Paths to Prosperity - Labour Market Ontario PC White Paper

7/29/2019 Paths to Prosperity - Labour Market Ontario PC White Paper

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PATHS TO PROSPERITYF L E X I B L E L A B O U R M A R K E T S

A n O n t a r i o P C C a u c u s W h i t e P a p e r

J u n e 2 0 1 2


2/20

Ontarians need hope that the provinces economy will improve and that there will be more oppor-unity or those who want it. Hope in itsel wont create change, though. Change requires ac-ion. One o those actions is a bold revision o outdated labour laws and workplace regulationshat hamper Ontarios ability to compete, to innovate and to develop a truly modern economy.

Ontarians are all too amiliar with the provinces current economic picture.

While other provinces economies have rebounded rom the recession, Ontarios growth is slowand its unemployment stubbornly high. The jobless rate continues its ive year streak o exceed-ng the national average. A net total o 300,000 jobs have been lost in our vital manuacturingndustries under the current governments approach.

Ontario is at a crucial inlection point. We need swit action on two parallel tracks. First, wemust set clear priorities and reduce excess government spending. Second, and equally impor-ant, we must restart sustainable economic growth. This action will require a comprehensive,ntegrated plan committed to resh ideas that get the economic undamentals right.

Ontarios economic decline continues despite a well-educated and experienced workorce witheasy proximity to internationa l markets. Ontario has great natural advantages, but our ailure toadapt to the realities o a 21st century economy is holding us back.

ts time or Ontario to re-examine outdated workplace rules that date back to the 1940s andadapt them to the much more lexible requirements o todays employees. We must realize thatabour lexibility and more opportunities or workers are essential to retaining and attracting thevery best talent to our province.

People are independent in ways previously unimagined. They leverage technology to providemore choices in how they run their lives, achieve their workplace expectations, spend their pay-cheques and organize their time. This is a good thing. People want more reedom in their lives,ncluding their workplaces. Put simply, the world o work has changed, but our laws have notkept pace with worldwide trends.

O particular concern is a series o government policies that avour union leaders over employeesand their employers in ways that reduce opportunities or individual workers and are obstacles toeconomic growth. Union leaders have become so powerul that many employees in eect havewo bosses, their actual employer and the people who run their union.

Mandatory union membership, orced paycheque contributions, closed tendering or governmentcontracts and the artiicial restriction on the number o our youth able to enter the skilled trades these are not policies that oster the open, innovative economy Ontario needs. Ontarians de-serve better.

British Columbia, Alberta and Saskatchewan have agreed to tear down rigid labour and regula-ory barriers in a bid to create the most open and competitive economies in the country. So ar,hey are succeeding.


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Leader o the Oicial Opposition

Ontarians will thrive in a uture o balanced budgets, lower taxes, aordable energy and a welleducated, competitive workorce. Rewarding hard work and talent will lead to more job oppornities and rising incomes. In this Paths to Prosperitywhite paper the second in a series thOntario PC Caucus oers creative ways to modernize Ontarios labour laws, workplace regula-tions and government agencies.

The changes we propose would, in many cases, break new ground in Canada. Given Ontarioeconomic perormance in the last ew years, its clearly time or a bold, new approach.


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The path Ontario is on today and the path it has been on or the last decadebears little resemblance to the paths that were available to me when I began my

journey into the workorce almost our decades ago.

Forty years ago, Ontarios skies shone bright with endless opportunities in man-

uacturing, skilled trades, proessional services and a burgeoning service sector.Multiple paths all led towards a stable middle class liestyle. Whether you chosea career in mining, orestry or agriculture, our resources were attainable throughproperty ownership and development.

The path Ontario previously travelled created the economic engine o Conederation. Sadly during the lastdecade Ontario veered o the prosperous path and began closing the doors o opportunity.

But we all know its never too late to change our path i it is ull o obstacles. The only question we needo ask ourselves is should Ontario wait until weve hit the dead end beore we alter paths, or should we

have the oresight to change? This Paths to Prosperitywhite paper shines the light on several new pathsowards reedom and prosperity that are worthy o discussion.

As an electrician, contractor and now as an elected ofcial, I have seen the root problems directly. We as anation recognize that our prosperity rests upon the ree trade o our goods, services and resources. But as aprovince, Ontarios labour laws remain highly restrictive and obstructive. They were created in the era o pro-ectionism. Ontarios legislation must be in lock step with Canadas economic polices, or we do a disserviceo both our province and our country.

