Opinion: Nova Scotia workers’ compensation system needs an independent review

View of Province House from the south lawn.
Credit: Communications Nova Scotia

Nova Scotia recently announced an independent review of the workers’ compensation system in Nova Scotia.

As spokesperson for the Nova Scotia Workers’ Compensation Stakeholders Coalition, I am encouraged by this announcement. The Nova Scotia WCB Stakeholders Coalition is a group of over 5,000 employers in Nova Scotia with over 70,000 employees. The Coalition was formed in 2022 due to concerns with the current workers compensation system and with a view that an independent review of the WCB system was required.

An effective workers’ compensation system achieves two important outcomes. First, it focusses on prevention of injuries in workplaces. Second, when a work-related injury does occur, it provides “insurance” so injured workers are supported during rehabilitation and receive compensation for times when they are unable to work due to their injury. Employers pay the sole cost of this insurance system and expect to pay reasonable “premiums,” in this case rates, for the benefits received by injured workers.

While we applaud the province’s willingness to move ahead with an Independent Review, we are very concerned that there has not been a clear statement about the reasons for the review.  The recent consultation guide released by the province opens with: “With the Workers’ Compensation Board being in a more stable financial position in Nova Scotia, it is time to hear from Nova Scotians on what is needed to make the workers’ compensations system the best system possible for Nova Scotians.”

This document and the rest of the communication surrounding the reasons for this consultation do not acknowledge the true state of the WCB system in Nova Scotia.

Nova Scotia has had the highest, or second highest, WCB rates of any province charged to employers since 2000 together with some of the lowest benefits in the country.

At $2.65 per $100 of payroll, the Nova Scotia rate is 79 per cent above the average provincial rates.  This translates into Nova Scotian businesses paying $162 million more each year than they would if Nova Scotia met the national average.

Nova Scotia provides the lowest percentage of earnings of any province in Canada to injured workers. Despite having the lowest coverage, we have the highest average claim cost per lost time injury, by 43 per cent. The portion of that cost that is administrative is the highest in Canada by 33 per cent. With all that administrative cost, we still manage to maintain the second longest average claim duration and the portion of the files closed after 30 days is the worst in Canada.

At the same time, in spite of decades of surcharges paid by employers, the program remains under funded and well behind the Canadian provincial average of having 125 per cent of the funds needed to cover the future costs of claims.

These issues are not new, nor are they the result of one particular government or leadership body; however, these shortcomings in the system mean injured workers have less benefits, employers pay more money, and our province is less attractive to both new employers and workers.

The positive news is that there is a path forward.  Taken seriously and done properly we have seen a thorough Independent Review turn the tides in provinces whose WCB systems were in a similar state.  Most recently, New Brunswick completed their review in 2019 and decreased their rate by more than 55 per cent from $2.65 to $1.18 per $100 of payroll with better benefits to workers than Nova Scotia currently offers. Also New Brunswick has 153 per cent of the funds needed for the future, meaning it is now a sustainable and stable system.

We encourage all stakeholders to take part in the independent review process. For the independent review to be effective we must first understand and acknowledge the problems at hand, then establish recommendations for material improvements to the system and, finally, put forward a clear path for implementation of the necessary changes. A good workers’ compensation system can be put in place in Nova Scotia. It already exists in many other provinces. It is time to bring these ideas home.

Peter McLellan is a spokesperson for Nova Scotia WCB Stakeholders Coalition.