On December 8, 2020, the Ontario government introduced Bill 238, the Workplace Safety and Insurance Amendment Act, 2020 (the “Bill”). If passed, the Bill would amend the existing Workplace Safety and Insurance Act, 1997 so as to protect employers from sudden and unexpected increases to their Workplace Safety and Insurance Board (or “WSIB”) premiums in the 2021 calendar year.
More specifically, because of the loss of jobs in lower wage sectors such as retail, hospitality and the service sectors as a result of the COVID-19 pandemic, the average industrial wage (or “AIG”) in Ontario has increased by 7.8%. Typically, an average increase would be significantly less, falling somewhere between 2.0% and 3.0%. Because the AIG has an impact on the calculation of WSIB premiums, the Bill proposes to limit the impact of the increase to 2.0%. The Bill will not, however, have any limiting effect on the impact of the AIG on the calculation of the increase to the maximum earning cap for worker benefits. This is to ensure the maintenance of appropriate compensation levels in case of occupational illness or injury occurring during the COVID-19 pandemic.
Currently, the Bill has passed First Reading and continues to make its way through the legislative process. Until such time as it becomes law, it is important to note that the Bill remains subject to potential change.
In Our View
Of note, although the special rule regarding WSIB premiums as currently drafted in the Bill only applies to the 2021 calendar year, the Bill also gives the Lieutenant Governor in Council the power to make regulations regarding the calculation of the premium under the special rule, as well as the period during which said special rule applies. We will keep Focus readers informed of any significant changes as Bill 238 progresses through its various readings.