Most Alberta and British Columbia employers will see a reduction in workers’ compensation premiums next year.
“In 2005, 83 per cent of Alberta employers will see a decrease in their industry premium rate,” said Guy Kerr, president and CEO of Alberta’s Workers’ Compensation Board, in announcing the 7.6 per cent rate decrease from $1.98 to $1.83 per $100 of insurable earnings.
“Safer workplaces and positive return-to-work outcomes are key factors contributing to lower premium rates.”
“Employers, workers and labor organizations have stepped up to make sure people aren’t getting hurt and to help those who are, return to work safely,” he said.
Kerr highlighted some of the positive trends affecting the Alberta’s WCB, including:
•A claim duration decrease of 15 per cent, averaging 41.8 days in 2004;
•Reduction of the injury rate from 2.8 injuries per 100 workers in 2003 to 2.5 in 2004;
•A 3.8 per cent decrease in lost time claims from 39,100 workers in 2003 to 37,600 workers in 2004; and
•A claims cost decrease of 11 per cent. Costs have gone from $640 million in 2003 to a forecast of $571.5 million in 2004.
The strong results were enhanced by positive investment returns and better than forecasted employer insurable earnings. As a result, the WCB anticipates it will reach its required funding level of 116 per cent by the end of 2005 — two years ahead of schedule.
While other Canadian workers’ compensation boards have yet to officially announce their rates, Alberta expects to have the second lowest average premium rate in Canada.
Last week, the Workers’ Compensation Board of British Columbia announced a 4.1 per-cent decrease in the overall premium rate for 2005.
“The 2005 aggregate base rate will be $1.975 per $100 of assessable payroll, compared to $2.059 in 2004,” said WCB Chief Financial Officer Sid Fattedad. “Clearly this is a good news story for the coming year; however I would caution that current premium rates reflect historical injury trends and these trends appear to be changing.”
The decrease reflects recent years’ trends of lower injury rates and lower duration of injuries.
“While we have experienced record low injury rates in recent years in British Columbia, what we're seeing now is the potential for an increase,” said Fattedad. “The injury rate is influenced by a number of factors including an increase in the volume of business activity in industries such as construction and forestry.”
Fattedad said employers can keep premiums down by improving health and safety and improving return to work outcomes. “Each percentage point of reduction in the injury rate means that approximately 600 fewer workers are injured and $9 million in claims costs is avoided,” he said.
Overall, approximately 56 percent of B.C. employers will have no change or a reduction in their 2005 base premium rate and 44 percent of employers' rates will experience a base rate increase
Key industries whose rates will increase include logging, industrial, commercial and high rise construction and shake or shingle mills.