Alec Caldwell weighs in on Jeff Koller's qualified support of Ontario WSIB expansion

Last month, Canadian Contractor editor Steve Payne did a couple of video interviews on this site with Jeff Koller, industry compliance officer for OCFIA (Ontario Construction Finishing Industries Alliance), an organization set up four years ago to represent legitimate employers and employees concerned about the underground market.

In the second video, “Problems with Mandatory WSIB in Ontario,” (Watch video), Koller talked about his (general) support for Ontario WSIB Bill 119 (though he admits it has some problems, too). That bill, as you probably know, has this year forced most self-employed contractors into WSIB. While the majority of what Koller says is fair, I believe he gives out some misinformation.

Koller makes a statement that I believe is confusing to home renovation contractors and everyone else when he says, “My understanding with regards to the home renovation business is they are exempt.” This statement indicates to me and, I’m sure, most viewers of the video, that contractors in the home renovation industry are exempt from mandatory WSIB as legislated in Bill 119. Is Koller right? No, only partly. (Read article “Ontario WSIB exemption for renovators easy to lose”)

The truth is, only the renovator who is hired and paid directly by the homeowner is exempt. Meaning, if you subcontract work to others, every subtrade hired has to register with WSIB and give clearance to you as a contractor. Failing to do this saddles you with the bill later, if you are audited by WSIB. You could owe thousands and thousands of back unpaid premium to WSIB, including accrued interest and fines.

Some contractors  try to get around WSIB (Read article “Evading mandatory WSIB can cause tragic consequences”) by asking  homeowners to contact the subtrades directly and pay them directly. And, of course, if the homeowner does this, they are now legally considered to be the “constructor.” And should an accident occur at the homeowner’s worksite/residence the homeowner can be prosecuted under the Ontario Health and Safety Act.

The main contractor could also be seen as the “supervisor” and prosecuted as well. Even worse, under investigation by the Ontario Ministry of Labour, the homeowner may yet be seen as a victim of an unscrupulous scheme by the contractor, and the contractor could indeed get hammered. Yet some contractors will still gamble with this arrangement in order to save on WSIB premiums, undercutting legitimate contractors who are also bidding for the same job. I know this is happening out there around the GTA area, I’ve seen it many times, personally.

Later in the video, Payne asks Koller why contractors simply can’t go and get their own insurance on the private market. Well, obviously the unfunded liability of the WSIB, somewhere close to $15 to $18-billion (!!!) is a factor here. Bill 119 and mandatory WSIB for self-employed contractors is part of the new funding that WSIB hopes for. Self-employed contractors now have to make large premium payments, but the WSIB is well aware that this type of contractor will rarely make claims.

Finally, Payne mentions that, simply for coming up with a plan for extra WSIB revenue, David Marshall, president & CEO of the WSIB, got himself a couple hundred thousand dollar bonus. Here’s the details on Mr. Marshall’s compensation package, posted publicly online.

• Appointed for a five year term beginning January 2010
• Salary rate of $400,000 annually plus taxable benefits
• Goals and expected outcomes include, but are not limited to the development and implementation of a financial plan to reduce, and ultimately retire the WSIB’s unfunded liability, as well as improvements in administrative efficiency and service delivery
• A performance incentive of 20% per year may be paid based on achievement of these goals, to be paid out at the end of the five year term
• Pension benefits under the WSIB pension plan and benefits in accordance with the WSIB’s standard benefits for its senior management

As usual, send us your comments.

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