Renovation contractors and their subtrades turned out in large numbers for mass protests in front of Workplace Safety and Insurance Board (WSIB) Offices in Ottawa and Hamilton, ON, on Feb. 12 to protest the Ontario government’s new WSIB fee structure. As a result of the province’s controversial Bill 119, which went into effect Jan. 1, independent small business operators must now purchase WSIB insurance at rates that could drive them out of business.
Justin Dokter, a 24-year-old self-employed carpenter from the Hamilton area who was one of the main organizers of the protests, told Canadian Contractor that he would have to foist these mandatory new charges on his customers, since paying them himself is not an option. And that, he said, could put him out of work, especially given the cash competitors he has to bid against.
Before Ontario introduced Bill 119, independent contractors still had to be insured, but they could, as Dokter did, choose their own insurer. The mandatory new WSIB premiums range from 1 to 18 per cent of a worker’s insurable earnings. In his own case, “it’s 7 to 15 per cent of our gross income,” Dokter said.
“This (WSIB) costs six to seven times more than my private insurance and it’s an inferior product,” Dokter added. “ And it only covers me if I get hurt on the job.” He said his private insurance covers him no matter where an injury or illness occurs.
Henry de Vries, a local painter who attended the Hamilton protest, said it was the first time he had ever carried a picket sign in his life. He said he would rather have been working but felt he had no choice to but to join a protest because, with the new WSIB rules and fees, his livelihood is now seriously threatened.
“The biggest problem is the rates they’re charging that contractors have to pay,” de Vries said. He said he’d heard of contractors paying “from 6 per cent to 30 per cent.”
“It’s gotten to the point between that and income tax that it is hardly worth going out to work anymore. I hope the government takes a look at WSIB, does an audit on them, like the WSIB did on us last year. (They need) to take a look at how they take care of their funds.
It’s well known that the WSIB has not, at all, “taken care of its funds.” At the end of 2011, the much-criticized agency had an “unfunded liability” (obligations it already has to pay out premiums to claimants) of a staggering $14.2-billion. Some analysts estimate that amount has now risen to $18-billion.
Roger Tickner, a safety professional in the industry, says it’s clear to him that the Ontario government sees independent contractors as a new source of revenue to deal with that money pit. “It’s been created by people that really don’t understand the business as well as they should,” he said.
Husband-and-wife contracting team Martin and Corinne Templeman, MET Services, attended the Hamilton rally and told Canadian Contractor that the new fees were potentially crippling to their business.
“My clients are going to be paying 5 per cent more for my services. And I’ve got to compete against the black market who pay cash,” Martin said. “We need to create awareness that the government is asking small contractors, small business people, to pay for a deficit that they had no part of creating,” Corinne said.
Conservative MPP Randy Hillier is one of the more vocal opponents of the WSIB in the legislature. Since Bill 119 was first introduced in 2009, he has introduced several bills to create exemptions for small business owners. They were all defeated. The lobby against the new WSIB rules has a website at www.fixthewsib.ca.
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harry veenstra
February 19, 2013
Justin Dokter statement of a precent of gross receipts is not correct -it only applies to the labour part of his invoice –unless he sells no product
Even that is not 100% correct as its based on his salary/drawing/he takes from his business
But it’s true it will really hepl the underground cash market
Rosaire Reaume
February 20, 2013
-For my part when I received notice that I needed to include myself on my w.s.i.b. remittance starting in 2013, I immediately contacted all of my sub-trades and informed them that after 42 years in the commercial construction business that I was no longer bidding any more projects and I have begun the process of laying off my staff.
-As Justin Dokter states above w.s.i.b. coverage is more expensive and covers less than my private coverage.
-W.s.i.b. needs to de-solve and let the business owners purchase private coverage for themselves and their employees.
David Sedore
February 20, 2013
I think its great that there is so much interest in the Workers Comp issue. I used to work in the residential market. I really wonder if it is a problem for
Workers Comp to actually go after all those cash going jobs 1st before going after inocent legitatmate companies.
The regular businesses are doing there best in these troubled times.
It’s true that the government only goes after the person they know, rather go after the indentured or the cash for work trades.
We all need to keep our hats on and not quit.
Just let your MP know that they better start doing something about the illegetamate undergound economy, rather than start pointing the finger at everyone they already know.
