Magazine for professional home renovators.

The new rules for WSIB in Ontario

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.

Posted by
Rob Koci is the publisher of Canadian Contractor magazine. Rkoci@bizinfogroup.ca 647 407 0754
8 total comments on this postSubmit yours
  1. By the legislation singling out the construction industry alone indicates a breach of the Charter. All are equal under the law. This act is in direct breach of the discrimination portion of the charter. That being said any legislation that contains a breach must have included with in it the notwithstanding clause. This legislation contains no such wording therefor the legislation holds no real merit. If this legislation were to be challenged it would certainly not stand up to the Oakes test.

    As far as the underground economy spin. Many Constructors are required to provide documentation re: permits, notice of project, form 1000, t5018′s etc… that form a recognizable trail of work. The reno Sector although subject to the same rules do not follow exactly.

    One other issue here in dealing with trades based on competitiveness by the Reno sector being exempt there forms a significant increase in the pricing deference for those contractors who work for builder’s.

    Some one should also look at the fact the WSI act was changed in 1992 by the NDP government for some of theses issues. Nothing in our industry has been changed since. The errors uncovered back then remain today. Supporting the CFIB position that this bill is indeed only to recover monies lost by the mismanagement at the WSIB. Paying into the WSIB or private insurance has nothing at all to do with safety.

  2. In response to the mandatory coverage issue, as a roofing and general contracting co., I pay the some of the highest premiums. As the economy gets increasingly squeezed, and margins in which to operate follow suit in an already over saturated industry, I find this terrifying. It will force an underground economy thrive, and allow companies who already roll with no insurance continue to out compete with legit contractors.
    The issue that I can’t understand is, what number will those premiums be based on? Will I now have to track hours and gross pay like I have to with my employees?
    Thus is nuts. If so, I guess I’ll pay myself about $5.00 an hour!
    Can anyone clarif?
    Matt Miller
    Metropolis Roofing & General Contracting

    • Hi Matt, As far as I can see you have to divide last years income into quarters. So if you made 100,000 last year you will pay the 13.5% every quarter on $25,000 or $3,375.00 per quarter. The nice thing is because we are legitimate businesses we have money to burn. If I am lucky this year I might have enough money to go on a vacation. I’m thinking of taking my family to Canada’s Wonderland as I am told the lineups are not very long in Feburary. That is if I save enough money for gas.

  3. This is wrong on may levels.
    1. We now have another bloated, bureaucratic out of control monster, much like hydro of old. A few make out like bandits off the backs of people like myself who for 32 yrs has risen daily, very early to work and produce for my living. This monster will grow too. We’ll have WSIB officers in WSIB patrol cars. There will be lawyers and judges and accountants who produce nothing but will make substantially higher incomes than the poor slob they will gang up on. It’s already happening with ministry of labour.
    2. It seems that it is an infraction of the laws of physics for bureaucrats to balance a budget, project future requirements or make wise and frugal monetary decisions. This appears to be a bail out scheme to cover for our insane attempts at getting bureaucrats to defy gravity.
    3. Why only the construction industry? Is this perhaps the cash cow? I prefer believe construction is the goose with the golden eggs.
    4. You want to see the Underground Economy summer 2013. Look out! You can’t combat the UE with more laws. The reason you have an UE in the first place is too many rules and regs. Historically you are able to measure the moral of a society by the size of it’s UE. Happy members comply.
    5. Where do these people think the money is ultimately coming from. The end user will pay. Competition is already keeping margins dangerously thin.
    6. On the macro scale the Ontario’s economy stinks, her balance sheet bold Red and these over educated produce nothing’s want to suck a couple more billion out of her. They will likely put into some financial vehicle to cover “Future Liabilities”, and they’ll loose that too, like the last time.
    7. A touch more personal sovereignty usurped from each of us. One of the thousand cuts that leads to death.

    I guess we get what we deserve, we blindly vote like trained mice.

  4. The problem with this bill is it targets a market that is already struggling to survive. I have 5 employees that I pay 13.5 percent WSIB on. I have always played fair and my guys have always been covered. For myself I have a disability policy that cost me about $200.00 a month that covers me 24/7.
    Now I need to cancel that for a plan that does not cover me at all for about $900.00 per month. I get hurt on the job the only thing I can do is shut the company down to collect. This is a 100% a tax grab. The only thing that is going to come out of this is now I have to compete against a lot of legitimate companies that have decided to go underground. Another problem that our kind government has overlooked is I’m a seasonal business that struggles every year to survive the winter. This 13.50 percent tax hike on me is what I survive on every winter. To top it all off we our in a recession here in the London region and my profit margins our about 20% lower then they were 2 years ago. I scratched my way to this winter but now I am worried about feeding my family. Customers don’t call for roofing in the winter time and once you are out of work the winter becomes very long. I’ve already told two of my longtime employees who are aging that I cannot afford to bring them back next year. I fiqure the only way to survive this is cheaper labour and to raise my prices. If not I am going to fold a company that has been around for almost 30 years. The government keeps talking about leveling the playing field when all they keep doing is going after the legitimate businsesses. Driving guys underground further is not going to help level the playing field. I’m worried that 2013 will be the end of something I have worked so hard to achieve.

  5. My 8 year old small business was 50/50 home renovation and commercial. I hade no option but to end a long time commercial maintenance contract this fall.
    With a 60% overhead cost per hour at this point {Building any business takes money} working commercial is not an option anymore. WSIB contribution would end my still growing business at this point for sure. I sure don’t envy the contractors that don’t have that option. A 50 % pay cut will be hard to swallow and I hope in these difficult times my business will survive and I can find enough houses to renovate or there will be a truck and trailer with a lot of nice tools going for cheap.. So much for trying to become self employed.

  6. To avoid this wsib gouge I just learned about applying for group rate 775. These guys explain it well. http://www.industrialmediation.com/newsletter/news_14.html
    Or google wsib group rate 775

  7. Dont forget to account for your losses next tax term, Mine is 7.5% plus the jobs that i lost at my price due to under the table ers, ,lol’ maybe ill get my money back in losses ?is that wrong? How do i prove that? maybe i should just join the underground realm and actually make some coin for once, but then we would be another portugal or greese, |Ahh , who wants that, Not me, but i will tell you that my kids are educated enough right now to not own their own business ever,!!!! but just have a recession proof job in the government !!! Hope theres room.
    Theres a shortage of labour trades coming soon, Because alot of them are retiring, ||Either union or non, I dont think this realm of contractors will ever be back due to the recent bureaucratic BS thats been happening for the last couple of generations, I dont want my kids to deal with this, And hopefully this will bring the price to where it needs to be, !!!!!
    I would be happy to do a job for once,, |Where i actually come ahead in the long run,, What s the FUTURE OF OUR CHILDREN/????????
    Do you ever wonder why our kids dont want to do manual labour?? I dooooooo, its what they hear from their parents, And it aint getting any better as time goes on,. Soo what do we do? push education hard, bust are balls and pay for sylvan learning which cost me $1400, each month, well worth it,.and many other involvements for my kids , so they dont have to suffer what we do, in this economy,
    im tired of working for nothing and breking my body to have very little, Im getting tired of working for everone else(mostly government) and not myself.
    Freedom 95 anyone?????????

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