Over the last nine years, Ontario has seen its real per capita GDP stagnate, growing by a paltry 0.86 percent in total. We must ace the reality that or the frst time Ontario is a have-not province and trending to-

wards becoming a Rust Belt state.

To overcome these challenges, we must change our attitude and our legislation. I we want to ensure thatOntario is the best place to fnd a good job, we must address the obstacles that have halted Ontario in itsracks. We must rethink our current labour legislation and the signifcant way it negatively aects both em-

ployees and employers opportunities or prosperity. Whether you are employed, unemployed or an employ-er, our current labour legislation is burdensome and a barrier to growth.

Bold ideas have always been the cornerstone o Ontarios economic success; something we ought never toorget. That is why this Ontario PC Caucus Paths to Prosperitywhite paper on labour reorm will outline newalternatives to Ontarios status quo. Rather than tinkering with small acets o labour legislation, we believe is time or substantive changes to reinvigorate our economy. Similar to our previous white paper, Paths to

Prosperity: Affordable Energy, we are proposing undamental change and advocating new ideas becausewe want to spark a debate and to solicit your eedback. Please let us know what you think by contactingmy ofce through email at [email protected] or by phone at 416-325-2244.

Ontario PC Caucus Labour Critic

Randy HillierM E M B E R O F P R O V I N C I A L P A R L I A M E N T L A N A R K , F R O N T E N A C , L E N N O X A N D A D D I N G T O N


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TA B L E O F C O N T E N T S

A New Vision or Labour Reorm

Giving Workers the Choice

Open Tendering

Reorming Workplace Agencies

A Pro-Jobs Agenda

Summary

06

08

11

12

16

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PATHS TO PROSPER I TY

A NEW VISION FORLABOUR REFORM

The biggest challenge acing Ontar iotoday is getting the economy

moving again, to create the jobs

Ontarians need and the tax revenues

government requires to provide core

public services like health care and

education. Over the past ew years,

government has tried to stimulate the

economy with massive inrastructure

spending, corporate welare to

avoured businesses and expensive

wind and solar energy subsidies.Instead o creating permanent ull-

time jobs, this approach doubled the

provincial debt.

Ontarios labour legislation is

also out o step with our nations

economic policies. As Canada

continues to broaden its trading

partners with ree trade agreements,

ewer regulatory burdens and a less

intrusive role or government in theeconomy, Ontarios policies remain

stuck in the era o protectionism.

The problem is that government has

ailed to address major economic

undamentals that lead to wealth and

job creation lower business taxes,aordable energy and regulatory

reorms that encourage businesses

to expand and employers to hire.

Ontarios workers and employers

must adapt to the rapidly changing

economy o the 21st century,

but they are being hampered by

employment law that is decades out

o date.

Its time the law is modernized togive Ontario employees more choice

and control, and to encourage the

kind o lexible workorce Ontario

businesses need to be competitive.

Its essential to creating jobs.

The world and our economy have

changed and will continue to do

so, not always in ways that beneit

Ontario. When the Canadian dollar

had a low value relative to theAmer ican do llar, many Canadian

businesses were slow to increase

productivit y. For a time, they could

aord rigid labour contracts and still

compete. Thats no longer possible.

Rigid labour legislation urther

hampers Ontario businesses ability

to react to changing consumer and

competitive demands.

The recent loss o the Caterp il lalocomotive plant in London was

just one example o Ontarios new

reality. International corpora tions

wont pay a signiicant premium to

employ Ontario workers. Increasing

productivity is essential to attrac

and retain both domestic and

international business operations.

We can wish that all this wasnt so

but it wont change the acts. Whawe need to do is adapt, looking

careully at what we do wrong and

what works elsewhere in the world.

Unions must adapt to the changing

economy, too. They are important

players in our economic uture

Unortunately, some have so lost

ocus that they are now doing things

like contributing union dues to the

student protesters in Quebec. Thiskind o behaviour is enabled by

the extraordinary powers granted

to union leaders by government

Because all unionized employees

must pay dues or be ired, the union

doesnt have to respond to thei

wishes or needs. We think tha

should change.

