Open Letter to Premier McGuinty from Ontario Network of Injured Workers Groups

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ThinkTHUNDER BAY – The Ontario Network of Injured Workers Groups have drafted an ‘Open letter’ to Ontario Premier Dalton McGuinty. The group representing injured workers in Ontario are concerned over how the Ontario Government is treating injured workers.

Here is the text of their letter:

Mr. Dalton McGuinty, Premier
Legislative Building
Queen’s Park
Toronto ON M7A 1A1

An open letter to the Premier of Ontario

Dear Premier McGuinty:

Re: Salary, Bonus and Mandate for WSIB President David Marshall

When your government introduced changes to the funding provisions of the Workplace Safety and Insurance Act in Bill 135 in 2010, the Ontario Network of Injured Workers Groups made our position very clear to the Standing Committee on Finance and Economic Affairs. We have always been concerned that the unfunded liability would be tackled by cuts to injured workers benefits and entitlements. Even though the WSIB would be fully funded if the Harris government had not drastically reduced employers’ rates, every time the government or the WSIB raises a concern about its funding level we find cuts to the benefits of injured workers.

Our concern was answered by your representative on the Standing Committee:

Mr. Peter Tabuns: So if, in fact, it’s found that there are financial problems with the WSIA, the government will ensure that the changes that are needed are not going to be done on the backs of workers. Is that correct?

Ms. Leeanna Pendergast: That’s correct, Mr. Tabuns. Full funding will not be achieved on the backs of injured workers.
Hansard, Standing Committee on Finance and Economic Affairs, Dec. 6, 2010, page 261

That was the assurance that injured workers needed, but it has not come to pass. We did not know that earlier in the year, in your appointment of David Marshall as President and CEO of the WSIB, you had made a contract that is bound to break that promise. We have obtained, under the Freedom of Information legislation, the Order in Council detailing the salary, bonus and mandate of Mr. I. David Marshall, President and CEO of the WSIB. His salary of $400,000 a year for five years has a bonus of up to 20% attached to it, based on his achievement of certain goals and objectives relating to reducing the unfunded liability and increasing efficiency. That is nearly half a million dollars more million to do the job he has been given.

It is clear that the Ministry of Labour and the Board determine the goals and outcomes that are to be achieved by Mr. Marshall. On its website, the WSIB boasts about Mr. Marshall’s salary and bonus and says that his “efforts to improve efficiency and address the unfunded liability have already made a difference…increased discipline in benefit entitlement decisions…improved electronic services…”

The unfunded liability is being tackled by cuts to injured workers benefits and entitlements. Injured workers with permanent impairments are already in poverty. Your government promised that the WSIB’s financial goals would not be achieved on the backs of injured workers. Mr. McGuinty, since Mr. Marshall took over, the WSIB’s unfunded liability is indeed being resolved on the backs of injured workers.

This is not only the experience of our Network. Recent statistics from the WSIB reveal drastic cuts to benefits and services for injured workers since the appointment of Mr. Marshall:

• Initial Entitlement: 50% increase in claims denial rate
According to the KPMG review of WSIB adjudication (p.22), from 2009 to 2010, the WSIB had increased its rate of denial of new claims from 7.9% to 11.3% as a result of “specialized training” and “management oversight.” That is nearly a 50% increase in claims denials.

• $631 Million benefits cut
The WSIB Third Quarter 2011 Report to Stakeholders talks about “positive trends in our benefits costs.” By September 2011 there was a $631 million reduction in benefits costs compared to the year before, attributed to a reduction in lost time claims and others (p.3).

• Vocational Retraining slashed from 19 months to 5 months
WSIB Third Quarter 2011 Report to Stakeholders states that by September 2011 the average length of a retraining plan was cut to 5 months compared to 19 months in 2009. Program costs have been cut from $120.9 million to $86.1 million during that period (p. 3). That is a 74% reduction in the length of vocational rehabilitation plans. It is worth noting that in 2009, when retraining plans averaged 19 months in 2009, a WSIB study by KPMG found that fewer than 50% of those who successfully completed the plans were able to get a job, even 18 months after completing their training. How many injured workers will return to employment with 5 months of training?

• 29% Reduction in long term benefits for permanently disabled
According to the KPMG Review of WSIB adjudication, by requiring management approval for a decision accepting that an injured worker is permanently unable to return to work, in 2010 there was a 27.6% reduction in the number of injured workers accepted as unable to return to work compared to 2009. The WSIB Second Quarter 2011 Report to Stakeholders states that the average annual benefit paid to an injured worker at the 6 year post injury review has been reduced to $15,106 a year compared to the average of $21,144 prior to 2010 (p.3). That is a 28.6% reduction in the average long term benefit payment to permanently disabled workers.

