Presentation to Parliamentary Committee on Finance & Economic Affairs

Pre-Budget Hearings

Dryden, OntarioJanuary 21, 2019

By Steve MantisTreasurer

Thunder Bay & District Injured Workers Support Group

Thank you for the opportunity to present to you today.

While I am active in a number of organizations including the: Thunder Bay & District Injured Workers’ Support Group – Treasurer Ontario Network of Injured Workers’ Groups – Research Action Committee

– Chair Centre for Research on Work Disability Policy – Executive Committee

Member New Directions Speakers School – Co-chair Thunder Bay Poverty Reduction Strategy – Income and Community

Economic Development Pillar – Co-chair (retired) Community Conversations on Shaw Cable TV – volunteer producer and host

I am appearing today as a representative of the Thunder Bay & District Injured Workers’ Support Group. I have taken the liberty of including others’ words and research in my submission. I don’t claim any intellectual property rights and thank those that have come before me in sharing more articulate communications.

The two issues we’d like to raise today are the growing gap of income inequality in Ontario (and Canada) and the negative impact that is having on our democratic society.

Concerns about the corrosive effects of extreme inequality are nothing new. In the 4th century B.C., for example, Plato wrote that no person should be more than four times wealthier than any other, lest the divide lead to laziness among the rich and stifle opportunity for the poor. He would not be very pleased, then, by a recent report from the Canadian Centre for Policy Alternatives, which shows that the country's 100 highest-paid CEOs make more than 200 times the average income - a ratio unprecedented in Canada's history. Nor would he be impressed to learn that the two richest Canadians own as much wealth as the poorest 30 per cent combined.

We have seen this gap between rich and poor grow for the last three decades as year after year, Canadian governments have reduced the taxes that corporations pay. Since 1981, the corporate tax rate on net income (that is on their profit only) has been cut almost in half, from 50.9% to 26.5%. And even with this major decrease in corporate taxes, many corporations are not satisfied. Canada’s top corporations often pay far less than the official average corporate tax rate. As

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revealed by a Toronto Star/Corporate Knights investigation, Canadian companies have used complex techniques and loopholes to reduce their tax bills by $62.9 billion over the past six years.

Sixty years ago, corporations and individuals contributed approx. equal shares into the government coffers. Today, citizens contribute $3.50 for every $1 paid by corporations.

Workers who are injured or made ill in the workplace are suffering as a result of the same mindset – that business needs more breaks.

For years now, injured workers and frontline advocates have been sounding the alarm that Ontario’s Workplace Safety & Insurance Board (WSIB) has been “getting its financial house in order” through austerity and cost-cutting measures. Whether it be from slashing compensation for lost wages, denying healthcare treatment and medication, or refusing to recognize mental health injuries, the cuts have come squarely on the backs of injured workers. A broken workers’ compensation system … in implementing its austerity agenda, the WSIB has adopted the mindset of a private insurance provider. Just as insurance companies look to deny and cut claims wherever they can, the WSIB has become rigid, aggressive, and adversarial in trying to find ways to deny or terminate injured workers’ claims.

We are seeking changes in WSIB policy and practice: 1) No cuts based on phantom jobs.2) Listen to injured workers’ treating healthcare professionals.3) Stop cutting benefits based on “pre-existing conditions”. These address some of the WSIB’s primary methods of cutting benefits and sending injured workers into poverty.

Below is a quick look at WSIB financial numbers and the results for injured and disabled workers.

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In addition to elevated poverty levels, disproportionately high rates of injured workers also suffer from an array of mental health struggles following their injuries. A 2012 study found that nearly 50% of injured workers experienced symptoms of depression, while 37% had symptoms of anxiety. In many cases, dealing with the WSIB itself causes these mental health issues to develop. Many ONIWG members report that they are unable to even open mail or answer phone calls from the WSIB because of the intense anxiety and panic-like symptoms that are provoked by any interactions with the system. Downloading costs onto public systems.

