Many B.C. businesses will be blindsided by escalating workers’ compensation system costs, says the Canadian Federation of Independent Business.
Jairo Yunis, a senior policy analyst for the CFIB, says with the business community already trying to recover from the COVID-19 pandemic compounded by rising interest rates this year, amendments to the Workers Compensation Act by the provincial government tabled earlier this year will see costs increase upwards of 20 per cent for many sectors.
Restaurants will be hit by the cost increase in 2023 as will others such as pool or hot tub services, locksmithing, pest control, funeral undertaking and commercial cleaning or janitorial services.
Yunis said the restaurant sector hike is particularly egregious given the shaky financial ground the industry finds itself coming out of the pandemic and ongoing labour shortage issues.
The CFIB speculates seven out of 10 businesses will be negatively impacted.
Yunis said the numbers don’t add up to provide a financial justification by the government for the increase.
The CFIB contends in just four years, WorkSafeBC claims costs have skyrocketed by 90 per cent or 1.5 billion, with an additional $136 million in administrative costs, despite overall injuries having declined 2.5 per cent over the last decade.
And that decline, he adds, is despite an increase of 300,000 jobs in recent years.
Why the need for workers’ compensation cost increases in light of those two trends remains a mystery, says Yunis, in part because the province has not consulted the CFIB or other B.C. business group representatives in the decision-making process.
“It’s the same situation as when the government added sick days for everyone and passed on the cost for medical premiums to businesses. There has been no discussion of these decisions,” he said.
“These costs now make up about five per cent of payroll costs for businesses.”
Yunis said the CFIB has sent a letter to provincial Labour Minister Harry Bains asking for a meeting to discuss the impact of this latest round of workers’ compensation cost increases and is awaiting a response.
The CFIB’s efforts have the support of other business groups including the B.C. Chamber of Commerce, Business Council of B.C., B.C. Hotel Association and B.C. Restaurant and Foodservices Association.
He said with the current increasing economic uncertainty, adding costs to a system that is working is troubling.
Yunis said along with workplace injuries on the decrease, the positive rating for workers who deal with WorkSafeBC on claims remains positive.
“The government is sitting on a $3.4 billion surplus right now so at the very least, a freeze on (workers’ compensation) rate hikes or adopt a do no harm approach giving a break to those businesses that don’t employees seeking (WorkSafe BC) benefits would be better alternatives,” he said.
A report released this week by the national office of the Canadian Centre for Policy Alternatives revealed huge pools of largely unallocated “fiscal padding” built into the B.C. government’s budget, amounting to $5.8 billion, $7.4 billion and $7 billion over the next three years.
That comes in comparison to the $5.1 billion in deficit projected spending during that same period.
“These forms of fiscal padding tend to fly below the radar and are rarely reflected in headlines about B.C.’s fiscal situation,” says the report.
“They have long been part of B.C.’s budgets – and long been problematic – but they have recently ballooned to multibillion-dollar levels each year.”
For the CFIB, he says such a budget projected deficit fiscal should not come at the expense of businesses already struggling with labour and economy-related issues.