Thats why we are proposing to

give workers an expanded choicewhen it comes to becoming and

remaining a union member, or not

and to ensure a workers individua

choice to pay union dues, or not. It

will make unions more responsive

to unionized employees, and to

the needs o employers. Economic

analyses o these reorms elsewhere

suggest rules that make union

leaders work a little harder to justiy

Growth in Average Weekly Earnings by ProvinceMarch 2011 to March 2012

Source: Statistics Canada payroll employment, earnings and hours, March 2012

0.1%

2%

2.2%

2.2%

2.7%

3.3%

3.8%

3.9%

4.7%

5.9%

Ontario

Nova Scotia

Quebec

New Brunswick

Manitoba

Alberta

British Columbia

Prince Edward Island

Newfoundland & Labrador

Saskatchewan


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Examples ofOntario Plant Closures & Relocations

GM (2,000 Jobs)

Xstrata (600 Jobs)

Timken (190 Jobs)

Daimler(1,300 Jobs)

John Deere & Co. (800 Jobs)

Navistar International Corp. (675 Jobs)

Siemens AG (500 Jobs)

Veyance Technologies Canada (44 Jobs)(former Goodyear plant)

Caterpillar subsidiary Electro-Motive (460 Jobs)

Volvo Group (500 Jobs)

Simmons Canada (153 Jobs)

Oshawa to Detriot, MI and Spring Hill, TN

Timmins to Quebec

St. Thomas to Ohio, North Carolina & South Carolina

St. Thomas to Saltillo, Mexico

Welland to Wisconsin and Mexico

Chatham to Wakarusa, IN

Hamilton to Charlotte, NC

Owen Sound to Nebraska and Mexico

London to Muncie, Indiana

Goderich to Shippensburg , PA

Ontario to Kirkland, Quebec, Calgary, Alberta,Janesville, WI, and Hazelton, PA

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their value boosts employment,

increases paycheques, attracts

business investment and expands

the economy.

For example, one recent study

published by the Paciic Research

Institute by economists Art Laer

and Wayne Winegarden ound that

U.S. states with expanded worker

choice legislation outperormed

orced unionism states on a number

o key metrics. Over the ten-year

period o 2001 to 2010, states that

gave workers a choice saw 11 per

cent higher economic growth, 11per cent higher personal income

growth and a 3 per cent increase in

employment growth, versus a 1 per

cent decline in states where some

orm o union dues are mandatory.

Central to growing the economy is

supporting the individual worker,

whether they are unionized or

not unionized. No one should be

ired rom their job, or not hired ora job or which they are the best

candidate, simply because they

arent a union member. We need to

make it easier or workers to make

this basic choice based on what

works or them and what will drive

their own prosperity.

These reorms would also

help government in its diicult

relationship with public sectorunions. While unions in the private

sector must ultimately compete

and change or lose jobs, the public

sector unions appear as monopolies

that are immune rom economic

conditions and the publics ability to

pay.

Our public sector tendering rules

should be changed to open more

government work up to realcompetition. This will ensure more

roads get built and new buildings

opened on time and on budget.

As well , our Workplace Saety and

Insurance Board and our Labour

Relations Board need reorms that

will encourage, not discourage, job

creation.

The real path to a growing economyand rising standard o living is

increasing economic activity and

employment demand. Thats why

the Ontario PC Caucus is proposing

a package o changes to help

achieve that goal.


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GIVING WORKERSTHE CHOICE

We believe its time to reconsider theextraordinary powers government

grants unions. While unions ight to

protect existing jobs, they cannot be

permitted to prevent new jobs rom

being created. Ontario needs to

ocus on expanding its economy and

creating jobs, not just on slowing job

loss. Thats not the road to success.

Ontario Manufacturing Jobs

1 , 1 5 0

1 , 0 5 0

9 5 0

8 5 0

7 5 0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Jobs(thousands)

Over time, unions have contributed

to developing Ontarios middle

class and to improving saety in the

workplace. These were important

gains and unions prospered in a

world o large corporations, jobs orlie and a relatively slower pace o

change. Unortunate ly, unions have

not adapted to the modern economy,

which eatures more small and

medium-sized employers, multiple

careers or workers and constantly

changing economic demands.

People today want and take ar more

control over their careers, switching

employers and even moving to

new ields altogether. They need

workplaces, pay and beneits that

will make it easy or them to branch

out and try new approaches and

ideas, not workplaces where union

contracts narrowly prescribe exactly

how a job must be done and whowill do it.

