If you don't work in Ontario, smile. This painful tax grab is not for you.
February 15, 2012 by Robert Koci
During 2012, the Worker Safety and Insurance Board (WSIB) in Ontario will conduct an education and registration program to introduce its latest tax on construction businesses. All independent operators (with the important exceptions of some renovators) will be required to register with WSIB and begin to pay premiums by January 1st, 2013. Previously, if you owned your company, you could exempt yourself from WSIB and get insurance tailored to your needs from a private firm.
It is important to note that, for this round of legislated changes, renovation company owners who are hired directly by homeowners and do not do any other kind of construction work remain exempt. That will have two important implications. It will mean that subtrades who work for renovators are not exempt and renovators can remain eligible for exemption only if they restrict themselves to renovation work only. If things slow down and other work within their trade beckons, they can only do that work if they register and begin to pay premiums.
It is not clear whether those renovators who decide to do other, non-exempted work must pay premiums for all the work or only for the non-exempted work.
“This one decision will remove $11,000 from the pockets of many job creators,” said CFIB’s Ontario vice president Satinder Chera. Affected businesses have reported the additional tax will force them to raise their prices (70 per cent), cut employee wages (25 per cent) or force them out of business (19 per cent). Incidentally, these businesses already carry private insurance, another good reason to shelve this ill-advised tax increase.
“Far from improving workplace safety, the only reason for this tax increase is to help the WSIB cover its $14 billion unfunded liability,” says Chera. “In fact, many businesses have already seen their WSIB tax bill rise in 2011, and are bracing for additional increases in 2012.”
CFIB hopes the government will reconsider its decision to bailout the executives at the WSIB. “Small employers should not be stuck with the bill for the gross mismanagement of the workers’ compensation system,” concluded Chera.
For a copy of CFIB’s full report on worker insurance across Canada, email us with “Workers insurance report” in the body of the email message.