive and extensive safety rules. That might be better for the territory’s workers, but businesses may be in for a shock.

In BC, a safety officer can issue, on the spot, a $45,000 fine for an Occupational Health and Safety violation that did not involve an injury. A serious injury or fatality can land a fine of up to $500,000 without having to go to court, said Tuton.

This year, the territory has already had four workers killed on the job.

If a case goes to court, a first-offence fine can reach $600,000 and subsequent offences can hit $1.2 million.

“Given the track record of some of the companies here in the Yukon, and the number of serious injuries and fatalities, the revenue from these fines alone would cover a significant portion of our costs of administration,” said Tuton.

Of course, the flipside is that it would probably force many companies out of business, he said.

When you farm out responsibility, you lose control of the safety policies you have to live by.

“It is ironic that I need to remind the Whitehorse chamber that they were, in fact, one of the instigators of bringing our system back when it was in another jurisdiction in Canada Ã� bringing it back to the Yukon where Yukoners have control of that system,” he said.

The outsourcing argument seems a textbook case of be careful what you wish for.

As for economies of scale, it is a problem for everything in the territory, said Tuton.

Education is more expensive, but we don’t send our children to boarding schools in BC. Health care is more expensive because of our small population base.

“It is even true of the same businesses that appear on the petition,” said Tuton. “That’s why I support their efforts to encourage Yukoners to buy locally rather than taking advantage of economies of scale and buying either over the internet or in southern jurisdictions.”

Yukon business owners are grousing about the costs of the WCB, but it’s the injury rate that is ramping up the costs of the program.

It’s typical for the territory’s residents and businesses to look to other Canadians to pay to solve local problems.

The solution to this problem is simple � reduce workplace injuries.

The territory’s businesses are making headway, the rates are decreasing. But the results are overstated Ã� there are fewer injuries, but there were fewer people working in the Yukon in the past year.

Much more work needs to be done improving safety.

And the focus on saving money is just a distraction.

If businesses and workers really want to improve the profitability of their workplaces, guaranteeing their respective futures, they should put more effort and money into safety.

That’s the surest way to reduce the cost of workers’ compensation.