Another important consequence of the WSIB’s cuts is that the costs of work injuries are being offloaded onto public systems. A common misconception is that the workers’ compensation is funded by taxpayers. In fact, this is not true; the system is funded entirely by employer premiums and the WSIB’s own investments. Every year, however, thousands of injured workers are forced onto publicly funded systems like Ontario Works (OW), the Ontario Disability Support Program (ODSP), and CPP-Disability, when they are cut off of WSIB benefits. Similarly, when the WSIB refuses to pay for healthcare treatment for injured workers, those costs are shifted onto OHIP. The reality is that work injuries are becoming a public burden precisely because the WSIB is trying to find ways to skirt its responsibilities. Shamefully, those with the most severe and complex injuries, including mental health injuries, are the ones who bear the brunt of the WSIB’s cost-cutting measures. The reason is simple: these injuries are the most expensive to deal with. Instead of being seen as human beings with a legal right to compensation and care workers who need the most support are seen as costs and liabilities, and are denied help.

1) No cuts based on phantom jobs — challenges the WSIB’s practice of “deeming.” In essence, deeming (also called “determining”) is when the WSIB pretends an injured worker has a job that they do not in fact have. It then pretends that the worker is earning a salary from the non-existent job, and uses the invented salary as a justification to cut their benefits. Injured workers are frequently deemed to have phantom jobs even when they are medically unable to work, or unable to actually obtain employment. If a worker is unemployed, the WSIB will still

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pretend they are working and earning money, and cut their benefits accordingly. 2) Listen to injured workers’ treating healthcare professionals — relates to the systemic problem of the WSIB ignoring medical evidence from injured workers’ treating doctors and health providers. Injured workers are frequently forced back to work before their healthcare professionals say it is safe to do so, and denied treatment or medication prescribed by their doctors. This puts workers at risk of re-injury, prolongs their recovery, and is another means of cutting benefits. 3) Stop cutting benefits based on “pre-existing conditions” — calls for an end to the WSIB’s practice of blaming ongoing disabilities on “conditions” that it claims existed before the work injury. All too often, the “pre-existing conditions” that the WSIB points to never actually affected the person at all until they were injured at work. In many cases, they were never diagnosed by a doctor before the work injury, and never caused the person any symptoms – and yet the WSIB calls them the “real” source of the injury and terminates the worker’s benefits.

While not a direct government budget concern is the enforcement of Ontario’s Occupational Health and Safety laws. I recommend an increase in the numbers and responsibilities of MOL’s OH&S inspectors. Note: The Ministry of Labour Safety inspectors are funded thru the WSIB accident fund.

It just makes sense to prevent accidents before they happen. Presently the MOL does not have the capacity to visit most workplaces in Ontario. Annually less than 10% of workplaces are visited by OH&S Inspectors. If the government were to increase the MOL staff compliment that actually visit workplaces and finds ways for the various staff to support good workplace practices, whether it be OH&S or Employment Standards, we could achieve efficiencies.

As a long time gardener, I understand that our health and productivity are subjected to complex and inter-related systems. The story below can give us some insight that goes beyond the garden.

The Farmer and his Amazing Corn

There was a farmer who grew award-winning corn. Each year he entered hiscorn in the state fair where it won a blue ribbon. One year a newspaperreporter interviewed him and learned something interesting about how he grew

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it.

The reporter discovered that the farmer shared his seed corn with hisneighbors. "How can you afford to share your best seed corn with yourneighbors when they are entering corn in competition with yours each year?"the reporter asked.

"Why sir," said the farmer, "didn't you know? The wind picks up pollen fromthe ripening corn and swirls it from field to field. If my neighbors growinferior corn, cross-pollination will steadily degrade the quality of mycorn. If I am to grow good corn, I must help my neighbors grow good corn."

He is very much aware of the connectedness of life. His corn cannot improveunless his neighbor's corn also improves.

So it is in other dimensions. Those who choose to be at peace must helptheir neighbors to be at peace. Those who choose to live well must helpothers to live well, for the value of a life is measured by the lives ittouches. And those who choose to be happy must help others to findhappiness, for the welfare of each is bound up with the welfare of all.

The lesson for each of us is this: if we are to grow good corn, we must helpour neighbors grow good corn.  ~ Author Unknown

A productive and healthy Ontario is composed of adults and children that are productive and healthy. Over the last 40 years, we have seen the wealth that is created in our workplaces is not be shared with the vast majority of citizens/workers. Productivity has grown by over 50%, while median hourly wages have stagnated.

It has been those on top of the economic systems that have benefited while the majority of families have not.

Some recent media coverage discusses some of the impacts of income inequality and potential approaches we might pursue.