Construction is the business that keeps all countries running. More legitamate opperators is not the problem it’s the illegitamte one’s.
Lets all have a level playing field. Or at least try before they go on a hunt to our bank accounts.
Violeta Guerette
February 22, 2013
My thoughts exactly! It kills me to hear about all these business owners who pay their employees cash, they pay no payroll taxes, and no personal taxes while we who play it by the book are being fleeced at every turn. Why cant the government put more effort into catching the crooks instead of taking the easy way by making the legitimate business owners pay even more.
Gordon purcell
February 23, 2013
As a company owner I have a very hard time competing with the cash fly by nighter. With the new WSIB law in effect I have to use less employes,or just do the easy thing and become a fly by nighter, they are making my decision pretty easy
Robert Martin
February 23, 2013
Can or does anybody know what or if the other providences are doing?
Robert Koci
February 23, 2013
A while ago, we had a round table discussion with contractors from across Canada. When we started talking about WSIB, the guys from the other provinces didn’t know what all the fuss was about. Almost every other province has managed to keep their books balanced and their premiums low.
mike
February 26, 2013
I use Pencor ins and a Senior Mgr there told me that if Rev Can has deemed you to be independent operator WSIB backs off. I realize this puts you on way more radar than you may want but it seems to be true. The other point is that I did get an Independent Operator status from WSIB and there is no time limit on the form and those firms that I show it to when they are being Audited by WSIB have it accepted.
Derek
March 6, 2013
I just paid my WCB in British Columbia for myself and my employee. We do refrigeration service and installation and my rate was $2.13 per $100. It is mandatory for workers and me as employer to pay.
There has been a serious push over the last few years to make sure all residential construction was covered and safe work procedures implemented.
I looked at some of the proposed rates in Ontario and they were substantially higher to the point of being absurd.
Kathy
March 9, 2013
Dererk: To boot the WSIB has already increased the rates as of January 1 2013 and also INCREASED THE AMOUNT OF INCOME cap off. I look at the rates of Janitors compared to that of a siding guy and it is 26.8% higher to the construction industry.
Mike: That has been in effect for years with the CRA when applying for Clearance Certificates to work for contractors/builders or on any construction site. That only comes into play if the WSIB is trying to make you (as the subcontractor) deemed a worker of the the Contractor/Builder. You have to prove to both the WSIB and the CRA with proof of invoices (and not to ONE contractor/builder) tools, accounts with Suppliers, and then they rule you as truly being your own business. (Independent Operator) Independent Operators did not have to pay WSIB until this year and yes what I’ve written here was the way it worked. If you are a SOLE INDEPENDENT Operator with NO workers you cannot exempt yourself – nor can you exempt yourself if you have workers if you YOURSELF as the I/O step on the jobsite to work. The paperwork you speak of is from years gone by now – the law is here unfortunately and we just have to keep fighting to get it repealed POINT BLANK!
Robert: Check their WSIB rates compared to the Extortion rates in Ontario!
Gordon: You are speaking about the undergrounders (I’ve hand them to the WSIB on a silver platter and they have NOT ACTED ON ONE I’VE GIVEN THEM YET” We are legit and aboveboard and I don’t want my husbands business to pay on his earnings when we are covered more superiorly than that WSIB could even imagine supplying to us! The underground undercuts everyone, and BTW most of those underground CASH WORKERS don’t file income tax other than to say I’ve got NO INCOME, they don’t pay taxes they don’t pay into HST, they don’t contribute to the society but sure as heck when they get hurt they run to WSIB for a payout! (TRUTH) Anyone who is legit has a hard time with the fly by nighters but why is that your fault or my fault? It is the WSIB fault..get up off their chairs/pound the jobsites (they do in my area) and find the underground and for PETE’S SAKE WSIB WHEN I OFFER UP THE UNDERGROUND ACT ON IT…THEY could care a less! They just KNOW of the LEGIT businesses and are going to make us pay for the UNDERGROUND, I’d rather eat wooden nickels then give the WSIB a red cent!
Violeta: It has been my argument with the WSIB since the year 2002 when they started spewing they were going to make it Mandatory coverage to the ENTIRE CONSTRUCTION INDUSTRY! The underground will get a LOT RICHER now because a LOT OF LEGIT BUSINESSES WILL GO OUT OF BUSINESS AND LAYOFF THEIR EMPLOYEES! No more income tax, no more HST collected, no more WSIB payments for employee, and guess what everyone in Business for themselves cannot collect EI, so where they going to go to feed their families WELFARE????
