December 2, 1998
(Environment and Labour)

The following statement was issued today by Oliver Langdon, Minister of Environment and Labour. It was also read in the House of Assembly:

Introduction of Legislation in Response to the Statutory Review Committee 
Report of The Workers' Compensation Act

Today government is tabling legislation in response to the Statutory Review Committee Report of the Workers' Compensation Act entitled Time to Refocus. In conjunction with this, I will also be tabling the 1997 Annual Report of the Workers' Compensation Commission as required under Section 12 of the act.

Upon receipt of the Statutory Review Report, my department immediately undertook a major review of the recommendations. We consulted with the Workers' Compensation Commission, the Federation of Labour, the Injured Workers' Association, the St. John's Board of Trade, the Employers' Council and many others.

Government has endeavoured throughout this process to provide fair and equitable benefits to injured workers while at the same time ensuring the long-term viability of the workers' compensation system. Through the tabling of this legislation today, government is demonstrating its commitment to a responsive and sustainable workers' compensation system.

Government agrees that it is time to refocus. We recognize that our injured workers need increased benefits, but we also acknowledge that our employers are paying the highest assessment premiums in the country. However, it must be fully understood that despite our intention to "refocus", we must not lose sight of the goal of providing a financially stable workers' compensation system.

While progress has been made in reducing the unfunded liability of the commission, I would remind honourable members that the system still has an unfunded liability of approximately $92 million dollars. We are not out of the woods yet as the system is still vulnerable from a financial perspective, particularly given the state of world markets which affect the commission's investment portfolio.

In responding to the Statutory Review Report, government has taken a balanced and equitable approach. We recognized that reasonable adjustments to the workers' compensation system could be implemented to better meet the needs of injured workers. Furthermore, we determined that there was some flexibility in the financial position of the commission to implement many of the recommendations contained in the report and to put more money in the hands of injured workers. We were able to do this while still maintaining our goal of ensuring the unfunded liability is fully addressed by 2012.

Today I want to highlight some of the key initiatives that are being undertaken as a result of the statutory review.

Effective January 1, 1998, government increased benefits for injured workers from 75 per cent to 80 per cent of net earnings for the first 39 weeks of an individual's claim. This was a direct benefit provided immediately to more than 500 short term clients. In addition, every injured worker who had a lost-time claim in 1998 benefited from this change. Based on yearly averages, this change could affect approximately 5,000 workers.

Injured workers in receipt of Canada Pension Plan benefits will receive an increase as a result of the CPP offset being reduced from 80 per cent to 75 per cent of net income. This is a direct benefit to long term clients and will be made retroactive to September 1, 1998.

As well, effective September 1, 1998, survivors will receive a minimum weekly payment of not less than $200 taking into account other survivor benefits such as CPP and employer sponsored pension plans. Furthermore, the commission is now providing up to $5,000 to survivors to cover burial expenses.

Funding for the Worker's Advisor Office and the Employer Advisor Office will be doubled to $200,000 for each office to provide additional information and support to workers and employers.

There are many other areas where significant changes will occur and will benefit injured workers, such as the following:

Two diseases have been added to the list of industrial diseases - cancer of the larynx and cancer of the esophagus as a result of exposure to metal working fluids.

Health care entitlement will be determined in consultation with the treating physician and the health care team. Specialists reports will take priority over reports of general practitioners or occupational therapists; however, recommendations of the health care team will be considered.

Time frames associated with the appeal process, both external and internal, are being reduced from six months to three months. I am pleased to note, that the commission and the Workers' Compensation Review Division have already achieved this target.

Given the magnitude and complexity of the workers' compensation system and its expanded mandate in education and prevention, the board of directors will be expanded to include additional representation from employees, employers and the general public.

Government acknowledges that the process known as deeming is controversial and problematic for injured workers. Therefore, we established an ad-hoc committee on deeming with representation from the Federation of Labour, the Injured Workers' Association, the Employers Council, the commission and my department. The work of this committee resulted in some changes to the deeming process.

Yet, there remains a need to review the deeming process further. Therefore, I have directed that this process be monitored and assessed for one year by a sub-committee of the expanded board of directors. That committee is to report to me at the conclusion of that review. I am aware that the framework for this review has been developed in consultation with stakeholders.

The Workplace Health, Safety and Compensation Commission has an excellent record in terms of collecting assessments from employers. Less than one per cent of assessments had to be written-off due to bankruptcies and business closures. Nevertheless, the ability of the commission to collect arrears will be strengthened even further by making directors of companies liable for unpaid assessments and by broadening the commission's ability to seize assets.

Government's response to the Statutory Review of the Workers' Compensation System addresses many of the concerns of injured workers without placing the financial integrity of the system in jeopardy. This system exists for the benefit of all Newfoundlanders and Labradorians. I believe that we have taken the necessary steps to ensure an equitable balance exists between the needs of injured workers and the employers of the province.

1998 12 02                     4:15 p.m.