“There is much disagreement about the causes of rising inequality, but much less about its effects: the decline of trust and social cohesion, the threats to democracy, the impact on economic growth of shrunken demand. The astounding gaps that have emerged between the richest and the rest are not only unfair, but also

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dangerous in their unfairness.”

Translating those thoughts into the world of occupational health and safety and workplace injury & disease, we have a long way to go to truly support each other, as many injured and disabled workers can tell you.

In terms of the experiences of workers that get hurt or ill thru their work, we see the first part of our social safety net, Workers Compensation or the WSIB, being turned into a short term disability scheme. Created over 100 years ago, Sir William Meredith, (the one time leader of the Conservative Party) the father of Workers Compensation in Canada, laid out key principles.

The Meredith Principles:∆ Compensation as long as disability lasts∆ Collective Liability / Employer pays∆ No fault∆ Independent Agency∆ Non-adversarial

Meredith believed that if you treated workers fairly, especially when injured, that social and economic stability would be the result. Unfortunately, these principles have been systematically eroded.

The evidence is overwhelming that people with disabilities face major barriers to employment with over 50% of us not able to find paid employment. Attached is some analysis done by the Ontario Network of Injured Workers’ Groups on employment outcomes compared to numbers of disabled workers who receive “wage loss” benefits.

As Professor Harry Arthur made clear in his 2010 report Funding Fairness, the Ontario Government has consistently interfered in the WSIB rate setting process in order to reduce employer assessments. This has in turn demanded a reduction in benefits to disabled workers in order to balance the WSIB budget.

This is once again, government actions that have led to greater income inequality, benefiting primarily large corporations at the expense of the rest of society. While the costs for the tens of thousands of unemployed/underemployed disabled workers does not go away, corporations are no longer sharing that burden.

We have undertaken research to try to understand what happens to these families.

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http://injuredworkersonline.org/where-did-they-go/

What happens to Ontario’s injured workers with permanent impairments who are denied workers’ compensation or their benefits are cut off when they are unable to get employment after their injury? A recently published report “Where Did They Go?” is the first step of a proposed research project to investigate what happens to these injured workers. Workers’ compensation is the one part of our social safety net that can actually lift someone out of poverty but many injured workers end up in poverty and rely on social assistance.

The project was initiated by Injured Workers’ Consultants, the Sudbury Community Legal Clinic, the Ontario Network of Injured Workers Groups, the Income Security Advocacy Centre and the Centre for Research on Work Disability Policy. Their first-hand observations of the decrease in workers’ compensation benefits resulting from changes in WSIB policies and practices, with related growing injured worker poverty, rising numbers of injured workers who rely on social assistance programs and rising Ontario Disability Support Program (ODSP) expenditure, raised several concerns, including:

A disregard for one of the fundamental (Meredith) principles of the workers’ compensation system – the right to fair compensation as long as the disability lasts

Cost-shifting for payment of injured worker benefits from the employer funded WSIB to the public purse, with increased funding pressure on ODSP & Health Care

Income support inadequacy of ODSP to meet basic

In this initial phase, the report, prepared by University of Waterloo Community Masters in Public Health graduates Amanda Richards with Sara Penny, includes a background literature survey; historical timeline of WSIB policy changes from 2000 on; and interviews of injured workers on their lived experience. Importantly, it also suggests methodologies for examining the larger research project – that is, of gaining a better understanding of what happens to permanently injured workers and how they end up relying on ODSP as their primary source of income, the costs to themselves and the social assistance system. The report identifies gaps in

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current data, and makes recommendations on effective methods of tracking the trajectory of these workers from workers’ compensation coverage to welfare.

The report was presented in November, 2017 at the Injured Workers and Social Assistance Conference organized by Rebecca Gewurtz (Centre for Research on Work Disability Policy; McMaster University, School of Rehabilitation Science). Avenues for continuing this valuable research are currently being explored.

While there have been some modest steps to help these disabled workers by pegging their benefits to inflation as of January 2018, the many who receive little or no income because of the WSIB’s practice of “deeming” are left behind. Deeming is the practice where the WSIB determines how much the disabled worker can earn and then subtracting that from any future benefits, regardless of the actual employment outcome.

One step to address income inequality is to compensate workers who become disabled and are unable to find work, and hold corporations financially responsible to “share the wealth”.

Another area that needs to be addressed is social assistance.

Despite recent changes, social assistance remains an outmoded system, designed in the 1990s to be deliberately inadequate, punitive, and coercive.