• 31% Reduction in permanent impairment awards
WSIB Second Quarter 2011 Report to Stakeholders reports a reduction of over 2000 permanent impairments in the first six months of 2011 compared to the same period in 2010 (p. 3). There has been a 31.3% reduction in permanent impairment awards compared to 2010.

• 4.5% reduction in medical expenditures on injured workers
According to the KPMG Review of WSIB adjudication (p. 12), the increase in the cost of health care has been greater that than the general rate of inflation in recent years. The WSIB Second Quarter 2011 Report to Stakeholders says that medical costs increased by an average of 7.6% every year from 2000 to 2009 despite a decrease in the number of new claims. However, despite this significant increase in medical costs, a rate of inflation over 7%, medical expenditures on injured workers actually decreased by 4.5% in 2011 compared to 2010 (p.4), which represents a dramatic cut to medical expenditures.

• Layoffs of 200 WSIB staff
The WSIB has recently laid off 200 staff that would be providing services to injured workers. While done in the name of efficiency, this can only increase the level of frustration among injured workers who are already reeling from the cuts by Mr. Marshall.

Your government and the WSIB commissioned respected arbitrator Harry Arthurs to study the WSIB funding and make recommendations about the funding of the WSIB. His report is not even completed and the WSIB is moving full speed ahead to address the unfunded liability with cuts to benefits and services to injured workers. We call on your government to stop these cuts and to review the cases and reinstate the benefits of those wrongly cut off as a result of WSIB’s failure to honour the promise.

Mr. McGuinty, it is the terms of your appointment of Mr. Marshall that create a huge conflict of interest between your government’s commitment that “full funding will not be achieved on the backs of injured workers” and Mr. Marshall’s significant financial incentives to reduce WSIB spending on injured workers. Sadly, we have now learned that Mr. Marshall made his intentions clear to the Standing Committee on Public Accounts at a hearing that injured workers were not invited to attend:

Mr. David Marshall: My commitment is to develop a plan … that brings us to a fully funded position within a reasonable amount of time … That plan will have measurable benchmarks. It will say that we have to hit this rate of return, that we have to reduce duration by this amount by this date … However, it’s going to have some tough, tough proposals in it. I mean, you can’t recover this amount of money without some sort of pain some-where in the system … We are taking it very seriously. It’s in my letter. I don’t get any bonus unless I can meet this target. It’s a very clear target, and we’re going to get there. I’m confident that we will…

Hansard, Standing Committee on Public Accounts 24 February 2010, p.490

Mr. McGuinty, the WSIB’s own figures show where the pain is being created. Do you want the workers’ compensation system run by a man unashamedly bent on earning his bonus by tough proposals, creating pain for injured workers? ONIWG is very alarmed by the fact that Mr. Marshall has personally taken over total control of the WSIB, eliminating the voice of the Board of Directors. In September 2011, the WSIB Board of Directors passed a resolution giving Mr. Marshall the power “to approve all operational policies, including changes to those previously approved by the Board of Directors” (copy of resolution attached). With the Board of Directors having no control over operational policy, nothing stands in the way of Mr. Marshall in pursuit of his bonus.

Nearly 100 years ago Ontario established its workers compensation system proudly on the principles of Sir William Meredith and was acclaimed as an international leader. This is no way to run a workers’ compensation system. It is clear that Mr. Marshall is doing exactly what he is being paid to do: reduce WSIB benefit expenses. We call on you to revoke the terms of Mr. Marshall’s appointment, reinstate the power of the WSIB Board of directors to determine operational policy, review Mr. Marshall’s salary in consideration of the poverty that injured workers and others in Ontario are experiencing and, most importantly, and eliminate any bonus that creates an incentive to cut injured workers off.

Mr. McGuinty, the WSIB’s own statistics show that the benefits of injured workers are under a major attack by the Marshall administration right now. Cuts this big and this sudden are intolerable. For injured workers, this is a crisis. Now is the time for action on your government’s commitment.

Yours truly,
Ontario Network of Injured Workers Groups,

Peter Page, President

copies:
Linda Jeffrey, Minister of Labour
Andrea Horwath, Leader, NDP
Tim Hudak, Leader PC
Sid Ryan, Leader OFL