The Alberta Construction Association (ACA) is opposing a proposal by the provincial Workers’ Compensation Board (WCB) to split its present Accident Fund into two distinct and segregated components.
The ACA, which represents about 3,000 firms across Alberta’s construction industry, contends such a move could, in the end, potentially weaken the ability for employers to safely manage their worksites.
Ken Gibson, executive director of the association, says the WCB’s current Accident Fund is actuarially sound and should not be divvied up into separate Worker Benefit and Safer Workplaces Development Funds. The association believes sustainability of the Accident Fund is best maintained by managing funds as a single pool.
“The Alberta Construction Association is concerned that the WCB’s proposed changes to the funding policy would reduce funds employers use to improve workplace safety,” Gibson said in a statement on the issue prepared for the Journal of Commerce. “ACA would like to see the current policy remain in place.”
The WCB is proposing to set up the two distinct components as a better way to manage funds for current and future claims costs and related administration and WCB services. The changes are part of Bill 30, dubbed an Act to Protect the Health and Well-being of Working Albertans, which came into effect June 1.
The purpose of Bill 30 is to improve worker safety, modernize workplace standards and practices, align Alberta’s standards with the rest of Canada and provide greater compensation and benefits to injured workers.
However, the ACA maintains a move to segregate the Accident Fund could lead to surpluses being taken away from employers and used to fund services that are already being provided. An additional concern is that such a move would also create the expectation of a continuous funding source.
Instead of splitting the fund, Gibson said the WCB should focus on a single, fully funded Accident Fund that covers current and future claims costs and related administration and WCB services.
“The Accident Fund is designed to operate on an actuarially sustainable basis, where current premiums cover the anticipated costs of current injuries. A portion of today’s premiums are invested through the Accident Fund to cover ongoing costs for a worker injured today,” said the ACA statement.
“Currently investment returns that exceed those requirements are returned to employers, and employers typically reinvest the surplus into their safety programs.”
Gibson said a portion of employer WCB premiums are already invested in improving safety through a levy fund to safety associations and to occupational health and safety operations, including grant programs, so it wouldn’t be right to take away any surpluses in the fund from the employers.
“Taking the return of surplus away from employers is a needless duplication of current approaches,” he said. “Based on recent years, the amount of surplus funds could be very large in relation to existing programs. Better to leave the money with employers who can invest directly in improved safety in each of their operations.”
ACA board chair Paul Heyens has written a letter to Wanda Stephens, the manager of policy development at the WCB, noting the association supports a sustainable workers’ compensation system funded through premium levies charged to employers and that its members have supported the WCB’s policy mix to balance collective liability with individual employer accountability.
However, the ACA states the creation of a segregated portion risks duplication of existing investments to improve safety, such as safety associations and the OHS Futures program that provides health and safety research funding for academic institutions, industry and labour organizations.
“We believe the sustainability of the funding of the WCB Accident Fund is best maintained by managing funds as a single pool,” it states.
The letter explains any surplus should be returned to employers who traditionally have reinvested returns to enhance safety. Further, the ACA states it also supports allocating surpluses to employers for special funding levies incurred in the previous three years.
If the WCB does proceed with its current proposal, the ACA recommends that the board at least retain responsibility for management of the Accident Fund.
The ACA also suggests no funds should be transferred to government and government should have no role in disbursement of any excess funds. In the event that a Safer Workplaces Development Fund is established, the ACA is recommending an industry stakeholder group be established, with representation from major stakeholder groups, to provide advice to the WCB.
Meanwhile, the letter notes, the maximum amount of excess funds that can be allocated to a new safety initiative should not be allowed to exceed the amount that is currently funding OHS and WCB safety-related grants.
In order to minimize duplication, the ACA recommends funds be used to focus specifically on areas that reduce WCB administration and claims costs such as IT enhancements and sharing best practices of what employers and health care providers can do to improve return-to-work outcomes for employees.
Recipients should also be required to report back on the use of the funds, objectives met and outcomes in order to ensure transparency and accountability, the ACA states, and the reports should be disseminated to stakeholders.