As a result of the structure and requirements of the programs, which are entrenched in law, people who receive supports actually become sicker, experience more social exclusion, and are less able to participate in the labour market.

We encourage the government to immediately move to increase the social assistance rates up to the poverty line quickly.

While addressing the needs of those on the bottom half of the income equation, we must look at the revenue needed to pay for these improvements.

Without the investment this year, the system will continue to impoverish people, keep them in poor health, increase their distance from the labour market, make it

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harder for them to participate in their communities, and limit their options and opportunities to build a better life for themselves.

We want to remind committee members that not acting has associated costs. Higher health care costs. Implications for the justice system. Lost productivity that results in between $4 and $6 billion in less income tax revenue. Costs of between 4% and 7.6% of GDP each year.

And we want to highlight the multiplier effect in the economy that comes from putting money in the hands of low income people. For every dollar invested, the economic return is $1.30. That’s almost as great a bang for the buck as investing in infrastructure.

We have seen a major shift in public policy since the 1970s that has benefited the wealthiest in our society. We need those with the most resources to contribute the most to the public good. As the farmer with the award winning corn knows, we all move forward together or we all suffer.

Sixty-five years ago,people and corporations contributed equal amounts of income tax to the Canadian government.

 Since then, the scales have tipped in the corporations’ favour. Corporate taxes have been slashed and people have been forced to make up the difference.

 In 2015/16 Canadians paid $145 billion in income tax, while corporations paid $41 billion.

It’s time to begin to rebalance our sources of public revenue. We need to increase taxes on corporate profits and the wealthiest parts of our society. Just imagine the positive things we could do to create an inclusive caring society with an increase of 36% to overall tax revenue.

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Appendix A

Analysis of the WSIB performance in recognizing actual wage loss and employment outcomes experienced by injured workers

versus the deeming process.

January 10, 2018

15,203 – 23,930 serious/permanent injuries per year that are recognized by WSIB with a Non Economic Loss (NEL) award (schedule 1 & 2 combined).1

2,814 - 3,429 serious/permanently injured workers received a lock in benefit 2

Ballantyne’s research3 found : only 55% of people with a NEL are back to work 54 months’ post

injury or 45% unemployed and experiencing full wage loss 68.8% of injured workers with a NEL experience an average

$13,500+ annual wage loss and 42 % are “poor or near-poor”.

Tompa’s research found at 10 years post injury: approx. 39% of injured workers receiving a NEL recover less than

75% of pre accident earnings approx. 19% recover between 75 - 99 % of pre accident earnings approx. 42% have recovered and some are making more than pre

accident earnings.4

58.3% of workers with a permanent disability (NEL) experience 1 WSIB website on March 23, 2015 – Statistic Supplement to the 2013 Annual Report – covering from 2009 - 20132 WSIB website on March 23, 2015 – Statistic Supplement to the 2013 Annual Report – covering from 2009 – 2013 [drawing on data from a freedom of information request November 2014, these numbers are slighting larger ranging from 3897 to 4526 workers who receive a locked in benefit.]3 Poverty status of worker compensation claimants with permanent impairments (2015) in Critical Public Health - Ballantyne et al4 Institute for Work and Health Working Paper #350 Comparative benefits adequacy and equity of three Canadian workers' compensation programs for long-term disabilityTompa E, Scott-Marshall H, Fang M, Mustard C

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significant wage loss 10 years post injury5

Only 14 – 18.5 % of workers with serious, life long injuries who have a work related permanent disability are receiving wage loss benefits 72 months after injury.6

O’Hagan research reports: “The findings paint a troubling picture of the mental health of injured workers with permanent impairment. The general prevalence of mental health conditions in the sample is of concern, with more than one third of the sample reporting five out of nine mental health diagnoses or conditions; almost 50% reported symptoms of depressed mood and problems concentrating; and somewhat greater than half of the sample had CES-D scores above the suggested cut-off for clinical depression. 7

5 Labour-market Earnings Recovery Following Permanent Impairment from a Work Injury, Presenter/Principal Investigator: Emile TompaPolicy Research and Action Forum, November 24, 20176 Determined by dividing the number of people receiving a lock in by the number of people receiving a NEL.7 Mental Health Status of Ontario Injured Workers With Permanent Impairments (2012 ) -O’Hagan et al - Canadian Journal Of Public Health

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