EDITORIAL PAGE — WCB’s confidence crisis

Federal and provincial politicians are not the only public servants being taken to task for poor fiscal management. Management at the provinces’ Workers’ Compensation Boards (WCBs) is also coming under fire, particularly in British Columbia where a crisis of confidence appears to have reached serious proportions.

Representatives of almost every industry in that province have expressed concern about WCB’s spiralling costs and lack of financial control. Business leaders are also upset by a controversial board re-appointment which they felt subverted the legitimate selection process. This matter was serious enough for the B.C. Business Council, among others, to call for the resignation of the WCB chairman.

But setting all that fuss aside, WCB still faces plenty of questions about the direction in which it appears to be heading. The mining industry, for example, is questioning why it is facing rate hikes as high as 30% at a time when both the number of employees and the number of accidents have been steadily declining.

The Mining Association of British Columbia (MABC) believes there can only be a couple of explanations. Either administrative costs are out of control (and thus are out of step with the service being

provided) or there is a complete lack of discipline in terms of awards being made (as suggested by the

fact that the duration of injuries is on the rise).

MABC says some settlements have been excessive. It also believes there is no interest, at the board level, in challenging the validity of some claims, or the amounts claimed. And it warns that a lack of interest or diligence in this regard will only see the system become further bogged down with false or misrepresented claims, “taking away from the legitimate needs of those who are truly injured and in need of service.”

A few years ago, the mining industry enjoyed a spending surplus as a result of being overfunded by WCB. Today, however, the industry faces an unfunded liability, and no explanation has been offered as to how this happened. The mining sector is not the only industry to argue that society cannot continue to compensate injured workers by paying 75% of wages tax-free. Ed Zurwick, MABC’s director of claims and compensation, says costs must be controlled to ensure that workers have sufficient coverage. “The administration of WCB needs a shake-up,” he says. “Someone needs to get in there and give them a dose of reality.”

It can be done. Two years ago, Alberta’s WCB was considered a financial disaster. Its unfunded liabilities stood at about $600 million in 1992, but the boom was lowered when Premier Ralph Klein took office and gave marching orders to his cabinet ministers to cut costs. The message was clear: “Get the bottom line in order or we will do it for you.”

After a new administration was put into place, WCB cut its unfunded liability to $270 million by the end of 1993. It expects zero unfunded liability by 1996.

British Columbia Premier Michael Harcourt is no Ralph Klein, but he should recognize that the

loss of confidence in WCB is a serious matter. A review could help ensure that industry gets value for its money while, at the same time, legitimately injured workers get fair and prompt service.