When times are tough or employers

unions need to respond in ways that

will help protect and create jobs

Thats what Ontario workers need

Thats what the near ly 600,000

unemployed Ontarians need

Negotiations are most oten viewed

as an opportunity to enhance pay

and beneit entitlements, regardlesso the employers ability to pay.

Nowhere is this more evident than in

the public sector. Ontario is on the

path towards a $30 billion deicit

Control over spending and public

sector compensation is absent. As

one idea to rein in spending, the

Ontario PC Caucus has proposed

an across-the-board public secto

wage reeze with no exceptionsAt current spending leve ls this

would save an estimated $2 billion

each year and provide a window to

reorm Ontarios broken arbitration

system. With compensation rozen

arbitrators would not be able to

ignore iscal circumstances and

award multi-year salary increases

that taxpayers cannot aord. The

In general, benefit levels in the public sector are generous;public-sector employees often have access to jointly

funded defined benefit pension plans; and many collective

agreements include job security provisions that greatly

reduce the likelihood that employees in a particular

bargaining unit would find themselves out of work

-- The Drummond Commission on the Reorm o Ontarios Public Services


9/20- 9 -


verage ear y conomc rowt n . . tatesNominal GDP 2002 to 2011

Source: Calculations based on data collected by the U.S. Bureau of Economic Analysis

STATES WITHMANDATORY UNIONISM

STATES WITHVOLUNTARY UNIONISM

3.6%4.4%

wage reeze would be in place or

at least two years, ater which time

we would assess the economic and

iscal situation to decide whether to

continue the wage reeze or allowor only modest increases.

Despite the provinces debt crisis

and recent credit rating downgrades,

most Ontario teachers unions

have walked away rom current

talks intended to lead to a pay

reeze. There has only been limited

willingness rom public sector unions

to do their part to help balance the

provinces books.

While most people would assume

union dues are used exclusively or

workplace situations, the Canadian

Union o Public Employees (CUPE)

has used dues to und campaigns

calling or a boycott o Israeli

academic institutions, protesting

the World Trade Organization and

encouraging bans on bottled water.

Some union leaders have clearly

lost their ocus, but workers in both

the public and private sectors have

to put up with these costly non-

bargaining or workplace-related

activities because o labour laws that

have given union leaders substantial

power with little or no accountability.

Few things seem more undamental

to reedom and prosperity thanremoving barriers to employment.

We all need jobs to sustain ourselves

and our amilies, to contribute to

society and to ulill our ambitions.

And yet, in workplaces where

standard union rules pertain, you

can lose your job i you reuse to

pay dues to a union. It doesnt

matter whether you agree with the

unions actions or eel tha t it doesnt

represent you properly.

Employees should be ree to choose

their associations and expression.

Thats the real ity in the United

States, Europe, Australia and New

Zealand. It appears only Canada is

out o step.

In American states with which

Ontario must compete, ar dierent

rules apply. Closed union shopsare illegal, and so ar 23 o 50

states have adopted laws protecting

employees rom being ired or not

paying union dues.

The changes in the United States

are critically important to Ontario

because our neighbour is on

the verge o a manuacturing

renaissance. The Boston Consulting

Group projects that net labour costsor manuacturing in China and the

U.S. will converge around 2015.

Operations starting up or returning to

the U.S. run counter to the prevailing

assumptions o the manuacturing

sectors inevitable decline.

The U.S. manuactur ing renaissance

is expected to take place primarily in

states with worker choice reorms.

Over the last decade, more than ivemillion Americans have moved rom

states where union inancial suppor

is mandatory to states where it is

voluntary. Modern union rules in

these jurisdictions give indivduals

control over their paycheques and

workers ollow.

Legislation and regulatory

changes that make union leaders

accountable to their members arepro-market, pro-worker, economic

reorms. These changes can take

a number o dierent orms. They

can make orced union membership

an unair labour practice or unions

and employers. They can also

require that union dues be collected

by union oicials themselves, not

by the employer or the provincia

government through automatic

payroll deductions.

And they can ensure that union

inances like those o charities and

public corporations be open and

transparent. This makes sense both

or current members and or those

who might be weighing the decision

to unionize in the irst place, ensuring

they have the inormation necessary

to make an inormed choice.


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PATH 1

PATH 2

PATH 3

PATH 4

Follow the example o jurisdictions rom Scandinavia to New Zealand to the United

States by oering worker choice reorms that put power and choice back in the

hands o unionized employees. No clauses in any provincial legislation, regulation

or collective agreement should require a worker to become a member o a union or

pay union dues as a condition o employment.

