CANADIAN FOUNDRY ASSOCIATION ASSOCIATION DES FONDERIES CANADIENNES

Transcription

1 CANADIAN FOUNDRY ASSOCIATION ASSOCIATION DES FONDERIES CANADIENNES October 2, 2015 Ms. Diane Weber Director, Consultation Secretariat Workplace Safety and Insurance Board 200 Front Street Toronto, ON M5V 3J1 Dear Ms. Weber: RE: Rate Framework Reform Please find attached the Canadian Foundry Association s Submission to the Workplace Safety and Insurance Board Rate Framework Reform. Thank you for your assistance. Yours very truly, Judith Arbour Executive Director

2 CANADIAN FOUNDRY ASSOCIATION ASSOCIATION DES FONDERIES CANADIENNES SUBMISSION TO THE WSIB RATE FRAMEWORK CONSULTATION OCTOBER 2, 2015

3 Introductory Comments The Canadian Foundry Association appreciates the opportunity to have participated in several direct consultations with the WSIB, and to provide input and address the issues and concerns of the foundry industry, regarding the WSIB Rate Framework Modernization. By way of background, the CFA is the national voice for the foundry industry in Canada. Incorporated in 1975, it is a proactive, issues driven association that draws on the industry s collective resources to solve common problems. There are approximately 150 foundries in Canada as well as supplier facilities, machine shops and assembly plants. The foundry industry directly contributes approximately $2 billion in annual sales and provides direct employment for approximately 10,000 people. There is also the multiplier effect of jobs whereby foundries supply machine shops and machine shops supply assembly plants. Additionally, industry suppliers provide jobs. The foundry industry is the original recycling industry, and raw material is typically recycled metal, thereby conserving precious natural resources and energy. Foundries are vital to the Canadian economy since metal castings are a strategic component of the manufacturing base. They are the first step in the value-added manufacturing chain and are utilized in the manufacture of most durable goods. It is fair to say that wherever people are, there is a casting within 10 metres. Markets and industries that have a critical reliance on the foundry industry include: automotive; construction; agricultural; forestry; mining; pulp and paper and other heavy industrial machinery and equipment; aircraft and aerospace; plumbing; soil and pipe and municipal road castings; defence; railway; petroleum and petrochemical; electrical distribution; and a variety of specialty markets. Casting markets are extremely competitive on a global basis and, as a result, the cost structure and competitive position of Ontario foundries are significantly affected by legislation and regulation and other related costs. Rate Framework Modernization, Comments and Concerns Following a review of the WSIB updated information on the rate framework modernization, CFA s comments and suggestions are as follows: As expressed before, the classification for foundries should be determined. Manufacturing would be split between three proposed classes: Food, Textile and Related Manufacturing, Class D (13.9%), Resource and Related Manufacturing, Class E (21.8%), and Machinery and Other Manufacturing, Class F (56.8%). The foundry classification is a key issue since the CFA and the industry wish to prevent overpayment of premiums due to incorrect classification and ensure fair premium rates for foundries, i.e. Class F rate $3.20, F1 rate $4.10, F2 rate $2.29, Class D $

4 Risk Disparity - Expanding the number of industry classes from 22 to 32 Under proposed 22 classes: Class D Rate: $3.08 Class E Rate: $3.30 Class F Rate: $3.20 Under risk disparity 32 classes: Class D Rate: $3.08 Class E1 Rate: $4.45 Class E2 Rate: $1.88 Class F1 Rate: $4.10 Class F2 Rate: $2.29 Rates F1, F2 where does foundry industry fit predominant work activity? SIEF WSIB has expressed that there is a clear consensus that some form of cost relief is required - we need to know more about this. The CFA strongly recommends maintaining SIEF refunds and premium reductions. Long Latency Occupational Diseases (LLOD) Stakeholders suggestions:. Claims should be allocated under the proposed preliminary rate framework. LLOD should be excluded from individual employer experience. Some percentage of LLOD cost should be shared across the whole schedule 1 rather than simply one industry class. Weighting Experience Window (6 years) There is a perceived imbalance towards greater rate stability; to counter imbalance more weight should be given to claims and insurable earnings experience of more recent years (years 2-3) and less weight on historic years (years 4-6). Concept Payroll and number of claims registered with the WSIB over 6 years which is a calculation on individual employer basis what does predictability look like i.e. 6 years totalling $260,000 is an average of $40,000. 2

5 What will the weight distribution be between recent years (years 2-3) and historic years (years 4-6)? Graduated Risk Band Limits Stakeholders suggested that risk band limitations vary based on predictability of employers. Most predictable employers could see an increase of +/- 5 risk bands, and smaller less predictable employers could see a risk band limitation of +/- 1 or 2 risk bands. How is the WSIB going to fit the different foundries/suppliers in this section and will it be based on payroll and number of claims? Surcharging Mechanism There is support for a special surcharge mechanism for employers above the premium rate cap and consideration should be given to using the workwell program. Rate Group Analysis Review of the rate group analysis and the proposed rate framework for each rate group / firm, i.e. a review of the rate analysis for group 361 indicates that the analysis has been done as though it had been implemented in 2014 using data from 2007 to 2012 and using the proposed 22 classes. Group 361 classified under class F - Machinery and Related Manufacturing - Class target rate $3.20 The analysis shows 79 risk bands for the employer target rate and a rate range from $1.82 to $9.82 and employer actual rate range with 82 risk bands and rate range from $2.33 to $5.74 Risk bands for group 361 shows a low rate of $2.33, an average rate of $3.88 and a high rate of $5.74. To determine the right classification is important. The rate group analysis above would be different if class F1 (under the 32 risk disparity classes) is used. This allows very few claims or a workplace that has very high claims. The rate group is an unknown to many stakeholders/cfa. This is of concern and what is the justification? The CFA asks that the WSIB provide more clarity and justification on the issues that are problematical for the industry and why. Injury Outside the Workplace The potential for fraudulent claims for injuries outside the workplace and the impact on premiums continues to be a concern for foundries, although this concern may be out of the scope of the rate framework modernization. It is suggested that the WSIB enhance fraud reduction practices and mechanisms to determine pre-existing conditions. 3

6 Timing The CFA requests that substantive modernization should take place no sooner than January Following the various sector submissions of October 2, 2015, the CFA looks forward to the WSIB s provision of a new working model and further consultation sessions in late November. October 2,