• Issued: December 16, 2010
  • Content last reviewed: December 2010

Workplaces in Ontario are responsible for ensuring that they are in compliance with both the OHSA and WSIA, but minimum compliance alone will not allow us to realize Ontario’s vision of zero workplace injuries, illnesses, and fatalities. Workplaces therefore need encouragement to go beyond minimum compliance in order for the province to build a strong health and safety culture.

To achieve this goal, the OHS system should provide appropriate incentives and disincentives to employers and, where appropriate, other workplace parties. Currently, the MOL applies enforcement-based disincentives to motivate behaviour, while the WSIB administers direct financial incentives (rebates, premium rate reductions) and disincentives (surcharges, withholding of rebates). In addition, some HSAs are involved with incentives, either in co-operation with WSIB, or through offering their own sector-specific recognition programs for superior performers.

Exclusive reliance on the OHS system’s financial incentive and disincentive programs, however, will not sufficiently motivate every workplace to improve its health and safety performance. In addition to providing these direct incentives, the system can adopt or promote other strategies to motivate health and safety performance, such as:

  • Accreditation: Currently, the Workplace Safety and Insurance Act, 1997 gives the WSIB the authority “[t]o develop standards for the accreditation of employers who adopt health and safety policies and operate successful health and safety programs.”
  • Supply chain relationships: Some employers take the initiative to link health and safety performance to preferential supply chain relationships. Employers may require potential bidders to incorporate health and safety into the design stage of a project or, alternatively, may make eligibility conditional on meeting minimum standards of health and safety performance.
  • Non-monetary recognition: Some stakeholders have indicated that meaningful recognition of health and safety leaders can motivate employers to improve health and safety, and several stakeholder submissions included proposals for non-monetary incentives. The Panel did not reach consensus on what constitutes meaningful non-monetary recognition, but acknowledges that there is an opportunity for the OHS system to work with stakeholders to define and establish a meaningful recognition program.

Financial Incentives

The WSIB currently administers two types of financial incentives:

  • Practice programs, which include the Safe Communities Incentive Program (SCIP) and the Safety Groups Program, are voluntary; participants must implement prescribed health and safety improvements in their workplaces to receive a rebate.
  • Performance programs, which apply to employers that pay a minimum of $1,000 in annual premiums; rebates or surcharges are issued based on an employer’s “experience rating” (a calculation of claims costs and/or frequency over a specified period). Performance programs include the New Experimental Experience Rating (NEER) program, the Council Amended Draft 7 (CAD-7) plan for large construction employers, and the Merit Adjusted Premium (MAP) program for small employers.

With the exception of SCIP, all of the current programs are either partially or entirely based on claims experience, with particular emphasis on lost-time injury (LTI) claims. This reliance on LTI figures has resulted in criticism from stakeholders who suggest that experience rating does not contribute to positive health and safety outcomes. A 2008 Morneau Sobeco report commissioned by the WSIB echoes this criticism, suggesting that experience rating programs can encourage cost-minimizing behaviours and claims management practices, rather than promoting investment in long-term health and safety in the workplace.

The WSIB has, in recent years, been reviewing its experience rating programs with a view to better aligning incentives with demonstrated improvement in workplace health and safety practices. With that in mind, the Panel strongly believes that financial incentives should not simply be tied to claims experience. An ideal incentive program should reduce emphasis on measures such as LTI by taking into account evidence of OHS practice improvements in the workplace, and reward employers for those improvements.

The Panel also supports the development of appropriate incentives for self-insuring Schedule 2 employers. Since Schedule 2 employers are charged for every dollar of every claim (plus an administration charge), self-insurance does act as an incentive to reduce claims and costs. However, the limitations of relying on LTI and costs as an incentive apply equally for Schedule 2 employers.

Recommendation 22

The Workplace Safety and Insurance Board, in conjunction with the new prevention organization and stakeholders, should review and revise existing financial incentive programs, with a particular focus on reducing their emphasis on claims costs and frequency.

In view of the Panel’s recommendation to shift the prevention function out of the WSIB, it must be noted that the WSIB will retain the responsibility to calculate and evaluate claims costs, and set or adjust premium rates accordingly. To that end, the WSIB recently initiated a comprehensive funding review, the scope of which will include a review of existing employer incentive programs. Nonetheless, the Panel also recognizes that the new prevention organization and the WSIB must collaborate on the administration of future incentive programs. Co-operation between the two authorities will be necessary to ensure that these programs consider evidence of health and safety improvements in the workplace, as opposed to strict reliance on claims experience alone.

Accreditation

The Panel was advised of the WSIB's efforts in the past two years to develop a pilot accreditation program based on the Canadian Standards Association’s Z1000 standard for health and safety management systems. Prior to the current WSIB initiative, a multi-stakeholder working group developed an accreditation framework in June 2006 for the WSIB consideration.

Though the Panel does not explicitly endorse either of these programs, it does recognize that accreditation should be a responsibility of the new prevention organization, and that an accreditation program should be developed — with participation of both employer and labour stakeholders — to reward employers who implement successful occupational health and safety management systems. Consideration should include how accreditation might apply to small business.

Recommendation 23

The new prevention organization, in conjunction with stakeholders, should develop an accreditation program that recognizes employers who successfully implement health and safety management systems.

Supply Chain

The Panel recognizes that while larger employers may be better equipped to evaluate the health and safety of suppliers, smaller employers may be precluded from doing so. Therefore, the new prevention organization, in conjunction with stakeholders, should develop appropriate standards and guidance material to encourage employers to incorporate health and safety qualification into their supply chain relationships. Employers that incorporate such a process could then be eligible for a financial incentive from the WSIB.

Recommendation 24

Concurrent with the proposed review of financial incentives, the new prevention organization should work with the Workplace Safety and Insurance Board to develop appropriate financial incentives that reward employers who qualify suppliers based on their health and safety performance.

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