Union leaders, not employers, should collect dues rom the workers they represent.

The provincial government should lead the way by ending these automatic

paycheque deductions. Private sector employers should have the option.

Amend legislation so that unions must provide ull and transparent disclosure o

their revenues and how they spend their unds.

Restore the Canadian principle o a secret ballot in all certiication votes in Ontario.

The Ontario Labour Relations Act should be amended to protect this basic right.

A supervised secret ballot shields workers rom intimidation at the hands o both

union organizers and employers equally by ensuring that their vote to join a union

remains private.

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Reorms can guarantee all votes

by a secret ballot are administered

independently, or example by the

Ontario Labour Relations Board or

Elections Ontario. Not only shouldevery employee have the right to a

secret ballot vote to certiy or not,

but all strike votes and collective

agreement ratiication votes should

be by supervised secret ballot as

well.

Al l o these changes have in common

new mechanisms based upon

timeless principles or unionized

employees to hold their leadershipaccountable.

Giving Ontario workers the choice

would be a irst in Canada, although

similar reorms have recently been

raised in Saskatchewan as well.

These are legal and regulatoryconcepts as yet unamiliar to many

Canadians, but experienced by

hundreds o millions o employees

worldwide.

Numerous economic reports and

academic studies conirm that

such reorms boost economic

perormance across every indicator,

rom job creation to economic

growth to standard o living to newbusiness openings to shareholder

investment. Thats what Ontario

needs and Ontarians deserve.

Instituting worker choice reorms

in Ontario would not only meethe challenge oered by American

states, it would put the province

in a leading competitive position in

Canada. We believe they should be

seriously considered.


11/20

Examples of items billed by the Maintenance and

Construction Skilled Trades Council to theToronto District School Board

Billing $143 to install a pencil sharpener with 4 screws

Billing 76 hours or 4 hours o work to install an electricaloutlet in a library

Billing $19,000 to install a ront lawn school sign

Billing $250,000 to install a 4.3m x 2.4m breakast clubkitchen

Billing or time spent at Tim Hortons, drinking in bars,ooling around in cars, and handing out personal fyersor a home-based repairs business

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OPEN TENDERING

As a basic pr inciple, al l compan ies

should be allowed to bid on

government contracts. Closed

tendering is the practice o allowing

only contractors with collective

agreements with unions in general,

or particular unions, to bid on

provincial or municipal construction

and maintenance projects.

Restrictive contracting and

subcontracting clauses in union

collective agreements with public

institutions and municipalities

including Ontario Power Generation,

Hydro One, the City o Toronto and

the City o Hamilton have created

monopolistic bidding conditions that

inlate costs and stile job creation.

More expensive inrastructure

means less o it gets built. This

means ewer hospitals, ewer roads

and ultimately ewer jobs.

For example, in Toronto the

Maintenance and Construction

Skilled Trades Council has an

exclusive contract with the Toronto

District School Board. This lack o

competition has lead to a number

o examples o wasteul spending

and questionable practices. A

recent expos in the Toronto Star

revealed that school work orders

are sometimes padded withadditional hours to account or

the whereabouts o workers who

either had no assignments or took

o during work hours. In one

instance, a union contracted by the

Council billed the Toronto District

School Board 76 hours or installing

a simple electrical outlet that only

took 4 hours to do. In another case,

one Toronto school was charged

$19,000 to install a school sign

that the supplier o the product said

should cost $2,000 to do.

The City o Hamilton estimates

restrictive clauses within its

collective agreement with the

United Brotherhood o Carpenters

and Joiners o America inlates the

prices o its construction projects by

The publ ic o ten assumes that

closed tendering aects only non-

union contractors. In reality, closed

tendering also prevents union

contractors rom bidding on some

contracts as well. Again, the City

o Hamilton is a perect example

O the 260 or so contractors

registered with the City at the time

only 13 o the 260 contractors

had unionized workorces with the

United Brotherhood o Carpenters

and Joiners o America. Some o

up to 40 per cent. Additionally, lastyear, Inrastructure Ontario revealed

that the $155 million Pan Am Games

construction project at Ivor Wynne

Stadium would be subject to the

same tendering restrictions. As a

result, its expected that the price o

this project will also be inlated by

up to 40 per cent costing Ontario

taxpayers millions more.

the contractors workorces wereunionized by other unions, some

were not unionized at all. Hundreds

o employers were prevented rom

competing, thousands o workers

were let with no opportunity to

prosper.