David: Well said they certainly spew out (the Government) that they estimate 140,000 businesses out there in construction BUT NO-ONE CAN COME UP WITH A NUMBER FOR THE UNDERGROUNDERS! As I stated earlier I’ve handed them over undergrounders and guess what they are still undergrounders!
Rosaire: Sadly that is going to happen more and more and not to just the little guy but the big CONTRACTORS/BUILDERS. The time to stand up to this is NOW by signing the petition and spreading the petition to everyone you know! WE 10,000′S OF thousands of us to BE IN THE PUBLIC EYE AND STANDING STRONG TOGETHER ON THIS ISSUE. Think about the petition and forwarding it and spread the word across this province. Randy Hillier has told me to keep it going and to EDUCATE the people and get them involved. I PLAN TO DO THAT without a PAID membership to any organization! some are planning to start an organization to represent the Businesses there are enough of them out there now. What needs to happen now is to EDUCATE the people across this province and get EVERY PERSON AFFECTED BY THIS BILL TO STAND ON THEIR OWN TWO FEET ALONG SIDE US TO HAVE THEIR VOICES/FACES/CONCERNS SHOWN VISIBILY.
Harry: You are absolutely correct the invoices have to be broken down to LABOUR (and it is charged 100% at your rate of premium) every $100.00 earned! Material should be separate on the invoice. New Tactic by the WSIB
Roy
March 15, 2013
I just did a calculation for 2011 to see what I would have paid in Wsib had I been required to, and then what I paid in other taxes. Wsib is charged on the amount I invoice, in short what they deem the labour portion, regardless of my expenses (guess they dont want you buying any other insurances)
Some interesting facts :
1. my wsib premiums amounted to more than my federal and provincial income taxes COMBINED.
2. My wsib premiums amounted to 60% of my net pay.
Seems to me that everyone I talk to at WSIB doesn’t understand that I am an Incorporated business. Somehow they feel that the can flout the laws of this country and charge me an almost 10% tax on money that is not even by Revenue Canadas standards taxable.
I’m thoroughly disgusted with this, and its sad that I have to consider closing my doors and going and getting a job.
dennis
March 18, 2013
HERES THE WAY OUT GUYS…. LISTEN. …
Start a 2nd company….solely intellectual providing expertise in your trade.NON CONSTRUCTION
IF A CONTRACTOR OWES YOU 10000 FOR EXAMPLE …..GIVE HIM 2 INVOICES….
ONE FOR 5000 PLUS HST …FROM YOUR CONSTRUCTION COMPANY
ONE FOR 5000 PLUS HST ….FROM YOUR NEW INTELLECTUAL COMPANY
By the time you pay the employees and materials from the construction company it will be broke with no gross to speak of.
the intellectual company being non construction will be immune from wsib
doesnt cost the builder a penny more and your guys are still covered by wsib
there is no law of how much you have to charge in CONSTRUCTION
there is no law against starting a new company
there is no law against having 2 companies
there is no law against a builder writing 2 cheques
insure him you will cover the cost of the 2nd cheque
YOUR RATIO MAY BE DIFFERENT FROM THE 50/50 EXAMPLE ABOVE …SET THE RATIO THAT BEST WORKS FOR YOU
GOD BLESS CONSTRUCTION WORKERS
Bryce Bond
April 2, 2013
please keep me posted
Wade
April 5, 2013
Well congratulations to the Ontatrio Liberals and WSIB. I just laid off both my workers and added them to the ranks of the unemployed which was just released; ‘Canada loses 55,000 jobs in March’. I can’t and won’t pay the extortion that the Ontario Liberals and WSIB want me to pay so I am giving you my workers and their families to look after. Well done McGuinty and Gwynn for driving good businesses out of Ontario with your brand of steal from the lower class to give to the rich. I’m done, I can’t deal with this crap any longer. This government will reap what it has sown. Wait til the coming months to see how bad it REALLY gets.
James Ponsford
April 12, 2013
The Canadian Home Builder Association recently published an article stating mandatory WSIB would actually combat the pervasive underground economy by closing the loophole that allows contractors to style their employees as independent contractors.
