SOMBA K'E/YELLOWKNIFE
Yellowknife contractors, retailers, and even the GNWT itself will see payroll costs increase in the new year, and the NWT Chamber of Commerce is saying enough is enough.

A new home under construction in the Grace Lake subdivision west of Kam Lake. Contractors will see their payroll costs increase next year after the Workers' Safety and Compensation Commission announced rate increases for many industry classifications. - Walter Strong/NNSL photo

The Workers' Safety and Compensation Commission (WSCC) set new rates for mandatory worker's insurance across the NWT and Nunavut.

On average, there will be a marginal decline territory-wide. The average charge per $100 of employer payroll is $2.00 for 2015, compared to $2.05 last year.

But few pay the average. Instead, employers pay according to their industry class. Twelve of 20 employer classifications will see rate increases of up to 12 per cent over last year.

Among those facing rate increases in the new year are general contractors who will see a new payroll charge of 6.49 per cent. Retail, wholesale and light manufacturing will see their rates increase to 2.16 per cent, and the service sector will see rates increase to 0.61 per cent.

Workers' compensation rates are 100 per cent paid by the employer, essentially becoming part of the cost of doing business in a jurisdiction.

"It's clearly one of the contributing factors to the high cost of operating businesses in the North," said NWT Chamber of Commerce executive director Mike Bradshaw.

"It doesn't matter what kind of employer you are, whether its public sector or private sector, the rates just keep going up."

Dave Grundy, WSCC president and CEO, said the organization's hands are tied when it comes to setting workers compensation rates.

"We don't want to contribute to rising costs for businesses in the North, but our assessment rates are based on the cost of claims," Grundy said.

"That's the sole driver of rates, other than a small bit of administration."

Grundy said WSCC rates are set by an independent actuary who crunches claims costs and long-term liabilities annually. The administration budget is a fixed amount, approved by a national governance body.

According to statistics provided by Grundy, the most recent numbers show $48 million in 2013 WSCC assessment revenue on approximately $2.5 billion in assessable payroll. Claim costs in 2013 were $40 million.

In the past three years, Grundy said claim costs have actually been trending downward. There were $58 million in claim costs in 2011, $52 million in 2012, and $40 million in 2013. Claims costs for 2014 are not yet available.

"We think overall claims cost will be down this year," Grundy said.

Even though overall claims costs are going down, claim costs in some industries are increasing, which drives up WSCC rates for all employers within that industry.

"It's a mathematical calculation done by an independent actuary, not by anybody here at the board," Grundy said.

"We are legislated to be fully funded. We have to (collect) 100 per cent of the money we need."

The chamber is not disputing that rates are driven by costs. Instead, the concern is whether the WSCC is doing all that it can to reduce injury rates in the North.

"The economy needs safety leadership, not just compliance checks and increased costs," stated chamber president Allen Stanzell in a news release.

"The WSCC needs to shift its focus to leadership and help develop a culture of safety in the NWT."

Against this backdrop of consistent rate increases, the chamber points to the Yukon Workers' Compensation Health and Safety Board, which has managed to introduce its sixth consecutive year of overall average rate reductions.

"Yukon got everybody in the same room and got them on the same page and the end result is lower rates," Bradshaw said.

"We need that kind of leadership here."

But Grundy said there are no quick comparisons to be made between jurisdictions.

"When they try to make comparisons between jurisdictions, you're talking apples and oranges for a lot of different reasons," Grundy said.

Richard Mostyn, Yukon Workers' Compensation Health and Safety Board spokesperson, said there isn't any one thing he could point at to explain Yukon's success in lowering rates over the past six years.

"It's very simple and very complicated," said Mostyn.

"A lot of the credit for reducing assessment rates in (Yukon) has to go to labour and business groups in the Yukon who have done a very good job improving safety practices."

But, "the largest factor is injury costs," he added.

And there's no guarantee rates in the Yukon, whether comparable or not, will continue to drop in the future.

"We had five fatalities this year," Mostyn said.

"That's going to have a real impact on rates."

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