Chamber wants WCB outsourcing examined

Local businesses want the territorial government to consider merging the Yukon Workers' Compensation Health and Safety Board with a larger jurisdiction. The territory pays some of the highest assessment rates in the country - an average of $3 per $100 of payroll.

Local businesses want the territorial government to consider merging the Yukon Workers’ Compensation Health and Safety Board with a larger jurisdiction.

The territory pays some of the highest assessment rates in the country – an average of $3 per $100 of payroll.

Rate decreases planned for next year will drop that average to $2.95, but it is still a far cry from other jurisdictions, such as BC, where the average rate is around $1.56.

To see the impact of this, let’s compare workers in a beauty salon in Yukon and BC.

If the worker were earning $30,000 a year, the employer would have to pay the compensation board nearly $990 each year.

That same employee in BC would cost the employer only $177 a year.

And as you increase the number of employees in that business, these numbers begin to add up.

The Whitehorse Chamber of Commerce has started a petition asking the government to fix this disparity.

The problem is that the Yukon is too small and doesn’t have enough employers (there are only 2,800) to cover the expense of having its own workers’ compensation body, according to chamber president Rick Karp.

In other words, the Yukon Workers’ Compensation Health and Safety Board lacks economies of scale.

The board does much of the same work that other large jurisdictions do, but has far fewer employers to pick up the tab.

Because of this, the territory has the highest assessment rates in Canada.

This deters business expansion, business retention and prohibits new businesses from starting, said Karp.

A chamber report says British Columbia is large enough to offer the Yukon those economies of scale.

Many industries, governments and nongovernmental agencies are already closely associated with BC.

The Yukon workers’ compensation board has reported losses of nearly $78 million since 2000.

In 2008, the board lost $18.5 million. However, $14 million was due to a number of investments going sour.

The average assessment rate has increased by 232 per cent since 2000.

Most of this is because it stopped subsidizing employer rates.

For many years it had surplus funds, allowing it to keep the territory’s rates among the lowest in the country.

When the surplus ran out and a review of the act was completed, employers were hit by a double whammy – more administration costs and the loss of the subsidy. Costs shot up.

“Running a compensation board has become more difficult in the past few years; there are very detailed policies and it’s nobody’s fault,” said Karp.

“They’re doing a wonderful job in trying to keep up with what’s going on across the country.

“However, increasing costs have forced businesses to ask us to try to do something.”

Businesses are told rates are high because there are many injuries in the territory.

But the chamber found three other jurisdictions had more injuries per capita.

The Yukon does, however, have more injuries than BC.

In 2007, the Yukon had 2,020 claims reported in a population of 32,600 – about 6.2 per cent of the population.

In BC that same year, there were 175,297 claims in a population of 4,309,500 – about 4.1 per cent.

That said, the number of claims in the territory does appear to be dropping.

The board reported 1,562 this morning, and looks set to reach somewhere between 1,600 and 1,700 before the end of the year.

Harmonizing with BC would help workers too, said Karp.

In the Yukon, a worker receives their first compensation payment in 41.7 days, on average.

In BC, the average is just 23.1 days.

However, the Yukon has the highest compensation rates for injured workers in Canada.

Outsourcing to BC would likely decrease rates by more than 16 per cent.

Even then, they would be higher than those in Alberta and NWT/Nunavut.

And only 28 employees would be needed in town, said Karp.

The WCB currently employs around 78 people.

Karp isn’t worried about the loss of 50 positions.

“These are government workers,” he said.

“The Yukon government has a lot of vacancies, so I’m sure they’ll find a place for them.”

If the government decides not to outsource the board, the chamber has additional issues they’d like addressed.

They want the board to cut the cost of operation, and ease the financial burden on the employer.

They would also like the board to reduce the size of the workers’ advocate office and create an employers’ adviser position.

Contact Chris Oke at

chriso@yukon-news.com