However, what I’ve read elsewhere is this mandatory WSIB coverage will in fact help the underground economy. I know I’m commenting on this article quite late – but does anybody know why the Canadian Home Builder Association would make that claim – that it is in face combating the underground economy?
This is the article that appeared in the ‘Home Builder’ magazine: http://www.building.ca/news/mandatory-wsib-coverage-combats-the-underground-economy/1001997526/
Robert Koci
April 12, 2013
You ask a good question. My first comment; Cash contractors don’t care if a loophole is closed or not. They don’t pay WSIB in the first place.
As long as the difference in costs between a legit contractor and a cash contractor is significant , the only thing that will combat the cash economy will be policing (forcing cash contractors to pay what they owe, or drive them out of the industry). The additional costs of WSIB will increase the difference and do nothing for policing.
Violeta
April 12, 2013
Why is there nothing , or very little , in the news about this bill? Does anybody out
there in the media care about this issue. It will affect not only the contractors but also the consumers. The only ones it will not touch at all is the guys that work for cash and their customers, who by the way are responsible for the cash economy in the first place. If we all paid our fair share of taxes maybe we have a hope of not becoming another Greece.
Robert Koci
April 12, 2013
I think the Toronto Sun is about the only newspaper that will cover something as specific to the industry as this. That’s why you have to keep reading Canadian Contractor!!
Ken O'Brien
April 19, 2013
are you suggesting that if i was to start a small contracting company in
retirement and gross say 30,000.00 in labour fees, that i would b required to
abtain Wsib insurance, what would that premium cost me. and as a self employed person, would i be eligible for E.I, and should i being sending detuctions in for same. please let me know . thank you in advance.
Larry
April 19, 2013
You have to register, your premiums will be about 6-9% of your gross income. If you do mostly roofing you will pay about 14% Now if you work only for homeowners you can be exempt. One sub contract or commercial job and you will have to pay WSIB on all income in that quarter. You are not eligible for any E.I,
If you hire employees than you have to pay WSIB on all their income as well as take E.I and CPP off. Vacation pay at 4% and Statutory holidays must be paid.
Hopefully this helps
Larry
April 19, 2013
Well almost 4 months into my season and over 50% loss of revenue. Almost every job the homeowner has a cash contractor> Not just any contractor but my competitors for years. It sucks because I’m be forced out of business because I refuse to do cash. Estimated on a job yesterday and the client wanted to meet me today to go over details. Thought finally someone who cares about quality. A government worker in the building and planning division. Sat down only to be presented with 5 quotes from other contractors. Three of which were 700 to 1300 cheaper and all cash. A couple of years ago I would have been able to sell the job but not anymore. Talked about hiring legitimate companies and warranties to no avail. These companies have all the insurances and if something goes wrong the job is now on the books. Warranties still as far as I’m convinced would be void as there are not invoices. Never in my life have I been so mad. I used to be able to get by on reputation only but now I feel like I am being targeted by our government. I know there are parts of Ontario that are still good for legitimate businesses but London is not one of them. Maybe I’m just one of the unlucky ones who run into more cash customers than others I don’t know. What I do know is my family is suffering and after 28 years of having a great company I am now pissed off.
Our government says the WSIB was created to fight the underground economy. I don’t see how this tax grab is fighting anything but the poor legitimate guys who are fighting to survive. Want to fight the underground economy try and come up something better than a scam to recover your 14 billion dollar deficit that you created from mismanagement.
Why not at least have a drivers license or some form of Id on every invoice. I know this won’t prevent the cash guys completely but it will make it harder. They need to start calling all of the so called Kijiji companies and ask for their WSIB numbers and registrations. Do something than just create another tax we can’t afford. The underground economy is not paying this tax and many other things so creating it just put another nail in our coffins.
Jim
April 28, 2013
As an independent these wsib rates are off the chart as far as being able to support a person trying to make ends meet on a dailey basis.
What is the incentive to keep working if, all you are doing is paying the Gov’t ?
We should be able to buy our own insurance coverage which is cheaper,covering independents for 24 hours instead of 8 hours while at work.
I was always a proud Canadian.
What happened to freedom of choice? The important thing is to be covered with insurance!
I have never collected wsib – Why should the average worker have to pay for McGuinty’s incompetence while he is enjoying retirement?