By Kelly Snider
The Workplace Safety and Insurance Board decided ‘yes’ on a mandatory insurance premium hike for employers, which has some small businesses worried.
“WSIB has been a huge concern for me in the past, because of the overall cost of it, and an increase is obviously not helpful,” Lorraine Hawley, owner of Mabel’s Bakery in Roncesvalles, Toronto, told Humber News. “I’m not worried that it’s going to shut down my business, but it will definitely be factored into prices and hiring new staff.”
The WSIB announced on Wednesday it would increase premium rates by 2.5 per cent in 2013.
This increased rate is another step to reduce the WSIB’s unfunded liability – meaning any liability or other expense that WSIB does not have money put aside to pay for.
According to the WSIB’s website, those expenses have grown to $14.2-billion.
“While this premium rate increase may add costs today, the retirement of the unfunded liability will result in lower premiums and strengthened competitiveness for Ontario businesses in the longer term,” WSIB Chair Elizabeth Witmer said in a press release.
The move however, will have an immediate impact on small businesses.
The Canadian Federation of Independent Business vice-president Satinder Chera said WSIB costs have been rising for the past two years, and CFIB is more worried about the short-term impact for small businesses.
“This is a unique situation because the increase could have been worse,” said Chera. “However this is another cost they have to absorb, and businesses will have to adjust business hours, or look to the savings.”
Hawley said this hike will result in an increase in labour costs.
“I either have to raise prices, or cut back a little bit on hours or staff, to accommodate the increase.”
According to the release on the WSIB’s website, the money collected from the hike will go to the following: five per cent to legislative obligations, 13 per cent to overhead and administration, 32 per cent to claims cost, and 50 per cent to new claims costs.