This is yet another example o

outdated government policy tha

hurts our economy and reduces


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PATH 5

Abol ish the practice o closed tendering across Ontarios municipal and broader public

sectors.

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In Ontario, there are two major

government agencies that aect

the workplace, the Ontario Labour

Relations Board (OLRB) and the

Workplace Saety and Insurance

Board (WSIB). Both are overdue or

reorm.

The OLRB is an independent,

quasi-judicial tribunal mandated to

mediate and adjudicate a variety o

employment and labour relations-

REFORMING WORKPLACEAGENCIES

opportunities or individual

workers and businesses. As

the representative o taxpayers,

government ought to be getting the

best price and oering opportunity tothe ull range o Ontario businesses,

not a avoured ew.

Government shouldnt be picking

winners and losers, but rather

ensuring all businesses have thesame chance to compete or

government work. Opening up

tendering or all companies wil

increase competition and ultimately

cut inrastructure costs across the

province.

related matters. It is also responsible

or ruling on complaints under the

Employment Standards Act and the

Occupational Health and Saety Act.

The OLRB plays an important role

in adjudicating labour practices,

but we have heard rom workers

and employers rom across Ontario

that the process is both unclear and

unair.

Historically, the OLRBs job was to

oversee the relationship between

employees, employers and unions

Its responsibilities included

adjudicating union certiication

processes, unair labour practice

allegations, collective agreemen

negotiation processes and illega

strikes and lock outs. In recent

years its jurisdiction has expanded

to cover employment standards and

health and saety matters aecting


13/20

PATH 6

Ensure the Ontario Labour Relations Board unctions as an impartial and e icient

arbiter o disputes. Its role should be strictly adjudicatory with rules and

regulations as minimally invasive as possible. The current mandate o the Board

must clearly establish these parameters.

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the workplace. What was supposed

to be a straightorward, transparent

process has become increasingly

complex, over-legalized and drawn

out.

It is time to ask i the OLRB still

serves the purpose or which it

was originally established. Do we

really need a dedicated, quasi-

judicial government body to manage

these relationships in the 21st

century? Consider that only about

28 per cent o workers in Ontario

are unionized. That means, or the

most part, 70 per cent o workerspreer to negotiate their terms and

conditions o employment directly

with their employer. Both employees

and employers are able to rely on

common law and the existing judicial

system or protection.

While the OLRB should not be

abolished, it must adapt and catch

up to the needs o the modern

workplace. It should act strictly

as an adjudicator, and the rules

and regulations it enorces should

be conducive to the operation o aree and competitive market. These

rules should be clear and air to all,

employees and employers alike. No

employee, employer or union should

have to engage lawyers to create

lengthy, complicated and costly legal

documents, as opposed to having

access to simple, straightorward

and transparent processes that result

in expeditious resolutions. While we

must move towards more expeditiousprocesses, a balance must be struck

to saeguard procedural airness

and the protection o the rights o

employees.

The powers o the OLRB to

unilaterall y amend its own processes

that impact on procedural airness

need to be substantially narrowed.

Similarly, the OLRB does not appea

to consider the impact o thei

decisions on workplace productivity

or economic growth as expressly se

out in the Purposes section o theAct.

Another deiciency is the absence

o any oversight over the length

o time the Board can take to

reach a decision on complaints

This produces an atmosphere o

uncertainty, arbitrariness and lack o

transparency that is not conducive

to the creation o an investment-

riendly environment. There shouldbe an improved system o checks

and balances put in place. We also

need to simpliy the OLRB appeals

process. Appeals o an OLRB

decision should not be made directly

to the Chair who delivered the initia

ruling.

Ontarios Workplace Saety and

Insurance Board is the government

agency that provides injury anddisability beneits to workers. WSIB

coverage is compulsory or most

businesses and industries in Ontario.

Employers und the WSIB through

payroll taxes in the orm o premiums

based on the earnings o their

employees. The WSIB sets these

premium rates, while government

sets beneits and coverage through

legislation.

WSIB premiums are necessary,

but they are also a tax on jobs.

The object ive should be to keeppremiums reasonable while still

meeting workers needs. The WSIB

has ailed to achieve this goal.

The WSIB current ly has an estimated

ununded liability o $14.5 billion.

