Workers' comp rates up for many
New year brings new costs for many Nunavut employers
Walter Strong
Northern News Services
Published Monday, December 22, 2014
NUNAVUT
Nunavut contractors, retailers, and even the Government of Nunavut itself will see payroll cost increases in the new year.
Nathaniel Mapsalak hammers away at the construction site of a new apartment building that was being built in Repulse Bay in 2010. Territorial workers compensation rates will rise in the new year across many categories of employer, including general contractors. - NNSL file 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 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.
Dave Grundy, WSCC president and CEO, said the organization's hands are tied when it comes to setting worker's 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 WSCC assessment revenue in 2013 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 be 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."
Against the backdrop of climbing rates in Nunavut, there is the Yukon Workers' Compensation Health and Safety Board, which has managed to introduce its sixth consecutive year of overall average rate reductions.
But Grundy said there are no quick comparisons to be made between jurisdictions.
"When (you) 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 would point at to explain Yukon's success in lowering rates over the past six years.
"It's very simple and very complicated," said Richard 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."
