WorkSafeNB is making temporary changes to how it collects funds from employers in an effort to offset costs that continue to rise, however the organization admits it isn’t without risk.
Traditionally, WorkSafeNB has drawn 110 per cent of necessary funding, with the extra money helping to stabilize rates.
With benefit rates rising approximately 50 per cent over the past two years, from $1.01 to $1.47 in 2018, they’re lowering the collected funds to 100 per cent to keep costs from going up even further.
“It’s kind of a calculated risk,” explained Dorine Pirie, board chairperson for WorkSafeNB. “We decided to suspend the policy of 110 per cent, put it over here for one year and let us draw down and use the funds to subsidize the rate.”
In the event the temporary measures result in a drop below the required funding an additional step would be administered, one that would mean additional charges to employers and employees.
“If you go below 100 per cent then you’ve got a five-year period to apply a surcharge each year and recover that money,” Pirie explained.
Already rising costs have caught the ire of business leaders who think a long-term solution needs to be sought out, rather than one focused on the short term.
“The CEO of WorkSafe can say on the one hand we’re long term thinkers,” said Joel Richardson, Canadian Manufacturers and Exporters NB and PEI vice president. “On the other hand they’re saying they’re planning rates on a one-year basis without thinking about the future and the potential impact this could have on the province.
A task force was set up by government several months ago to find potential improvements to the WorkSafeNB model.
Pirie welcomes the recommendations.
“We’re so in favour of that,” she said. “We’re waiting to hear what they’re going to say and see if there aren’t some ways that we can improve the system and maybe some of that is even the way we set the rate.”