This means that the assets in its

insurance und are $14.5 billion less

than what is needed to meet the

estimate o lietime costs o all claims

under the WSIBs coverage. Bu

according to one recent analysis by

the independent, not-or-proit C.DHowe Institute, entitled The Hole in

Ontarios Budget: WSIBs Ununded

Liability, authors Colin Busby and

Finn Poschmann ound that on a

air-value accounting approach, the

ununded liability could actually be

closer to $20 billion.

The massive ununded liab il ity

is also the result o establishing


14/20- 14 -


businesses to hire new employees.

The management o the WSIB is

not a new concern. Since the early

1980s, every government o all

political stripes has tried to ix the

Board, through legislative reorm

and administrat ive action. Yet,

core problems persist and worsen.

The hard act is that th is system

was designed or a post-industrial

revolution world a century ago and

simply no longer meets the modern

needs o Ontarios workers and

employers. The time or thoughtul

change is overdue.

One solution to this problem is to

allow the private sector to compete

or providing insurance coverage

or workers in Ontario. Most U.S.

states already allow private insurers

to compete with state insurance

unds or the provision o workers

compensation. We believe that a

premiums and beneits to suit

political considerations instead

o actual market demands. The

WSIBs problems were exacerbated

by the recent economic downturn,

which exposed a reckless

investment strategy, and reduced

premium payments due to higher

unemployment.

Taxpayers, uture employers and

ultimately workers are on the hook

or the shortall. This has been a

cause o concern not only to the

Auditor General but more recently to

the WSIB unding review, think tanks

and business groups.

Yet despite an increasing ununded

liability, the Ontario government

recently unilaterally increased

WSIB beneits, making the problem

worse. The WSIB can be expected

to increase premiums yet again,

acting as a powerul disincentive or

similar model would work well o

Ontario.

Presently, only 70 per cent o

Ontarios workorce is covered unde

the WSIB even though protecting

Ontarios workers or on-the-job

injury is the only reason the Board

was set up in the irst place. Even

so, imposing a deteriorating WSIB

on the 30 per cent let out makes

no sense. In spite o that, next year

the Ontario government will do just

that or sel-employed independent

construction contractors under Bil

119, called the Workplace Saety

and Insurance Amendment Act. We

will start our reorms by repealing this

backward step while still ensuring

adequate insurance protection.

Al lowing pr ivate insurers into the

market would provide employers

with choices, not just as to which

company, but on the speciic details

WSIB Unfunded Liability2002 to 2011

2002 2003 2004 2005 2006 2007 2008 2009 2010

6.57.1

6.4 6.5 5.9

8.0

11.4 11.712.3

2011

14.5*

Source: WSIB Annual Reports, 2002-2011*projection

($B

illions)


15/20- 15 -


Ontario currently assesses among

the highest employer premiums

among Canadian provinces. Theunfunded liability exacerbates

matters: premiums in Ontario must

remain high to pay for prior unfunded

claims, even though the cost of new

claims is below the national average.-- C.D. Howe Institute, March 2012

o coverage. Mandatory coverage

at equal or better terms would

still be in place, and an employer

would be required to present proo

o membership in an alternate planbeore they would be allowed to opt

out o the WSIB. Private insurance,

like WSIB coverage, would remain

a no-ault system to maintain the

integrity o workplace insurance.

Under this proposal, a streamlined,

more accountable WSIB governed by

a competent, non-political board o

directors would continue to operate

in competition with private sectorcompanies. The WSIB would serve

as an insurer o last resort, providing

coverage to those businesses that

cannot obtain insurance elsewhere.

We recognize that these are bold

suggestions that must be careully

and thoughtully introduced. The

millstone o the ununded liability is

both the catalyst and impediment

or needed reorm. A catalystbecause the continued presence o

the ununded liability over 30 years

shows the system is oten captive

to short term political intererence

which must end. An impedimentbecause responsible reorm cannot

permit employers to abandon the

Boards liabilities.

We thereore propose a staged

reorm process. We would start

with the repeal o Bill 119 which

orces Ontarios sel-employed

independent operators to join the

WSIB. Instead, we would allow

those entrepreneurs to opt orcomparable private insurance.

Next, as individual business sectors

secure an adequate level o unding,

we would allow those employers to

obtain suitable private insuranceInsurance choice will be respected

Third , we would immediately revamp

the Board, replacing a politica

board o directors with a skills-

based board, charged with prope

corporate governance oversight.

These reorms wi ll tr igger a

modernization o Ontarios workplace

insurance system, which was once

at the vanguard o public policyOntarios needs have changed. The

Board hasnt. It now must.

PATH 7

Al low private companies to compete with the WSIB or the provision o workplace

insurance coverage.

Well establish a new regulation under the Workplace Safety

and Insurance Act, to require the WSIBs insurance fund to

reach a full 100 per cent funding by 2027-- Ontario Minister o Labour Linda Jerey, May 4, 2012 (emphasis added)


16/20- 16 -


Its time to get Ontarians back to

work.

Years o government inaction and

outmoded labour policies relective

o a long past era have hindered

Ontario workers and businesses

trying to succeed in an ever-more-

challenging world. We need to

eliminate the protectionist barriers

that are holding us back. Ontario

has a series o labour policies that

actively discourage employment.

We cant aord to continue on that

path.

The proposals the Ontario PC Caucus

have put orward here are not a

magic solution to Ontario s economic

problems, but they will reduce some

o the obstacles we have put in our

own way. They are an important part

o a series o economic policies that

we will propose, including urtherdiscussion on reducing government

spending, reining in public sector

wages and pension costs and new

ideas on how to attract investment

and create jobs.

A number o the proposals in this

Paths to Prosperity white paper

have to do with the privileges

and practices o unions. Where

Ontarios new economy demandslexibility, union leaders oer rigidity.

Unions demand their members be

judged by senior ity, not meri t. In a

world that rewards productivity and

competitiveness, unions still believe

the best way to increase wages is

through strikes and demands.

These are values and act ions that are

People Leaving Ontario

for Western Economies

Source: Statistics Canada, Table 051-0019

200,000

AB BC MB SK

159,000

40,00025,000

2001 to 2010

A PRO-JOBS AGENDA

out o sync with a modern economy,

and with worker expectations. They

hurt much-needed job creation.

Government should create the

conditions or change.

There is a va lid role or unions, but

they must be reely supported by

their own members.

When it comes to labour laws,

we need a new standard. When

government puts in place a labour

law, it should be designed to

increase job creation, not protect

the status quo or the interests o

some sectors o the economy at the

expense o others.

No doubt some will attack these

proposals as anti-union, but tha

miscasts the issue. The Ontario

PC Caucus is pro-job creation

Unions should be, too. We believe

that uture job creation requires

rebalancing the roles o unions

employers and workers, always

with a ocus on creating more jobs

and opportuni ties. Its what Ontario

needs.


17/20- 17 -


End all subsidies or electric cars and charging stations.

Please let us know what you think bycontacting us at:

[email protected]

416-325-2244 (Queens Park)

RM 207 North WingMain Legislative BuildingQueens Park, Toronto, ONM7A 1A8

email:

phone:

mail:


18/20


19/20

PATH 1

PATH 2

PATH 3

PATH 4

PATH 5

PATH 6

PATH 7

Follow the example o jurisdictions rom Scandinavia to New Zealand to the United

States by oering worker choice reorms that put power and choice back in the

hands o unionized employees. No clauses in any provincial legislation, regulation

or collective agreement should require a worker to become a member o a union or

pay union dues as a condition o employment.

Union leaders, not employers, should collect dues rom the workers they represent.

The provincial government should lead the way by ending these automaticpaycheque deductions. Private sector employers should have the option.

Amend legislation so that unions must provide ull and transparent disclosure o

their revenues and how they spend their unds.

Restore the Canadian principle o a secret ballot in all certiication votes in Ontario.

The Ontario Labour Relations Act should be amended to protect this basic right.A supervised secret ballot shields workers rom intimidation at the hands o both

union organizers and employers equally by ensuring that their vote to join a union

remains private.

Abol ish the practice o closed tendering across Ontarios municipal and broader

public sectors.

Ensure the Ontario Labour Relations Board unctions as an impartial and eicient

arbiter o disputes. Its role should be strictly adjudicatory with rules and

regulations as minimally invasive as possible. The current mandate o the Board

must clearly establish these parameters.

Al low private companies to compete with the WSIB or the provision o workplace

insurance coverage.

PATHS TO PROSPERITYF L E X I B L E L A B O U R M A R K E T S

- 19 -



20/20

Documents

Paths to Prosperity - Labour Market Ontario PC White Paper